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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| GRUPO International Inc (CE) | USOTC:GRPI | OTCMarkets | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.0001 | 0.00 | 00:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2008
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 000-30603
HIV-VAC INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 86-0876846 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) |
14 LAUREL BLVD COLLINGWOOD, ONTARIO, CANADA L9Y 5A8
(ADDRESS OF PRINCIPAL ADMINISTRATIVE OFFICES)
(705) 446 7242
(REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934:
COMMON STOCK ($.001 PAR VALUE)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [ ]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act Yes [ ] No [x]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Website, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.406
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 [ ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
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]
The aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter, was $10,430,652.
The issuer has two classes of stock with 10,430,652 common shares and 300,000 preferred "B" outstanding as of September 30, 2011.
TABLE OF CONTENTS
PAGE PART I Item 1. Business....................................................... 3 Item 1A. Risk Factors................................................... 9 Item 1B. Unresolved Staff Comments...................................... 9 Item 2. Properties..................................................... 9 Item 3. Legal Proceedings.............................................. 9 Item 4. (Removed and Reserved)......................................... 9 PART II Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities............. 9 Item 6. Selected Financial Data........................................ 10 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations........................... 10 Item 7A. Quantitative and Qualitative Disclosures About Market Risk..... 12 Item 8. Financial Statements and Supplementary Data.................... F-1 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............................ 13 Item 9A. Controls and Procedures........................................ 13 Item 9B. Other Information.............................................. 13 PART III Item 10. Directors, Executive Officers and Corporate Goverance.......... 14 Item 11. Executive Compensation......................................... 15 Item 12. Security Ownership of Certain Beneficial Owners and Management And Related Stockholder Matters.................... 15 Item 13. Certain Relationships and Related Transactions and Director Independence......................................... 16 Item 14. Principal Accounting Fees and Services......................... 17 PART IV Item 15. Exhibits, Financial Statement Schedules........................ 17 Item 14. Disclosure Controls and Procedure.............................. 18 SIGNATURES................................................................ 18 |
Item 1. Business.
We were originally incorporated in Nevada in 1997. We were formerly known as Persona Records Inc, ("Persona") a corporation involved in the marketing and development of music recordings. In November 1998, we merged with Nouveaux Corporation with Persona as the surviving corporation. We changed our name to HIV-VAC Inc in March 2000 and to Grupo International Inc in September 2010.
Our business is the development and marketing of a proposed vaccine designed to combat HIV/AIDS. This proposed vaccine, which is called NFU.Ac.HIV, was developed by Dr. Gordon Skinner, our director of research, through the University of Birmingham, in the U.K. The proposed vaccine was licensed to Intracell Vaccines Limited from the University of Birmingham in November of 1998, and Intracell in turn entered into an assignment of the license agreement with us in April of 1999. In addition to his position as our Chairman and President, Kevin Murray was the managing Director of Intracell Vaccines Limited. Further, our Director of Research, Dr. Gordon Skinner was a Director of Intracell. Dr. Skinner, Kevin Murray and John Palethorpe, our Vice President, each owned 33.33% of the outstanding shares of the common stock of Intracell until 28 February 2006, at which time they each acquired one third of Intracell Vaccines Ltd's shareholding in the Company. Intracell owned 6,683,244 or 67.97% of the outstanding shares of our outstanding common stock and 10,000 or 100% of our outstanding Series A preferred stock at that time. See security ownership of Certain Beneficial Owners and Management.
The proposed vaccine was developed in Birmingham, UK, by Dr. Skinner. The approach was based on twenty years experience of similar intracellular vaccines, one of which has shown to modulate the pattern of herpes genitalis in a multi center, placebo controlled trial in the United States and has been used prophylactically and therapeutically on a named patient basis for two decades in the UK.
By 1993, the underlying concept for the vaccine had been examined for feasibility of preparation of the proposed vaccine under the guidance of Dr. Skinner. The first experimental preparation was made using a B subtype of the isolate HIV-1 or GB8 virus strain grown in a leukaemic T-lymphocyte cell line from a young male known as JM cells and was manufactured at the Centre for Applied Microbiological Research (CAMR), in Porton Down, UK. The proposed vaccine was tested for antigenic content (protein on the surface of a cell or bacterium that stimulates the production of antibody) at CAMR and for antigenic content and immunogenicity (production of an immune response) in laboratories at the Department of Infection, University of Birmingham. This work was financially supported by the Vaccine Research Trust, a Charitable Trust registered in the UK and chaired by Dr. Skinner. This led to the publication of a scientific paper entitled "Early Studies on a candidate Intracellular Subunit Vaccine NFU.AcHIV[JM] for prevention and/or modification of HIV related disease," in the Journal Intervirolgy 1994;37:259-268.
Between 1993 and 1999 the proposed vaccine was the subject of a research contract between Dr. Skinner, at the time a senior lecturer at the University of Birmingham, and the Russian Federal AIDS center, Moscow, Russia. The proposed vaccine underwent initial tests to establish optimum conditions of preparation, antigenicity and immunogenicity in Russia, with additional tests for antigenicity being carried out in the UK. The proposed vaccine remained the property of the University of Birmingham during this time.
Preclinical trials were undertaken at the Russian Federal AIDS center, Moscow, Russia during the period June 2000 through December 2001. The trials were undertaken in small animals. Data from the trials indicate that the vaccine appears to be safe. The vaccine was also shown to illicit an immune response in small animals.
Our research activities since 2001 have been limited to small in-house research projects that have allowed us to maintain our ability to continue development in the future.
We have been unable to secure funding for a phase one human trial. This trial is estimated to require $6 million to complete and is required to demonstrate the safety of the vaccine through the vaccination of approximately 20 healthy individuals. To date, we have had very limited success in raising funds, and if we are unable to raise this amount, we will most likely cease all activity related to our vaccine development and marketing.
We returned our rights to the vaccine back to the University of Birmingham in December 2007, as we did not believe that we would be able to commercialize the vaccine prior to the expiration of the patents.
We plan, subject to funding, to continue development of the vaccine, and believe, that subject to further research, that it might be possible to develop other patents, depending on the outcome of the research.
A vaccine is part of a process that stimulates the body to mount an immune response to a harmless version of a micro-organism, or part of a micro-organism, and from this to construct a type of immune memory which would allow the immune system to mount a rapid response when and if the body is invaded by a potent version of a micro-organism. This response, ideally, is sufficiently rapid so that the micro-organism is not able to replicate to any great extent before it is eliminated, and thus the individual vaccinated is protected from disease. The immune memory induced by vaccination is usually long-lived, and creates antibodies that neutralize invading micro-organisms, by binding to them and preventing them from infecting cells, and lymphocytes, which recognize cells infected by micro-organisms (ones the antibodies did not destroy) and destroys them before other cells can be infected. A vaccine can also be therapeutic because it can stimulate both the humoral and cell mediated immunity over and above the existing immune status of a person and this is particularly important in patients who are HIV positive because it is clearly essential to initiate therapeutic strategy while there is residual functioning of immune competence in these individuals. This is presently unproven but a placebo controlled multicentre trial in the United States to look at the therapeutic value of the herpes vaccine developed by Dr. Skinner has shown that vaccination of patients who already had the infection modified the pattern of genital herpes resulting in reduction in the number and severity of recurrences.
HIV/AIDS is a disease that has the effect of hindering the body's immune response system, allowing for opportunistic infections and diseases, such as tuberculosis, to overwhelm the body's immune response to disease. It does this by infecting and killing the T-lymphocytes of the immune system, which is consequently unable to deal with other infections, or proliferating cancer cells. There are two variants of the disease, known as HIV-1 and HIV-2, which share certain structural similarities, but differ greatly in certain types of proteins that produce the effects of AIDS. HIV-1 has a shorter time between infection and the onset of the symptoms of AIDS, and is more easily transmitted. Transmission can occur through sexual contact, maternal transmission to infants either in utero or through breastfeeding, or from receiving blood transfusion from, or sharing hypodermic needles with, infected persons.
The HIV-1 virus particle has an outer envelope, which is studded with projections of clusters of glycoprotein molecules, surrounding a dense conical core containing the genomic material. Once received into the bloodstream (by any of the means described above, for example), the virus essentially "docks" with a lymphocyte cell and injects its viral core into the cell. The virus, in effect, hijacks the cell's metabolism, using it to replicate itself so that thousands of new particles are released into the bloodstream, and the cell dies. These particles go on to infect other cells, in a kind of chain reaction. Cells can also be infected by contact with infected cells, owing to certain proteins transmitted by contact. Some virus particles can become trapped in the lymph nodes, where they can remain for long periods and infect other cells. Eventually, so many lymphocyte cells are infected and destroyed that the body's immune system collapses.
The HIV-1 virus is variable, in that within HIV-1 exist 3 main groups of HIV strains. According to the international AIDS charity known as AVERT, the groups are the "major" group, M; the "outlier" group, O; and the "new" group, N. Most HIV infections are part of the major or M group. Infections from the N group are rare, and O group infections occur mostly in west-central Africa. Group M has at least 9 different subtypes. The subtypes differ by slight variations in the glycoproteins, which mean that any effective vaccine will have to deal with all of these variations.
It is estimated by AVERT, that 33 million people are currently HIV /AIDS positive, 2.6 million were infected in 2009, and 1.2 million people died of HIV infection in 2009. It is estimated that 22.5 million of infected persons are located in sub-sahara Africa. It is estimated that 1.5 million residents in North America are infected with the HIV/AIDS virus. Due to all of these factors, HIV-1 has been the principal focus of vaccine development and drug treatment.
Our proposed vaccine is subject to regulation by all countries. In the United States, the vaccine is regulated by the federal government, principally through the Food and Drug Administration under various federal laws. Regulations promulgated by various federal, state and local governments govern or influence the testing, manufacture, safety and efficacy requirements, labeling, storage, record keeping, licensing, advertising, promotion, distribution and export of our products. In general, similar regulations are found in all countries throughout the world, though we may have to demonstrate different levels of efficacy, depending on the regulatory requirements in each nation.
Before we can market our proposed vaccine in the United States, since it is a biological drug product, we must take numerous steps, which include:
- pre-clinical laboratory and animal testing, to evaluate product chemistry, formulation and stability, as well as the potential safety, purity and potency of the proposed vaccine;
- submission to the FDA of an Investigational New Drug Application, which includes the results of the pre-clinical laboratory and animal testing, and which must become effective before clinical trials may commence;
- the conduct of well-controlled clinical trials, conducted in accordance with FDA protocols (including review by an institutional review board) to adequately establish the safety, potency and purity of the biological drug product (i.e., our proposed vaccine), and trials to characterize how it behaves in the human body;
- submission to the FDA of a biologics license application, and the FDA review of same;
- completion of an FDA pre-approval inspection of the manufacturing facilities; and
- FDA approval of the license application and all product labeling.
In addition to these steps, we are required to meet with the FDA and its Vaccines and Related Biological Product Advisory Committee, which is composed of outside experts who assist the FDA in product reviews, and provide advice on various issues; in the case of our proposed vaccine, the advice would typically relate to the clinical development program and clinical study designs for our proposed vaccine. The recommendations of these committees are not binding upon the FDA, but are commonly followed by the FDA. The FDA has broad authority to suspend clinical trials, and all of the FDA's concerns must be resolved before trials may recommence.
In general, the key element in the process is a demonstration by us that our proposed vaccine has meaningful efficacy at a statistically significant level, which means there must be an observed reduction in the incidence of HIV in the group receiving our proposed vaccine, compared to the control group. As noted above, the level of efficacy that we must demonstrate may vary from country to country, depending on the prevailing regulations. Our initial testing is planned to be performed in the UK and possibly Africa, there is no guarantee that the FDA will accept the results of tests completed in these other countries. If the FDA does not, this could cause substantial delays, by essentially requiring similar tests in the United States in order to satisfy FDA requirements.
It is also possible that a regulatory agency, in reviewing our proposed vaccine's efficacy, might only approve the proposed vaccine for certain high risk populations, thus limiting the market for our proposed vaccine by limiting the customer base.
Even after approval of the proposed vaccine for use, the manufacture of our proposed vaccine would be subject to a variety of laws relating to such matters as safe working conditions, manufacturing practices, environmental protections, fire hazard control and hazardous substance disposal, which could incur substantial costs that we cannot predict at this time.
Our proposed vaccine's license would be subject to continual review, and newly discovered or developed safety or efficacy data could result in revocation of relevant licenses.
General. Our proposed vaccine is designed to perform two functions. The first function, which is typical of traditional vaccines, is to develop an immune response in the vaccinated person in order to prevent HIV from infecting the human body. The second is to provide therapeutic benefits, like those described above, to people who are already infected by HIV.
Process of Manufacture. Our proposed vaccine is manufactured by
treating HIV-1 infected lymphocyctic cells with detergent, formaldehyde and
acetone treatments. What are called envelope proteins, [that is, the outer shell
of these cells] are then stripped from the newly formed viruses [within these
infected cells], virus proteins are collected, and the remaining virus
particulates are discarded. The virus proteins are then mixed with proteins
[from other, healthy cells]. This process ensures that the proposed vaccine is
inactivated (that is, the virus is not infective), but that it also contains the
vital HIV-1 glycoproteins, core proteins, regulatory and intermediate proteins
needed to produce the desired effects of the desired immunity and/or therapeutic
effects. Importantly, the method of manufacture allows us to customize a
proposed vaccine to a specific strain, including strains that may evolve over
the next few years.
We intend to rely on third parties to manufacture our proposed vaccine, as we do not have the facilities for the large scale manufacture of the proposed vaccine. The quality control will be carried out according to guidelines recommended by the Medicines Control Agency in the UK which includes tests on the antigenicity and immunogenicity of the preparation and safety testing in animals.
The proposed vaccine was previously produced at the Russian Federal AIDS Center. Although the Russian Federal AIDS Center is the most recent group who have produced the proposed vaccine, we are not completely dependent upon this group due to the fact that we feel that our proposed vaccine can be produced elsewhere for nominal set-up costs.
We believe that our proposed vaccine differs from other vaccines currently in development, in that it contains a wide spectrum of virus proteins in their natural configuration with cell proteins, but does not contain virus particles. By using this intracellular, multi-component approach, we include all possible protective antigens and possible cross strain protective antigens. The importance of this is that presentation of virus antigens in association with cell proteins may preserve the immunogenicity of virus antigens and improve their protective potential.
The manufacturing process allows slotting in of any virus strain including new wild type virus strain or recombinant virus strain to the preparative process. This will exclude a prolonged dead time which would be inevitable in preparation of vaccines by more molecular methods to accommodate new virus strains. This approach has been successfully used for many years to manufacture the influenza vaccine where different strains may be involved in different years.
Trials. Before any vaccine can be introduced into humans, it must be rigorously tested under scientific conditions, in order to prove its effectiveness and safety. This must be done before a country will allow a vaccine to be sold and used.
Our proposed vaccine was first tested for safety, antigenicity and immunogenicity at four different centers in the U.K., these being: the Centre for Applied Microbiological Research in Porton Down, Wiltshire; the Medical Research Council Mill Hill Laboratories, London; St. Bartholomew's Hospital, London; and the Department of Infection of the University of Birmingham.
Vaccines then go through a three-stage trial process. Phase I tests for safety and dosage in small groups of subjects. Phase II comprises larger scale safety testing and, in the case of vaccines, whether they elicit an immune response. Phase III comprises large scale, placebo controlled, double-blind tests for efficacy of the preparation in subjects at high risk of infection.
As a standard industry practice, Phases I and II are often combined, or run concurrently in the testing of vaccines, so that the first stage of tests becomes a "Phase I/II trial."
We have completed initial pre- clinical trials in Russia, in conjunction with The Russia Federal Aids Center, a department of The Central Institute of Epidemiology, Moscow, Russia.
We intend, subject to financing, to continue pre-clinical trials in order to establish data that will be required prior to the implementation of a PhaseI/II trial. We plan to commence a Phase I/II trial as soon as funding permits us to complete pre-clinical studies.
The Phase I/II trials will involve three volunteer groups, running concurrently: a reactogenicity, safety and specific activity trial in a limited group of healthy volunteers; an evaluation of clinical effect and safety in a limited group of HIV-infected volunteers; and reactogenicity, safety and specific activity trial in a limited group of volunteers who have a concurrent illness or disease, but who are not in serious ill health. There is a specific process, involving various entry criteria, used to screen volunteers and determine their suitability for participation in the study. When the pool of appropriate volunteers is complete, ten volunteers in each group will receive four immunizations each of the proposed vaccine, at 30-day intervals, and each volunteer will be followed up for a period of one year, with monitoring for safety and immunological responses. Procedures exist for allowing volunteers to voluntarily withdraw from the trail process, or withdraw mandatorily, if there is a serious adverse effect. Subjects will be replaced until twenty subjects have completed the trial. The trial will likely be undertaken in the United Kingdom using the strain that is predominant in Europe. A separate trial using the same criteria will be necessary to teat the stain that dominates Africa. This trial would need to be undertaken in Africa after the UK trial.
No trials are currently scheduled to take place in the United States. However, it is our intention to invite the National Institute of Health (NIH) through the offices of The Division of AIDS (DIADS) to assist in the planning and execution of the trials and monitor the trials described above. If the trials are successful, then we would hope to undertake a Phase I/II trial in the United States, within two years of successfully completing trials in the UK. There can be no assurance that we will be able to undertake such a trial in the United States, nor can the results of the trials in the UK or Africa be predicted.
Ultimate Market. The proposed vaccine is directed at the prominent strain found in Russia, certain parts of Europe and the Americas, while the proposed vaccine we anticipate preparing for Africa would be directed at the strain prevalent in southern Africa and in India. The ability to custom-manufacture different proposed vaccines for different strains (see the caption above: Process of Manufacture) will enhance our ability to address the worldwide market, by allowing us to design proposed vaccines targeting different strains of the HIV virus present in different areas of the world.
Marketing. We intend to rely on third parties for the sales and marketing of our proposed vaccine. To date, we have not entered into any marketing agreements. We intend to enter into agreements for the marketing and distribution of our proposed vaccine with partners, once we have established the effectiveness of the proposed vaccine.
Competition. We estimate that approximately 30 other companies have been engaged in research to produce an HIV vaccine. To our knowledge, most of these efforts have not produced a viable vaccine. AIDSVAX, a product produced by Vaxgen Inc, completed a phase 3 trial in both the United States and Thialand during 2003, where results showed that the candidate vaccines were ineffective. ALVAC, a vaccine produced by Adventis began a trial in Thialand in the Fall of 2003, but results where disappointing. In 2006, AIDSVAX was used in another phase III trial in combination with ALVAC. The trial recruited 16,402 young adults in Thailand, but 2007 results showed that 74 trial candidates who received a placebo became infected compared to 51 who has received the vaccine candidate. A phase II trial undertaken by Merck was halted pre-maturely in 2007 when it was determined that the vaccine was not effective. The International AIDS Initiative data base shows that there are 2 phase II, three Phase III and seventeen Phase I on-going trials of preventative HIV vaccine candidates.
To our knowledge, our proposed vaccine is the only intracellular multi-component vaccine in development. It also differs from other vaccines presently in clinical trial, in that it contains a wide representation of virus proteins in their natural configuration, but does not contain virus particles. In addition, our proposed vaccine can be easily adapted to different virus strains. It is our belief that these factors give our proposed vaccine more potential for protection, therapy, and safety.
Patent Protection. We had previously acquired an assignment of license agreement with Intracell Vaccines Limited, whereby we held exclusive rights to patents owned by the University of Birmingham. For a description of our obligations to the University of Birmingham under our assignment agreement see the caption below License Agreement and Consulting Agreement. These patents describe a method of manufacture of a HIV vaccine owned by the University of Birmingham (see the caption above: Process of Manufacture). We had exclusive rights to use the patents which are protected in Australia, the Netherlands, Germany, Italy, France and Great Britain. In addition, we had the right to use two United States patents owned by the University of Birmingham. The United States patents relate to a method of manufacture of a herpes vaccine. We believed that the United States patents cover all similar methods of manufacture related to the proposed HIV vaccine and would have provided reasonable assistance in enforcing these patents. Because these patents covered the method of manufacture, we believe that the patents cover all strains of the HIV virus. These patents expire in 2011, and as it was unlikely that the Company would be in a position to commercialize the vaccine prior to the expiration of the Patents, it was decided to return the patents to the University in 2007. We believe that it might be possible to make new patent applications on new developments as we continue our vaccine research, although we give no guarantee that this is possible.
We entered into a license assignment agreement with Intracell Vaccines Limited, by agreement dated April 6, 1999. We agreed to assume all of Intracell Vaccine's obligations under its license agreement with the University of Birmingham, and issued them 57,529 shares of our common stock, and 10,000 shares of preferred stock. We also agreed to finance the development of the proposed vaccine, and entered into an anti-dilution agreement with Intracell Vaccines, so that Intracell Vaccines and its shareholders would maintain a 60% interest in our common shares (after allowing for options), up until the time we raise $5 million [in financing]. The shareholders of Intracell Vaccines also received stock options under the license assignment agreement. These options expired on April 1, 2004 without being excercised.
We failed to attract financing as agreed under our agreement with Intracell Vaccine Ltd, and on August 7, 2001 the Company entered into an agreement with Intracell, whereby Intracell agreed to waive its right to terminate the assignment of license agreement provided that the Company issue an additional 3,000,000 of its common shares to Intracell and 7,500,000 options to purchase shares of common stock of the Company. Such options vested in blocks of 2,500,000 upon the occurrence of certain events. The options expired on September 1, 2007 without being exercised.
The license agreement with the University of Birmingham that we acquired by assignment from Intracell Vaccines Limited provided for the payment of an annual minimum royalty to the University of Birmingham of approximately $75,000, commencing on January 1, 2002. Royalties were also payable at a rate of between 3% and 5%.
In addition, we, as the licensee, were responsible under the license agreement for carrying out all clinical trials of the proposed vaccine that may be required for patent and licensing purposes. We were also responsible for the maintenance of the patents. In the event we, or the University of Birmingham, made improvements to the patents, this would result in the extension of the royalty obligations for the life of the new patent. The agreement could be terminated if we failed to make the royalty payments within 60 days after notice, or if we have a receiver appointed for all or any part of our assets.
We terminated the license agreement with the University on December 1, 2007. Under the termination agreement, the University agreed to waive all outstanding royalty payments amounting to $566,005 and the Company agreed to make a cancellation payment of approximately $40,000 when funds are available.
We also entered into a consulting agreement with Intracell Vaccines pursuant to which Intracell Vaccines agreed to provide us with research, process science, clinical and regulatory support, primarily by making the services of certain Intracell Vaccines personnel available to us. We were also required to reimbursed Intracell Vaccines for all of its costs and expenses relating to the provision of these services. We currently owe Intracell Vaccine Ltd $457,406 in outstanding consulting fees. We ceased using Intracell's services in July 2005.
Item 1A. Risk Factors
Not applicable to a smaller reporting company.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 2. Properties.
Our administration offices are located in Collingwood, Ontario. The office is provided to us by Kevin Murray. We lease approximately 400 square feet of laboratory space in Moseley, Birmingham, United Kingdom under a lease agreement on a month to month basis at a rate of approximately $3,900 per annum. The laboratory space in Moseley is used for storage of vaccine and limited research that will allow us to maintain our ability to continue development of our proposed vaccine in the future. We do not engage in any aspects of the real estate business.
Item 3. Legal Proceedings.
We are not a party or subject to any legal proceedings the outcome of which management believes would have a material adverse effect on our financial condition or results of operations.
Item 4. (Removed and Reserved)
Item 5. Market For Registrant's Common Equity and Related Stockholder Matters.
a) Market Information. Our common shares trade under the symbol "HIVV" in July 2001. Our common shares ceased trading on the OTCBB on February 19, 2004, because we were unable to maintain our full reporting status requirements for financial reasons. We continued trading on the Pink Sheets since February 20, 2004 under the symbol HIVV. We are unable to retrieve historical data on the trading price of our common stock between 2007 and 2008, but believe that the stock traded in the range of $0.01 and $0.05. We currently trade on the Pink Sheets under the symbol GRPI.PK
b) Holders As of September 30, 2008, there were 325 holders of record based on the records of our transfer agent. This number does not include beneficial owners of our common shares, of which we believe there are a substantial number whose shares are held in the names of various securities brokers, dealers and registered clearing agencies.
c) Dividends. We have never paid dividends on our common shares and do not intend to pay dividends on our common shares in the foreseeable future. Our board of directors intends to retain any future earnings to provide funds for the operation and expansion of our business. Any decision as to the future payments of dividends will depend on our results of operations and financial position and such other factors as our board of directors, in its discretion, deems relevant.
d) Securities authorized for issuance under equity compensation plans. No securities are authorized for issuance by the Company under equity compensation plans.
e) Performance graph. Not applicable.
f) Recent Sales of Unregistered Securities
We did not issue any securities during the period.
Item 5(b) Use of Proceeds.
Not applicable.
Item 5(c) Purchases of Equity Securities by the issuer and affiliated
purchasers.
Not applicable
Item 6. Selected Financial Data
Not applicable to a smaller reporting company.
Item 7. Management's Discussion And Analysis Financial Condition and Results of Operations.
The following discussion regarding us and our business and operations contains forward-looking statements. Such statements consist of any statement other than a recitation of historical fact, and can be identified by the use of such forward-looking terminology such as "may," "expect," "anticipate," "estimate" or "continue" or the negative thereof or other variations thereon, or comparable terminology. The reader is cautioned that all forward-looking statements are necessarily speculative, and there are certain risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements.
Summary of Critical Accounting Policies
The following accounting policies are considered critical by our management.
Use of estimates:
These and other accounting policies require that estimates be made based on
assumptions and judgment, which affect revenues, expenses, assets, liabilities
and disclosure of contingencies in our financial statements. These estimates and
assumptions are based on historical experience and on various other factors that
are believed to be reasonable under the circumstances. However, actual results
may differ from these estimates under different and/or future circumstances..
Impairment of long-lived assets:
The Company has adopted the provisions of Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS 144"). Under SFAS 144, impairment losses on long-lived assets are recognized when events or changes in circumstances indicate that the undiscounted cash flows estimated to be generated by such assets are less than their carrying value and, accordingly, all or a portion of such carrying value may not be recoverable. Impairment losses are then measured by comparing the fair value of assets to their carrying amounts.
Net earnings (loss) per share:
The Company presents "basic" earnings (loss) per share and, if applicable,
"diluted" earnings per share pursuant to the provisions of Statement of
Financial Accounting Standards No. 128, "Earnings per Share". Basic earnings
(loss) per share is calculated by dividing net income or loss by the weighted
average number of common shares outstanding during each period. The calculation
of diluted earnings per share is similar to that of basic earnings per share,
except that the denominator is increased to include the number of additional
common shares that would have been outstanding if all potentially dilutive
common shares, such as those issuable upon the exercise of stock options, were
issued during the period.
Foreign currency translation and transactions:
British assets and liabilities are translated at current exchanges rates and expenses are translated at average exchange rates in effect during each period. Resulting translation adjustments, if material, would be recorded as a separate component of stockholders' deficiency. Foreign currency transaction gains and losses, which have not been material, are included in results of operations as incurred.
Stock-Based Compensation
We record stock based compensation in accordance with FASB ASC 718, Stock Compensation. ASC 718 requires that the cost resulting from all share-based transactions be recorded in the financial statements and establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement in accounting for share-based payment transactions with employees. The Statement also establishes fair value as the measurement objective for transactions in which an entity acquires goods or services from non-employees in share-based payment transactions.
Recent Pronouncements
We have determined that all recently issued accounting standards will not have a material impact on our financial statements, or do not apply to our operations.
Our Plan of Operation
We were incorporated in January of 1997, and do not have any significant operating history or financial results. We have limited vaccine development and marketing operations, including the pre-clinical testing in Russia of our proposed vaccine designed to combat HIV/AIDS, building an infrastructure and updating our research. As a result, for the fiscal year ended September 30, 2008 and the period from January 10, 1997 (date of inception) to September 30, 2008 we incurred approximately $20,902, and $1,793,270 in research and development costs and $20,220 and $795,302 in general and administrative expenses, respectively. During the year we terminated the license agreement with the University of Birmingham. This resulted in the Company incurring an amortization charge over intangible assets of $53,963. Under the termination agreement, the licensor agreed to waive $566,005 in outstanding royalty payments which are reflected in our statement of operations. As a result, we reflected a gain from operations of approximately $455,805 or $(.05) per share based on 9,830,652 weighted average shares outstanding for the fiscal year ended September 30, 2008 compared to loss of approximately $7,152,226 or $(1.02) per share based on 7,045,116 weighted average shares outstanding for the period from January 10, 1997 (date of inception) to September 30, 2008.
We did not conduct any operations of a commercial nature during the period from January 10, 1997 (date of inception) to September 30, 2008 Through September 30, 2008 we have relied on advances of approximately $538,899 from our principal stockholders, trade payables of approximately $548,978 proceeds of $1,196,272 from the sale of common stock and the issue of stock for fees and/or services in the amount of $4,684,900 to support our limited operations. As of September 30, 2008, we had approximately $897 of cash and cash equivalents. We seek additional equity or debt financing of up to $7 million which we plan to use for HIV-VAC and to continue implementing pre-clinical and Phase I/II testing of our proposed vaccine. If we do not get sufficient financing, we will not be able to continue as a going concern and we may have to terminate our operations and liquidate our business (see Note 1 to financial statements).
Our business plan for the next year, is dependent on raising sufficient funding to implement a Phase I/II trial in the United Kingdom through the application for a CTX exemption with the Medical Control agency. We plan to apply for a CTX exemption using the Clade B strain of the virus. The manufacture of the vaccine will be contracted out to a manufacturer located in either the UK or the USA.
We also plan, subject to financing, to initiate further trials in Russia, in conjunction with The Russia Federal Aids Center, a department of The Central Institute of Epidemiology, Moscow, Russia. using in non-human primates in parallel or preceding Phase I trials. We expect the regulatory approval process to take up to twelve months to complete. The proposed primate vaccine will be manufactured in Russia or the UK, under the supervision and quality control of various parties, including independent laboratories in London and our laboratory in Birmingham..
In addition, we anticipate, subject to financing set forth above, to initiate a Phase I/II trial in Sub-Sahara Africa using the local African HIV sub-type. These trials will be done in conjunction with local Government and would commence after a satisfactory pre-clinical trial has completed the evaluation of toxicity and immunogenicity of the local strain. However, we cannot initiate the pre-clinical or Phase I/II trials until such time as we have raised at least $9 million, which is the amount we anticipate we will need for these trials. Furthermore, in addition to restrictions due to lack of funding, we also need to manufacture a batch of the vaccine to initiate these trials. We cannot manufacture a batch until we have an agreement in place with a country in Africa that is prepared to work with us. It is estimated that these pre-clinical trials would take approximately twelve months to complete once we have an agreement in place. If these trials take place, we intend to invite the Division of AIDS of National Institute of Allergy and Infectious Diseases to monitor the African trials.
No trials are currently scheduled to take place in the United States. However, it is our intention to invite the National Institute of Health (NIH) through the offices of The Division of AIDS (DIADS) to assist in the planning and execution of the trials and monitor the trials described above. There can be no assurance that the results of the trials in Russia and/or Africa and the UK can be predicted to be positive.
We estimate that we will require approximately $6 million to $7 million to conduct our vaccine development activities through to a phase I trial.. This amount would be used to pay for vaccine manufacture, vaccine trial costs and testing, equipment and corporate overhead. We are hoping to raise a minimum of $6 million through one or more private offerings pursuant to Rule 506 or Regulation D or through an offshore offering pursuant to Regulation S; however, nothing in this annual report shall constitute an offer of any securities for sale. Such shares when sold will not have been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. To date, we have had very limited success in raising funds, and if we are unable to raise this amount, we will most likely cease all activity related to our vaccine development and marketing. We have to date relied on a small number of investors to provide us with financing for the commencement of our development program, including Intracell Vaccines Limited. Amounts owed to these individuals are payable upon demand.
If we proceeded with our vaccine development, we would need to purchase approximately $500,000 in equipment to be used for research and expanding testing laboratories. In addition, we would expect to hire an additional fifteen employees for both research and administrative support over the duration of the trials.
We are anticipating that the sources of funds for the intended clinical trials will be the proceeds that we receive from the conversion of the Series B preferred stock, and possible assistance from Intracell in the form of a loan. In addition we are looking at other financing methods including finding joint venture partners who might provide substantial funding to the project or the granting of sub-licenses on payment of upfront fees and the payment of on-going royalties on sales. The Company is not currently negotiating with any potential joint venture partners and there can be no assurance that the Company will enter into any joint venture agreements. We are also looking at obtaining government or charitable grants to assist us in our funding.
We are also considering the acquisition of other technologies that might make financing the Company more viable.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable
Item 8. Financial Statements and Supplementary Data.
HIV-VAC, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
AND FROM INCEPTION (JANUARY 10, 1997)
THROUGH SEPTEMBER 30, 2008
CONTENTS
Report of Independent Registered Public Accounting Firm F-1 Balance Sheets F-2 Statements of Operations and Comprehensive Income (Loss) F-3 Statements of Stockholders' Equity (Deficit) F-4 - F-8 Statements of Cash Flows F-9 - F-10 Notes to Financial Statements F-11 - F-20 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders of
HIV-VAC, Inc.
We have audited the accompanying balance sheets of HIV-VAC, Inc. (the "Company") as at September 30, 2008 and 2007, and the statements of operations and comprehensive income (loss), stockholders' equity (deficit), and cash flows for each of the two years in the period ended September 30, 2008, and cumulative from inception (January 10, 1997) through to September 30, 2008, except as explained as follows: we did not audit the cumulative date from January 10, 1997 to September 30, 2001. The cumulative data was audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts in the cumulative data through September 30, 2001, is based solely on the report of other auditors. The Company's management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HIV-VAC, Inc. as at September 30, 2008 and 2007 and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2008 in conformity with accounting principles generally accepted in the United States.
/s/ SF Partnership, LLP Toronto, Canada CHARTERED ACCOUNTANTS July 6, 2011 |
HIV-VAC, INC.
(A Development Stage Company)
Balance Sheets
September 30, 2008 and 2007
2008 2007
ASSETS
Current Cash $ 897 $ 952 Prepaid and sundry assets -- 24,489 ----------- ----------- Total Current Assets 897 25,441 Furniture and Equipment, Net (Note 3) 4,289 4,915 Intangible Asset, Net (Note 4) -- 53,963 ----------- ----------- Total Assets $ 5,186 $ 84,319 =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable $ 92,508 $ 665,925 Accrued liabilities 184,971 148,971 Advances from related parties (Note 5) 538,899 537,699 ----------- ----------- Total Liabilities 816,378 1,352,595 ----------- ----------- Stockholders' Deficit Preferred stock, $0.01 par value; 10,000,000 shares authorized Series A, non-preferential; 10,000 issued and outstanding 100 100 Series B, convertible, non-preferential; 300,000 shares issued and outstanding 3,000 3,000 Common stock, $0.001 par value; 500,000,000 shares authorized 9,830,652 shares issued and outstanding 9,831 9,831 Additional paid in capital 6,434,160 6,434,160 Deficit accumulated during the development stage (7,162,226) (7,608,031) Accumulated other comprehensive loss (96,057) (107,336) ----------- ----------- Total Stockholders' Deficit (811,192) (1,268,276) ----------- ----------- Total Liabilities and Stockholders' Deficit $ 5,186 $ 84,319 =========== =========== |
(The accompanying notes are an integral part of these financial statements.)
HIV-VAC, INC. (A Development Stage Company) Statements of Operations and Comprehensive Income (Loss) Years Ended September 30, 2008 and 2007 and for the Period from January 10, 1997 (Inception) to September 30, 2008 Cumulative from January 10, 1997 (Inception) to September 30, 2008 2007 2008 Expenses Write off of intangible asset (note 4) $ 53,963 $ -- $ 53,963 Royalty fees 24,489 98,407 2,045,239 Research and development costs 20,902 19,870 1,793,270 General and administrative 20,220 19,455 795,302 Depreciation and amortization 626 16,138 175,165 Legal fees -- -- 1,500,028 Licensing fees -- -- 635,500 Loss from disposal of assets -- -- 30,195 ----------- ----------- ------------- 120,200 153,870 7,028,662 ----------- ----------- ------------- Loss from Operations (120,200) (153,870) (7,028,662) ----------- ----------- ------------- Other Income (Expense) Other expenses -- -- (261,162) Other income (Note 6) 566,005 -- 569,779 ----------- ----------- ------------- Total Other Income 566,005 -- 308,617 ----------- ----------- ------------- Income (Loss) from Continuing Operations 445,805 (153,870) (6,720,045) Loss from Discontinued Operations -- -- (432,181) ----------- ----------- ------------- Net Income (Loss) 445,805 (153,870) (7,152,226) Foreign currency translation adjustment 11,279 (49,069) (96,057) ----------- ----------- ------------- Comprehensive Income (Loss) $ 457,084 $ (202,939) $ (7,248,283) =========== =========== ============= Weighted average number of shares outstanding - basic and diluted 9,830,652 9,830,652 =========== =========== Income (Loss) per weighted average number of shares outstanding - basic and diluted $ 0.05 $ (0.02) =========== =========== |
(The accompanying notes are an integral part of these financial statements.)
HIV-VAC, INC. (A Development Stage Company) Statements of Stockholders' Equity (Deficit) Period from January 10, 1997 (Inception) to September 30, 2008 Preferred Stock ------------------------------------------------- Series A Series B Common Stock -------------------- --------------------------- -------------------------- Shares Amount Shares Amount Shares Amount -------- ---------- ------------ ------------- ----------- ------------- Issuance of shares to founders -- $ -- -- $ -- 1,016 $ 1 Net loss -- -- -- -- -- -- Merger with Nouveaux Corporation -- -- -- -- 781 1 Additional investment by stockholders -- -- -- -- -- -- -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 1998 -- -- -- -- 1,797 2 -------- ---------- ------------ ------------- ----------- ------------- Net loss -- -- -- -- -- -- Issuance of common stock under 504 offering -- -- -- -- 200,103 200 Issuance of common stock under 504 offering -- -- -- -- 92,463 92 Officers' compensation capitalized -- -- -- -- -- -- Issuance of common and series A preferred stock for license agreement 10,000 100 -- -- 57,529 57 Purchase of treasury stock -- -- -- -- -- -- Issuance of common stock -- -- -- -- 400 1 -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 1999 10,000 100 -- -- 352,292 352 -------- ---------- ------------ ------------- ----------- ------------- Net loss -- -- -- -- -- -- Other comprehensive loss -- -- -- -- -- -- Shares issued - acquisition of Lifeplan -- -- -- -- 1,001 1 Forgiveness of stockholder debt -- -- -- -- -- -- Issuance of common stock -- -- -- -- 4,548 4 Shares issued for license -- -- -- -- 31,252 31 Issuance of common stock -- -- -- -- 733 1 Shares issued for services -- -- -- -- 60,031 60 Issuance of common stock -- -- -- -- 4,600 5 Subscription received -- -- -- -- -- -- Issuance of common stock -- -- -- -- 4,600 5 Issuance of common stock -- -- -- -- 6,352 6 Officers' compensation capitalized -- -- -- -- -- -- -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2000 10,000 $ 100 -- $ -- 465,409 $ 465 ======== ========== ============ ============= =========== ============= (The accompanying notes are an integral part of these financial statements.) F-4 |
HIV-VAC, INC. (A Development Stage Company) Statements of Stockholders' Equity (Deficit) Period from January 10, 1997 (Inception) to September 30, 2008 Deficit Accumulated Accumulated Total Additional Other During the Stockholders' Treasury Paid in Subscription Comprehensive Development Equity Stock Capital Receivable Income (loss) Stage (Deficit) -------- ---------- ------------ ------------- ----------- ------------- Issuance of shares to founders $ -- $ 507 $ -- $ -- $ -- $ 508 Net loss -- -- -- -- (432,181) (432,181) Merger with Nouveaux Corporation -- 350,458 -- -- (243,934) 106,525 Additional investment by stockholders -- 342,108 -- -- -- 342,108 -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 1998 -- 693,073 -- -- (676,115) 16,960 -------- ---------- ------------ ------------- ----------- ------------- Net loss -- -- -- -- (212,460) (212,460) Issuance of common stock under 504 offering -- 99,800 -- -- -- 100,000 Issuance of common stock under 504 offering -- 139,908 (140,000) -- -- -- Officers' compensation capitalized -- 15,000 -- -- -- 15,000 Issuance of common and series A preferred stock for license agreement -- 99,843 -- -- -- 100,000 Purchase of treasury stock (1,767) -- -- -- -- (1,767) Issuance of common stock -- 5,040 -- -- -- 5,041 -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 1999 (1,767) 1,052,664 (140,000) -- (888,575) 22,774 -------- ---------- ------------ ------------- ----------- ------------- Net loss -- -- -- -- (2,622,708) (2,622,708) Other comprehensive loss -- -- -- (9,240) -- (9,240) Shares issued - acquisition of Lifeplan -- 9,999 -- -- (17,227) (7,227) Forgiveness of stockholder debt -- 7,227 -- -- -- 7,227 Issuance of common stock -- 99,986 -- -- -- 99,990 Shares issued for license -- 635,469 -- -- -- 635,500 Issuance of common stock -- 23,654 -- -- -- 23,655 Shares issued for services -- 1,349,940 -- -- -- 1,350,000 Issuance of common stock -- 99,985 -- -- -- 99,990 Subscription received -- -- 140,000 -- -- 140,000 Issuance of common stock -- 99,985 -- -- -- 99,990 Issuance of common stock -- 99,984 -- -- -- 99,990 Officers' compensation capitalized -- 25,000 -- -- -- 25,000 -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2000 $ (1,767) $3,503,893 $ -- $ (9,240) $(3,528,510) $ (35,059) ======== ========== ============ ============= =========== ============= (The accompanying notes are an integral part of these financial statements.) F-5 |
HIV-VAC, INC. (A Development Stage Company) Statements of Stockholders' Equity (Deficit) Period from January 10, 1997 (Inception) to September 30, 2008 Preferred Stock ------------------------------------------------- Series A Series B Common Stock -------------------- --------------------------- -------------------------- Shares Amount Shares Amount Shares Amount -------- ---------- ------------ ------------- ----------- ------------- Balance carried forward - September 30, 2000 10,000 $ 100 -- $ -- 465,409 $ 465 Net loss -- -- -- -- -- -- Other comprehensive loss -- -- -- -- -- -- Shares issued for services -- -- -- -- 5,003 5 Issuance of common for license -- -- -- -- 3,000,000 3,000 Issuance of series B preferred stock -- -- 1,000,000 10,000 -- -- Officers' compensation capitalized -- -- -- -- -- -- Dividends - preferred B stock -- -- -- -- -- -- -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2001 10,000 $ 100 1,000,000 $ 10,000 3,470,412 $ 3,470 ======== ========== ============ ============= =========== ============= Net loss -- $ -- -- $ -- -- $ -- Other comprehensive loss -- -- -- -- -- -- Purchase of Treasury Stock -- -- -- -- -- -- Officers compensation capitalized -- -- -- -- -- -- Shares issued for services -- -- -- -- 150,000 150 Shares issued for services -- -- -- -- 200,000 200 Shares issued to directors and officers -- -- -- -- 300,000 300 Sale of treasury stock -- -- -- -- -- -- Shares issued to officer for cash -- -- -- -- 100,000 100 Shares issued for debt -- -- -- -- 2,272,727 2,273 Shares issued for debt -- -- -- -- 1,323,529 1,324 Convert Note for Options -- -- -- -- -- -- -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2002 10,000 $ 100 1,000,000 $ 10,000 7,816,668 $ 7,817 ======== ========== ============ ============= =========== ============= (The accompanying notes are an integral part of these financial statements.) F-6 |
HIV-VAC, INC. (A Development Stage Company) Statements of Stockholders' Equity (Deficit) Period from January 10, 1997 (Inception) to September 30, 2008 Deficit Accumulated Accumulated Total Additional Other During the Stockholders' Treasury Paid in Subscription Comprehensive Development Equity Stock Capital Receivable Income (loss) Stage (Deficit) -------- ---------- ------------ ------------- ----------- ------------- Balance carried forward - September 30, 2000 $ (1,767) $3,503,893 $ -- $ (9,240) $(3,528,510) $ (35,059) Net loss -- -- -- -- (2,015,401) (2,015,401) Other comprehensive loss -- -- -- 2,030 -- 2,030 Shares issued for services -- 19,995 -- -- -- 20,000 Issuance of common for license -- 1,497,000 -- -- -- 1,500,000 Issuance of series B preferred stock -- 10,000 -- -- -- 20,000 Officers' compensation capitalized -- 40,000 -- -- -- 40,000 Dividends - preferred B stock -- -- -- -- (10,000) (10,000) -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2001 $ (1,767) $5,070,888 $ -- $ (7,210) $(5,553,911) $ (478,430) ======== ========== ============ ============= =========== ============= Net loss $ -- $ -- $ -- $ -- $ (806,523) $ (806,523) Other comprehensive loss -- -- -- (1,059) -- (1,059) Purchase of Treasury Stock (10,000) -- -- -- -- (10,000) Officers compensation capitalized -- 20,000 -- -- -- 20,000 Shares issued for services -- 22,350 -- -- -- 22,500 Shares issued for services -- 31,800 -- -- -- 32,000 Shares issued to directors and officers -- 59,700 -- -- -- 60,000 Sale of treasury stock 3,000 12,000 -- -- -- 15,000 Shares issued to officer for cash -- 19,900 -- -- -- 20,000 Shares issued for debt -- 497,727 -- -- -- 500,000 Shares issued for debt -- 223,676 -- -- -- 225,000 Convert Note for Options -- 140,000 -- -- -- 140,000 -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2002 $ (8,767) $6,098,041 $ -- $ (8,269) $(6,360,434) $ (261,512) ======== ========== ============ ============= =========== ============= (The accompanying notes are an integral part of these financial statements.) F-7 |
HIV-VAC, INC. (A Development Stage Company) Statements of Stockholders' Equity (Deficit) Period from January 10, 1997 (Inception) to September 30, 2008 Preferred Stock ------------------------------------------------- Series A Series B Common Stock -------------------- --------------------------- -------------------------- Shares Amount Shares Amount Shares Amount -------- ---------- ------------ ------------- ----------- ------------- Balance carried forward - September 30, 2002 10,000 $ 100 1,000,000 $ 10,000 7,816,668 $ 7,817 Shares issued for to directors and officers -- -- -- -- 300,000 300 Shares issued for debt -- -- -- -- 1,290,000 1,290 Net loss -- -- -- -- -- -- Other comprehensive loss -- -- -- -- -- -- -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2003 10,000 $ 100 1,000,000 $ 10,000 9,406,668 $ 9,407 ======== ========== ============ ============= =========== ============= Net Loss -- $ -- -- $ -- -- $ -- Other comprehensive loss -- -- -- -- -- -- Shares issued for services -- -- -- -- 425,000 425 -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2004 10,000 $ 100 1,000,000 $ 10,000 9,831,668 $ 9,832 ======== ========== ============ ============= =========== ============= Deficit Accumulated Accumulated Total Additional Other During the Stockholders' Treasury Paid in Subscription Comprehensive Development Equity Stock Capital Receivable Income (loss) Stage (Deficit) -------- ---------- ------------ ------------- ----------- ------------- Balance carried forward - September 30, 2002 $ (8,767) $6,098,041 $ -- $ (8,269) $(6,360,434) $ (261,512) Shares issued for to directors and officers -- 49,800 -- -- -- 50,100 Shares issued for debt -- 246,010 -- -- -- 247,300 Net loss -- -- -- -- (510,450) (510,450) Other comprehensive loss -- -- -- (15,222) -- (15,222) -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2003 $ (8,767) $6,393,851 $ -- $ (23,491) $(6,870,884) $ (489,784) ======== ========== ============ ============= =========== ============= Net Loss $ -- $ -- $ -- $ -- $ (282,180) $ (282,180) Other comprehensive loss -- -- -- (17,408) -- (17,408) Shares issued for services -- 42,075 -- -- -- 42,500 -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2004 $ (8,767) $6,435,926 $ -- $ (40,899) $(7,153,064) $ (746,872) ======== ========== ============ ============= =========== ============= (The accompanying notes are an integral part of these financial statements.) F-8 |
HIV-VAC, INC. (A Development Stage Company) Statements of Stockholders' Equity (Deficit) Period from January 10, 1997 (Inception) to September 30, 2008 Preferred Stock ------------------------------------------------- Series A Series B Common Stock -------------------- --------------------------- -------------------------- Shares Amount Shares Amount Shares Amount -------- ---------- ------------ ------------- ----------- ------------- Balance carried forward - September 30, 2004 10,000 $ 100 1,000,000 $ 10,000 9,831,668 $ 9,832 Cancellation of Treasury Stock -- -- (700,000) (7,000) (1,016) (1) Net Loss -- -- -- -- -- -- Other comprehensive income -- -- -- -- -- -- -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2005 10,000 $ 100 300,000 $ 3,000 9,830,652 $ 9,831 ======== ========== ============ ============= =========== ============= Balance carried forward - September 30, 2005 10,000 $ 100 300,000 $ 3,000 9,830,652 $ 9,831 Net Loss -- -- -- -- -- -- Other comprehensive loss -- -- -- -- -- -- -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2006 10,000 $ 100 300,000 $ 3,000 9,830,652 $ 9,831 ======== ========== ============ ============= =========== ============= Deficit Accumulated Accumulated Total Additional Other During the Stockholders' Treasury Paid in Subscription Comprehensive Development Equity Stock Capital Receivable Income (loss) Stage (Deficit) -------- ---------- ------------ ------------- ----------- ------------- Balance carried forward - September 30, 2004 $ (8,767) $6,435,926 $ -- $ (40,899) $(7,153,064) $ (746,872) Cancellation of Treasury Stock 8,767 (1,766) -- -- -- -- Net Loss -- -- -- -- (157,621) (157,621) Other comprehensive income -- -- -- 14,714 -- 14,714 -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 200 $ -- $6,434,160 $ -- $ (26,185) $(7,310,685) $ (889,779) ======== ========== ============ ============= =========== ============= Balance carried forward - September 30, 2005 $ -- $6,434,160 $ -- $ (26,185) $(7,310,685) $ (889,779) Net Loss -- -- -- -- (143,476) (143,476) Other comprehensive loss -- -- -- (32,082) -- (32,082) -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2006 $ -- $6,434,160 $ -- $ (58,267) $(7,454,161) $ (1,065,337) ======== ========== ============ ============= =========== ============= (The accompanying notes are an integral part of these financial statements.) F-9 |
HIV-VAC, INC. (A Development Stage Company) Statements of Stockholders' Equity (Deficit) Period from January 10, 1997 (Inception) to September 30, 2008 Preferred Stock ------------------------------------------------- Series A Series B Common Stock -------------------- --------------------------- -------------------------- Shares Amount Shares Amount Shares Amount -------- ---------- ------------ ------------- ----------- ------------- Balance carried forward - September 30, 2006 10,000 $ 100 300,000 $ 3,000 9,830,652 $ 9,831 Net loss -- -- -- -- -- -- Other comprehensive loss -- -- -- -- -- -- -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2007 10,000 $ 100 300,000 $ 3,000 9,830,652 $ 9,831 ======== ========== ============ ============= =========== ============= Net Income -- $ -- -- $ -- -- $ -- Other comprehensive Income -- -- -- -- -- -- -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2008 10,000 $ 100 300,000 $ 3,000 9,830,652 $ 9,831 ======== ========== ============ ============= =========== ============= Deficit Accumulated Accumulated Total Additional Other During the Stockholders' Treasury Paid in Subscription Comprehensive Development Equity Stock Capital Receivable Income (loss) Stage (Deficit) -------- ---------- ------------ ------------- ----------- ------------- Balance carried forward - September 30, 2006 $ -- $6,434,160 $ -- $ (58,267) $(7,454,161) $ (1,065,337) Net loss -- -- -- -- (153,870) (153,870) Other comprehensive loss -- -- -- (49,069) -- (49,069) -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2007 $ -- $6,434,160 $ -- $ (107,336) $(7,608,031) $ (1,268,276) ======== ========== ============ ============= =========== ============= Net Income $ -- $ -- $ -- $ -- $ 445,805 $ 445,805 Other comprehensive Income -- -- -- 11,279 -- 11,279 -------- ---------- ------------ ------------- ----------- ------------- Balance - September 30, 2008 $ -- $6,434,160 $ -- $ (96,057) $(7,162,226) $ (811,192) ======== ========== ============ ============= =========== ============= |
(The accompanying notes are an integral part of these financial statements.)
HIV-VAC, INC. (A Development Stage Company) Statements of Cash Flows Years Ended September 30, 2008 and 2007 and for the Period from January 10, 1997 (Inception) to September 30, 2008 Cumulative from January 10, 1997 (Inception) to September 30, 2008 2007 2008 Cash Flows from Operating Activities Net income (loss) $ 445,805 $ (153,870) $ (7,152,226) Adjustments to reconcile net loss to net cash used in operating activities Amortization and depreciation 626 16,138 175,165 Officers' compensation capitalized -- -- 100,000 Other expenses relating to Noveaux and Lifeplan acquisition -- -- 261,163 Issuance of stock for services -- -- -- Issuance of stock for licensing fees -- -- 2,135,500 Issuance of stock to directors and officers' compensation -- -- 110,100 Issuance of option for note payable, current -- -- 140,000 Issuance of stock for services -- -- 2,439,300 Gain on forgiveness of debt (566,005) -- (566,005) Decrease in notes payable -- -- (140,000) Decrease (increase) in prepaid expenses 24,489 (2,979) -- Increase in accounts payable 3,867 105,284 548,978 Increase in accrued liabilities 36,000 34,000 184,971 Write off of intangible asset 53,963 -- 53,963 ----------- ----------- ------------- Net Cash Used in Operating Activities (1,255) (1,427) (1,709,091) ----------- ----------- ------------- Cash Flows from Investing Activities Purchase of license rights -- -- (85,000) Purchase of furniture and equipment -- -- (48,416) Cash acquired in acquisition -- -- 120,272 ----------- ----------- ------------- Net Cash Used in Investing Activities -- -- (13,144) ----------- ----------- ------------- Cash Flows from Financing Activities Proceeds from issue of preferred stock series B -- -- 10,000 Proceeds from issuance of common stock -- -- 689,164 Purchase of treasury stock -- -- (11,767) Proceeds from notes payable -- -- 140,000 Proceeds from sale of treasury stock and warrants -- -- 15,000 Proceeds (repayment) from advances from related parties 1,200 1,455 538,899 Payment of stockholder's loan -- -- (272) Proceeds from additional paid in capital -- -- 342,108 ----------- ----------- ------------- Net Cash Provided by Financing Activities 1,200 1,455 1,723,132 ----------- ----------- ------------- Net (Decrease) Increase in Cash (55) 28 897 Cash - Beginning of Year 952 924 -- ----------- ----------- ------------- Cash - End of Year $ 897 $ 952 $ 897 =========== =========== ============= (The accompanying notes are an integral part of these financial statements.) F-10 |
HIV-VAC, INC. (A Development Stage Company) Statements of Cash Flows Years Ended September 30, 2008 and 2007 and for the Period from January 10, 1997 (Inception) to September 30, 2008 Cumulative from January 10, 1997 (Inception) to September 30, 2008 2007 2008 Supplemental Disclosure of Cash Flow Information Non Cash Transactions: Issuance of common shares for Noveaux merger $ -- $ -- $ 106,525 =========== =========== ============= Issuance of common shares for Lifeplan merger $ -- $ -- $ 50,000 =========== =========== ============= Preferred B stock dividend $ -- $ -- $ 10,000 =========== =========== ============= Forgiveness of stockholder debt $ -- $ -- $ 7,227 =========== =========== ============= Cancellation of Treasury Stock $ -- $ -- $ (8,767) =========== =========== ============= |
(The accompanying notes are an integral part of these financial statements.)
HIV-VAC, INC. (A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
1. Operations
HIV-VAC, Inc. (the "Company"), formerly known as Personna Records, Inc., was incorporated on January 10, 1997 in the State of Nevada. Personna Records formerly known as Sonic Records, Inc. was engaged in the production and distribution of musical records. In April 1998, Personna became the surviving corporation after a merger with Nouveaux Corporation. In March 2000, HIV-VAC, Inc. became the surviving corporation after a merger with Life Plan.
The Company is currently engaged in the research and development of a vaccine to combat the Human Immunodeficiency Virus ("HIV"). The Company's headquarters are located in Ontario, Canada and the research facility is located in Birmingham, United Kingdom.
2. Summary of Significant Accounting Policies
Basis of Presentation
The Company's financial statements have been prepared following generally accepted accounting principles in the United States ("U.S. GAAP"), which are expressed in United States funds.
a) Use of Estimates
The preparation of the Company's financial statements in conformity with U.S. GAAP 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 dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. These estimates are based on management's best knowledge of current events and actions the Company may undertake in the future. Significant areas requiring the use of estimates relate to the estimated useful lives of furniture and equipment. Actual results could differ from these estimates. These estimates are reviewed periodically and as adjustments become necessary, they are reported in earnings in the period which they become available.
b) Furniture and Equipment
Furniture and equipment are stated at cost. Major renewals and betterments are capitalized while maintenance and repairs, which do not extend the lives of the respective assets, are expensed when incurred. Depreciation is computed over the estimated useful lives of the assets.
Useful lives for furniture and equipment are as follows:
Office equipment 15% Declining balance Furniture 10% Declining balance
The cost and accumulated depreciation for furniture and equipment sold, retired, or otherwise disposed of are relieved from the accounts, and any resulting gains or losses are reflected in income.
HIV-VAC, INC. (A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
2. Summary of Significant Accounting Policies (cont'd)
c) Intangible Asset
Intangible asset consisted of a licensing right.
The licensing rights had been previously amortized over the remaining estimated useful life of 12 years commencing April 1999 using the straight line method.
d) Long-lived Assets
The Company reviews its long lived assets for impairment whenever events or circumstances indicate that the related carrying amount of the assets may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount.
e) Financial Instruments
All the Company's financial instruments are initially recorded at their fair value. The Company classifies all financial instruments as held-for-trading or other financial liabilities. Financial liabilities are measured at amortized cost. Instruments classified as held for trading are measured at fair value.
The Company has designated its cash as held for trading. Accounts payable, accrued liabilities, and advances from related parties are classified as other liabilities.
f) Income Tax
Deferred tax assets and liabilities are recorded for differences between the financial statement and tax basis of the asset and liabilities that will result in taxable deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.
HIV-VAC, INC. (A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
2. Summary of Significant Accounting Policies (cont'd)
g) Translation of Foreign Currency
The activity of the Company's foreign offices are translated in accordance with ASC Topic 830, "Foreign Currency Matters", which requires that foreign currency assets and liabilities be translated using the exchange rates in effect at the balance sheet date. Revenues and expenses are translated using the average exchange rates prevailing throughout the year. Unrealized gains and losses from foreign currency translations are included in other comprehensive income for the period.
h) Loss Per Share
Basic loss per share, which does not include any dilutive securities, is computed by dividing the loss available to common stockholders by the weighted average number of common shares outstanding during the period. In contrast, diluted loss per share considers the potential dilution that could occur from other financial instruments that would increase the total number of outstanding shares of common stock. Potentially dilutive securities, however, have not been included in the diluted loss per share computation because their effect is anti-dilutive.
i) Comprehensive Income (loss)
The Company accounts for comprehensive loss in accordance with ASC Topic 220, "Comprehensive Income", which establishes standards for reporting and presentation of comprehensive loss and its components. Comprehensive loss is presented in the statements of shareholders' equity (deficit), and consists of net loss and foreign currency translation adjustment.
j) Stock Based Compensation
The Company enters into transactions in which goods or services are the consideration received for the issuance of equity instruments. The value of these transactions are measured and accounted for, based on the fair value of the equity instrument issued or the value of the goods or services received, whichever is more reliably measurable. The services are expensed in the periods that the services are rendered.
k) Segment Reporting
ASC Topic 280 "Segment Reporting" establishes standards for the manner in which public enterprises report segment information about operating segments. The Company has determined that its operations primarily involve one reportable segment.
HIV-VAC, INC. (A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
2. Summary of Significant Accounting Policies (cont'd)
l) Recent Accounting Pronouncements
Many recent accounting pronouncements have been issued since 2004. The Company has determined that the applicable accounting pronouncements will not have a material affect on the financial statements.
3. Furniture and Equipment, Net
2008 2007 Accumulated Accumulated Cost Depreciation Cost Amortization --------- ------------ --------- ------------ Furniture and equipment $ 48,416 $ 44,127 $ 48,416 $ 43,501 --------- ------------ --------- ------------ Net carrying amount $ 4,289 $ 4,915 ------------ ------------ |
Depreciation expenses for the years ended September 30, 2008 and 2007 were $626 and $722, respectively.
4. Intangible Asset, Net
2008 2007 Accumulated Accumulated Cost Depreciation Cost Amortization --------- ------------ --------- ------------ License $ 185,000 $ 185,000 $ 185,000 $ 131,037 --------- ------------ --------- ------------ Net carrying amount $ - $ 53,963 ------------ ------------ |
The License Agreement was terminated effective December 1, 2007. Under the termination agreement, the $566,005 in outstanding royalty payments were forgiven.
Management has assessed that the net value of the license is not recoverable as the Company does not have the ability to use the asset as a result of the termination of the license agreement. The net value of the asset of $53,963 has been written off during the year and the resulting loss has been reflected in net income.
HIV-VAC, INC. (A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
5. Advances From Related Parties
2008 2007
Intracell Vacinnes Limited ("Intracell") $ 457,406 $ 457,406
Directors and officers of the Company 81,493 80,293
------------ ------------
$ 538,899 $ 537,699
============ ============
|
Intracell is a related party to the Company by virtue of the Company's controlling shareholders owning Intracell.
These advances are non-interest bearing, unsecured and have no specified terms for repayment.
6. Stockholders' Equity (Deficit))
Common and preferred stock were issued as follows:
a) Sale of common stock - In April 1998, the Company issued 1,016 shares of common stock to the Company's founders for cash of $508.
b) In April 1998, the Company issued 781 shares of common stock to acquire 100 percent of the issued and outstanding shares of Nouveaux Corporation.
c) During the year ended September 30, 1998, stockholders contributed $342,108 in additional paid in capital.
d) On February 10, 1999, the Company issued 200,103 shares of common stock for an aggregate amount of $100,000 under the Securities Act of 1993, as amended Under Regulation D, Rule 504.
e) On February 23, 1999, the Company declared a 1:50 reverse split of the Company's common stock, effective March 8, 1999.
f) On March 15, 1999, the Company issued 92,463 shares of common stock for a subscription receivable with an aggregate amount of $140,000 under the Securities Act of 1993, as amended Under Regulation D, Rule 504. The Company accepted a note receivable in lieu of payment. The note was paid in 2000.
g) On April 6, 1999, the Company issued 57,529 shares of common stock and 10,000 shares of preferred stock, Series A, for an aggregate amount of $99,900 and $100 respectively, in exchange for the exclusive right to the worldwide license for the development and distribution of a HIV vaccine to combat aids. Each share of preferred stock has 3,000 votes per common share at any meeting of the stockholders where votes are submitted.
h) On April 6, 1999, the Company purchased treasury stock for $1,767.
HIV-VAC, INC. (A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
6. Stockholders' Equity (Deficit) (cont'd)
i) On September 27, 1999, 400 shares of common stock were issued for an aggregate amount of $5,041.
j) On March 8, 2000, the Company issued 1,001 shares of common stock for the merger of Scientific Life Plan ("Lifeplan")
k) On May 26, 2000, the Company issued 4,548 shares of common stock for an aggregate amount of $99,990. Concurrently, the Company issued 6,835 shares of common stock with an aggregate value of $150,000 to Intracell under the terms of the anti-dilution provision of the Assignment of License Agreement.
l) On June 29, 2000 the Company issued 733 shares of common stock for an aggregate amount of $23,655. Concurrently, the Company also issued 1,100 shares of common stock with an aggregate value of $35,500 to Intracell under the terms of the anti-dilution provision of the Assignment of License Agreement.
m) On June 29, 2000, the Company issued 30,000 shares of common stock for an aggregate amount of $675,000 in legal services.
n) On July 5, 2000 the Company issued 4,600 shares of common stock for an aggregate amount of $99,990. Concurrently, the Company issued 6,896 shares of common stock with an aggregate value of $150,000 to Intracell under the terms of the anti-dilution provision of the Assignment of License Agreement.
o) On July 24, 2000, The Company issued 30,031 shares of common stock for an aggregate amount $675,000 in legal services.
p) On July 27, 2000 the Company issued 4,600 shares of common stock for an aggregate amount of $99,990. Concurrently, the Company issued 6,896 shares of common stock with an aggregate value of $150,000 to Intracell under the terms of the anti-dilution provision of the Assignment of License Agreement.
q) On August 21, 2000, the Company issued 6,352 shares of common stock for an aggregate amount of $99,990. Concurrently, the Company issued 9,525 shares of common stock with an aggregate value of $150,000 to Intracell Vaccines Ltd under the terms of the anti-dilution provision of the Assignment of License Agreement.
r) On May 16, 2001, the Company issued 5,003 shares of common stock for an aggregate amount of $20,000 for consulting services.
s) On July 6, 2001 the Company declared a 1:100 reverse split of the Company's common stock, effective March 22, 2001.
HIV-VAC, INC. (A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
6. Stockholders' Equity (Deficit) (cont'd)
t) On August 7, 2001, the Company amended its license agreement with Intracell. The amendment called for Intracell to waive its right to terminate the agreement due to the Company's failure to raise $1,500,000 pursuant to Section 9.1(b) of the agreement dated April 6, 1999 in exchange for the following:
i) 3,000,000 shares of common stock, and
ii) options to acquire 7,500,000 shares of the Company's common stock.
The 3,000,000 shares were valued at the closing price on August 7, 2001 of $0.50 per share.
u) On August 10, 2001, the Company issued 1,000,000 shares of its preferred stock, Series B, with attached warrants at par value of $0.01 per share, or $10,000. The preferred Series B stock converts to 20 million shares of the Company's common stock at 40 percent of the market value of the common stock based on a stated value. The attached warrants convert to 5,000,000 shares of the Company's common stock at $1.50 per share. In accordance with the Emerging Issues Task Force ("EITF") 98-5, the Company valued the beneficial conversion feature at the amount of the proceeds received from the sale of the stock ($10,000).
v) On January 7, 2002, the Company bought back the 1,000,000 preferred shares and the attached warrants that had been issued on August 10, 2001 for a total consideration of $10,000. The preferred shares were added to the treasury stock, while the warrants were cancelled.
w) On March 21, 2002, the Company issued 150,000 shares of common stock for an aggregate amount of $22,500 for consulting services.
x) On April 15, 2002, the Company issued 200,000 shares of common stock for an aggregate amount of $32,000 for consulting services.
y) On May 25, 2002, the Company issued 300,000 shares of common stock for an aggregate amount of $60,000 for services rendered by the directors and officers of the Company.
z) On July 29, 2002, the Company sold 300,000 preferred B series shares from treasury for a total consideration of $15,000. The Company also issued the purchaser of the preferred B series stock, 3,000,000 warrants. Each warrant is convertible into one common share at an exercise price of $1.50 and expires in December 2003.
aa) On August 3, 2002, the Company issued 100,000 shares of common stock for cash of $20,000 to an officer of the Company.
ab) On August 7, 2002, the Company issued 2,272,727 shares of common stock to Intracell, under a settlement of debt agreement valued a $500,000.
HIV-VAC, INC. (A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
6. Stockholders' Equity (Deficit) (cont'd)
ac) On August 30, 2002, the Company issued 1,323,529 shares of common stock to Intracell, under a settlement of debt agreement valued a $225,000.
ad) On October 30, 2002, the Company issued 300,000 shares of common stock for an aggregate amount of $50,100 for services rendered by the directors and officers of the Company.
ae) On October 31, 2002, the Company issued 1,150,000 shares of common stock under debt settlement agreements with a total value of $195,500.
af) On April 23, 2003, the Company issued 140,000 shares of common stock for an aggregate amount of $51,800 for legal fees for services rendered to the Company during the previous 18 months.
ag) On November 3, 2003 the Company issued 425,000 common shares for an aggregate amount of $42,500 for legal fees and consulting fees.
ah) On September 30, 2005, the Company cancelled 1,016 Common shares and 700,000 Preferred Series "B" shares that were held as treasury stock.
7. Income Taxes
2008 2007 Temporary differences $ 14,562 $ 14,355 Loss carryforwards 1,885,254 2,095,867 Allowance for valuation (1,899,816) (2,110,222) ------------ ------------ $ - $ - ============ ============ |
Potential benefits of net operating losses have not been recognized in these financial statements because the Company can not be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
The Company's tax returns have not yet been filed and when they are filed will be subject to audits and potential penalties and reassessments by taxation authorities. The outcome of audits can not be reasonably determined and the potential impact on the financial statements is not determinable.
HIV-VAC, INC. (A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
8. Related Party Transactions
The following table summarizes the Company's related party transactions, that occurred in the normal course of operations for the year, which are measured at the exchange amount agreed to by the related parties:
2008 2007 Directors and officers compensation $ 34,000 $ 32,000 ============ ============ 9. Financial Instruments |
a) Fair Value
The carrying amount of cash, accounts payable, accrued liabilities, and advances from related parties approximate fair values due to the short term nature of these items.
b) Currency Risk
While the reporting currency is in the U.S. Dollar, 24% of expenses for the year ended are denominated in U.K. pound (2007 - 66% of expenses). As at September 30, 2008, 0% of assets and 11% of liabilities are originally denominated in U.K. pound (2007 - 29% of assets and 49% of liabilities). The Company is exposed to foreign exchange risk as the results of operations may be affected by fluctuations in the exchange rates between U.S. dollar and U.K. pound.
10. Stockholders' Restrictions
The stockholders of the Company have a pre-emptive right regarding the purchase of stock. Furthermore, the transfer of certain stock is restricted, in accordance with the regulations of the Securities and Exchange Commission ("SEC"). The regulations prevent the transfer of stock, unless a registration statement is in effect, or if the stock is subject to exemption under SEC regulations.
HIV-VAC, INC. (A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
11. Subsequent Events
a) On August 23, 2010, the Company entered into an irrevocable agreement to acquire 80% of the issued and outstanding share capital of Richard Y Lange, a Mexican corporation, through the issue of 8,000,000 of the Company's common shares valued at $0.25 per common share. Under the agreement, Richard Y Lange warrants that shareholders equity in Richard Y Lange will not be less than 70,000,000 pesos ($5,995,000). Richard Y Lange is involved in construction, property development and product distribution. It also owns a block plant and a sand pit. The agreement will close as soon as Richard Y Lange has verified its assets through audit or as agreed to by the parties. The Company represents, at Closing, there will be 10,421,916 common shares and 300,000 Preferred "B" shares outstanding. Thus, the Company has agreed to reduce their common shares by 8,736 shares.
b) The Company changed its name to Grupo International Inc. on September 2, 2010.
Item 9. Changes In And Disagreements With Accountants On Accounting And Financial Disclosure.
None
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures:
Our chief executive officer and chief financial officer have concluded that the disclosure controls and procedures were not effective as of September 30, 2008. These controls are meant to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The registrant has been delinquent in its SEC filing. Management has only recently prepared the required reports for filing. Management intends to implement internal controls to ensure that similar situations do not occur in the future and that required SEC filings will be timely.
Management's Annual Report on Internal Control over Financial Reporting:
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is the process designed by and under the supervision of Kevin Murray, who was chief executive officer and chief financial officer, or the persons performing similar functions, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. Mr. Murray has evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control over Financial Reporting - Guidance for Smaller Public Companies.
The chief financial officer and chief executive officer has assessed the effectiveness of our internal control over financial reporting as of September 30, 2008, and concluded that it is not effective for the reasons discussed above.
This annual report does not include an attestation report of the registrant's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the registrant's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the registrant to provide only management's report in this annual report.
Evaluation of Changes in Internal Control over Financial Reporting:
Our chief executive officer and chief financial officer have evaluated changes in our internal controls over financial reporting that occurred during the period ended September 30, 2008. Based on that evaluation, our chief executive officer and chief financial officer did not identify any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Important Considerations:
The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.
Item 9B. Other Information
None
PART III
Item 10. Director's And Executive Officers Promoters and Corporate Goverance.
Directors and Executive Officers
Our directors and executive officers during the period were as follows
NAME AGE POSITION -------- --- -------- Kevin W Murray 56 Director and CFO Gordon R B Skinner 67 Director, Director of Research Sally del Principe 52 Director, John Palethorpe 65 Vice President |
There are no individuals, other than those listed above, who make a significant contribution to our business.
Kevin W. Murray has served as our Vice President of Finance and Administration, and as a director, since from April of 1999 to June 2002. He was appointed our Chairman, President and Chief Executive Officer in June 2002. He has been a director of Intracell Vaccines Limited since September 1998. He is currently a director of numerous private companies, including Mobsafety Inc, Pipevision Inc, Bullfrog Wireless Ltd, Vision Aviation and Vaccine Research International Plc. Mr. Murray holds a Bachelor of Accounting Science degree from The University of South Africa, and completed post-graduate studies in accountancy at The University of Cape Town, prior to gaining admission to the South African Institute of Chartered Accountants.
Dr. Gordon R.B. Skinner is the developer of our proposed vaccine. He served as our Chairman and President from April of 1999 to June 2002 and as our Director of Research since June 2002. He has been a director of Intracell Vaccines Limited since November of 1998. He is the Managing Director of Vaccine Research International, PLC, a corporation involved in the development of a staphylococcal vaccine. He is Chairman of the Vaccine Research Trust UK, and was previously an Honorary Consultant in Infection at The University Hospital Birmingham NHS Trust, Birmingham. Dr. Skinner was a senior lecturer at the Department of Medical Microbiology at The University of Birmingham from 1976 to 1998. He received an MB ChB from the University of Glasgow in 1965, an MD (First Class Honors) from The University of Birmingham in 1975, and a DSc from The University of Birmingham in 1989. He is a Fellow of The Royal College of Obstetrics and Gynecologists, and a Fellow of The Royal College of Pathologists. Dr. Skinner developed the Skinner Herpes vaccine, and is the author of more than 100 scientific and medical publications. He maintains a medical practice in the United Kingdom.
Sally Del Principe served as a director of the company from June 2001 to August
13, 2010 and served as Chief Financial Officer from June 2002 to September 2004.
She is a resident of United Kingdom and since 1992 has been a partner in Lupton
Del Principe Associates, a private company which specializes in credit insurance
brokerage.
Ms Del Principe resigned on August 13, 1010
John Palethorpe has served as a Vice President since April of 1999. Since 1979, Mr. Palethorpe has been the Chairman and Managing Director of Stourbridge Forklift Co. Ltd., a company that acts as an agent for the sale of Desta and Hyundai Forklifts. He is also the Chairman and managing director of the following companies: Randcrown Ltd., a property and investment company incorporated in 1979; J.Rigg Construction Ltd a property maintenance and repair company incorporated in 1979; and Tionmartin Ltd., a company that sells used forklifts and has been incorporated since 1975 and Vaccine Research International Plc, a corporation involved in the development of a Staphyloccocal vaccine. He has been involved in the financing of the development of our proposed vaccine since 1993. Mr Palethorpe resigned as Vice President on August 5, 2010
There are no familial relationships between any of the Company's executive officers and directors.
Conflicts of Interest
Our management has other financial and business interests to which a significant amount of time is devoted which may pose conflicts of interest with regard to allocation of their time and efforts. Our management, together, both directly and indirectly, hold 75.62% of our common stock. There can be no assurance that management will resolve all conflicts of interest in favor of HIV-VAC.
Section 16(a) Beneficial Ownership Reporting Compliance .
Section 16(a) of the Exchange Act requires the Company's directors and executive officers, and persons who own more than 10% of the Company's outstanding common stock, to file with the SEC, initial reports of beneficial ownership and reports of changes in beneficial ownership of the Company's common stock and other equity instruments of the Company. To the Company's knowledge, the Company's directors and officers have complied with the requirement.
Corporate Governance
There have been no changes in any state law or other procedures by which security holders may recommend nominees to our board of directors. In addition to having no nominating committee for this purpose, we currently have no specific audit committee and no audit committee financial expert. Based on the fact that our current business affairs are simple, any such committees are excessive and beyond the scope of our business and needs.
CODE OF ETHICS
The company has adopted a Code of Ethics applicable to its Chief Executive Officer and Chief Financial Officer. This Code of Ethics is filed herewith as an exhibit.
Item 11. Executive Compensation.
As of the fiscal year ended September 30, 2008, we have accrued compensation to our executive officers as follows:
Annual Compensation Long Term Compensation ------------------- ---------------------- Stock Awards Fiscal and Other Name and Position Year Salary Bonus Compensation Kevin Murray 2006 $ 16,000 $ - $ - CEO, CFO 2007 $ 16,000 $ - $ - 2008 $ 17,000 $ - $ - Dr. Gordon Skinner 2006 $ 16,000 $ - $ - Director, Director of 2007 $ 18,000 $ - $ - Research 2008 $ 17,000 $ - $ - Sally Del Principe 2006 $ - $ - $ - 2007 $ - $ - $ - 2008 $ - $ - $ - John Palethorpe 2006 $ - $ - $ - Vice President 2007 $ - $ - $ - 2008 $ - $ - $ - -------------------------------------- |
No cash fees or other consideration has been paid to our directors through the date hereof. The above compensation chart reflects amounts accrued, but not paid to the officers.
There are no employment contracts in effect with any of our officers or directors, nor are there any agreements or understandings with such persons regarding termination of employment or change-in-control arrangements.
Item 12. Security Ownership Of Certain Beneficial Owners And Management and Related Stockholders Matters.
The following chart sets forth certain information with respect to the beneficial ownership of the common stock and the Series A preferred stock of the Company as of September 30, 2008: (i) each person who is known by the Company to beneficially own more than 5 percent of the Company's common stock, (ii) each of the Company's directors, (iii) each of the Company's Named Executive Officers (defined below), and (iv) all directors and executive officers as a group. As of September 30, 2008, the Company had 9,830,652 shares of common stock outstanding, 10,000 Series A preferred shares outstanding and 1,000,000 Series B preferred shares outstanding.
Percentage Name and Address Title of Class # of shares of Class ---------------- -------------- ----------- ---------- Kevin W. Murray Common Stock 2,445,098(1) 24.86% 12 Harben Court Collingwood, Ontario Canada Series A Preferred Stock 3,333(1) 33.33% L9Y 4L8 Gordon Skinner Common Stock 2,445,098(1) 24.86% Harborough Banks Old Lapworth Rd Series A Preferred Stock 3,333(1) 33.33% Solihill B94 6Ld United Kingdom John Palethorpe Common Stock 2,445,098(1) 24.86% Knoll Hill Belbroughton Road Series A Preferred Stock 3,333(1) 33.33% Blakedown, Kidderminster 9YLD 3LN United Kingdom Sally Del Principe Common Stock 100,000(1) 1.02% Sunny Bank House 32 Moorhall Lane Stourport on Severn Worcestershire DY13 8RB United Kingdom Directors and Officers Common Stock 7,435,294 75.62% as a Group Series A Preferred Stock 10,000 100% Tradebay Investments Ltd. Common Stock 3,000,000(1) 30.51% |
Securities Authorized for Issuance Under Equity Compensation Plans
As of the end of the fiscal year, the Company does not have any equity securities outstanding or authorized for issuance pursuant to any equity compensation plans.
Item 13. Certain Relationships And Related Transactions and Director Independence.
As further noted above in more detail under the caption License Agreement and Consulting Agreement, we acquired the rights to our proposed vaccine from Intracell Vaccines Limited for consideration consisting of common and preferred securities. At that time, Messrs. Skinner, Murray and Palethorpe were shareholders of Intracell Vaccines, and Messrs. Skinner and Murray also served as Intracell Vaccines directors. Messers Murray, Skinner and Palethorpe acquired all of Intracell's shareholdings in equal proportions on 28 February 2006.
Director Independence. The Company's board of directors consisted of Kevin W. Murray, Dr Gordon Skinner,and Sally Del Principe. Mr. Murray and Dr Gordon Skinner are not independent as such term is defined by a national securities exchange or an inter-dealer quotation system. During the year ended September 30, 2008, there were no transactions with related persons other than as described in the section above entitled "Item 11. Executive Compensation".
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees. We paid aggregate fees and expenses of approximately $2,000 and $2,000, respectively, _ during 2008 and 2007, respectively, for work completed for our annual audits and for the review of our financial statements included in our Form 10-Q.
Tax Fees. We did not incur any aggregate tax fees and expenses from S F Partnership LLP for the years September 30, 2008 and 2007, respectively, for professional services rendered for tax compliance, tax advice, and tax planning.
All Other Fees. We did not incur any other fees from S F Partnership LLP during 2008 and 2007.
The board of directors, acting as the Audit Committee considered whether, and determined that, the auditor's provision of non-audit services was compatible with maintaining the auditor's independence. All of the services described above for the years ended September 30, 2008 and 2007 were approved by the board of directors pursuant to its policies and procedures.
Item 15. Exhibits, Financial Statement Schedules
(a) Exhibits:
(a)(1) List of Financial statements included in Part II hereof
Balance Sheets, September 30, 2008 and 2007 Statements of Operations for the years ended September 30, 2008 and 2007 Statements of Stockholders' Equity (Deficit) for the years ended September 30, 2008 and 2007 Statements of Cash Flows for the years ended September 30, 2008 and 2007 Notes to the Financial Statements
(a)(2) List of Financial Statement schedules included in Part IV hereof:
None
(a)(3) Exhibits
Exhibit Number Description 3.1 Articles of Incorporation, filed as Exhibit to the Form 10-QSB filed May 16, 2000. 3.2 Amended Articles of Incorporation, filed as Exhibit to the Form 10-QSB filed August 14, 2001. 3.3 By-laws, filed as Exhibit to Form 10-QSB filed May 16, 2000. 3.4 Certificate of Amendment to Certificate of Incorporation, dated as of May 15, 2001, filed as Exhibit to the Form 10-QSB filed August 14, 2001. 10.1 License agreement between University of Birmingham and Intracell Vaccines Ltd dated November 5, 1998, filed as and Exhibit to the Amended Form 10-KSB filed Oct 22, 2002. 10.2 License Agreement between HIV-VAC, Inc. and Intracell Vaccines Ltd., filed as an Exhibit to the Registration Statement on Form SB-2 filed August 22, 2001. 10.3 Consulting Agreement between HIV-VAC, Inc. and Intracell Vaccines Ltd., filed as and Exhibit to the Registration Statement on Form SB-2 filed August 22, 2001. 10.4 Extension of Consulting Agreement between HIV-VAC, Inc. and Intracell Vaccines Ltd. dated June 1, 2002, filed herewith. 10.5 Debt Settlement Agreement between HIV-VAC, Inc. and Sheldon Cohen filed as Exhibit to Form S-8 POS filed Oct 31, 2002. 10.6 Debt Settlement Agreement between HIV-VAC, Inc. and Irwin Rapoport, filed as Exhibit to Form S-8 POS filed Oct 31, 2002. 10.7 Debt Settlement Agreement between HIV-VAC, Inc. and Lina Fedko, filed as Exhibit to Form S-8 POS filed Oct 31, 2002. 10.8 Debt Settlement Agreement between HIV-VAC, Inc. and Cliff Bodden, filed as Exhibit to Form S-8 POS filed Oct 31, 2002. 10.9 Subscription Agreement between HIV-VAC, Inc. and Tradebay Investments, Inc. dated July 29, 2002 filed January 13, 2003. 10.10 Stock Option Agreement between HIV-VAC, Inc. and Trinity Funding, Inc., dated September 2, 2002, filed January 13, 2003. 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HIV-VAC, Inc.
By: /s/ KEVIN MURRAY ------------------------------ President & CEO |
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.
By: /s/ KEVIN MURRAY Chief Financial Officer September 30, 2011 --------------------- Kevin Murray By: /s/ KEVIN MURRAY Director September 30, 2011 --------------------- KEVIN MURRAY |
HIV-VAC, INC.
FINANCIAL CODE OF ETHICS
As a public company, it is of critical importance that HIV-VAC, Inc. ("HIV-VAC") filings with the Securities and Exchange Commission be accurate and timely. Depending on their position with HIV-VAC, employees may be called upon to provide information to assure that HIV-VAC's public reports are complete, fair, and understandable. HIV-VAC expects all of its employees to take this responsibility seriously and to provide prompt and accurate answers to inquiries related to HIV-VAC's public disclosure requirements.
HIV-VAC's Finance Department bears a special responsibility for promoting integrity throughout HIV-VAC, with responsibilities to stakeholders both inside and outside of HIV-VAC. The Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Finance Department personnel have a special role both to adhere to the principles of integrity and also to ensure that a culture exists throughout HIV-VAC as a whole that ensures the fair and timely reporting of HIV-VAC's financial results and conditions. Because of this special role, the CEO, CFO, and all members of HIV-VAC's Finance Department are bound by HIV-VAC's Financial Code of Ethics, and by accepting the Financial Code of Ethics, each agrees that they will:
- Act with honesty and integrity, avoiding actual or actual conflicts of interest in personal and professional relationships.
- Provide information that is accurate, complete, objective, relevant, timely and understandable to ensure full, fair, accurate, timely, and understandable disclosure in the reports and documents that HIV-VAC files with, or submits to, government agencies and in other public communications.
- Comply with the rules and regulations of federal, state and local governments, and other appropriate private and public regulatory agencies.
- Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing one's independent judgment to be subordinated.
- Respect the confidentiality of information acquired in the course of one's work, except when authorized or otherwise legally obligated to disclose. Confidential information acquired in the course of one's work will not be used for personal advantage.
- Share job knowledge and maintain skills important and relevant to stakeholders needs.
- Proactively promote and be an example of ethical behavior as a responsible partner among peers, in the work environment and in the community.
- Achieve responsible use of, and control over, all HIV-VAC assets and resources employed by, or entrusted to yourself, and your department.
- Receive the full and active support and cooperation of HIV-VAC's Officers, Sr. Staff, and all employees in the adherence to this Financial Code of Ethics.
- Promptly report to the CEO or CFO any conduct believed to be in violation of law or business ethics or in violation of any provision of this Code of Ethics, including any transaction or relationship that reasonably could be expected to give rise to such a conflict. Further, to promptly report to the Chair of HIV-VAC's Audit Committee such conduct if by the CEO or CFO or if they fail to correct such conduct by others in a reasonable period of time.
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