UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month ofJune 2007
Commission File No.0-29328
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Translation of registrant's name into English)
BioSquare, 650 Albany Street, Boston, MA 02118
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7) [ ]
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
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SUBMITTED HEREWITH
Exhibits
99.1
Interim Consolidated Financial Statements for the Nine Months ended April 30, 2007
99.2
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Nine Months Ended April 30, 2007
99.3
Certification of Chief Executive Officer
99.4
Certification of Chief Financial Officer
99.5
News Release dated June 19, 2007 announcing engagement of investor relations consultant
SIGNATURES
Pursuant to the requirements 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.
ADVANCED PROTEOME THERAPEUTICS CORPORATION
Date: July 3, 2007
/s/ Alexander (Allen) Krantz________________________
Name:
Alexander (Allen) Krantz
Title:
President and Chief Executive Officer
Exhibit 99.1
Interim Consolidated Financial Statements of
ADVANCED PROTEOME
THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
(Expressed in U.S. Dollars)
NINE MONTHS ENDED APRIL 30, 2007
Unaudited – prepared by management
NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3(3), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.
The Company’s independent auditor has not performed a review of these financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor.
Allen Krantz
| | |
President, Chief Financial Officer, Secretary and Director | | |
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
INTERIM CONSOLIDATED BALANCE SHEET
Unaudited – prepared by management
(Expressed in U.S. Dollars)
| | | | |
| | April 30 2007 | | July 31 2006 |
| | (Unaudited) | | |
ASSETS | | | | |
| | | | |
Current | | | | |
Cash and cash equivalents | | $ 1,472,320 | | $ 101,315 |
Receivables | | 29,408 | | 15,852 |
Prepaid expenses | | 30,900 | | 1,257 |
Total current assets | | 1,532,628 | | 118,424 |
| | | | |
Demand promissory note(Note 5) | | - | | 132,556 |
| | | | |
Equipment (Note 6) | | 228,477 | | 2,114 |
| | | | |
Deferred costs (Note 10) | | - | | 57,271 |
| | | | |
Patent application and technology (Note 4) | | 1,091,374 | | - |
| | | | |
Total assets | | $ 2,852,479 | | $ 310,365 |
| | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | |
| | | | |
Current | | | | |
Accounts payable and accrued liabilities | | $ 29,586 | | $ 88,885 |
| | | | |
Due to related party(Note 13) | | 140,660 | | - |
| | | | |
Non-controlling interest(Note 4) | | 662,020 | | - |
| | | | |
Shareholders’ equity | | | | |
Capital stock (Note 10) | | | | |
Authorized: No maximum number of common shares, without par value | | | | |
Issued: 55,508,964 (July 31, 2006 - 26,507,297) common shares | | 10,122,459 | | 8,101,117 |
Contributed surplus | | 861,802 | | 505,236 |
Deficit | | (8,964,048) | | (8,384,873) |
| | | | |
Total shareholders’ equity | | 2,020,213 | | 221,480 |
| | | | |
Total liabilities and shareholders’ equity | | $ 2,852,479 | | $ 310,365 |
| | | |
Nature and continuance of operations (Note 1) Commitments and contingencies(Note 9) Subsequent events (Note 15) |
| | | |
On behalf of the Board: | | | |
| | | |
“Allen Krantz” | Director | “Jean Bellin” | Director |
| | | |
The accompanying notes are an integral part of these interim consolidated financial statements.
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
Nine months ended April 30, 2007 and 2006
| | | | | | | |
| Three Months Ended | Nine Months Ended |
| April 30 2007 | | April 30 2006 | | April 30 2007 | | April 30 2006 |
| | | (Restated) | | | | (Restated) |
Revenues | | | | | | | |
Interest income | $ 18,447 | | $ 8,640 | | $ 40,637 | | $ 9,751 |
| | | | | | | |
Operating expenses | | | | | | | |
Amortization of equipment | 12,116 | | 104 | | 12,831 | | 308 |
Consulting | 2,251 | | 6,523 | | 32,848 | | 18,554 |
Interest | - | | - | | 7,128 | | - |
General and administration | 1,432 | | 3,747 | | 22,814 | | 13,526 |
Professional fees | 14,952 | | 47,171 | | 79,511 | | 91,721 |
Regulatory filings | 3,834 | | 5,308 | | 31,632 | | 12,850 |
Rent | 18,750 | | 4,000 | | 31,583 | | 11,795 |
Shareholder information | - | | - | | 8,969 | | - |
Stock based compensation | 271,566 | | - | | 271,566 | | - |
Supplies | 57,676 | | - | | 57,676 | | - |
Travel and entertainment | 2,945 | | - | | 16,687 | | - |
Wages and benefits | 117,323 | | - | | 185,201 | | - |
| | | | | | | |
| | | | | | | |
| (484,398) | | (58,213) | | (717,809) | | (139,003) |
| | | | | | | |
Other items | | | | | | | |
Gain on settlement of debt (Note 7) | - | | - | | - | | 38,100 |
| | | | | | | |
Net loss for the period before non-controlling interest | $ (484,398) | | $ (58,213) | | $ (717,809) | | $ (100,903) |
| | | | | | | |
Non-controlling interest | 92,900 | | - | | 138,634 | | - |
| | | | | | | |
Net loss for the period | $ (391,498) | | $ (58,213) | | $ (579,175) | | $ (100,903) |
| | | | | | | |
Basic and diluted earnings (loss) per common share | $ (0.01) | | $ (0.01) | | $ (0.02) | | $ 0.01 |
| | | | | | | |
Weighted average number of common shares outstanding – basic and diluted |
55,201,043 | |
26,507,927 | |
45,837,004 | |
23,721,523 |
The accompanying notes are an integral part of these interim consolidated financial statements.
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
Nine months ended April 30, 2007 and 2006
| | | | | | | | | | |
| Three Months Ended | Nine Months Ended |
| April 30 2007 | | April 30 2006 | | April 30 2007 | | April 30 2006 |
| | | (Restated) | | | | (Restated) |
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | | | | | | | |
Net loss for the period | $ (391,498) | | $ (58,213) | | $ (579,175) | | $ (100,903) |
Items not affecting cash: | | | | | | | |
Amortization of equipment | 12,116 | | 104 | | 12,831 | | 308 |
Gain on settlement of debt | - | | - | | - | | (15,000) |
Non-controlling interest | (92,900) | | - | | (138,634) | | - |
Stock based compensation | 271,566 | | - | | 271,566 | | - |
Changes in non-cash working capital items: | | | | | | | |
Increase in receivables | (485) | | (2,712) | | (13,556) | | (8,495) |
Increase in prepaid expenses | (18,397) | | - | | (29,643) | | - |
Increase (decrease) in accounts payable and accrued liabilities | (40,649) | | 28,319 | | (24,120) | | (3,998) |
Decrease in income and other taxes payable | - | | (282) | | - | | (4,670) |
Net cash flows provided by (used in) operating activities |
(260,247) | |
(32,784) | |
(500,731) | |
(132,758) |
| | | | | | | |
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | | | | | | | |
Deferred costs | - | | - | | 22,092 | | - |
Due to related party | (7,077) | | - | | 140,660 | | - |
Repayment of long-term debt | - | | - | | - | | (45,000) |
Issuance of common shares, net of share issuance costs | 70,225 | | - | | 2,106,742 | | 308,510 |
Net cash flows provided by (used in) financing activities |
63,148 | |
- | |
2,269,494 | |
263,510 |
| | | | | | | |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | | | | | | | |
Demand promissory note | - | | - | | 132,556 | | - |
Equipment | (230,573) | | - | | (239,194) | | - |
Non-controlling interests | - | | - | | 800,654 | | - |
Patent applications and technology | (1,587) | | - | | (1,091,374) | | - |
Net cash flows used in investing activities | (232,160) | | - | | (397,358) | | - |
| | | | | | | |
Change in cash during the period | (429,259) | | (32,874) | | 1,371,005 | | 130,752 |
| | | | | | | |
Cash, beginning of period | 1,901,579 | | 353,840 | | 101,315 | | 190,304 |
| | | | | | | |
Cash, end of period | $ 1,472,320 | | $ 321,056 | | $ 1,472,320 | | $ 321,056 |
|
Supplemental disclosure with respect to cash flows(Note 11) |
|
The accompanying notes are an integral part of these interim consolidated financial statements.
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIENCY)
Unaudited – prepared by management
(Expressed in U.S. Dollars)
Nine months ended April 30, 2007 and 2006
| | | | | | | | | | |
| | Number of | | | | Contributed | | | | |
| | Shares | | Amount | | Surplus | | Deficit | | Total |
| | | | | | | | | | |
Balance, July 31, 2006 | | 26,507,297 | | $ 8,101,117 | | $ 505,236 | | $ (8,384,873) | | $ 221,480 |
| | | | | | | | | | |
Issue of common shares for cash pursuant to a private placement | |
25,000,000 | |
2,224,207 | |
- | |
- | |
2,224,207 |
| | | | | | | | | | |
Issue of common shares for cash pursuant to the exercise of warrants | |
3,501,667 | |
322,391 | |
- | |
- | |
322,391 |
| | | | | | | | | | |
Issue of agents warrants | | - | | - | | 85,000 | | - | | 85,000 |
| | | | | | | | | | |
Issue of common shares as a finders’ fee | |
500,000 | |
44,484 | |
- | |
- | |
44,484 |
| | | | | | | | | | |
Share issuance costs | | - | | (569,741) | | - | | - | | (569,741) |
| | | | | | | | | | |
Stock based compensation | | - | | - | | 271,566 | | - | | 271,566 |
| | | | | | | | | | |
Net loss | | - | | - | | - | | (579,175) | | (579,175) |
| | | | | | | | | | |
| | | | | | | | | | |
Balance, April 30, 2007 | | 55,508,964 | | $ 10,122,459 | | $ 861,802 | | $ (8,964,048) | | $ 2,020,213 |
| | | | | | | | | | |
| | Number of | | | | Contributed | | | | |
| | Shares | | Amount | | Surplus | | Deficit | | Total |
| | | | (Restated) | | | | | | (Restated) |
Balance, July 31, 2005 | | 20,007,297 | | $ 7,801,123 | | $ 505,236 | | $ (8,247,419) | | $ 58,940 |
| | | | | | | | | | |
Issue of common shares for cash | | 6,000,000 | | 308,510 | | - | | - | | 308,510 |
| | | | | | | | | | |
Issue of common shares as a finders’ fee | |
500,000 | |
25,709 | |
- | |
- | |
25,709 |
| | | | | | | | | | |
Share issuance costs | | - | | (25,709) | | - | | - | | (25,709) |
| | | | | | | | | | |
Net loss | | - | | - | | - | | (100,903) | | (100,903) |
| | | | | | | | | | |
| | | | | | | | | | |
Balance, April 30, 2006 | | 26,507,297 | | $ 8,101,117 | | $ 505,236 | | $ (8,348,322) | | $ 266,547 |
The accompanying notes are an integral part of these interim consolidated financial statements.
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
April 30, 2007
1.
NATURE AND CONTINUANCE OF OPERATIONS
The Company was incorporated in British Columbia, Canada on December 12, 2005 under the name Advanced Proteome Therapeutics (Canada) Inc., as a wholly-owned subsidiary of Thrilltime Entertainment International, Inc. (“Thrilltime”). As at July 31, 2006 the Company had no principal business activity. The Company was specifically incorporated for the purpose of completing an acquisition of Advanced Proteome Therapeutics, Inc. (“APTI”), a bio-tech company located in the United States (Note 4). The Company subsequently changed its name, on August 15, 2006, to Advanced Proteome Therapeutics Corporation and completed the acquisition of APTI effective on October 25, 2006 and a plan of arrangement with Thrilltime. The result was the Company acquired a 56% interest in APTI for consideration of $2,045,254 USD ($2,300,000 Cdn) and concurrently exchanged all of the shares of Thrilltime for shares of the Company. ;As a result the Company was identified as the acquirer pursuant to the business combination, and Thrilltime became the wholly owned subsidiary of the Company. These financial statements have been accounted for as a continuity of interests with Thrilltime.
APTI is a biotechnology company founded to develop and commercialize a platform that is intended to use advanced protein modification technologies to create proprietary human protein pharmaceuticals with enhanced therapeutic properties.
These consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to develop profitable operations in the future. The Company generated operating losses in the nine months ended April 30, 2007 and fiscal year ended July 31, 2006. The application of the going concern concept is dependent on the Company’s ability to obtain a viable operation and receive continued financial support from its shareholder and from external financing. Management is of the opinion that sufficient working capital will be obtained from external financing to meet the Company’s liabilities and commitments.
There can be no assurances that the Company will be successful in raising additional cash to finance operations or that the continued support of creditors and shareholders will be available. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
| | | | |
| | | April 30 2007 | July 31 2006 |
| | | | |
| Working capital | | $ 1,503,042 | $ 29,539 |
| Deficit | | (8,964,048) | (8,384,873) |
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
April 30, 2007
2.
SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and consolidation
These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Thrilltime Entertainment International, Inc. a Canadian company incorporated under the laws of British Columbia., and Superstar Dragsters, Inc. and Skycoaster, Inc., both incorporated under the laws of the State of Nevada, U.S.A..
The accounts of the Company’s 56% owned subsidiary, Advanced Proteome Therapeutics, Inc., incorporated under the laws of the State of Deleware, has been consolidated effective the date of its acquisition on October 25, 2006.
These financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) which are substantially in accordance with United States generally accepted accounting principles (“U.S. GAAP”), except as disclosed in Note 14. All significant inter-company transactions have been eliminated on consolidation.
Use of estimates
The preparation of consolidated financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of the assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the year. Actual results could differ from those estimates.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, demand deposits and short term, highly liquid investments that are readily convertible to known amounts of cash within ninety days of deposit.
Comparative figures
Certain of the prior periods comparative figures have been restated to conform to the presentation adopted for the current period.
Earnings (loss) per share
Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of shares outstanding during the reporting period. Diluted earnings per share are computed similar to basic earnings per share except that the weighted average shares outstanding are increased to include additional shares from the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options were exercised and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the reporting period.
Equipment
Equipment is recorded at cost and is amortized over their remaining estimated useful economic life as follows:
Office and computer equipment
Declining-balance basis at between 20% and 30% per annum
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
April 30, 2007
2.
SIGNIFICANT ACCOUNTING POLICIES (cont’d…)
Deferred costs and share issue costs
Deferred costs consist primarily of corporate finance fees, legal fees and sponsorship fees directly identifiable with raising capital or acquiring a business or assets. These costs are deferred until the issuance of the shares or a completion of a business acquisition to which the costs relate, at which time the costs will be charged against the related capital stock or asset or charged to operations if the transactions are not completed.
Income taxes
The Company follows the asset and liability method of accounting for income taxes whereby future income taxes are recognized for the future income tax consequences attributable to differences between the financial statement carrying values and their respective income tax bases (temporary differences). Future income tax assets and liabilities are measured using enacted or substantively enacted income tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on future income tax assets and liabilities of a change in tax rates is included in income in the period in which the change occurs. The amount of future income tax assets recognized is limited to the amount that is more likely than not to be realized.
Patent applications and technology
The costs incurred to acquire options and/or rights to technologies and also the costs to register patents on these technologies have been capitalized and will be amortized over the estimated useful lives of the technology commencing upon its commercial release.
Research costs are expensed as incurred. Development costs are expensed as incurred except when the costs associated with the process are clearly identifiable, the Company has indicated its intention to use the process and funding for continued development is available. In these circumstances, the costs are deferred and amortized on a systematic basis.
Management continuously assesses the recoverability of the Company’s technology. When management believes that the Company will no longer pursue an option, patent or right, or if management concludes that it is recorded at an amount in excess of its net recoverable amount, the cost associated with the option, patent or right is written off or written down
Stock-based compensation
Stock options and direct awards of stock granted to employees and non-employees are recorded at fair value on the date of grant and the associated expense is amortized over the vesting period. The Company issues shares and share options under its share-based compensations plans. Any consideration paid upon exercise of the share options or purchase of shares is credited to share capital.
The Company has adopted the fair value based method of accounting for all stock-based compensation.
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
April 30, 2007
3.
SHARE EXCHANGE AGREEMENT
Effective October 25, 2006 the Company acquired 100% of the outstanding common shares of Thrilltime and its wholly-owned subsidiaries, Superstar Dragsters, Inc. and Skycoaster, Inc.. The Company exchanged 52,007,297 common shares of the Company for all of the issued and outstanding common shares of Thrilltime.
For accounting purposes, the share exchange is accounted for by combining the net book value of the assets, liabilities and shareholders’ equity of the Company and Thrilltime. The exchange of shares does not result in a revaluation of the net assets and liabilities of the companies since there is no change in the overall control of the companies involved. These interim consolidated financial statements are based on the assumption that the companies were combined for the prior and current accounting periods.
4.
BUSINESS COMBINATION AND NON-CONTROLLING INTEREST
Effective October 25, 2006 the Company acquired 56% of the outstanding common shares of APTI for
consideration in the amount of $2,045,254 USD ($2,300,000 Cdn), comprising a cash payment of $1,779,518 USD ($2,000,000 Cdn) and the conversion of a demand promissory note (Note5) in the amount of $265,736 USD ($300,000 Cdn).
The acquisition has been accounted for by the purchase method and the operations of APTI have been included in the interim consolidated financial statements from the date of acquisition.
The purchase price was allocated as follows:
| | | | |
| Cash | | $ 38,957 | |
| Equipment | | 396 | |
| Deferred charges | | 86,250 | |
| Patent applications and technology | | 1,077,669 | |
| Accounts payable and accrued liabilities | | (83,495) | |
| Promissory note payable | | (176,760) | |
| Due to related party (Note 13) | | (142,363) | |
| Non-controlling interest | | (800,654) | |
| | | $ 2,045,254 | |
| | | | | |
| Non-controlling interest | | | |
| Incurred upon acquisition of business combination (above) | (800,654) | |
| Non-controlling portion of loss from operations (44% of $315,078) |
138,634 | |
| | | $ 662,020 | |
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
April 30, 2007
5.
DEMAND PROMISSORY NOTE
On May 25, 2006 the Company entered into a letter of intent with APTI, which was completed on October 25, 2006 (Note 4). Pursuant with the letter of intent the Company agreed to loan APTI up to $300,000 Cdn. As at July 31, 2006 the demand promissory note of $132,556 USD ($150,000 Cdn) was advanced to APTI, bore interest at 1% per annum, was secured by a promissory note and was due on demand. The note was convertible to 4,000,000 shares of APTI subject to certain conditions. As at October 25, 2006 a further $44,204 USD ($50,000 Cdn) and $89,260 USD ($100,000 Cdn) was advanced and the note was applied to the purchase price of the acquisition of APTI (Note 4).
6.
EQUIPMENT
| | | | | | |
|
April 30, 2007 |
Cost | | Accumulated Amortization | | Net Book Value |
| | | | | | |
| Office and laboratory equipment | $ 246,998 | | $ 25,939 | | $ 221,059 |
| Computer equipment | 8,224 | | $ 806 | | 7,418 |
| | $ 255,222 | | $ 26,745 | | $ 228,477 |
| | | | | | |
| | | | |
|
July 31, 2006 |
Cost | Accumulated Amortization | Net Book Value |
| | | | |
| Office equipment | $ 16,028 | $ 13,914 | $ 2,114 |
| | | | |
7.
LONG-TERM DEBT
Note payable bearing interest at 5% per annum
A promissory note in the principal sum of $ 60,000, as at July 31, 2005 was due on demand and bore interest at 18% per annum. During the fiscal year ended July 31, 2006 the Company settled the long-term debt of $60,000 and all accrued interest of $23,100 by way of a one-time payment of $ 45,000, resulting in a gain of $ 38,100.
8.
SEGMENTED INFORMATION
The Company currently conducts substantially all of its operations in the United States in one business segment.
9.
COMMITMENTS AND CONTINGENCIES
The Company is committed to lease premises at a monthly rent of $ 6,250 for a period of 1 year, commencing 1, 2007, with an option to extend the lease for 1 additional year.
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
April 30, 2007
10.
CAPITAL STOCK
Share issuances
Concurrent with, and as a condition precedent to a plan of arrangement with its wholly-owned subsidiary, on October 24, 2006 Thrilltime completed a brokered and non-brokered private placement of 25,000,000 units at a price of $0.10 Cdn per unit for gross proceeds of $ 2,224,207 USD ($2,500,000 Cdn). Each unit is comprised of one common share and one-half share purchase warrant, each warrant exercisable at a price of $0.15 Cdn per share for a period of one year. A cash commission of 8% ($177,936 USD) was paid to the selling agent and the selling group, and to finders on the non-brokered portion at closing. The agent was also issued 3,440,367 agent’s warrants for its services at a deemed value of $85,000 USD, exercisable into one common share of the Company at a price of $0.10 Cdn per unit for a period of one year. Thrilltime paid $35,590 USD ($40,000 Cdn) in expenses relating to this transaction and issued 500,000 common shares of the Company as sponsorship fees at a deemed value of $ 0.10 Cdn per share ($ 44,485 USD ($50,000 Cdn)).
As at July 31, 2006 the Thrilltime had incurred $57,271 USD of deferred costs in connection with these transactions.
Effective October 25, 2006, the Company completed its acquisition of APTI (Note 4). The result was that the Company acquired a 56% interest in APTI and concurrently exchanged 52,007,297 of the shares of the Company for shares of Thrilltime. As a result of the share exchange agreement (Note 3), Thrilltime has become a wholly owned subsidiary of the Company. These and future financial statements of the Company will be accounted for as a continuity of interests in the name of the Company.
The Company received proceeds of $252,032 USD ($296,667 Cdn) from the exercise of warrants at a price of $0.10 Cdn per share.
Stock options
The Company has a stock option plan (“the Plan”) that allows the directors to grant stock options to purchase up to 10% of issued and outstanding totalling 5,200,729 common shares, provided that stock options in favour of any one individual may not exceed 5% of the issued and outstanding shares. No stock option granted under the Plan is transferable by the optionee other than by will or the laws of descent and distribution, and each stock option is exercisable during the lifetime of the optionee only by such optionee.
The exercise price of all stock options granted under the Plan must not be less than the Discounted Market Price (the last closing price of the listed shares before the date of the grant, less the applicable discounts), subject to a minimum price of $0.10 Cdn per share, and the maximum term of each stock option may not exceed five years. Vesting is provided at the discretion of the directors and once vested, options are exercisable at any time. Any shares issued on the exercise of stock options must be legended with a four-month holding period commencing on the date the stock options were granted.
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
April 30, 2007
10.
CAPITAL STOCK(cont’d…)
Stock options(cont’d…)
Stock option transactions and the number of share options outstanding are summarized as follows:
| | | | |
| |
Number Of Options | | Weighted Average Exercise Price |
| | | | |
| Balance, July 31, 2005 | 1,900,000 | | 0.10 Cdn |
| | | | |
| Expired or cancelled | (1,900,000) | | (0.10) Cdn |
| | | | |
| Balance, July 31, 2006 | Nil | | $ Nil |
| | | | |
| Granted and outstanding at April 30, 2007 | 4,300,000 | | $ 0. 20 Cdn |
| | | | |
| Number of options currently exercisable | 4,300,000 | | $ 0. 20 Cdn |
During the fiscal year ended July 31, 2006, all options expired unexercised.
During the nine months ended April 30, 2007 the Company granted incentive stock options to directors, officers, employees and consultants to purchase up to an aggregate of 4,300,000 common shares exercisable on or before February 16, 2012 at a price of $0.20 Cdn per share. 1,900,000 of these stock options vested immediately, and the remaining 2,400,000 vest at a rate of 25% every year over the next three years, and expire over a life of 5 years. For the three months ended April 30, 2007 the Company recorded a total of $ 271,566 in stock based compensation expense related to stock options in the consolidated statement of operations.
Subsequent to April 30, 2007 the Company granted incentive stock options to directors, officers, employees and consultants to purchase up to an aggregate of 300,000 common shares exercisable on or before April 10, 2012 at a price of $0.30 Cdn per share.
Stock options to purchase shares from the Company are granted to directors and employees of the Company on the terms and conditions acceptable to the applicable securities regulatory authorities in Canada, in particular the TSX Venture Exchange (TSX-V).
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
April 30, 2007
10.
CAPITAL STOCK(cont’d…)
Warrants
As at April 30, 2007 the following warrants were outstanding:
| | | | |
| |
Number Of Warrants | | Weighted Average Exercise Price |
| | | | |
| | | | |
| Balance, July 31, 2006, expiring November 25, 2006 | 3,000,000 | $ | 0.10 Cdn |
| | | | |
| Exercised on or before November 25, 2006 | (2,966,667) | $ | (0.10) Cdn |
| | | | |
| Expired as of November 25, 2006 | (33,333) | $ | (0.10) Cdn |
| | | | |
| Issued pursuant to private placement, expiring October 24, 2007 | 12,500,000 | $ | 0.15 Cdn |
| Less warrants exercised in the three months ended April 30, 2007 | (535,000) | $ | (0.15) Cdn |
| | 11,965,000 | $ | 0.15 Cdn |
| | | | |
| Agents warrants, expiring October 24, 2007 | 3,440,367 | | 0.10 Cdn |
| | | | |
| Balance, April 30, 2007 | 15,405,367 | $ | 0.14 Cdn |
| | | | |
11.
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
Supplemental cash flow disclosure and non-cash financing and investing activities are as follows:
| | | |
| | April 30 2007 | April 30 2006 |
| | | |
| | | |
| Interest paid | $ - | $ - |
| Income taxes paid | - | - |
| | | |
The significant non-cash transactions for the period ended April 30, 2007 consisted of :
a)
The issuance of 500,000 common shares valued at $44,484 USD ($50,000 Cdn) as a sponsor fee relating to the private placement of 25,000,000 units.
b)
The issuance of 3,440,367 agent’s warrants valued at $ 85,000 USD ($95,540 Cdn) for services related to the private placement of 25,000,000 units.
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
April 30, 2007
12.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, receivables, demand promissory note, accounts payable and accrued liabilities, the carrying values of which approximate fair value due to the immediate or short-term maturity of these financial instruments. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying value, unless otherwise noted.
The Company is exposed to financial risk arising from fluctuations in foreign exchange rates and the degree of volatility in those rates. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.
13.
RELATED PARTY TRANSACTIONS
The Company entered into the following transactions with related parties:
During the nine month period ended April 30, 2007 the Company paid or accrued $32,848, (2006 - $18,554) to directors and officers for consulting.
Included within amounts due to related party, is $140,660 payable to an officer and director, secured by a promissory note bearing interest at a rate of 5% per annum, maturing on December 31, 2008. Annual interest in the amount of $7,076, due as of December 31, 2006, was accrued in the accounts and paid during the nine months ending April 30, 2007 (2006 - $nil).
These transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
14.
DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Accounting practices under Canadian and United States generally accepted accounting principles (“GAAP”), as they affect the Company are substantially the same except for the following:
Convertible securities
Under Canadian GAAP, convertible securities are split into their liability and equity components based on their fair values at the time of issuance. Subsequent to initial recognition, the implied debt discount is recognized as additional interest expense over the term to maturity. Under U.S. GAAP , the intrinsic value of the embedded beneficial conversion feature of convertible securities issued with a non-detachable conversion feature that are in-the-money at the date of issuance is allocated to additional paid-in capital. The amount allocated is to be accounted
for as additional interest expense over the minimum period in which the holder can realize its return. The beneficial conversion option on previously issued convertible debt at the date of its issuance was $975,000. The deemed
discount attributable to this beneficial conversion option was amortized to interest expense over the period to the first conversion date.
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
April 30, 2007
14.
DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (cont’d…)
As a result of these differences and settlement of the convertible securities, the value of share capital issued on conversion of convertible securities in 1999 would be increased by $9,000, the contributed surplus from the discharge component of the convertible securities for the nine months April 30, 2007, would increase by $479,619 (July 31, 2006 - $479,619) and deficit at April 30, 2007 would increase by $479,619 (July 31, 2006 - $479,619).
Differences affecting the Company’s financial statements are summarized as follows:
| | | |
| | April 30 2007 | July 31 2006 |
| | | |
| Income (loss) for the period under U.S. and Cdn. GAAP | $ (579,175) | $ (137,454) |
|
Earnings (loss) per common share under U.S. and Cdn. GAAP |
$ (0.01) |
$ (0.01) |
Convertible securities (cont’d…)
| | | | | | | |
| | |
Under Canadian GAAP | | Adjustments to reconcile to U.S. GAAP | |
Under U.S. GAAP |
| April 30, 2007 | | | | | | |
| Issued share capital | | $ 10,122,459 | | $ 9,000 | | $ 10,131,459 |
| Contributed surplus | | 861,802 | | 479,619 | | 1,341,421 |
| | | 10,984,261 | | 488,619 | | 11,472,880 |
| | | | | | | |
| Deficit, beginning of period | | (8,384,873) | | (479,619) | | (8,864,492) |
| Income (loss) for the period | | (579,175) | | - | | (579,175) |
| Deficit, end of period | | (8,964,048) | | (479,619) | | (9,443,667) |
|
Shareholders’ equity | |
$ 2,020,213 | |
$ 9,000 | |
$ 2,029,213 |
| | | | | | | |
| | |
Under Canadian GAAP | | Adjustments to reconcile to U.S. GAAP | |
Under U.S. GAAP |
| July 31, 2006 | | | | | | |
| Issued share capital | | $ 8,101,117 | | $ 9,000 | | $ 8,110,117 |
| Contributed surplus | | 505,236 | | 479,619 | | 984,855 |
| | | 8,606,353 | | 488,619 | | 9,094,972 |
| | | | | | | |
| Deficit, beginning of year | | (8,247,419) | | (479,619) | | (8,727,038) |
| Income for the year | | (137,454) | | - | | (137,454) |
| Deficit, end of year | | (8,384,873) | | (479,619) | | (8,864,492) |
|
Shareholders’ equity | |
$ 221,480 | |
$ 9,000 | |
$ 230,480 |
ADVANCED PROTEOME THERAPEUTICS CORPORATION
(Formerly Advanced Proteome Therapeutics (Canada) Inc.)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited – prepared by management
(Expressed in U.S. Dollars)
April 30, 2007
14.
DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (cont’d…)
There were no differences affecting the Company’s statement of cash flows for nine months ended April 30, 2007 or the fiscal year ended July 31, 2006.
15.
SUBSEQUENT EVENTS
Subsequent to April 30, 2007 the Company granted incentive stock options to directors, officers, employees and consultants to purchase up to an aggregate of 300,000 common shares exercisable on or before April 10, 2012 at a price of $0.30 Cdn per share.
Exhibit 99.2
ADVANCED PROTEOME THERAPEUTICS CORPORATION
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Nine Months Ended April 30, 2007
April 30, 2007
The following discussion and analysis should be read in conjunction with the financial statements and notes for the Nine Months Ended April 30, 2007 accompanying this report. All monetary amounts, unless otherwise indicated, are expressed in United States dollars. Additional information relating to the Company, including the Annual Information Form and other regulatory filings, can be found on the SEDAR website atwww.sedar.com
Forward-Looking Statements
Certain statements contained in this document constitute “forward-looking statements”. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “propose”, “anticipate”, “believe”, “forecast”, “estimate”, “expect” and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. Such statements reflect the Company’s current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Given these risks and uncertai nties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company does not intend, and does not assume any obligation, to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments.
Overview
APT is a biotechnology company founded to develop and commercialize a new, promising technology platform that is intended for the chemical modification of protein therapeutics. The platform anticipates important practical applications in the field of protein therapeutics by producing novel protein conjugates (therapeutic proteins whose properties are modified and further enhanced by chemically attached entities). APT's technology involves a way of potentially using proprietary ensembles of molecules to site-selectively modify therapeutic proteins to improve critical properties, i.e., duration of action. Such a "chemoselective" methodology has heretofore been lacking in the fields of chemistry and biochemistry.
APT intends to use advanced protein modification technologies to create proprietary human protein pharmaceuticals with enhanced therapeutic properties. Most protein pharmaceuticals are rapidly eliminated by the body, which limit their effectiveness and require that they be administered by frequent, often daily, injection. By selectively attaching life-time enhancing entities to therapeutic proteins, APT products are expected to last longer in the body. This feature will allow them to be administered less frequently, such as once per week to once per month, and maximize their therapeutic benefits to patients. Historically, loss of biological activity and product heterogeneity have been the two most common problems encountered in the development of long-acting protein pharmaceuticals. The targeted protein modification technologies used by APT is intended to overcome these problems.
During this quarter the Company has established laboratories in Boston, Massachusetts at the Boston University Discovery and Innovation Center, 650 Albany Street, Boston, MA 02118. The business operations have been relocated to the Boston area and the Albany Street laboratory. The laboratory has been equipped, and contracts established with service providers. R&D activities have begun and APC’s first proprietary ensembles of molecules using a combination of automation and organic chemical synthesis have been generated for the screening of protein targets.
To the extent possible, management endeavors to implement strategies aimed at reducing or mitigating the risks and uncertainties associated with the Company’s business. Operating risks include (i) market acceptance of the Company’s technology and products, (ii) the Company’s ability to obtain and enforce timely patent protection of its technology and products, (iii) the Company’s ability to manufacture its products cost effectively; (iv) the competitive environment and impact of technological change, and (v) the continued availability of capital to finance the Company’s activities.
Critical Accounting Policies and Estimates
The attached consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes the realization of assets and the settlement of liabilities in the normal course of business. The appropriateness of the going concern assumption is dependent upon the Company’s ability to generate future profitable operations and/or generate continued financial support in the form of share issuances. The Company plans to issue more securities at such time as it believes additional capital could be obtained on favorable terms; however, there can be no assurance that such funds can be available on favorable terms, if at all.
These consolidated financial statements are prepared in accordance with accounting principles generally accepted in Canada and include the accounts of the Company and its wholly-owned US subsidiary, Advanced Proteome Therapeutics Inc..
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management’s estimates.
Equipment
Equipment is recorded at cost and is amortized over their remaining estimated useful economic life as
follows:
·
Office, laboratory and computer equipment - Declining-balance basis at between 20% and 30% per annum
Patent application and technology
The costs incurred to acquire options and/or rights to medical technologies and also the costs to register patents on these technologies have been capitalized and will be amortized over the estimated useful lives of the technology commencing upon its commercial release.
Research costs are expensed as incurred. Development costs are expensed as incurred except when the costs associated with the process are clearly identifiable, the Company has indicated its intention to use the process and funding for continued development as available. In these circumstances, the costs are deferred and amortized on a systematic basis.
Management continuously assesses the recoverability of the Company’s technology. When management believes that the Company will no longer pursue an option, patent or right, or if management concludes that it is recorded at an amount in excess of its net recoverable amount, the cost associated with the option, patent or right is written off or written down.
- 2 -
Stock option plan
All The Company has a stock option plan (“the Plan”) that allows the directors to grant stock options to purchase up to 10% of issued and outstanding totalling 5,550,896 common shares, provided that stock options in favour of any one individual may not exceed 5% of the issued and outstanding shares. No stock option granted under the Plan is transferable by the optionee other than by will or the laws of descent and distribution, and each stock option is exercisable during the lifetime of the optionee only by such optionee.
The exercise price of all stock options granted under the Plan must not be less than the Discounted
Market Price (the last closing price of the listed shares before the date of the grant, less the applicable discounts), subject to a minimum price of Cdn. $0.10 per share, and the maximum term of each stock option may not exceed five years. Vesting is provided at the discretion of the directors and once vested, options are exercisable at any time. Any shares issued on the exercise of stock options must be legended with a four-month holding period commencing on the date the stock options were granted.
Share issue costs and deferred costs
Deferred costs consist primarily of corporate finance fees, legal fees and sponsorship fees directly identifiable with raising capital or acquiring a business or assets. These costs are deferred until the issuance of the shares or a completion of a business acquisition to which the costs relate, at which time the costs will be charged against the related capital stock or asset or charged to operations if the transactions are not completed.
Future income taxes
The Company follows the asset and liability method of accounting for income taxes whereby future income taxes are recognized for the future income tax consequences attributable to differences between the financial statement carrying values and their respective income tax bases (temporary differences). Future income tax assets and liabilities are measured using enacted or substantively enacted income tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on future income tax assets and liabilities of a change in tax rates is included in income in the period in which the change occurs. The amount of future income tax assets recognized is limited to the amount that is more likely than not to be realized.
Financial instruments
The Company has various financial instruments including cash, receivables, payables and accruals, interest bearing advances and capital leases. It was not practicable to determine the fair value of the advances as there are no specified terms of repayment. The carrying value of all other financial instruments approximates their fair value.
Earnings (loss) per share
Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of shares outstanding during the reporting period. Diluted earnings per share are computed similar to basic earnings per share except that the weighted average shares outstanding are increased to include additional shares from the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options were exercised and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the reporting period.
- 3 -
Outstanding Share Data
The authorized share capital of Advanced Proteome Therapeutics Corporation is an unlimited number of common shares, without par value. At April 30, 2007 there were 55,508,964 shares outstanding (July 31, 2006: 26,507,297). There are 15,405,367common shares allocable for issuance upon the exercise of common share purchase warrants (July 31, 2006: 3,000,000) and 4,300,000 common shares granted for issuance upon the exercise of stock options.
Results of Operations
Net Loss
The consolidated net loss for the Nine Months Ended April 30, 2007, was $(579,175) or $(0.02) per share as compared with a net loss of $(100,903) or $(0.01) per share for the comparative period in 2006.
Revenues
During the Nine months ending April 30, 2007 the company recorded $40,637 (2006 - $9,754) as interest income from funds placed on deposit with financial institutions.
Operating expenses
Operating Expenses were $758,446 for the nine months ended April 30, 2007, compared with $148,854 for the nine months ended April 30, 2006.
Amounts by major sub-category are as follows:
| | | | | |
| | | 2007 | | 2006 |
| | | | | |
Amortization of equipment | | | $ 12,831 | | $ 308 |
Consulting | | | 732,848 | | 18,554 |
Interest | | | 7,128 | | - |
General and administration | | | 22,814 | | 13,526 |
Professional fees | | | 79,511 | | 91,721 |
Regulatory filings | | | 31,632 | | 12,850 |
Rent | | | 31,583 | | 11,795 |
Shareholder information | | | 8,969 | | - |
Stock based compensation | | | 271,566 | | |
Travel and entertainment | | | 16,687 | | - |
Wages and benefits | | | 185,201 | | - |
| | | $ 758,446 | | $ 148,754 |
Depreciation and Amortization
Amortization expense relates to the amortization of equipment. For the Nine Months Ended April 30, 2007, amortization expense was $12,116, compared with $308 for the nine months ended April 30, 2006
Related Party Transactions
The Company entered into the following transactions with related parties:
During the nine month period ended April 30, 2007 the Company paid or accrued $32,848 (2006 - $18,554) to directors and officers for consulting.
Included within amounts due to related party, is $140,660 payable to an officer and director, secured by a promissory note bearing interest at a rate of 5% per annum, maturing on December 31, 2008. Annual interest in the amount of $7,076, due as of December 31, 2006, was accrued in the accounts and paid during the nine months ending April 30, 2007 (2006 - Nil).
These transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
- 4 -
Liquidity and Capital Resources
Advanced Proteome Therapeutics Corporation has financed activities, operations and capital expenditures primarily from public and private equity and repayable loans. Until the Company receives substantial revenue from product sales, it plans to issue more securities at such time as it believes additional capital could be obtained on favourable terms. However, there can be no assurance that such funds can be available on favourable terms, if at all.
As at April 30, 2007, the Company had cash and cash equivalents of $1,472,320 and working capital of $1,503,042. This compares with cash and cash equivalents of $101,315 and a working capital position of $29,539 at July 31, 2006.
Cash provided by the issuance of new shares during the nine months ended April 30, 2007 was $2,036,117.
During the nine months ending April 30, 2007 the Company received an additional $322,391 ($376,917 Cdn) pursuant to the exercise of outstanding warrants.
The Company believes that cash flows from operations and funds on hand will be sufficient to fund its cash requirements through 2007. However, the Company plans to issue more securities at such time as it believes additional capital could be obtained on favourable terms. There can be no assurance that such funds can be available on favourable terms, if at all. The Company has no material commitments.
Commitments
The Company is committed to license premises at a monthly rent of $ 6,250 for a period of 1 year, commencing January 1, 2007, with an option to extend the license for 1 additional year.
Subsequent events
Subsequent to April 30, 2007 the Company granted incentive stock options to directors, officers, employees and consultants to purchase up to an aggregate of 300,000 common shares exercisable on or before April 10, 2012 at a price of $0.30 Cdn per share. .
Financing Risks
History of Losses
- -The Issuer has been in a cumulative net loss position throughout its operating history. The Issuer’s limited operating history makes it difficult to evaluate the future financial prospects of its business. There is no assurance that the Issuer will grow or be profitable or that the Issuer will have earnings or significant improvement in its cash flow from operations in the future. The future earnings on and cash flow from operations are dependent on the Issuer’s ability to further develop and sell its products and the Issuer’s operational expenses. Management expects that the Issuer will continue to have high levels of operating expenses, since the Issuer needs to make significant up-front expenditures for product development, and corporate development activities. Management anticipates that the operating losses for the Issuer may continue until such time as the Issuer co nsistently generates sufficient revenues to support operations.
Need for Additional Financing
- The implementation of the Issuer’s business plan requires significant capital outlays and operating expenditures over the next several years. There can be no assurance that additional financing will be available to the Issuer when needed, on commercially reasonable terms, or at all. Any inability to obtain additional financing when needed would have a material adverse effect on the Issuer. Further, any additional equity financing may involve substantial dilution to the Issuer’s then existing shareholders. Debt financing, if available, may involve onerous obligations, monetary or otherwise. If adequate funds are not available, the Issuer may obtain funds through arrangements with strategic partners or others who may require the Issuer to relinquish rights to certain technologies, any of which could adversely affect its business, financial condition and results of operations.
- 5 -
Product Risks
Uncertain Demand for Products
- Demand for pharmaceutical products is dependent on a number of social, political and economic factors that are beyond the control of the Issuer. The healthcare industry is likely to continue to change as the public, government, medical practitioners, and the pharmaceutical industries focus on ways to expand medical coverage while controlling the growth in healthcare costs. While the Issuer believes that demand for pharmaceutical products will continue to grow, there is no assurance that such demand will exist or that the Companies products will be purchased to satisfy that demand.
Dependence on Development of New Products
- New technological or product developments in the pharmaceutical industry may render the Issuer’s products obsolete or reduce their value. The Issuer’s future prospects are highly dependent on its ability to develop new products - from new technologies and achieve market acceptance. There can be no assurance that the Issuer will be successful in these efforts.
Summary of Quarterly Results
The following table sets out selected consolidated quarterly information for the three months ended Janaury 31, 2007 and the previous quarters of 2004 through and 2006:
| | | | |
Quarter Ended 2007 | October 31 $ | July 31 $ | April 30 $ | January 31 $ |
Revenue | | | 18,447 | 22,089 |
Loss | | | (484,398) | (113,252) |
Loss per common share | | | (0.01) | (0.01) |
|
| | | | |
Quarter Ended 2006 | October 31 $ | July 31 $ | April 30 $ | January 31 $ |
Revenue | 101 | 780 | 8,640 | 1,080 |
Loss | (74,425) | (36,551) | (58,213) | (52,531) |
Loss per common share | (0.01) | (0.01) | (0.01) | (0.01) |
|
Quarter Ended 2005 | October 31 $ | July 31 $ | April 30 $ | January 31 $ |
Revenue | 31 | 50,121 | 391,091 | 243,813 |
Income (loss) | 9,841 | (127,514) | (44,681) | (145,843) |
Loss per common share | 0.01 | (0.01) | (0.01) | (0.01) |
|
Quarter Ended 2004 | October 31 $ | July 31 $ | April 30 $ | January 31 $ |
Revenue | 440,193 | 646,133 | 442,993 | 170,811 |
Loss | (45,202) | (130,640) | (34,647) | (150,612) |
Loss per common share | (0.01) | (0.01) | (0.01) | (0.01) |
- 6 -
ADVANCED PROTEOME THERAPEUTICS CORPORATION
CORPORATE DATA
April 30, 2007
| | | | |
HEAD OFFICE
Advanced Proteome Therapeutics Corporation Bio Square, 650 Albany Street Boston, Massachusetts USA 02118 Tel: (617) 638 0340 Fax: (617) 638 0341 Email: akrantz@aptbiotech.com | | SOLICITOR
Erwin Sui Sui & Company, Solicitors
Vancouver Office: Suite 306, 1311 Howe Street , Vancouver, B.C. V6Z 1R7 Tel: 604.605.6117 Fax: 604.605.6118
Toronto Office: The Exchange Tower , Suite 1800, 130 King Street West , Toronto, Ontario M5X 1E3 Tel: 416.360.6481 Fax: 416.360.3761 |
| | |
REGISTRAR & TRANSFER AGENT
Computershare Inc. 510 Burrard Street Vancouver , B. C., Canada V6C 3B9 | | AUDITORS
Davidson and Company, LLP 1200 – 609 Granville Street P.O.Box 10372, Pacific Centre Vancouver, BC V7Y1G6 |
| | |
DIRECTORSAND OFFICERS
Dr. Allen Krantz
Russell Phares Jean Bellin Robert Bender Dr, Gary Hayes |
President , CFO, Secretary & Director
Director Director Director Director
| INVESTOR CONTACTS
Peter Genge President Encompass Communications Inc. 1295 Johnston St. Vancouver, B.C. V6H 3R9 604 630-0770 877 566-6592 toll free N/A 604 630-0774 fax |
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CAPITALIZATION
Authorized: Issued: Escrow: Options: Warrants: |
| LISTINGS
TSX Venture Exchange Trading Symbol: V.APC CUSIP #: 552692
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Exhibit 99.3
Form 52-109F2Certification of Interim Filings
I,ALEXANDER (ALLEN) KRANTZ, CHIEF EXECUTIVE OFFICER OF ADVANCED PROTEOME THERAPEUTICS CORPORATION,certify that:
1.
I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109Certification of Disclosure in Issuers’ Annual and Interim Filings) ofADVANCED PROTEOME THERAPEUTICS CORPORATION(the issuer) for the interim period endingApril 30, 2007;
2.
Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;
3.
Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings;
4.
The issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting for the issuer, and we have:
(a)
designed such disclosure controls and procedures, or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared; and
(b)
designed such internal control over financial reporting, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP; and
5.
I have caused the issuer to disclose in the interim MD&A any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent interim period that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting.
Date: June 29, 2007
/s/ Alexander (Allen) Krantz__________
ALEXANDER (ALLEN) KRANTZ
CEO
Exhibit 99.4
Form 52-109F2Certification of Interim Filings
I,ALEXANDER (ALLEN) KRANTZ, CHIEF FINANCIAL OFFICER OF ADVANCED PROTEOME THERAPEUTICS CORPORATION,certify that:
1.
I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109Certification of Disclosure in Issuers’ Annual and Interim Filings) ofADVANCED PROTEOME THERAPEUTICS CORPORATION(the issuer) for the interim period endingApril 30, 2007;
2.
Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;
3.
Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings;
4.
The issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting for the issuer, and we have:
(a)
designed such disclosure controls and procedures, or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared; and
(b)
designed such internal control over financial reporting, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP; and
5.
I have caused the issuer to disclose in the interim MD&A any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent interim period that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting.
Date: June 29, 2007
/s/ Alexander (Allen) Krantz_____________
ALEXANDER (ALLEN) KRANTZ
CFO
Exhibit 99.5
ADVANCED PROTEOME THERAPEUTICS CORPORATION
NEWS RELEASE
APC Retains Encompass Communications as Investor Relations Consultant
Vancouver B.C., June 19, 2007. Advanced Proteome Therapeutics Corporation (APC:TSX-V) (the “Company”) is pleased to announce that it has engaged Encompass Communications Inc. (“Encompass”) as its investor relations consultant.
Encompass was founded in 2003 and specializes in corporate communications, investor relations and developing investment community sponsorship for growth oriented public companies. Encompass will concentrate on introducing the Company to its network of brokers, analysts and money managers, institutional investors and investment bankers.
Encompass has been engaged for a six month contract at a rate of Cdn$5,000 per month. The term of the contract may be extended for a further six months by the Company or cancelled by either party upon 30 days notice. The Company has also granted to Encompass an option entitling them to purchase up to an aggregate of 300,000 common shares of the Company at an exercise price of $0.40 for a five year term expiring June 18, 2012. The options will vest as to 25% per quarter.
Encompass does not have any direct or indirect interest in the Company.
Advanced Proteome Therapeutics Inc. features a technology focused on the redevelopment and rapid commercialization of protein therapeutics and has established laboratory operations at the BioSquare Discovery and Innovation Center on the campus of the Boston University School of Medicine. The technology will be targeted initially for the creation of improved versions of sub-optimal human protein pharmaceuticals with established markets. For further information about APC and APT Inc., e-mail our President and CEO, Alexander (Allen) Krantz at akrantz@aptbiotech.com or telephone at 415.722.1209.
ON BEHALF OF THE BOARD
Alexander (Allen) Krantz
President & CEO
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.