UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2010
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ________
Commission File No. 000-30603
grupo international inc.
(Exact name of registrant as specified in its charter)
Nevada 86-0876846
------ ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
14 Laurel Blvd,
|
Collingwood, Ontario Canada L9Y 5A8
(Address of principal executive offices, Including zip code)
(705) 446-7242
Registrant's telephone number, including area code
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 Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section
232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes |_|
No |_|
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company, as
defined by Rule 12b-2 of the Exchange Act: (Check one):
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller reporting company |X|
Indicate by a check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act. Yes |_| No |X|
There were 10,430,652 shares of common stock outstanding, and 300,000 shares of
preferred series "B" stock outstanding as of September 30, 2011.
GRUPO INTERNATIONAL INC.
(A Development Stage Company)
INDEX TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
PAGE
----
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED BALANCE
SHEET AS OF DECEMBER 2010 (UNAUDITED) 3
CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009
PERIOD FROM JANUARY 10, 1997 (DATE OF INCEPTION) TO
DECEMBER 31, 2010 (UNAUDITED) 4
CONDENSED STATEMENTS OF CASH FLOWS
|
THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009 AND
PERIOD FROM JANUARY 10, 1997 (DATE OF INCEPTION) TO
DECEMBER 31, 2010 (UNAUDITED) 5-6
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 7-11
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 12
AND RESULTS OF OPERATIONS
ITEM 4. CONTROLS AND PROCEDURES 14
PART II-- OTHER INFORMATION 15
ITEM 1. LEGAL PROCEEDINGS 15
ITEM 1A RISK FACTORS 15
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 15
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 15
ITEM 4. REMOVED OR RESERVED 15
ITEM 5. OTHER INFORMATION 15
ITEM 6. EXHIBITS 15
Exhibit 31.1
Exhibit 32.1
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GRUPO INTERNATIONAL INC.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
ASSETS
December 31, September 30,
2010 2010
------------- -------------
Current Assets
Cash and equivalents $ 1,995 $ 847
Prepaid Expenditure 1,125 1,500
------------- -------------
Total current assets 3,120 2,251
------------- -------------
Furniture and equipment, net 3,172 3,274
------------- -------------
Total assets $ 6,292 $ 5,525
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accrued liabilities:
Accounts payable 88,091 89,268
Accrued Liabilities 273,971 262,971
Related parties (Note 4) 87,849 86,119
------------- -------------
Total Current Liabilities 449,911 $ 438,358
------------- -------------
Stockholders' Equity (Deficit)
Series B, convertible, non-preferential;
1,000,000 and -0- shares issued and
outstanding, respectively 3,000 3,000
Common stock, $0.001 par value;
500,000,000 shares authorized;
10,431,652 and 10,431,652 shares
issued and outstanding, respectively 10,431 10,431
Additional paid in capital 6,901,066 6,901,066
Deficit accumulated during
the development stage (7,273,886) (7,261,147)
Accumulated other comprehensive loss (84,230) (86,183)
------------- -------------
Total stockholders' equity (deficit) (443,619) (432,833)
------------- -------------
Total liabilities and stockholders'
equity (deficit) $ 6,292 $ 5,525
============= =============
|
See accompanying notes to unaudited condensed financial statements.
3
GRUPO INTERNATIONAL INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED DECEMBER 31, 2010, 2009 AND FOR THE PERIOD FROM
JANUARY 10, 1997 (INCEPTION) TO DECEMBER 31, 2009
Period from
January 10,
1997
Quarter Quarter (Inception)
Ended Ended to
December 31, December 31, December 31,
2010 2009 2010
------------ ------------ ------------
Expenses
General and administrative 6,861 5,197 856,879
Research and development costs 5,776 5,311 1,842,236
Depreciation and amortization 102 118 176,282
Patent fees -- -- 2,045,239
Legal fees -- -- 1,500,028
Licensing fees -- -- 635,500
Write down of intangible asset -- -- 53,963
Loss from disposal of assets -- -- 30,195
------------ ------------ ------------
12,739 10,626 7,140,322
------------ ------------ ------------
Loss from operations (12,739) (10,626) (7,140,322)
------------ ------------ ------------
Other Income (Expense)
Other expenses -- -- (261,162)
Interest income -- -- 569,774
------------ ------------ ------------
Total other income (expense) -- -- 308,617
------------ ------------ ------------
Profit (Loss) from
continuing operations (12,739) (10,626) (6,831,705)
Loss from discontinued operations -- -- (432,181)
------------ ------------ ------------
Net profit (loss) (12,739) (10,626) (7,263,886)
============ ============ ============
Foreign Currency
Translation Adjustment 1,953 1,228 (84,230)
------------ ------------ ------------
Comprehensive Loss (10,786) (9,398) (7,348,216)
============ ============ ============
Profit(Loss) per weighted
number of outstanding
shares- basic and diluted $ (0.00) $ (0.00)
============ ============
Weighted average number of
common shares outstanding
during period - basic and diluted 10,430,652 9,830,653
============ ============
|
See accompanying notes to unaudited condensed financial statements.
4
GRUPO INTERNATIONAL INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 30, 2010 AND 2009 AND FOR THE PERIOD
FROM JANUARY 10, 1997 (INCEPTION) TO DECEMBER 31, 2010 (UNAUDITED)
Period from
January 10,
1997
(Inception) For the Three Months Ended
to ----------------------------
December 31, December 31, December 31,
2010 2010 2009
------------ ------------ ------------
Cash Flows From Operating Activities:
Net profit (loss) $(7,263,886) $ (12,739) $ (10,626)
Adjustments to reconcile net loss to
net cash used in operating activities:
Amortization and depreciation 176,282 102 118
Officers' compensation capitalized 100,000 -- --
Other expenses relating to Noveaux
and LifePlan acquisitions 261,163 -- --
Issuance of stock for services 2,449,300 -- --
Issuance of stock for licensing fees 2,135,500 -- --
Issuance of stock for directors and
officers compensation 110,100 -- --
Issuance of stock for note payable 140,000 -- --
Gain on forgiveness of debt (566,005) -- --
(Decrease) in notes payable (140,000) -- --
Increase (Decrease) in prepaid expense (1,125) 375 --
Write-down of intangible asset 53,963 -- --
Increase payables and
in accrued liabilities 830,359 11,776 10,313
----------- ----------- -----------
Net Cash Used in Operating Activities (1,714,349) (486) (195)
----------- ----------- -----------
Cash Flow From Investing Activities:
Purchase of patent 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 advances from related parties 545,245 1,730 179
Proceeds from sale of treasury stock and
warrants 15,000 -- --
Payment of stockholder's loan (272) -- --
Proceeds from additional paid in capital 342,108 -- --
----------- ----------- -----------
Net Cash Provided by Financing Activities 1,729,488 1,730 179
----------- ----------- -----------
Net increase (decrease) in cash 1,995 1,244 (16)
Cash and equivalents at beginning of period -- 751 847
----------- ----------- -----------
Cash and equivalents at end of period $ 1,995 $ 1,995 $ 831
=========== =========== ===========
5
|
GRUPO INTERNATIONAL INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 30, 2010 AND 2009 AND FOR THE PERIOD
FROM JANUARY 10, 1997 (INCEPTION) TO DECEMBER 31, 2010 (UNAUDITED)
Period from
January 10,
1997
(Inception) For the Three Months Ended
to ----------------------------
December 31, December 31, December 31,
2010 2010 2009
------------ ------------ ------------
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 $ -- $ --
=========== =========== ===========
Issuance of stock to directors and officers $ 110,100 $ -- $ --
=========== =========== ===========
Forgiveness of stockholder debt $ 7,227 $ -- $ --
=========== =========== ===========
Cancellation of treasury stock $ (8,767) $ -- $ --
=========== =========== ===========
|
See accompanying notes to unaudited condensed financial statements.
6
GRUPO INTERNATIONAL INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 2010.
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited condensed financial statements of GRUPO INTERNATIONAL INC.
included herein have been prepared by HIV-VAC pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information or
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations.
In the opinion of GRUPO`s management, the accompanying unaudited condensed
financial statements contain all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial information
included herein. These financial statements should be read in conjunction with
GRUPO INTERNATIONAL INC`s audited financial statements contained in its Annual
Report on Form 10-K for the year ended September 30, 2009.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Operations: GRUPO INTERNATIONAL INC. (the "Company"), formerly
known as Personna Records, Inc. (Personna) was incorporated on January 10,1997
in the State of Nevada. Personna (originally known as Sonic Records, Inc.) was
engaged in the production and distribution of musical records. In April 1998,
Personna merged with Nouveaux Corporation whereby Personna became the surviving
corporation. The Company changed its name to HIV-VAC INC in 1998 and to Grupo
International Inc on September 30, 2010.
Development Stage Enterprise: GRUPO INTERNATIONAL INC. reverted to a development
stage enterprise when it disposed of its music recording assets (March 1999) and
commenced the research and development of its HIV vaccine. The Company's
principal activities since March 1999 have included defining and conducting
research programs, conducting animal clinical trials, raising capital and
researching ways to enhance the company's intellectual property. The Company has
not yet commenced human trials.
Going Concern: The Company's financial statements are presented on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company has experienced
recurring losses since inception and has negative net working capital and cash
flows from operations. For the years ended September 30, 2010 , the Company
experienced a net loss of $55,571, For the year ended September 30, 2009, the
Company recorded a loss of $43,350. The Company's ability to continue as a going
concern is contingent upon its ability to secure additional financing, initiate
sale of its product, and attain profitable operations.
Management is pursuing various sources of equity financing. Although the Company
plans to pursue additional financing, there can be no assurance that the Company
will be able to secure financing or obtain financing on terms beneficial to the
Company.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
Fixed Assets: Fixed assets are stated at cost. Maintenance and repairs are
expensed in the period incurred; major renewals and betterments are capitalized.
When items of property are sold or retired, the related costs are removed from
the accounts and any gain or loss is included in income. Depreciation is
computed using the diminishing balance method using 15%pa for office equipment
and 10% pa for office furniture.
7
GRUPO INTERNATIONAL INC.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Cash and Cash Equivalents: For purposes of the cash flow statement, the Company
considers all highly liquid investments with maturities of three months or less
at the time of purchase to be cash equivalents.
Fair Value of Financial Instruments: The carrying amounts reported in the
balance sheets for cash and cash equivalents, accounts receivable, and accounts
payable approximate fair value because of the immediate or short-term maturity
of these financial instruments.
Income Taxes: 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.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the finical statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Net Loss Per Common Share: Basic and diluted net loss per common share for the
periods ended December 31, 2010, and 2009 are computed based on the weighted
average common shares outstanding. Common stock equivalents have not been
included in the computation of diluted loss per share since the effect would be
anti-dilutive.
Foreign Currency: Assets and liabilities recorded in foreign currencies are
translated at the exchange rate on the balance sheet date. Revenue and expenses
are translated at average rates of exchange prevailing during the year.
Translation adjustments resulting from this process are charged or credited to
other comprehensive income.
Recent Accounting Announcements: The Company has reviewed the recent accounting
pronouncements and has determined that there are no recent accounting
pronouncements that will have a material effect on the Company's financial
statements.
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.
Stock Issued For Services: The company enters into transactions in which goods
or services are the consideration received for the issue 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 services,
whichever is more reliably measurable. The services are expensed in the periods
that they are rendered.
8
GRUPO INTERNATIONAL INC.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 - FIXED ASSETS Fixed Assets consisted of the following:
December 31, September 30,
2010 2010
------------- -------------
Furniture $ 936 $ 936
Equipment 47,480 47,480
------------- -------------
48,416 48,416
Less accumulated depreciation (45,244) (45,172)
------------- -------------
Net $ 3,172 $ 3,274
============= =============
|
Depreciation expense for the three months ended December 31, 2010 and the year
ended September 30, 2010, was $102 and $472 respectively
NOTE 3 - STOCKHOLDERS' EQUITY
No stock was issued during the reporting period.
NOTE 4 - ADVANCES FROM RELATED PARTIES
Dec 31, Sept 30,
2010 2010
------------- -------------
Directors and officers of the Company 87,849 86,119
------------- -------------
$ 87,849 $ 86,119
============= =============
|
These advances are non-interest bearing, unsecured and have no specified terms
for repayment.
NOTE 5 - 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:
Dec 31, Dec 31,
2010 2009
------------- -------------
Directors and officers compensation $ 10,000 $ 9,000
============= =============
|
9
GRUPO INTERNATIONAL INC.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 6 - 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.
The financial instruments of the Company have been classified into
levels using a fair value hierarchy.
Level 1 valuation is determined by unadjusted quoted prices in
active markets for identical assets and liabilities. The Company's
cash of $1.995 is classified into Level 1.
Level 2 valuation is based upon inputs other than quoted prices
included in level 1 that are observable for the instrument either
directly or indirectly. The Company's accounts payable of $88,093,
accrued liabilities of $273,971 and advances from related parties of
$87,849 are classified into level 2.
Level 3 valuation is for assets or liabilities that are not based on
observable market data.
b) Currency Risk
While the reporting currency is in the U.S. Dollar, 6% of expenses
for the period ended are denominated in U.K. pound (2009 - 7% of
expenses). As at December 31, 2010, 19% of liabilities are
originally denominated in U.K. pound (2009 - 21% 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.
NOTE 7 - INCOME TAXES
Dec 31, Sept 30,
2010 2010
------------- -------------
Temporary differences $ 14,771 $ 14,741
Loss carryforwards 2,068,304 2,064,483
Allowance for valuation (2,083,075) (2,079,224)
------------- -------------
$ -- $ --
============= =============
|
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.
10
GRUPO INTERNATIONAL INC.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 8 - COMMINTMENTS AND CONTINGENCIES
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 the number of
common shares by 8,736.
11
ITEM 2. MANAGAMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operation
We were incorporated in January of 1997, and do not have any
significant operating history or financial results. In 2000 we began our 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 general research.. To date, we have been unable to obtain the
funding that we need to move forward to a phase I trial. We returned the License
that we held for the vaccine back to the licensor, as the license expires in
2011 and we did not believe that we would be able to commercialize the vaccine
prior to the expiration of the patents. Under the termination agreement, the
licensor agreed to forgo $566,005 in outstanding royalty payments, and the
Company agreed to pay a cancelation fee of $38,359 when funds become available.
Research and development costs for the three months ended December 31,
2010 increased by $465from $5,311 for the three months ended December 31, 2009
to $5,776 for the three months ended December 31, 2010. The increase in
expenditure was due to an increase in director costs. Administrative expenditure
increased by $1,664 from $5,197 for the three months ended December 31, 2009 to
$6,861 for the three months ended 31 December 2010. The increase was due to an
increase in salary and filing costs. For the quarter ended December 31, 2010, we
incurred a loss of $12,739 or $(0.00) per share based on 10,430,652 weighted
average shares outstanding for the quarter ended December 31, 2010 compared to a
loss of $10,626 or $0.00 per share based on 9,830,652 weighted average shares
outstanding for the quarter ended December 31, 2009. We did not conduct any
operations of a commercial nature during the period from January 10, 1997 (date
of inception) to December 31, 2010. Through December 31, 2010 we have relied on
advances of approximately $545,245 from our principal stockholders, trade
payables of approximately $556,388, proceeds of $1,196,000 from the sale of
common stock and the issue of stock for fees and/or services in the amount of
$4,594,800 to support our limited operations. As of December 31, 2010, we had
$1,995 of cash and cash equivalents. Operations for the three months ended
December 31, 2010 have been financed through a loan from related parties and an
increase in payables. We seek additional equity or debt financing of up to $7
million which we plan to use to use for working capital 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 curtail or terminate our operations and liquidate our
business (see Note 1 to financial statements).
Our business plan requires at least $6,000,000 to implement, and cannot
be implemented until funding for this amount has been achieved. If the funding
is achieved, we plan, in the first year, to implement a PhaseI/II trial with the
Medical Control Agency in The United Kingdom through the application for a CTX
exemption to commence a Phase I/II trial. We plan to apply for a CTX exemption
using the Clade B strain of the virus as soon as a vaccine using the local Clade
B strain is made available. The manufacture of the vaccine will be contracted
out and the Company is currently evaluating various different manufacturers in
Russia, the UK and the USA.
12
We also plan, subject to financing, in the future, to initiate further
trials in Russia, in conjunction with The Russia Federal Aids Center, a
department of The Central Institute of Epidemiology, Moscow, Russia. We intend
to institute studies of the efficacy of the vaccine in non-human primates in
parallel or preceding Phase I trials of the vaccine in human subjects in Moscow,
Russia. We expect the regulatory approval process to take up to six months to
complete. The proposed vaccine could be manufactured in Russia, under the
supervision and quality control of various parties within and without Russia,
including the Federal Russia AIDS Centre in Moscow and laboratories in
Birmingham and London, U.K.
In addition, and subject to financing, we anticipate initiating 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 $6
million, which is the minimum 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. The results
of the proposed trials in Russia and/or Africa and the UK cannot be predicted.
We estimate that we will require approximately $6 million to $7 million
to conduct our vaccine development activities through the next two years. This
amount will 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 quarterly report shall constitute an offer of any securities for
sale. Such shares if 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. 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 with the payment of on-going royalties on sales. We are also
looking for grants from governments and organisations involved in HIV work. We
are also looking at the possibility of acquiring other technologies which might
assist in financing.
If we are unable to raise $6 million, we will most likely cease all
activity related to our vaccine development and marketing, or at the very least,
proceed on a reduced scale. 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.
Subject to financing, we expect to purchase approximately $500,000 in
equipment in the next two years to be used for research and expanding testing
laboratories. In addition, with available funding, we expect to hire an
additional fifteen employees for both research and administrative support over
the next five years.
13
Item 3. Controls and Procedures.
(a) Disclosure controls and procedures. Within 90 days before filing this
report, the Company evaluated the effectiveness of the design and operation of
its disclosure controls and procedures. The Company's disclosure controls and
procedures are the controls and other procedures that it designed to ensure that
it records, processes, summarizes and reports in a timely manner the information
it must disclose in reports that it files with or submits to the Securities and
Exchange Commission. Kevin W. Murray, the Company's Chief Executive Officer and
Chief Financial Officer, supervised and participated in this evaluation. Based
on this evaluation, Mr. Murray concluded that, as of the date of their
evaluation, the Company's disclosure controls and procedures were effective.
(b) Internal controls. Since the date of the evaluation described above, there
have not been any significant changes in the Company's internal accounting
controls or in other factors that could significantly affect those controls.
14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently subject to any legal proceedings or claims.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits: Exhibits required to be attached by Item 601 of Regulation S-B are
listed below:
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.
|
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the period
covered by this Form 10Q-SB
15
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 30th day of September, 2011.
HIV-VAC, INC.
/s/ Kevin W. Murray
-------------------------------
Kevin W. Murray
President, CEO & CFO
|
16
GRUPO (CE) (USOTC:GRPI)
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GRUPO (CE) (USOTC:GRPI)
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