UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the quarterly period ended January 31, 2007
Commission File Number
0-33473
VIRIDAX CORPORATION.
(Name of Small Business Issuer in its charter)
| FLORIDA | | 65-1138291 |
(State or other jurisdiction of | | (I.R.S. Employer Identification No.) |
| Incorporation or organization) | | |
270 NW 3rd Court | | 33432-3720 |
| Boca Raton, Florida | | (Zip Code) |
| (Address of principal executive offices) | | |
Issuer’s Telephone: (561) 368-1427
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to filed such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by checkmark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes oNo x
APPLICABLE ONLY TO CORPORATE ISSUERS
As of January 31, 2007, there are 24,338,090 shares
of common stock outstanding.
Transitional Small Business Format: No
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Unaudited financial statements for Viridax Corporation as of the fiscal quarter ended January 31, 2007 are submitted in compliance with Item 310(b) of Regulation S-B.
ITEM 2. PLAN OF OPERATION
The Company's Plan of Operation for the next twelve months is to acquire adequate laboratory space to continue the development of high value biopharmaceutical products, to complete a contractual relationship with a manufacturing facility to produce the Company's first Staph phage product in compliance with USFDA guidelines, to commence preclinical and clinical testing, and to obtain the financing necessary to achieve these objectives. In addition, Viridax intends to initiate an Intellectual property strategy and program, and to engage the services of one or more key scientists to formulate and initiate the technology strategic plan.
The Company has engaged the services of Speckman Law Group, a biotechnology intellectual property law firm in Seattle, Washington (SLG). SLG has initiated key science literature searches and prior art patent searches to evaluate the baseline of information related to the Company's anticipated new intellectual property strategy. In addition, SLG has completed searches and has filed Trademark applications to protect the Company's name and logotype, and to assure there is no conflict regarding the Company's proposed product names. The engagement of SLG, and SLG's new Intellectual Property and scientific literature work assignments, preclude the need for additional consulting work as was performed previously by an outside consultant.
Viridax plans to engage the Services of several key scientists having specific experience in the fields of Bacteriophage biology and therapeutics. The Company intends to engage the scientists as full-time employees of Viridax upon completion of the current financing. Each scientist employed is anticipated to hold a PhD degree and have direct experience in the discovery and development of therapeutic bacteriophages.
The Company has received a draft of a Research Agreement between the Company and Olive View-UCLA Education and Research Institute, a California non-profit corporation ( ERI ). The agreement identifies the research assistance Viridax is seeking and ERI agrees to assist Viridax (also identified as the “Sponsor”) by furnishing such personnel, facilities, expertise and skills for the scope of work identified as the “Project” as may be required to complete the scope of work. Under this draft the Project is identified as follows:
“The Project involves the isolation, culture, amplification, purification and screening of bacteriophage found to be lytic to the bacterial pathogen Staphylococcus aureaus, including antibiotic-resistant form of Staphylococcus aureaus known as Methicillin Resistant Staphylococcus aureaus (MRSA), plus certain forms of MRSA known as Hospital-Acquired MRSA and Community-Associated MRSA. The Project also involves the isolation, culture, amplification, purification and screening of bacteriophage found to be lytic to other forms of Staphylococcus aureaus, such as Vancomycin-Resistant Staphylococcus aureaus (VRSA) or Vancomycin Intermediate Resistant Staphylococcus aureaus (VISA), plus any new variants or novel forms of Staphylococcus aureaus that may emerge during the course of the Project. The Project also involves the isolation, culture, amplification, purification and screening of less-virulent forms of Staphylococcus aureaus for use in amplification or manufacture of bacteriophage that are lytic to Staphylococcus aureaus. Also, Sponsor has a collection of Staphylococcus aureaus bacteriophage and bacterial host producer strains of Staphylococcus aureaus that will be provided to ERI for use in the project. For purposes of clarity, it is the stated objective of the Project that ERI will perform laboratory work to isolate, culture, amplify, purify and characterize, and thereafter provide to Sponsor a collection of bacteriophage lytic to pathogenic strains of Staphylococcus aureaus, plus a collection of non-pathogenic or less-virulent strains of Staphylococcus aureaus that will support amplification or manufacture of the lytic bacteriophage. It is also a stated objective of the Project that ERI will perform screening assays of selected lytic Staphylococcus aureaus bacteriophage against clinical isolates of Staphylococcus aureaus to assist Sponsor in identifying specific bacteriophage that may be useful for their further development as therapeutic agents.”
ERI is a non-profit corporation that administers and manages all research conducted at Olive-View-UCLA Medical Center. It is contractually related to and responsible for coordinating research activities with the County of Los Angeles/Olive View Medical Center, the Medical Center’s Professional Staff Association (PSA) and the University of California, Los Angeles. Because of the nature and diversity of patient illness and the high volume of medical problems seen at the medical center, Olive View-UCLA has become a successful site for clinical research, and accepts contracts for research and services from governmental and for-profit agencies.
Assuming final agreement of the parties, it is anticipated that $82,660 will be required upon execution of the final agreement, with an additional $135,000 due over the next nine months.
A long-range objective of Viridax Corporation is to bring forward a series of high value biopharmaceutical products based on the development of new and modified bacteriophages including certain proprietary delivery technologies. While the Company has the option of taking its bacteriophage therapy to foreign countries, such as phage therapy centers now operating in the Republic of Georgia and in Mexico, the Company has decided to gain approval under the United States federal and state regulations in order to market its products initially in the US. As a consequence, until all required testing is completed and final approvals obtained, the Company does not expect any revenue stream. It does, however, expect that funding from sales of its stock will be sufficient to maintain the Company until revenues in the United States may be obtained. There can be no assurance that the anticipated stock sales will be realized as anticipated. If required, the Company may seek funds in the form of loans. However, the Company has not entered into any loan agreements at this time, and there is no assurance that adequate, or any, loans could be obtained that would be sufficient to continue operations
It should be pointed out that the Plan of Operation for the Company is based upon successful sales of the Company’s Class A Preferred Stock, as offered by a prospectus for the public sale of 3,000,000 shares of such stock, which has been approved for sale in Germany by the German Federal Financial Supervisory Authority. (BaFin) Under the provisions of this offering the Company will realize net proceeds of US $3.50 per share. As of the date of this filing 36,000 shares of Class A Preferred Stock have been sold for net proceeds to Viridax Corporation of $126,000. These sales are at a rate which is below the expectations of the Corporation. Based upon funds currently on hand, the Company estimates that it has sufficient funds to continue operations for the next six months. The Company expects sales of its Preferred Stock to materially increase in the coming months because sales efforts are being expanded to Great Britain and other European countries, but there is no assurance that its expectations will be realized.
The Company has its President as its present sole full-time salaried employee. While the Company does anticipate hiring additional employees, no decisions have been made by the Board of Directors at this time.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things:
| · | Our ability to obtain capital; |
| · | Our ability to fully implement our business plan; |
| · | General economic and business conditions, both nationally and in our markets; |
| · | Our expectations and estimates concerning future financial performance, financing plans and the impact of competition; |
| · | Anticipated trends in our business; |
| · | Other risk factors set forth under “Other Risk Factors” in this report. |
In addition, in this report, we use words or phrases such as “high value”, “plans,” “expects,” “future,” “intends,” and similar expressions to identify forward-looking statements.
We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this report. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.
ITEM 3. CONTROLS AND PROCEDURES
| (a) | Disclosure Control and Procedures. Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(c) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports we file or submit under the Exchange Act. |
| (b) | Internal Control over Financial Reporting. There have not been any changes in our internal control over financial reporting (as such item is defined in Rules 13-a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to affect, our internal control over financial reporting. |
PART II
ITEM 1. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
On April 24, 2005 the Company executed an Asset Purchase Agreement with Mycobis Corporation, a private company, whereby Viridax purchased certain bacteriophage-based products in exchange for 2,000,000 shares of its common stock. A copy of this Agreement is provided as Exhibit (3)(1)(d) at Page Number E-9. The Company claimed exemption from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, (the "Act") as being a transaction by the issuer not involving any public offering. In consideration of the factors in determining whether a transaction is a public offering, such factors being (1) the number of the offerees and their relationship to each other and to the issuer, (2) the number of units offered, (3) the size of the offering, (4) the manner of the offering, the Company takes the position that because the number of offerees was one, the shares as issued were restricted, and the manner of the offering was a business transaction under direct negotiation between the two parties, no public offering was involved.
By approval of the Board of Directors, on April 15, 2005 the Company sold 25,000 shares of its common stock to an unrelated non-affiliated individual for the cash price of $25,000.00 and on April 29,2005 the Company sold 15,000 shares of its common stock to an unrelated non-affiliated individual for the cash price of $15,000.00. In both situations, the Company claims an exemption under Section 4(2) of the Act, based on the factors as set forth above, the Company takes the position that these two separate sales were sales not involving a public offering, The purpose of the 4(2) exemption was to permit an issuer to make a specific or isolated sale of its securities to particular persons without incurring the expense of registration. That is precisely the situation in the sales identified above to sophisticated investors.
On June 1, 2005 the Company entered into a Stock Purchase Agreement with Mason-Fenway, a Seychelle Islands Corporation, for the sale of up to 500,000 shares of its common stock. A total of 357,167 shares of common stock were sold in various increments at a cash price of $1.00 per share. No commissions were paid. The Stock Purchase Agreement was terminated April 25, 2006. The Company claimed an exemption from registration under Regulation S, as promulgated by the Securities and Exchange Commission. The facts relied upon to claim an exemption under Regulation S are: (1) the offer and sale of the shares was made in an offshore transaction because the purchaser was not a person within the United States and when all purchases were made the purchaser was outside the United States, (2) there were no directed selling efforts because the shares were all sold to a single entity and the consideration of activities to condition the market with respect to the stock being sold was inapplicable. The Company comes within the Category 2 safe harbor as set forth in Rule 903(c)(2) because the sale of the common stock complies with the general conditions of Rule 903(a) and (b) and the stock certificates bear restrictive legends that meet the Regulation S selling restrictions in terms of transactional restrictions and offering restrictions.
On July 1, 2005 the Company entered into a Stock Purchase Agreement with Rowland Associates, A BVI limited company, for the sale of 400,000 shares of its common stock. A total of 188,173 shares were sold in various increments at a cash price of $0.80 per share amounting to a total cash price of $153,476 (rounded). No commissions were paid. The Stock Purchase Agreement was terminated on April 25, 2005. The Company claimed an exemption from registration under Regulation S, as promulgated by the Securities & Exchange Commission. The facts relied upon to claim the Regulation S exemption and the Category 2 safe harbor are identical to the facts as specified above in respect to the offer and sale of the common stock with Mason-Fenway.
On March 31, 2006, the Board of Directors of Viridax Corporation approved the efforts of the Company in filing with the German Federal Financial Supervisory Authority (BaFin) a sales prospectus providing for the sale of up to the authorized limit of 3,000,000 shares of its Class A Preferred Stock, Par Value $1.00 per share, pursuant to the rules and requirements of Regulation S as promulgated by the United States Securities and Exchange Commission. Pursuant to the terms of that prospectus, East Slope Funding Corp., a Colorado corporation, has been designated as the Escrow Agent to receive the gross proceeds as paid by a given subscriber and to pay the net sum of US $3.50 per share to the Company and deliver a copy of the purchaser's subscription agreement. Under this arrangement, and within exemptions from the requirements of the prospectus, 36,000 shares have been sold to 21 individuals for a total cash consideration of $126,000. No sales commissions were paid.
The Company claimed an exemption from registration under Regulation S based upon the following facts: (1) the offer and sale of the shares to each individual purchaser was an offshore transaction because each purchaser was a resident of Germany at the time of the transaction and located within that country, (2) there were no directed selling efforts and no activities were undertaken to condition the market. The Company comes within the Category 2 safe harbor as set forth in Rule 903(c)(2) because the sale of the preferred stock complies with the general conditions of Rule 903(a) and (b) and the stock certificates bear restrictive legends that meet the Regulation S selling restrictions in terms of transactional restrictions and offering restrictions.
The Class A Preferred Stock is non-cumulative and non-voting. Each share of Preferred Stock is convertible to Common Stock as follows: (1) if the owner wishes to exchange the certificate within one year from the date of purchase, that owner shall receive four shares of Common Stock for each one share of Preferred Stock, (2) if the owner wishes to exchange the certificate after owning it for a period longer than one year but less than two years, the owner shall receive 4.4 shares of Common Stock for each one share of Preferred Stock, (3) if the owner wishes to exchange the certificate after owning it for a period longer than two years but less than three years, the owner shall receive 4.6 shares of Common Stock for each one share of Preferred Stock, and (4) if the owner wishes to exchange the certificate after owning it for three years, that owner shall receive five shares of Common Stock for each one share of Preferred Stock. Once an owner has owned the Preferred Stock for three years, the option to convert to Common Stock must be exercised within 30 days thereafter or the conversion option shall lapse.
On April 12, 2006, with approval of the Board of Directors, the Company entered into a Stock Purchase Agreement with Innovative Strategies, a Panama Company, for the sale to Innovative Strategies of up to 1,000,000 shares of the Company's Common Stock, at irregular intervals, on a best efforts basis, at US $1.00 per share. As of the date of this filing, the Company has sold 22,750 shares for a net to the Company of $22,750. All shares as sold are subect to Regulation S under which the Company has claimed an exemption from registration. The facts relied upon to claim an exemption under Regulation S are: (1) the offer and sale of the shares was made in an offshore transaction because the purchaser was an entity outside of the United States when the purchases were made, (2) there were no directed selling efforts because the shares were sold to a Single entity and the consideration of activities to condition the market with respect to the stock being sold was inapplicable. The Company comes within the Category 2 safe harbor as set forth in Rule 903(c)(2) because the sale of the common stock complies with the general conditions of Rule 903(a) and (b) and the stock certificates bear restrictive legends that meet the Regulation S selling restrictions in terms of transactional restrictions and offering restrictions. This Agreement with Innovative Strategies is ongoing.
By approval of the Board of Directors, on December 1, 2006 the Company sold 10,000 shares of its common stock to an unrelated non-affiliated individual for the cash price of $14,000. Net proceeds to the Company was $11,200 net of commissions of $2,800. The Company claims an exemption from registration under Section 4(2) of the Act on the basis that this is an isolated single sale to an accredited investor not involving a public offering. As noted above, the purpose of the 4(2) exemption is to permit an issuer to make a specific sale of its securities without incurring the expense of registration, which applies to this transaction.
ITEM 2. EXHIBITS
(a) INDEX TO EXHIBITS
Exhibit Number | | Page Number | | Description |
| 3(i)(a) | | | | *Articles of Incorporation of Media Advisory Group, Inc. |
| | | | | |
| 3(i)(b) | | | | *Certification of Reinstatement |
| | | | | |
| 3(i)(c) | | | | *Articles of Amendment changing name to I & E Tropicals, Inc. |
| | | | | |
| 3(i)(d) | | | | **Articles of Amendment changing name to Viridax Corporation |
| | | | | |
| 3(ii) | | | | *Bylaws of Viridax Corporation |
| | | | | |
| 10 | | | | **Asset Purchase Agreement |
| | | | | |
| 14 | | | | **Code of Ethics |
| | | | | |
| 31.1 | | E-1 | | Certification by President |
| 31.2 | | E-3 | | Certification by Chief Financial Officer |
| | | | | |
| 32.1 | | E-5 | | Certification, 18 U.S.C. |
| | | | | |
| 32.2 | | E-6 | | Certification, 18 U.S.C. |
*Incorporated by reference to Form 10-SB/12G, filed 1/7/02.
**Incorporated by reference to Form 10-KSB, filed on 6/27/05.
(b) REPORTS ON FORM 8-K
None.
SIGNATURES
In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | |
| Dated: March 12, 2007 | By: | /s/ Richard C. Honour |
| |
Name: Richard C. Honour Title: President |
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | |
| /s/ Richard C. Honour | | | President and Director |
Richard C. Honour | | | |
| | | | |
| /s/ Ledyard H. DeWees | | | Secretary |
Ledyard H. DeWees | | | |
| | | | |
| /s/ Michael C. Maloney | | | Director |
Michael C. Maloney | | | |
| | | | |
| /s/ Javaid Sheikh | | | Director |
Javaid Sheikh | | | |
| | | | |
| /s/ Kenneth E. Lehman | | | Chief Financial Officer Director |
Kenneth E. Lehman Director | | | |
VIRIDAX CORPORATION
(A Development Stage Company)
BALANCE SHEET
JANUARY 31, 2007
(Unaudited)
ASSETS | | | |
| CURRENT ASSETS | | | |
| Cash | | $ | 13,256 | |
| Notes receivable and accrued interest - related | | | | |
| party | | | 12,258 | |
| | | | | |
| Total Current Assets | | | 25,514 | |
| | | | | |
| COMPUTER EQUIPMENT - NET | | | 3,045 | |
| | | | | |
| OTHER ASSET | | | | |
| Bacteriophage material | | | 2,000,000 | |
| | | | | |
| TOTAL ASSETS | | $ | 2,028,559 | |
| | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | |
| CURRENT LIABILITIES | | | | |
| Accounts payable and accrued expenses | | $ | 131,762 | |
| Note payable and accrued interest - related | | | | |
| party | | | 6,168 | |
| | | | | |
| Total Liabilities | | | 137,930 | |
| | | | | |
| | | | | |
| STOCKHOLDER’S EQUITY | | | | |
| Non-cumulative, convertible preferred stock, | | | | |
| $1 par value, 3,000,000 shares authorized, | | | | |
| 33,500 shares issued and outstanding | | | 33,500 | |
| Common stock, $.001 par value, 50,000,000 | | | | |
| shares authorized, 24,338,090 shares issued | | | | |
| and outstanding | | | 24,338 | |
| Additional paid-in capital | | | 2,699,109 | |
| Deficit accumulated during the development stage | | | (866,318 | ) |
| | | | | |
| Total Stockholders’ Equity | | | 1,890,629 | |
| | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 2,028,559 | |
Read accompanying Notes to Financial Statements.
VIRIDAX CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
| | | Three Months Ended January 31, | | Nine Months Ended January 31, | | Period From July 1, 1998 (Inception) To January 31, | |
| | | 2007 | | 2006 | | 2007 | | 2006 | | 2007 | |
| | | | | | | | | | | | |
| REVENUES | | $ | - | | $ | - | | $ | - | | $ | - | | $ | 735 | |
| | | | | | | | | | | | | | | | | |
| EXPENSES | | | | | | | | | | | | | | | | |
| General and administrative | | | 73,872 | | | 167,002 | | | 294,037 | | | 362,165 | | | 867,053 | |
| | | | | | | | | | | | | | | | | |
| NET (LOSS) | | $ | (73,872 | ) | $ | (167,002 | ) | $ | (294,037 | ) | $ | (362,165 | ) | $ | (866,318 | ) |
| | | | | | | | | | | | | | | | | |
| (LOSS) PER SHARE | | $ | - | | $ | (.01 | ) | $ | (.01) $ | | | (.01 | ) | $ | (.07 | ) |
| | | | | | | | | | | | | | | | | |
| WEIGHTED AVERAGE NUMBER OF | | | | | | | | | | | | | | | | |
| SHARES OUTSTANDING | | | 24,334,394 | | | 24,449,975 | | | 24,325,017 | | | 24,202,689 | | | 12,991,752 | |
Read accompanying Notes to Financial Statements.
VIRIDAX CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
| | | Nine Months Ended January 31, | | Nine Months Ended January 31, | | Period From July 1, 1998 (Inception) to January 31, | |
| | | 2007 | | 2006 | | 2007 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | |
| Net (loss) | | $ | (294,037 | ) | $ | (362,165 | ) | $ | (866,318 | ) |
| Adjustments to reconcile net (loss) to net | | | | | | | | | | |
| cash (used in) operating activities: | | | | | | | | | | |
| Depreciation | | | 990 | | | 81 | | | 1,306 | |
| Common shares issued for services rendered | | | - | | | - | | | 5,000 | |
| Conversion of accrued interest to | | | | | | | | | | |
| additional paid-in capital | | | - | | | - | | | 576 | |
| Decrease (increase) in miscellaneous receivable | | | 511 | | | (512 | ) | | - | |
| (Increase) in accrued interest receivable | | | (509 | ) | | - | | | (558 | ) |
| Increase in accrued interest payable | | | 168 | | | - | | | 168 | |
| Increase in accounts payable | | | 125,146 | | | 40,588 | | | 131,762 | |
| | | | | | | | | | | |
| NET CASH (USED IN) OPERATING ACTIVITIES | | | (167,731 | ) | | (322,008 | ) | | (728,064 | ) |
| | | | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | |
| Purchase of computer equipment | | | (924 | ) | | (2,188 | ) | | (4,351 | ) |
| Increase in notes receivable | | | (7,700 | ) | | - | | | (11,700 | ) |
| Increase in loans receivable - stockholder | | | - | | | - | | | (12,000 | ) |
| Repayment of loans receivable - stockholder | | | - | | | - | | | 4,000 | |
| NET CASH PROVIDED BY (USED IN) INVESTING | | | | | | | | | | |
| ACTIVITIES | | | (8,624 | ) | | (2,188 | ) | | (24,051 | ) |
| | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | |
| Issuance of common stock, net | | | 33,950 | | | 487,954 | | | 620,901 | |
| Issuance of preferred stock, net | | | 117,250 | | | - | | | 117,250 | |
| Proceeds of note payable - related party | | | 6,000 | | | - | | | 6,000 | |
| Increase in amount due to stockholder | | | - | | | - | | | 16,220 | |
| Proceeds of note payable | | | - | | | - | | | 5,000 | |
| NET CASH PROVIDED BY FINANCING ACTIVITIES | | | 157,200 | | | 487,954 | | | 765,371 | |
| | | | | | | | | | | |
| NET (DECREASE) INCREASE IN CASH | | | (19,155 | ) | | 163,758 | | | 13,256 | |
| CASH - BEGINNING | | | 32,411 | | | 36,106 | | | - | |
| CASH - ENDING | | $ | 13,256 | | $ | 199,864 | | $ | 13,256 | |
Read accompanying Notes to Financial Statements.
VIRIDAX CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
| | | Nine Months Ended January 31, | | Nine Months Ended January 31, | | Period From July 1, 1998 (Inception) to January 31, | |
| | | 2007 | | 2006 | | 2007 | |
| | | | | | | | |
| SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING | | | | | | | |
| AND FINANCING ACTIVITIES: | | | | | | | |
| Common shares issued for services rendered | | $ | - | | $ | - | | $ | 5,000 | |
| | | | | | | | | | | |
| Common shares issued for purchase | | | | | | | | | | |
| of bacteriophage material | | $ | - | | $ | - | | $ | 2,000,000 | |
| | | | | | | | | | | |
| Conversion of net stockholders loans to | | | | | | | | | | |
| additional paid-in capital | | $ | - | | $ | - | | $ | 13,796 | |
Read accompanying Notes to Financial Statements.
VIRIDAX CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2007
NOTE 1. ORGANIZATION
Viridax Corporation was incorporated on July 1, 1998 under the laws of the State of Florida as Media Advisory Group, Inc. and on August 6, 2001 changed its name to I & E Tropicals, Inc. On April 5, 2005, the Company amended its Articles of Incorporation to change its name to Viridax Corporation. With the acquisition of the bacteriophage material on April 24, 2005, the Company is pursuing its plan to expedite the bacteriophage material’s commercialization. This bacteriophage material is expected to be used for the treatment of bacterial infections incited by Staphylococcus aureus and other Staphlylococcus species. The Company has decided to discontinue its original business plan for the importing and exporting of exotic marine life. The Company’s headquarters is in Boca Raton, Florida.
The Company has insignificant revenue to date. Since its inception, the Company has been dependent upon the receipt of capital investment or other financing to fund its continuing activities. In addition to the normal risks associated with a new business venture, there can be no assurance that the Company’s product development will be successfully completed or that it will be a commercial success.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed financial statements are unaudited. These statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (which include only normal recurring adjustments) considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the Company’s financial statements and notes thereto for the year ended April 30, 2006, included in the Company’s Form 10-KSB as filed with the SEC. The results of operations and cash flows for the period are not necessarily indicative of the results of operations or cash flows that can be expected for the year ending April 30, 2007.
VIRIDAX CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2007
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(Loss) Per Share
Basic and diluted (loss) per share is based on the weighted average number of common shares outstanding. The effect of the conversion of the preferred stock is excluded from the calculation of net loss per share as the effect was anti-dilutive.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Accordingly, actual results could vary from the estimates that were assumed in preparing the financial statements and the differences could be material.
VIRIDAX CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2007
NOTE 3. RELATED PARTY TRANSACTIONS
Notes Receivable and Accrued Interest
During the nine months ended January 31, 2007, an additional $7,700 was advanced to a company, the president of which is the president of the Company. The note is unsecured, bears interest at 6% per annum and is due on demand. The total notes receivable balance as of January 31, 2007 includes accrued interest of $558.
During the three months and nine months ended January 31, 2007, $15,000 and $45,000, respectively, was charged by a stockholder for legal services rendered. During the three months and nine months ended January 31, 2006, $15,000 and $43,750, respectively, was charged by this stockholder. As of January 31, 2007, the amount due this stockholder was $45,000 and is included in accounts payable.
Note Payable and Accrued Interest
On August 14, 2006, the Company received a loan of $6,000 from a company, the president of which is the president of the Company. The loan is unsecured, bears interest at 6% per annum and is due on demand. The note payable balance as of January 31, 2007 includes accrued interest of $168.
NOTE 4. CAPITAL STOCK
The Company has 3,000,000 shares of Class A non-cumulative, convertible preferred stock of $1 par value authorized. The preferred shares are non-cumulative, non- voting and convertible to common shares during the first 3 years under the following schedule: shares converted within the first year of purchase shall receive 4 shares of common for every share of preferred; shares converted within the second year after purchase shall receive 4.4 shares of common for every share of preferred; shares converted within the third year after purchase shall receive 4.6 shares of common for every share of preferred; after 3 years of ownership, the shareholder shall receive 5 shares of common for every share of preferred, but the right to convert must be exercised within 30 days after the third year anniversary of purchase or the conversion right will lapse.
VIRIDAX CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2007
NOTE 4. CAPITAL STOCK (CONTINUED)
On April 1, 2006, the Company entered into an Agency Agreement for the sale of up to 3,000,000 shares of the Company’s Class A Preferred Stock. The stock is being offered for sale in Germany and elsewhere in Europe at $7 per share ($3.50 per share net proceeds to the Company), as determined by the Company’s management, such sale being exempt from registration under Regulation S of the Securities Act of 1933.
During the nine months ended January 31, 2007, 33,500 preferred shares were sold for net cash of $117,250. Subsequent to January 31, 2007, 2,500 preferred shares were sold for cash totaling $8,750.
As of January 31, 2007, 33,500 preferred shares were issued and outstanding.
The Company has 50,000,000 shares of $.001 par value common stock authorized. Shareholders of common stock have one vote per share.
On April 12, 2006, the Company entered into a Stock Purchase Agreement for the sale, on a best efforts basis, of an aggregate of 1,000,000 shares of common stock for $1 per share, as determined by the Company’s management, such sale being exempt from registration under Regulation S of the Securities Act of 1933. The Agreement provides for the purchase of the shares at irregular intervals. During the nine months ended January 31, 2007, 22,750 common shares were sold for cash totaling $22,750.
VIRIDAX CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2007
NOTE 4. CAPITAL STOCK (CONTINUED)
On December 1, 2006, the Company issued 10,000 common shares in a private sale at $1.40 per share, as determined by the Company’s management, such sale being exempt from registration under Regulation D of the Securities Act of 1933. The shares were issued for cash totaling $11,200 net of commissions of $2,800.
As of January 31, 2007, 24,338,090 shares of common stock were issued and outstanding.
NOTE 5. GOING CONCERN
As reflected on the balance sheet, the Company does not have sufficient working capital to carry it through the next twelve months. This factor raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on its ability to raise additional capital. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
With the recent Agency Agreement and Stock Purchase Agreement in place for the sale of preferred and common stock, respectively, and the approval for the sale of preferred stock on the German exchange, management believes the Company will have sufficient working capital to be able to continue as a going concern.
