SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 or 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Dated October 06, 2003
For The Six Months Ended April 30, 2003
REGISTRATION NO. 333-101771
GUARDIAN BIOTECHNOLOGIES INC.
-------------------------------
IPW, 4450 - 110 Gymnasium Place
SASKATOON, SASKATCHEWAN, CANADA S7N 0W9
(306)-384-4114
-------------------------
(Address of Principal Executive Offices)
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):
Yes: |_| No: |X|
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):
Yes: |_| No: |X|
Indicate by check mark whether the registrant by furnishing the
information contained in this form 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): 82- __________
1
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.
GUARDIAN BIOTECHNOLOGIES INC.
Date: October 06, 2003 By: /s/ Sun Lee
Name: Sun Lee
Title: President
2
TABLE OF CONTENTS
Operating and Financial Review 4
Operation Results 5
PART I - FINANCIAL INFORMATION
Introduction 8
Interim Financial Statements
Interim Balance Sheet (Unaudited) at April 30, 2003 10
Interim Statements of Loss and Comprehensive loss (Unaudited) 11
Interim Statement of Changes in Shareholders' Equity (Unaudited) 12
Interim Statements of Cash Flows (Unaudited) 13
Notes to the Interim Financial Statements (Unaudited) 14
3
OPERATING AND FINANCIAL REVIEW
Guardian Biotechnologies Inc. is a development stage company and has no previous
business activity. The following discussion and analysis should be read in
conjunction with our unaudited interim financial statements and notes thereto
for the period from inception, August 15, 2002, through April 30, 2003 and other
financial information included elsewhere in this report. This report contains,
in addition to historical information, forward-looking statements that involve
risks and uncertainties. Guardian's actual results may differ materially from
the results discussed in the forward-looking statements. Examples of these
forward looking statements include the ability of Guardian to reach contractual
terms with its parent company, the ability of Guardian to achieve sales of Toy
Lab products and to generate fees for services, and the ability of Guardian to
raise sufficient funds to carry out its business plan.
OVERVIEW
Guardian Biotechnologies Inc. (Guardian) is a Canadian corporation formed
federally on August 15, 2002. The Company utilizes Molecular Farming techniques
to introduce human derived genes into plants to create highly valued therapeutic
proteins in a cost effective manner through mass production. Plant Molecular
Farming activities have the potential to impact many different disciplines such
as conventional agricultural production, forestry, fisheries, veterinary
medicine, and human health care. We are developing relations with North American
pharmaceutical, cosmetic and other industrial partners to distribute medical,
cosmetic and industrial enzymes to a variety of commercial markets. We intend
to recruit recognized leaders in scientific research who will aid Guardian in
its research goals by participating on the advisory board of scientific
directors for Guardian. Short-term revenue streams are expected to be generated
from the sales of lab equipment and supplies and from fees for a service program
that will test genetically modified organism (GMO).
Platforms
Plant cells are biochemically similar to human cells that they are capable of
producing authentic human or animal proteins. We use several plant platforms to
ensure flexibility and provide more opportunity for varying protein expression.
The variety of our plant platforms provides us with flexibility in regards to
regulatory decisions by being less susceptible to unintentional contamination.
Products
Guardian aims to develop a variety of protein products that will range from
cosmetic proteins, therapeutic proteins for humans and animals, human and animal
antibodies and vaccines as well as multifunctional industrial and animal
feed-additive enzymes. The products we are currently developing are:
1) an edible vaccine that will vaccinate fowl against Eimeria parasites
2) an Enzyme Linked Immunosorbant Assay (ELISA) for the detection of
hyperthyroidism
3) antibodies using various protected genes
4) enzymes that have commercial value such as the enzyme protease which
degrades proteins
Nexgen Biotechnologies, Inc.
Nexgen Biotechnologies, Inc. (Nexgen) is a biotechnology company in the
molecular farming business with a dedicated focus on developing and
mass-producing recombinant proteins used in pharmaceuticals, industrial enzymes
and cosmeceuticals.
4
Nexgen is also developing a position in the GMO detection kit market against
international and local competitors. Nexgen commercialized its GMO detection
kits in mid 2000 and established a 'Korea GMO Detection Center'. The center
provides not only qualitative determination services, which determine whether or
not the organism is genetically modified, but also provides quantitative
determination services of GM foods, which show how much of the organism is
genetically modified, to institutions, government and businesses. The GMO
Detection Kit was awarded a Korea Millennium Product 2000 by the Ministry of
Commerce, Industry and Energy.
Nexgen is the largest shareholder and parent company of Guardian. Sun Lee, PhD,
is a director, officer and the second largest shareholder of Guardian and is a
director, officer and shareholder of Nexgen. Guardian and Nexgen have two
agreements and a Memorandum of Understanding in place to define their business
relationship and responsibilities. As a start of entering into a Memorandum of
Understanding, Nexgen agreed to transfer one of its patented gene designs, the
Hyperthyroidism Diagnostic Assay System, to Guardian at no cost during the test
period.
OPERATION RESULTS
At April 30, 2003, Guardian had $221,083 of cash. Guardian holds the majority
of its cash in Canadian funds, and incurs most of its expenses in Canadian
dollars.
Funding
We have successfully acquired $200,000 of equity funding from Nexgen for the
subscription of 2,000,000 common shares on April 30, 2003. These common shares
subsequently issued. We also have been confirmed for the Industrial Research
Assistance Program (IRAP) on May 12, 2003 for up to $76,730 ($110,000 CDN) this
year.
We hired new staff during May 2003. Guardian now has a receptionist/bookkeeper
/assistant, two technicians. The salary for these employees is $61,434 per year,
and approximately $21,973 will be offset by the Western Economic Diversification
Funds.
Recent Developments within our Research and Development
Research and development is continuing with all of our products:
Edible Poultry Vaccine
We are developing an edible vaccine that will vaccinate fowl against Eimeria
parasites. The oral delivery of vaccines is a very attractive alternative to
injections due to the low cost of production, easy administration and long term
room temperature storage. Our edible vaccine is ready for initial testing in
chickens and making arrangements for the first round of chicken testing to begin
soon.
Hyperthyroidism Assay Test
Hyperthyroidism is a disease most often diagnosed long after it has begun due to
costs involved in screening for the disease, especially in the USA. The
development of a rapid screening test would increase the speed of diagnosis of
this disease. We are developing a method of screening for hyperthyroidism.
Antibodies
We are currently in discussions with several Canadian scientists and
Institutions for the rights to produce antibodies using their protected genes.
We have obtained the rights to express an antibody against the herbicide 2,4-D
from the University of Guelph. The expression of this antibody in any plant
line would result in resistance to this herbicide.
5
Proteases
Guardian has initiated a new project with the Plant Biotechnologies Institute
(PBI). Working closely with scientists at PBI, we are isolating enzymes that
have commercial value such as the enzyme protease which degrades proteins, and
some proteases function at extreme temperatures, such as 5 C or above 60 C.
These proteins would function well in cold water or hot water washing and has
potential as an additive in detergents for washing clothing. The target markets
are very diverse for this project. They range from detergent manufactures to
animal food producers, used making cheese, food processing. There are proteases
on the current market but they are generally produced from fungus and are not
pure. The fungus is dried down and crushed into a powder.
No commitments to provide additional funds have been made by management,
stockholders or anyone else. Accordingly, there can be no assurance that any
additional funds will be available on terms acceptable to Guardian or at all.
The absence of funding would make the successful completion of any of the Phases
of Guardian's business plan doubtful.
We will record revenue in two categories over the next year: laboratory supplies
and new product sales and fees for service. We plan to sell products into the
market using salaried sales agents. We are targeting to generate $800,000 CDN
in gross sales of Toylab products and GMO services in the next 12 months.
Generating this projected revenue will depend upon our ability to successfully
launch our business over the next two quarters. We plan to begin realizing
revenue in the first quarter of 2003. Investors are cautioned against
attributing undue certainty to our projections for generating revenue due to
potential contract negotiation difficulties, budget uncertainties, and delays in
planned completion dates and market acceptance.
LIQUIDITY AND CAPITAL RESOURCES
Our initial sources of liquidity are expected to be existing cash, sales from
Toylab products, fees from GMO testing services and cash from operations.
Guardian has on hand as at April 30, 2003, $ 221,083.00 (approximately $ 334,587
CDN) and anticipates expending $191,197 ($ 274,100 CDN) to complete our planned
business strategy, over the next year of its business plan inclusive of
$ 146,000 ($ 209,306 CDN) in salaries for the year to two of Guardian's
directors. We will need additional funding in order to produce and distribute
our products that are under development. We have been confirmed for the
Industrial Research Assistance Program (IRAP) on May 12, 2003 for up to $76,730
($110,000 CDN) this year. We also have received a confirmation that we would
receive the Western Economic Diversification funds for half the salaries of the
new technicians. There can be no assurances that financing, whether debt or
equity, will be available to us in the amounts required at any particular time
or for any particular period other than aforementioned funding, or if available,
that it can be obtained on satisfactory terms. We have made no arrangements
with our officers, directors or affiliates to provide liquidity to us.
We anticipate that we will need to raise additional capital within the next 12
months in order to continue implementing our business plan and commence full
operations. We will need to raise the funds through debt or equity financing or
a combination of both. To the extent that additional capital is raised through
the sale of equity or equity-related securities, the issuance of such securities
is likely to result in dilution to our shareholders. There can be no assurance
that sources of capital will be available to us on acceptable terms, or at all.
If we are unable to raise additional capital, we may not be able to continue as
a going concern, and might have to reorganize under bankruptcy laws, liquidate
or enter into a business combination. We have not presently identified any
probable business combination. If adequate funds are not available within the
next 12 months, we may be required to significantly curtail our operations or no
longer be able to operate.
6
QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to market risk exposures due to fluctuations in exchange rates
and interest rates. Changes in the foreign exchange rate between the CDN$ and
the US$ may affect us due to the effect of such changes on any shareholder
distributions to the shareholders using US$ as a main currency. Guardian
denominates its financial statements in the United States dollars but conducts
its daily affairs in Canadian dollars. We are not currently carrying significant
amounts of short term or long-term debt. Upward fluctuations in interest rates
increase the cost of additional debt and the interest cost of outstanding
floating rate borrowings.
INFLATION
We do not consider that inflation in Canada has had a material impact on our
results of operations. Inflation in Canada in 2000, 2001 and 2002 was 2.7%,
2.6%,and 2.2% respectively.
7
PART I - FINANCIAL INFORMATION
INTRODUCTION
Interim Report for the six months ended April 30, 2003
The accompanying interim financial statements have been prepared to show the
results of Guardian Biotechnologies Inc. ("the Company") for the six months
ended April 30, 2003 compared to the last fiscal year ended October 31, 2002 and
to show the financial condition of the Company as at April 30, 2003 compared to
October 31, 2002.
The Company was federally incorporated in Canada on August 15, 2002.
Forward-Looking Statements
The Company and its affiliates and representatives may from time to time make
written or verbal statements which, to the extent that they are not historical
fact, constitute "forward -looking statements". By their nature, forward-looking
statements involve risk and uncertainty because they relate to events and depend
on circumstances that will occur in the future. There are a number of factors
that could cause actual results to differ materially from those expressed or
implied by these forward-looking statements. Any statements regarding past
trends or activities should not be taken as a representation that such trends or
activities will continue in the future.
8
ITEM 1. FINANCIAL STATEMENTS
Guardian Biotechnologies Inc.
(A Development Stage Company)
INTERIM FINANCIAL STATEMENTS
April 30. 2003
(Expressed in U.S. dollars)
9
Guardian Biotechnologies Inc.
(A Development Stage Company)
INTERIM BALANCE SHEET
(Expressed in US Dollars)
April 2003 October 31, 2002
ASSETS. . . . . . . . . . . . . . . . . . .(UNAUDITED)
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . . $ 221,083 $ 259,186
Accounts receivable . . . . . . . . . . . . . . $ 12,307 -
Prepaid expenses . . . . . . . . . . . . . . . $ 485 -
___________ __________
$ 233,875 -
PROPERTY AND EQUIPMENT (Note 2) $ 3,538 -
____________ __________
$ 237,413 -
============ ==========
LIABILITIES
CURRENT LIABILITIES
Account Payable and Accrued Liabilities . . . . $ 3,834 $ 40,496
COMMITMENT UNDER OPERATING LEASE (Note 3)
STOCKHOLDERS' EQUITY
Common stock: authorized-
10,000,000 Common shares without par value
Issued and outstanding: 2003 - 8,200,000
shares. . . . . . . . . . . . . . . . . . . . $ 357,124 $ 318,569
Subscriptions received . . . . . . . . . . . . . . $ 200.000 -
Accumulated other comprehensive income (loss) . . $ 7,235 $ (1,672)
(Deficit) accumulated during the development stage $ (330,780) $ (98,207)
___________ __________
$ 233,579 $ 218,690
___________ __________
$ 237,413 $ 259,186
========== ==========
SUBSEQUENT EVENTS (Note 5)
See accompanying notes to the interim financial statements
/S/ Sun Lee . . . . . . . . . . . . . . . .October. 06, 2003
Sun Lee - Director. . . . . . . . . . . . .Date
- ---------------------------------------------------
/S/ James Macpherson . . . . . . . . . . . October. 06, 2003
James Macpherson -Director . . . . . . . . Date
- ---------------------------------------------------
10
Guardian Biotechnologies Inc.
(A Development Stage Company)
STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Expressed in US Dollars)
THREE MONTHS ENDED SIX MONTHS ENDED CUMULATIVE
April 30, 2003 April 30, 2003 FROM INCEPTION ON AUGUST 15
(UNAUDITED) (UNAUDITED) TO APRIL 30, 2003
EXPENSES
Administrative Salaries & Benefits. . . . . . . . . $ 29,911 $ 49,426 $ 51,544
Amortization of property and equipment . . . . . . $ 723 $ 700 $ 700
Office . . . . . . . . . . . . . . . . . . . . . . $ 7,042 $ 4,260 $ 4,787
Research . . . . . . . . . . . . . . . . . . . . . $ 1,838 $ 2,315 $ 2,315
Rent. . . . . . . . . . . . . . . . . . . . . . . . $ 8,571 $ 8,965 $ 9,425
Travel. . . . . . . . . . . . . . . . . . . . . . . $ 1,531 $ 2,792 $ 3,738
Professional Fees . . . . . . . . . . . . . . . . . $ 68,142 $ 164,115 $ 258,271
NET INCOME (LOSS) FOR THE PERIOD. . . . . . . . . . . $ (117,758) $ (232,573) $ (330,780)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss). . . . . . - 8,908 7,235
OTHER COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD. . . $ (117,758) $ (223,665) $ (323,545)
EARNINGS (LOSS) PER SHARE - basic and diluted . . . . . $ (0.014) $ (0.030) $ (0.060)
See accompanying notes to the consolidated financial statements
11
Guardian Biotechnologies Inc.
(A Development Stage Company)
INTERIM STATEMENT OF STOCKHOLDERS EQUITY
Six months ended April 30, 2003
(Expressed in U.S. dollars)
Accumulated (Deficit)
other accumulated
Common Stock Subscriptions comprehensive development Shareholders'
Shares received income(loss) stage Equity
Balances at August 15, 2002 - $ - $ - $ - $ - $ -
Issuance of common stock for cash 7,000,000 318,569 - 318,569
Other comprehensive income
Foreign currency translation gain(loss) - - - (1,672) (1,672)
Net income (loss) for the period - - - - (98,207) (98,207)
___________________________________________________________________________________________________________________________________
Balances at October 31, 2002 7,000,000 318,569 - (1,672) (98,207) 218,690
Issuance of common stock to settle
accounts payable and accrued
liabilities 1,200,000 38,555 - - 38,555
Subscriptions received - - 200,000 - - 200,000
Other comprehensive income
Foreign currency translation gain (loss) - - 8,907 8,907
Net income (loss) for the period - - - (232,573) (232,573)
___________________________________________________________________________________________________________________________________
Balances at April 30, 2003 8,200,000 $ 357,124 $ 200,000 $ 7,235 $ (330,780) $ 233,579
See accompanying notes to the interim financial statements
12
Guardian Biotechnologies Inc.
(A Development Stage Company)
INTERIM STATEMENTS OF CASH FLOW
(Expressed in U.S. dollars)
Cumulative
from
inception on
Six months August 15,
ended 2002 to
April 30, April 30,
2003 2003
(Unaudited) (Unaudited)
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) for the period $ (232,573) $ (330,780)
Adjustments to reconcile net cash provided
by operating activities
Amortization of property and equipment 738 738
Increase (decrease) in
Amounts receivable (12,307) (12,307)
Prepaid expenses (485) (485)
Increase (decrease) in
Accounts payable and accrued liabilities 1,892 3,833
$ (242,735) $ (339,001)
CASH FLOW FORM FINANCING ACTIVITIES
Shares issued for cash - 318,569
Subscription proceeds received 200,000 200,000
200,000 518,569
_________ _________
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment $ (4,276) $ (4,276)
INCREASE (DECREASE) IN CASH DURING THE PERIOD (47,011) 198,931
EFFECT OF FOREIGN CURRENCY TRANSLATION 8,908 22,152
CASH, beginning of period 259,186 -
CASH, end of period $ 221,083 $ 221,083
See accompanying notes to the interim financial statements
13
Guardian Biotechnologies Inc.
(A Development Stage Enterprise)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
April 30, 2003
(Expressed in U.S. Dollars)
The accompanying interim financial statements of Guardian Biotechnologies Inc.
are unaudited. In the opinion of management, the interim data includes all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the results for the interim period. The results of
operations for the six months ended April 30, 2003 are not necessary
representative of the operating results for the entire year.
We have prepared the interim financial statements included herein pursuant to
the rules and regulations of the United States Securities and Exchange
Commission ("SEC"). Certain information and footnote disclosure normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. We believe the disclosures made are adequate to make the
information not misleading and recommend that these condensed financial
statements be read in conjunction with the financial statements and notes
included in our Form F-1 for the period from inception on August 15, 2002 to
October 31, 2002.
Guardian Biotechnologies Inc. was incorporated under the Canada Business
Corporations Act on August 15, 2002 and is registered under The Business
Corporation Act (Saskatchewan). The Company has not yet commenced planned
principal business operations. To date the Company has devoted substantially
all of its efforts to developing a business plan and raising capital. The
Company has not yet generated revenue from its planned principal business
operations. The Company's planned principal business operations will include
the development, and commercial exploitation, of therapeutic proteins for
medical and veterinary use and for use in the production of industrial and
cosmetic enzymes. The Company plans to distribute laboratory equipment; plastic
consumable laboratory supplies and testing kits for use with genetically
modified organisms.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
These interim financial statements have been prepared in accordance with United
States generally accepted accounting principles ("GAAP"). The preparation of
financial statements in accordance with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Foreign currency translation
The Company's functional currency is the Canadian dollar. These interim
financial statements are presented in United States ("US") dollars. Assets and
liabilities are translated at the rate of exchange in effect at the balance
sheet date. Revenues and expenses are translated at the exchange rates in
effect at the time the transactions occurred, which is approximated by the use
of a weighted average rate of exchange for the periods presented. Foreign
currency translation gains and losses are excluded from earnings and are
included in a separate component of stockholders' equity referred to as
accumulated other comprehensive income.
14
Revenue recognition
The Company recognizes revenue when persuasive evidence of an arrangement
exists, delivery has occurred, the sales price to the customer is fixed or
determinable and when collectability is reasonably assured. This policy is in
accordance with the SEC's Staff Accounting Bulletin No. 101, as amended.
Property and equipment
Property and equipment is initially recorded at cost. Amortization is provided
by use of the straight-line method over the estimated useful lives of the
related assets, presently three years. Expenditures incurred for replacement
and betterment of property and equipment are capitalized when incurred.
Maintenance and repairs are charged to expense as incurred.
Impairment of long-lived assets
The Company has adopted Statement of Financial Accounting Standard ("SFAS")
No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets"
which requires that long-lived assets to be held and used be assessed for
impairment whenever events or changes in circumstances indicated that the
carrying amount of an asset may not be recoverable. SFAS No. 144
established a single accounting model for long-lived assets to be disposed
nof by sale.
Research and development
All research and development costs are expensed when incurred.
Income taxes
The Company follows SFAS No. 109 Accounting for Income Taxes. SFAS No. 109
requires recognition of deferred income tax liabilities and deferred income
tax assets for the expected future income tax consequences of events that
have been included in the financial statements or income tax returns.
Under this method, deferred income tax liabilities and deferred income tax
assets are determined based on the difference between the financial
statement and income tax basis of assets and liabilities using enacted
income tax rates in effect for the year in which the differences are
expected to reverse.
/
Recent accounting pronouncements
In June 2001, the Financial Accounting Standards Board ("FASB") issued SFA
No. 143, "Asset Retirement Obligations". SFAS No. 143 establishes
accounting requirements for retirement obligations associated with tangible
long-lived assets, including (1) the timing of liability recognition, (2)
initial measurement of the liability, (3) allocation of asset retirement
costs to expense, (4) subsequent measurement of the liabilities and (5)
financial statements disclosure. SFAS No. 143 requires that an asset
retirement cost be capitalized as part of the cost of the related
long-lived assets and subsequently allocated to expense using a systematic
and rational method. The provisions of SFAS No. 143 are effective for
financial statements issued for fiscal years beginning after June 15, 2002.
The adoption of SFAS No. 143 is not expected to have a material effect on
the Company's financial position, results of operations or cash flow.
In April 2002, the FASB issued SFAS No. 145, "Recession of FASB Statements
No. 4, 44, and 64, Amendment of FASB No. 13, and Technical Corrections."
FASB 4 required all gains or losses from extinguishments of debt to be
classified as extraordinary items net of income taxes. SFAS 145 requires
that gains and losses from extinguishments of debt be evaluated under the
provisions of Accounting Principles Board Opinion No. 30, and be classified
as ordinary items unless they are unusual or infrequent or meet the
specific criteria for treatment as an extraordinary item. This statement
is effective January 1, 2003. The Company does not anticipate that the
adoption of this statement will have a material effect on its financial
position or results of operations.
15
In July 2002, the FASB issued SFAS No. 146, " Accounting for Costs
Associated with Exit or Disposal Activities." This Statement addresses
financial accounting and reporting for costs associated with exit or
disposal activities and nullified EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to
Exit an Activity (including Certain Costs Incurred in a Restructuring)."
This Statement requires recognition of a liability for a cost associated
with an exit or disposal activity when the liability is incurred, as
opposed to when the entity commits to an exit plan under EITF No. 94-3.
SFAS No. 146 is to be applied prospectively to exit or disposal activities
initiated after December 31, 2002. The Company does not anticipate that
the adoption of this statement will have a material effect on its financial
position or results of operations.
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure - an amendment of FASB Statement
No. 123." SFAS No. 148 amends SFAS No. 123, "Accounting for Stock Based
Compensation" to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based
employee compensation. In addition, SFAS No. 148 amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on
reported results. SFAS No. 148 is effective for financial statements for
fiscal years ending after December 15, 2002. The Company will continue to
account for stock-based compensation using the methods detailed in the
stock-based compensation accounting policy and has adopted the disclosure
requirement of SFAS No. 148.
In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement No.
133 on Derivative Instruments and Hedging Activities." SFAS No. 149 amends
certain portions of SFAS No. 133 and is effective for all contracts entered
into or modified after June 30, 2003 on a prospective basis. SFAS No. 149
is not expected to have a material effect on the results of operations or
financial position of the Company since the Company currently has no
derivatives or hedging contracts.
2. PROPERTY AND EQUIPMENT
2003 2002
Accumulated
Cost Amortization Net Net
Computer equipment $ 3,453 $ 731 $ 2,722 -
Office furniture 823 7 816 -
$ 4,276 $ 738 $ 3,538 -
3. COMMITMENT UNDER OPERATING LEASE
The Company leases its premises under an operating lease that expires during the
fiscal year ending October 31, 2007. The Company is obligated to make the
following minimum rental payments under its operating lease in each of the
fiscal years ending:
16
October 31, 2003 $ 16,614
October 31, 2004 33,229
October 31, 2005 33,229
October 31, 2006 33,229
October 31, 2007 33,229
________
$149,530
________
4. RELATED PARTY TRANSACTIONS
During the six months ended April 30, 2003 the Company paid $ 53,169
(2002 - nil) to officers and directors for consulting fees.
Also during the six months ended April 30, 2003 the Company received $ 200,000
in subscription proceeds, for the issue of 2,000,000 common shares from
treasury, from Nexgen Biotechnologies Inc. Nexgen Biotechnologies Inc. is a
shareholder of the Company and is controlled by a director.
As a start of entering into a Memorandum of Understanding, Nexgen agreed to
transfer one of its ten patented gene designs, the Hyperthyroidism Diagnostic
Assay System, to Guardian at no cost during the test period.
5. SUBSEQUENT EVENTS
Subsequent to April 30, 2003, the Company:
Issued 2,000,000 common shares in settlement of the subscriptions received at
April 30, 2003;
Issued 2,407,500 common shares for cash of $ 240,750.
17
End of Filing