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 October 31, 2005
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
Incorporation or organization) Identification No.)
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 |_|
Indicate by checkmark whether registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes |_| No |X|
APPLICABLE ONLY TO CORPORATE ISSUERS
As of October 31, 2005, there are 24,056,500 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 October 31, 2005 are submitted in compliance with Item 310(b) of
Regulation S-B.
VIRIDAX CORPORATION
(F/K/A I & E TROPICALS, INC.)
(A Development Stage Company)
BALANCE SHEET
OCTOBER 31, 2005
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 186,637
Miscellaneous receivable 512
-----------
Total Current Assets 187,149
OTHER ASSET
Bacteriophage material 2,000,000
-----------
TOTAL ASSETS $ 2,187,149
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 61,906
-----------
STOCKHOLDER'S EQUITY
Non-cumulative, convertible preferred stock,
$1 par value, 3,000,000 shares authorized,
-0- shares issued and outstanding
Common stock, $.001 par value, 50,000,000
shares authorized, 24,395,500 shares issued
and outstanding 24,396
Additional paid-in capital 2,604,400
Stock subscriptions receivable (271,200)
Deficit accumulated during the development stage (232,353)
-----------
Total Stockholders' Equity 2,125,243
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,187,149
===========
Read accompanying Notes to Financial Statements.
F-1
VIRIDAX CORPORATION
(F/K/A I & E TROPICALS, INC.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Period From
July 1, 1998
Three Months Six Months (Inception)
Ended October 31, Ended October 31, To October 31,
2005 2004 2005 2004 2005
------------ ------------ ------------ ------------ ------------
REVENUES $ -- $ -- $ -- $ -- $ 735
EXPENSES
General and administrative 100,283 3,388 195,163 3,451 233,088
------------ ------------ ------------ ------------ ------------
NET (LOSS) $ (100,283) $ (3,388) $ (195,163) $ (3,451) $ (232,353)
============ ============ ============ ============ ============
(LOSS) PER SHARE $ -- $ -- $ (.01) $ -- $ (.02)
============ ============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 24,266,890 15,600,000 24,081,452 15,600,000 11,037,609
============ ============ ============ ============ ============
Read accompanying Notes to Financial Statements.
F-2
VIRIDAX CORPORATION
(F/K/A I & E TROPICALS, INC.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Period From
July 1,1998
Six Six Ended
Months Ended Months (Inception)
October 31, October31, to October 31,
2005 2004 2004
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $(195,163) $ (3,451) $(232,353)
Adjustments to reconcile net loss to net
cash (used in) operating activities:
Common shares issued for services
rendered -- --
5,000
Conversion of accrued interest to
additional paid-in capital -- -- 576
(Increase) in miscellaneous receivable (512) -- (512)
Increase in:
Accounts payable 61,906 325
61,906
Accrued interest -- 126 --
--------- --------- ---------
NET CASH (USED IN) OPERATING ACTIVITIES (133,769) (3,000) (165,383)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in loans receivable - stockholder -- -- (12,000)
Repayment of loans receivable - stockholder -- -- 4,000
--------- --------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES -- --
(8,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock, net 275,500 -- 330,000
Payments received on stock subscription
receivable 8,800 -- 8,800
Increase in amount due to stockholder -- 3,000 16,220
Proceeds of note payable -- -- 5,000
--------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 284,300 3,000 360,020
--------- --------- ---------
NET INCREASE IN CASH 150,531 -- 186,637
CASH - BEGINNING 36,106 -- --
--------- --------- ---------
CASH - ENDING $ 186,637 $ -- $ 186,637
========= ========= =========
Read accompanying Notes to Financial Statements.
F-3
VIRIDAX CORPORATION
(F/K/A I & E TROPICALS, INC.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Period From
Six Six July 1,1998
Months Ended Months (Inception)
October 31, October31, to October 31,
2005 2004 2005
-------- -------- ----------
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 $ -- $ 3,000 $ 13,796
======== ======== ==========
Read accompanying Notes to Financial Statements.
F-4
VIRIDAX CORPORATION
(F/K/A I & E TROPICALS, INC.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2005
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 also intends to continue its
business plan for the importing and exporting of exotic marine life
and received its wholesale saltwater products license on May 9,
2002. 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. Further, the Company is dependent upon certain related
parties to provide continued funding and capital resources.
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
F-5
VIRIDAX CORPORATION
(F/K/A I & E TROPICALS, INC.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2005
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis of Presentation (Continued)
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, 2005, 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, 2006.
(Loss) Per Share
(Loss) per share is computed by dividing net (loss) for the year by
the weighted average number of shares outstanding.
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.
F-6
VIRIDAX CORPORATION
(F/K/A I & E TROPICALS, INC.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2005
NOTE 3. RELATED PARTY TRANSACTIONS
During the six months ended October 31, 2005, the Company entered
into a consulting agreement with the Company's president to provide
technical and procedural advisory services at a rate of $200 per
hour. The agreement is effective until terminated by either party
upon fifteen days notice. During the six months ended October 31,
2005, $19,500 was paid. Effective September 1, 2005, the consulting
agreement was terminated and the Company's president was placed on
payroll for compensation of $5,000 per month.
During the three months and six months ended October 31, 2005,
$10,000 and $28,750 was paid to a stockholder for legal services
rendered, respectively.
NOTE 4. CAPITAL STOCK
The Company has 3,000,000 shares of non-cumulative, convertible
preferred stock of $1 par value authorized and 50,000,000 shares of
$.001 par value common stock authorized.
On June 1, 2005, the Company entered into a Stock Purchase Agreement
for the sale, on a best efforts basis, of an aggregate of 500,000
shares of common stock for $1 per share, as determined by the
Company's management, 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 six month period
ended October 31, 2005, 235,500 common shares were sold for cash
totaling $235,500.
Subsequent to October 31, 2005, 124,235 common shares were sold for
cash totaling $124,235.
Effective June 30, 2005, the Board of Directors approved a 4 for 1
stock split. As a result of the stock split,
F-7
VIRIDAX CORPORATION
(F/K/A I & E TROPICALS, INC.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2005
NOTE 4. CAPITAL STOCK (CONTINUED)
the 5,940,000 common shares issued and outstanding have been
retroactively adjusted to 23,760,000 common shares.
On July 1, 2005, the Company entered into a Stock Purchase Agreement
for the sale of an aggregate of 400,000 shares of common stock for
$.80 per share, as determined by the Company's management, exempt
from registration under Regulation S of the Securities Act of 1933.
The Agreement provides for the purchase of the shares in
installments with the first installment of 50,000 shares ($40,000)
due within ten days of the date of the Agreement. The remaining
350,000 shares are to be paid in not more than seven installments
with a minimum of 50,000 shares per installment. During the three
month period ended October 31, 2005, this payment arrangement was
not followed. Installments were received on an irregular time
schedule and in varying amounts. All remaining installments are to
be made within 180 days following the date of the Agreement. During
the six month period ended October 31, 2005, 50,000 common shares
were sold for cash totaling $40,000. Stock subscriptions receivable
of $280,000 were recorded for the to be issued 350,000 common
shares, of which $8,800 was received during the six month period
ended October 31, 2005.
As of October 31, 2005, -0- and 24,395,500 preferred and common
shares were issued and outstanding, respectively.
NOTE 5. COMMITMENTS
On July 25, 2005, the Company entered into a one year consulting
agreement for $3,000 per month for the creation, design and
management of a bacteriophage information data base. The agreement
can be terminated at any time by the Company or upon 30 days notice
from the consultant.
F-8
ITEM 2. PLAN OF OPERATION
The Company's plan of operation for the next twelve months, as previously
reported, is to acquire adequate laboratory space to continue its 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.
The Company is continuing to use the services of a physician investigator
to take the lead position in the scientific and medical literature searches for
the purposes of intellectual property prior art and to develop a literature data
base in support of anticipated US Food and Drug Administration (FDA) regulatory
filings. The cumulative data base is also being formatted into a CD presentation
to assist due diligence providers during the financing process.
VIRIDAX has identified and is negotiating a lease agreement for finished
laboratory and office space in a Bothell, WA biotechnology Park (Canyon Park,
Bothell, WA). The targeted space is approximately 5,000 square feet consisting
of about 4,000 square feet of fully configured laboratory space and about 1,000
square feet of office space. The space was recently built to specifications and
occupied by a biotechnology firm that moved to expansion space in Seattle, WA.
The laboratory space is fully founded with laboratory benching, air, water and
gas fixtures, appropriate power for the required laboratory equipment, built-in
walk-in refrigerators, built-in media and autoclave equipment, hepafiltered air
supply, separate contained laboratory spaces and secured access.
On a recent trip to Europe, the President of Viridax met with
representatives of a pharmaceutical company in Russia, the government of Hungary
and the government of Romania.
The pharmaceutical company in Moscow may provide an opportunity for
Viridax to collaborate in the manufacturing and marketing of its bacteriophage
anti-microbial products in Russia to serve geographical areas served by that
company, which include The Russian Federation, other regions of the former
Soviet Union, China, and elsewhere out of the United States, Great Britain and
the European Union. Viridax and the Russian firm are currently crafting a
first-draft "Heads of Agreement" document to discover the nature, terms and
conditions of a possible business arrangement that would be acceptable to both
parties. In general, the companies are discussing an agreement whereby Viridax
would receive licensing fees for its bacteriophage products, payment of research
and development costs, and a royalty on future products sales.
Also, Viridax held several meetings with key scientists, government
representatives and investor candidates in Vienna, Austria, related to a
potential business and technology opportunity in Hungary. Viridax seeks to
manufacture its bacteriophage products in an Eastern European country for
marketing, sales and distribution within selected countries of Eastern Europe.
The Hungarian government, through its Ministry of Finance, has stated strong
interest in receiving a proposal from Viridax, whereby Viridax would establish a
bacteriophage manufacturing operation in Hungary within a facility that is
supported by the Hungarian government, and with manpower also supported by the
government. Viridax would manage the technology and manufacturing operations in
Hungary in compliance with the U.S. Food and Drug Administration standards and
guidelines. The Hungarian Ministry of Finance views this potential project as an
economic development program to provide new employment opportunities for its
skilled scientists and technologists, and Viridax views the opportunity as an
entry into markets that are generally difficult to access.
Viridax is crafting a similar business proposal to representatives of the
Romanian government through a representative there. The initial verbal response
by the Romanian government stated strong interest in receiving and reviewing
such a proposal from Viridax.
In order to achieve the above-stated objectives for U.S. operations, the
Company estimates that it will require additional funding of approximately Four
and One-Half Million Dollars to support the first 12 months of pharmaceutical
development operations. The Company plans to acquire this funding through a sale
of its common and preferred stock, primarily conducted under the rules and
regulations of Regulation S as promulgated by the Securities and Exchange
Commission.
It is a long-range objective of Viridax Corporation 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 Tbillisi, Republic of
Georgia and Tijuana, Mexico, where typical prices for phage-based treatment
range from US $8,000 to $20,000, it has decided to gain approval under United
States federal and state regulations in order to market its products in this
country. As a consequence, until all required testing is completed and final
approvals obtained, the Company will 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
is certainly no assurance that the anticipated stock sales will be realized as
anticipated. In the alternate, the Company would seek funds in the form of
loans. The Company has no loans on its books at this time, but there is no
assurance that adequate, or any, loans could be obtained that would be
sufficient to continue operations.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 (the Act) provides a
safe harbor for forward-looking statements by, or on behalf of our Company. From
time to time, our representatives and we may make written or verbal
forward-looking statements including statements contained in this report and
other company filings with the SEC and in stockholder reports. Statements that
relate to other than strictly historical facts, such as statements about our
plans and strategies, expectations for financial performance, new and existing
products and technologies, and markets for our products are forward-looking
statements within the meaning of the Act. Generally, the words "believe,"
"expect," "intend," "estimate," "anticipate," "will" and other such expressions
identify forward-looking statements. The forward-looking statements are and will
be based on our then-current assumptions regarding future events and operating
performance, and speak only as of their dates. Investors are cautioned that such
statements involve risks and uncertainties that could cause actual results to
differ materially from historical or anticipated results as to many factors
including, but not limited to, our lack of revenues, future capital needs,
uncertainty of capital funding, acceptability of product offerings, the effects
of government regulations on our business, competition, and other risks. We
undertake no obligation to publicly update or revise any forward-looking
statements.
ITEM 3. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, Viridax carried out an
evaluation, under the supervision and with the participation of management,
including the Chief Executive Officer and Chief Financial Officer of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the
said Officers have concluded that the Viridax disclosure controls and procedures
are effective in timely alerting them to material information relating to
company information required to be included in our periodic SEC filings. It
should be noted that the design and system of controls is based in part upon
certain assumptions about the likelihood of future events, and we cannot assure
you that this design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote.
There were no changes in the Viridax internal controls over financial
reporting that occurred during our most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect, the internal
control over financial reporting.
Since the date of the evaluation to the filing date of this quarterly
report, there have been no significant changes in our internal controls or in
other factors that could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) On June 1, 2005 the Board of Directors approved a stock purchase
agreement between the Company and Mason Fenway, Inc., a Seychelle
Islands corporation, whereby the purchaser will buy, on a best
efforts basis, an aggregate of 500,000 shares of the Company's
common stock at U.S. $1.00 per share. As of October 31, 2005,
235,500 shares have been sold. On July 1, 2005, the Board of
Directors approved a stock purchase agreement with Rowland
Associates, a BVI limited company, for the purchase of 400,000
shares of the Company's common stock, on an installment basis, at
the price of US $.80 per share. The first installment under this
agreement was for the purchase of 50,000 shares for the cash price
of $40,000 on July 19, 2005. As of the end of this quarter 61,000
shares have been sold.
In the instance of both of the above-referenced stock purchase
agreements, the Company has relied upon the exemption from
registration provided by Regulation S as promulgated by the
Securities & Exchange Commission. In both sales, the purchaser was
not, and at the time of the acquisition of the stock is not, a U.S.
person as defined in Regulation S. The purchasers are the sole
beneficial owners of the stock issued to them and there has been no
pre-arranged sale to U.S. persons. At the date of delivery of the
stock the purchasers are outside the United States and the shares as
issued contain restrictive legends as contemplated by Regulation S.
Further, the purchasers have agreed not to sell or otherwise
transfer the stock except in accordance with the provisions of
Regulation S.
(b) Not applicable
(c) Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS.
(a) Exhibits3(i)(a), 3(i)(b), 3(i)(c), 3(i)(d), 3(ii), 10, and 14 are
incorporated into this filing by reference to ITEM 13 of Form 10KSB
as filed with the Securities and Exchange Commission. Exhibits 31
and 32 are included herein.
(b) Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, the
registrant has duly caused this report be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: December 9, 2005 VIRIDAX CORPORATION
By: /s/ Richard C. Honour
----------------------------
Richard C. Honour
President
By: /s/ Kenneth E. Lehman
----------------------------
Kenneth E. Lehman
Chief Financial Officer