MILLENIA HOPE INC.
(Exact name of Small Business Issuer as Specified in its Charter)
DELAWARE 98-0213828
(State or other Jurisdiction of (I.R.S Employer
Incorporation or Organization) Identification No.)
1250 Rene Levesque West, suite 2200, Montreal, Quebec H3B 4W8
(Address of Principal Executive Offices)
(514) 846-5757
Issuer's Telephone Number Including Area Code)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: At April 19, 2007 Issuer had
224,544,339 outstanding shares of Common Stock.
INDEX
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet (Unaudited) at February 28, 2007.
Consolidated Statements of Operations (Unaudited) for the three
months ended February 28, 2007 and February 28, 2006 and from
inception (December 24, 1997) to February 28, 2007.
Consolidated Statements of Cash Flows (Unaudited) for the three
months ended February 28, 2007 and February 28, 2006 and from
inception (December 24, 1997) to February 28, 2007.
Notes to the Consolidated Financial Statements (Unaudited)
Item 2. Plan of Operations
Item 3. Controls and procedures
PART II. Other Information
Item 2. Sale of Unregistered Securities
Item 6. Exhibits and Reports on Form
SIGNATURES
2
Millenia Hope Inc.
(A Development Stage Company)
Consolidated Balance Sheet
February 28, 2007
(Unaudited)
Feb. 28, 2007 Nov. 30, 2006
Assets
Current Assets
Cash $ 58,518 $ 2,582
Prepaid expenses 443,561 397,994
Research Tax Credits receivable 470,013 -
Accounts and taxes receivable 1,063 37,063
------------ ------------
Total Current Assets 973,155 437,639
Property and equipment, net 629,583 646,011
------------ ------------
$ 1,602,738 $ 1,083,650
============ ============
Liabilities & Stockholders' (Deficit)
Current Liabilities
Accounts Payable and Accrued Liabilities $ 611,481 $ 745,865
Advances from related parties 574,590 432,361
Notes Payable 1,446,000 418,899
------------ ------------
Total Current Liabilities 2,632,071 1,567,125
------------ ------------
Convertible Note Payable, net 1,199,996 1,265,460
Minority Interest 716,128 529,016
Stockholders' (Deficit)
Preferred Stock, $.0001 par value 50,000,000 shares authorized
none issued and outstanding - -
Common Stock, $.0001 par value; 280,000,000 shares authorized,
223,044,339 shares issued and outstanding - February 28, 2007
193,149,717 shares issues and outstanding - November 30, 2006 22,304 19,315
Paid in Capital 25,451,401 24,614,759
Deferred Stock Compensation (27,740) (252,990)
(Deficit) Accumulated During the Development Stage (28,391,422) (26,659,035)
------------ ------------
(2,945,457) (2,277,951)
------------ ------------
$ 1,602,738 $ 1,083,650
============ ============
See the accompanying notes to the consolidated financial statements.
3
Millenia Hope Inc.
(A Development Stage Company)
Consolidated Statements of Operations
Three months ended February 28, 2007 and February 28, 2006, and
the Period From Inception (December 24, 1997) to February 28, 2007
(Unaudited)
Three months Three months
ended ended Inception to
February 28, February 28, February 28,
2007 2006 2007
---- ---- ----
Revenues $ 359,387 $ 81,460 $ 2,317,837
Cost of Sales - - 789,540
------------- ------------- -------------
Gross Profit 359,387 81,460 1,528,297
------------- ------------- -------------
Operating Expenses
Biotech Wages 169,279 - 817,794
Administrative Salaries 35,425 103,880 4,782,761
Marketing 81,079 143,282 6,055,617
Development 945,427 624,305 7,338,617
Patent rights - - 1,005,827
Selling, general and administrative 503,949 295,886 6,463,027
------------- ------------- -------------
1,735,159 1,167,353 26,463,643
------------- ------------- -------------
Operating (Loss) (1,375,772) (1,085,893) (24,935,346)
------------- ------------- -------------
Other income (expense)
Gain on disposition of subsidiary - - 737,262
Interest Income - 13,500 131,323
Interest expense (169,503) - (736,489)
Write-off of leasehold improvements, inventory - - (68,106)
Write-off of notes receivable, related parties - - (629,739)
Write-off of other assets - - (2,799,999)
------------- ------------- -------------
(169,503) 13,500 (3,365,748)
------------- ------------- -------------
(Loss) before minority interest (1,545,275) (1,072,393) (28,301,094)
Minority Interest (187,112) - (90,328)
------------- ------------- -------------
Net (Loss) $ (1,732,387) $ (1,072,393) $ (28,391,422)
============= ============= =============
Per share information - basic and diluted:
Weighted Average Number of Common
Shares Outstanding 212,576,876 131,200,335
============= =============
(Loss) Per Common Share $ (0.01) $ (0.01)
============= =============
See the accompanying notes to the consolidated financial statements.
4
Millenia Hope Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
Three months ended February 28, 2007 and February 28, 2006 and
the Period From Inception (December 24, 1997) to February 28, 2007
(Unaudited)
Three Months Three Months Inception to
Ended Ended February 28,
February 28, 2007 February 28, 2006 2007
----------------- ----------------- ----
Operating Activities
Cash (used in) operating activities (519,306) (159,630) (6,925,425)
----------- ----------- -----------
Financing Activities
Bank Overdraft - (3,408) -
Advances from related parties 142,229 594,947 1,942,051
Proceeds from convertible note payable - - 2,000,000
Payments on convertible note payable (95,622) - (274,772)
Proceeds from notes payable 227,101 - 952,560
Payments on notes payable - - (81,000)
Issuance of capital stock for cash 318,131 116,160 2,814,721
Contribution to paid in capital - - 1,318,347
----------- ----------- -----------
Cash provided by financing activities 591,839 707,699 8,671,907
----------- ----------- -----------
Investing activities
Additions to fixed assets (16,597) (526,270) (843,949)
Deposits on future acquisition - - (1,000,000)
Issue of stock for subsidiary cash balance - - 40,628
Repayment of subsidiary related party note receivable - - 34,233
Collection of subsidiary share subscription receivable - - 83,331
Note receivable - - (2,207)
----------- ----------- -----------
Cash flows provided by (used in) investing activities (16,597) (526,270) (1,687,964)
----------- ----------- -----------
Increase (decrease) in cash 55,936 21,799 58,518
Cash and cash equivalents
Beginning of period 2,582 - -
----------- ----------- -----------
End of period $ 58,518 $ 21,799 $ 58,518
=========== =========== ===========
Supplemental Cash Flow Information
Cash Paid for Income Taxes $ - $ - $ -
=========== =========== ===========
Cash Paid for Interest $ - $ - $ 257,144
=========== =========== ===========
Issuance of capital stock for convertible note Repayment $ 19,332 $ - $ 108,643
=========== =========== ===========
Issuance of subsidiary stock for debt repayment $ - $ - $ 225,560
=========== =========== ===========
Issuance of subsidiary stock as dividend $ - $ - $ 240
=========== =========== ===========
Issuance of warrants associated with convertible note payable $ - $ - $ 599,244
=========== =========== ===========
Cancellation of treasury shares $ - $ - $ 100
=========== =========== ===========
5
MILLENIA HOPE INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2007
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Millenia Hope
Inc. have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB and Rule 10-01 of Regulation S-X. The financial statements reflect all
adjustments consisting of normal recurring adjustments, in the opinion of
management, necessary for a fair presentation of the results for the periods
shown. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.
These consolidated financial statements should be read in conjunction with the
audited financial statements and footnotes thereto of Millenia Hope Inc. as of
November 30, 2006, and the periods then ended on Form 10KSB as filed with the
Securities and Exchange Commission.
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
that effect the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Earnings (Loss) Per Share
The Company follows Statement of Financial Accounting Standards ("SFAS") 128,
"Earnings Per Share." Basic earnings (loss) per common share ("EPS")
calculations are determined by dividing net income (loss) by the weighted
average number of shares of common stock outstanding during the year. Diluted
earnings per common share calculations are determined by dividing net income
(loss) by the weighted average number of common shares and dilutive common share
equivalents outstanding. During the periods presented common stock equivalents
were not considered, as their effect would be anti-dilutive.
Basis of Consolidation
The consolidated financial statements include the accounts of Millenia Hope
Inc., the parent company, and Millenia Hope Pharmaceuticals, a Canadian
Corporation, the Company's subsidiary. All significant intercompany balances and
transactions have been eliminated in consolidation.
Note 3. GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. The company reported a net loss of
$ 1,732,387 for the three months ended February 28, 2007 as well as reporting
net losses of $28,391,422 from inception (December 24, 1997). As reported on the
consolidated statements of cash flows, the Company had deficit cash flows from
operating activities of $519,306, for the three months ended February 28, 2007
and has reported deficit cash flows from operating activities of $ 6,925,425
from inception (December 24, 1997). To date, these losses and cash flow
deficiencies have been financed principally through the sale of common stock
$2,814,721 and term debt $4,619,839, which is partially related party debt.
Additional capital and/or borrowings will be necessary in order for the Company
to continue in existence until attaining and sustaining profitable operations.
Management has continued to develop a strategic plan to maintain reporting
compliance and establish long-term relationships with other major organizations
to distribute the product MMH(TM)MALAREX /MMH(TM) 18 as well as generating
revenue from its subsidiary Millenia Hope Biopharma. Management anticipates
generating revenue through the sales of MMH(TM) MALAREX /MMH(TM) 18 during this
fiscal year and revenue from its subsidiary company. The directors and officers
of the company have committed to fund the operations of the organization during
the next fiscal year until the company can generate sufficient cash flow from
operations to meet current operating expenses and overhead.
Note 4 STOCKHOLDERS' EQUITY
During the period ended February 28, 2007, the Company issued 11,325,000 shares
of common stock, pursuant to Regulation S, in settlement of consulting services,
development costs, and administration salaries valued at $431,500. During the
period ended February 28, 2007, the Company issued 17,569,622 shares of common
stock, pursuant to Regulation S, for $318,131 cash received and 1,000,000 common
shares, under an SB-2 Registration Statement, in payment of $90,000 of
Convertible Note debt.
6
Note 5 REFUNDABLE TAX CREDITS
The federal government of Canada and the state of Quebec give refundable tax
credits to Canadian companies engaged in scientific research and development,
based on specific expenditure criterion. Millenia Hope Pharmaceuticals has
qualified for these tax credits based on the research work it carries on and on
the salaries they paid and other expenditures incurred. The Company has claimed
a total of $470,013, the net amount to be received by Millenia Hope
Pharmaceuticals after deducting the amount due to their tax credit
professionals.
Millenia Hope Pharmaceuticals has already received acceptance of its $229,000
claim, for said tax credits, from the government of Canada and expects to
shortly receive its acceptance of its $ 241,000 claim from the government of
Quebec.
Note 6 SIGNIFICANT EVENTS
On December 11, 2006, the Company entered into an agreement with an unrelated
company to secure the rights for a method for treating hyper-cholesterol in all
indications and conditions. The Company issued 8,750,000 shares of its common
stock plus a note payable in the amount of $800,000 payable by August 31, 2007,
bearing interest at 7% after that date.
Note 7 SUBSEQUENT EVENTS
Between March 1, 2007 and April 19, 2007, the company issued 1,500,000 common
shares, under an SB-2 Registration Statement, in payment of $90,000 of
Convertible Note debt.
7
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINACIAL CONDITION AND RESULTS
OF OPERATIONS.
Special Note Regarding Forward-Looking Statements
Some of the statements under "Plan of Operations," "Business" and elsewhere in
this registration statement are forward-looking statements that involve risks
and uncertainties. These forward-looking statements include statements about our
plans, objectives, expectations, intentions and assumptions and other statements
contained herein that are not statements of historical fact. You can identify
these statements by words such as "August," "will," "should," "estimates,"
"plans," "expects," "believes," "intends" and similar expressions. We cannot
guarantee future results, levels of activity, performance or achievements. Our
actual results and the timing of certain events August differ significantly from
the results discussed in the forward-looking statements. You are cautioned not
to place undue reliance on any forward-looking statements.
Plan of Operation.
The following discussion should be read in conjunction with the financial
statements and related notes, which are included elsewhere in this prospectus.
Statements made below which are not historical facts are forward-looking
statements. Forward-looking statements involve a number of risks and
uncertainties including, but not limited to, general economic conditions and our
ability to market our product.
The business objectives of Millenia are twofold. First, is to bring to market
our drugs used to combat infectious diseases, initially via 2 major programs,
Malaria and HIV/AID. Our mission is to alleviate human suffering in individuals
afflicted with these diseases. We are determined to market affordable treatments
to individuals infected with Malaria and HIV/AIDS to help increase their
survival rate and offer them a better quality of life.
Millenia has endeavored diligently to position MALAREX/MMH(TM)18 as an accepted
control agent for the treatment and prevention of malaria, a $10 billion market,
throughout the world. We believe that MALAREX/MMH(TM)18 is a highly effective
anti-malarial drug, and will be made available at prices that are competitive
for a new anti-malarial agent with no parasitic resistance. The availability and
pricing of MALAREX/MMH(TM)18, and its lack of harmful side effects, will ensure
its use in the fight against malaria. To this end, the company is involved in
ongoing clinical trials of MALAREX/MMH(TM)18, to be monitored by regional
offices of the World Health Organization (WHO) designed to get MALAREX/MMH(TM)18
global recognition as an anti-malarial treatment. This will allow organizations,
such as the Global Fund and other international Non-Governmental Agencies (NGO),
to fund the purchase of our products on behalf of different countries.
Millenia are also pursuing its patent application (pending) to identify potent
inhibitors of a specific HIV enzyme, RNase H. There is a substantial amount of
information in the literature to indicate that inhibition of this enzyme or
certain mutations in the domain of this enzyme leads to the inhibition of HIV
replication. These observations are of the paramount importance to support our
drug development program for this enzyme target, that will lead to a successful
outcome. Successful development of a drug that targets HIV RNase H will play an
important role in the treatment of HIV/AIDS patients who have become resistant
to current therapy. The revenue of a first in class, orally bio-available drug
that targets HIV RNase H is estimated at US $350-$500 million, per year. The
current market for HIV drugs is about US$ 6 billion estimated to reach US$ 10
billion by 2010. Professor Michael A. Parniak (University of Pittsburgh School
of Medicine) presented some of our results at the 12th conference on
Retroviruses and Opportunistic Infections in Boston, Massachusetts (February
2005).
Inquiries were made by pharmaceutical companies, regarding the strong
correlation between the results of the bio-chemical and cell-based assays
obtained by Millenia Hope. These results are unique for this particular target,
HIV-1 RNaseH, and validate it as a highly valued program. Millenia made a
strategic decision to further develop this program, before considering
partnering with a pharmaceutical company.
8
Based on the strength of the scientific data obtained so far, we decided to
continue our collaboration with Prof. Parniak, a long time collaborator of
Millenia Hope, and to submit, under his leadership, a grant application to the
National institute of Health, USA (NIH). To strengthen the application we
invited Prof. Eddie Arnold and Prof. Ron Levy, both from Rutgers University, to
participate in this application.
The Millenia " Hope Village" project, an original concept of Millenia Hope in
lock step with the objectives of the UN's Millenium Development Goals, is
showing steady progress with a June 2006 meeting, in Geneva, between Millenia's
CEO, Leonard Stella, and the African co-ordinator of our project. Preliminary
criteria and parameters are being defined by our African foundation partners and
a further concretizing of the details timetable should happen between Q3-Q4 of
2006. As stated on the U.N. Millenia Project's website, "The underlying
principal for each Millenia Village is that community empowerment, participation
and leadership are key to designing and implementing the solutions."
Each pre-selected African Village will implement as Home Based Treatment (HBT)
anti-malaria program, since 80% of all deaths occur at home. HBT specifically
targets women and children, as they are the segment of the population at the
greatest risk. The programs will include: education effective anti-malaria
treatments for the entire village consisting of MALAREX/MMH(TM)18, attention to
the environmental factors inherent in the spread of malaria i.e. stagnant water
etc. and the promotion of co-operation between private individuals and public
sector institutions in this initiative.
Taking the aforementioned into account, as of February 28, 2007, Millenia Hope
had received 18 sales authorizations from West African nations, Congo
(Brazzaville) and Guinea (Conakry), Togo, Burundi, Central African Republic,
Benin, Gabon, Chad, Niger, Mali, Senegal, Democratic Republic of Congo, Guinea
(Equatorial), Cameroon, Ghana, Sierra Leone, Mauritania and Burkina Faso, and
one from the Caribbean nation of the Dominican Republic. These authorizations
mean that we have the right currently, without doing any further testing or
receiving any further approval, to sell MALAREX/MMH(TM)18 to any individual,
group, company or NGO or Governmental Agency in those countries. We are also
awaiting sales authorizations from several other African nations. In fact, as of
September 2005 Millenia had 2 MALAREX/MMH(TM)18 sales, one in Guinea Conakry and
one in Mali. We are actively working with other groups and individuals to
conclude further sales of MALAREX/MMH(TM)18. The only cost to concluding future
sales is the normal day-to-day operating costs of our business. Based on
management's best estimates, Millenia hopes to conclude on several large orders
for MALAREX/MMH(TM)18, in at least 2 major markets during fiscal 2007. We have
concluded an intensive marketing effort in Africa led by our CEO, in Spring -
Summer 2006. Helping us coordinate our effort in this area, as well as in other
strategic areas, is the firm of Henan, Blakie. Henan Blakie's knowledge of the
international markets will continue to give Millenia a great lead to future
sales and opportunities.
In the face of anti-malarial drug resistance in the case of quinine-based
treatments and neuro-toxicity for artimisin products, the need for effective
treatments will continue to intensify. Millenia has commenced building a network
of local distributors and expects that the demand for MALAREX/MMH(TM)18 should
progressively increase over time. Millenia has chosen to remain conservative and
has established a goal of capturing 1 1/2% - 2% ($150 - $200 million) of the
marketplace by 2011. According to the company's estimates, attaining this sales
level will ensure the viability and solid profitability of the Company for its
shareholders. No assurance can be given that the Company will meet its sales
goals.
Millenia continues to have regular commercial access to Voacmine processed by
producers in Southern Brazil and does not foresee any supply shortages in the
near future. Millenia utilizes the services of Ropack, an FDA approved, HACCP,
cGMP and ISO 9002 certified corporation as well as other providers, to perform
quality control and encapsulating of MALAREX/MMH(TM)18, conforming to the
lightest level of U.S. and Canadian manufacturing standards.
In August 2006 Millenia co-sponsored the business evening entitled "Africa, Open
for Business" as well as the "Coupe de la Prix" cycling race. Both events helped
raise the public of the Company, as well as garnering much sought after
corporate contacts. Also, the former event gave us further exposure for
MALAREX/MMH(TM)18 with the African and Canadian businessmen present at the
evening.
Secondly, Millenia is committed to ongoing research and development, to expand
the efficacy of MALAREX/MMH(TM)18 and its derivatives and other acquired or to
be acquired products, in fighting infectious diseases. Based on discoveries in
the development program, the Company has submitted a global patent covering a
profile of the active ingredients and the additional clinical properties of the
product, namely anti-parasite, anti-viral and antibacterial activities. A second
US patent application was filed in 2005 covering the treatment and prevention of
multi-drug resistant strains of malaria utilizing Millenia Hope's products. As
the company has not yet made any significant sales of its product, it is
difficult for management to evaluate the growth curve of product sales. However,
given the market size and the recognized need, by the world's premier
anti-malaria organizations (WHO, etc.) for new, viable and effective drugs, the
Company believes that it will not have a problem generating sales, thereby
creating positive cash flow, once it has attained its first large volume sales
of the product.
9
In furtherance of and in concert with Millenia's R&D efforts in the area of
infectious diseases, we have signed a partnering protocol with a leading Quebec
Research Institute, the Institute Armand-Frappier - INRS. This institute, a
member of the international network of Pasteur Institutes organization, will
collaborate with Millenia in the discovery and development of new
anti-infectious therapeutic products, specifically anti- bacterials.
On February 14, 2006 Millenia Hope Pharmaceuticals (Millenia Hope Biopharma or
MH-B), purchased intellectual property and research equipment from Avance
Pharma, an unrelated company, for $526,270.
MH-B is one of the world's leading bio-research firms in Phytomic Technology,
the commercialization of plant cell cultures. MH-B has spent over $25 million US
in creating its unique technology, including the world's largest collection of
highly purified phyto-chemical fractions to be utilized in the pharmaceutical,
cosmetic and nutraceutical industry and is commencing the initial
commercialization of several projects, with leading multi-national corporations,
in the cosmetic, pharmaceutical and nutraceutical industries.
MH-B has made great strides in its metamorphosis from pure plant-based drug
research and discovery. Commencing with the end of Q1 and continuing in Q2 and
Q3 of 2006, MH-B has signed plant-based product agreements, and received the
initial payments, with the world's largest cosmetics and health beauty products
giant, France based L'Oreal. A similar agreement was signed with the Pierre
Fabre Group, a company with $1.8 billion in revenue, from pharmaceuticals and
cosmeceuticals. In Q1 of 2007 we signed a contract with Sederma S.A.S. of
France, a large provider of ingredients to the cosmetic industry. MH-B is
currently in the midst of a 2 yr. contract to do research and analyses for
Millenia Hope Inc.
These contracts have up - front payments, fees for services rendered and add-on
payments for reaching pre-agreed upon milestones. Furthermore, these agreements,
we anticipate, are just the inaugural step in long-term collaborative relations
with these French multi-nationals.
Taking the above report on our commercial activities into account, we continue
with our R&D and drug discovery efforts, in order to avail ourselves of new and
unique molecules and fractions to offer to our client base. As well, Millenia
Biopharma is investigating the ramifications and potentialities of building its
own research and production laboratory or locating to a larger premises at a
better lease rate, within the next 12 months.
On December 11, 2006, the Company entered into an agreement with an unrelated
company to secure the rights for a method for treating hyper-cholesterol in all
indications and conditions. The Company issued 8,750,000 shares of its common
stock plus a note payable in the amount of $800,000 payable by August 31, 2007,
bearing interest at 7% after that date.
10
Three months ended February 28, 2006 compared to February 28, 2007.
In 2006 our subsidiary MH-B had revenue of $81,460 for work for a multi-national
cosmetic firm. We had income in 2007 of $359,387 from the aforesaid cosmetic
company and 2 pharmaceutical/neutraceutical firms.
In 2007 we had $1,735,159 of operating expenses vs. $1,167,353 in 2006, broken
down as follows:
Comparative figures 3 months ended February 28, 2007 and 2006
2006
Stock Non-Stock
Compensation Expense Total
------------ ------- -----
Biotech Wages - - -
Admin salaries $ 96,000 $ 7,880 $ 103,880
Consulting $ 232,070 $ 3,940 $ 236,010
Development $ 580,181 $ 44,124 $ 624,305
Marketing $ 143,282 - $ 143,282
Other S, G and A - $ 59,876 $ 59,876
---------- ---------- ----------
$1,051,533 $ 115,820 $1,167,353
========== ========== ==========
2007
Stock Non-Stock
Compensation Expense Total
------------ ------- -----
Biotech Wages -- $ 169,279 $ 169,279
Admin salaries $ 27,225 $ 8,200 $ 35,425
Consulting $ 141,775 $ 80,081 $ 221,856
Development $ 487,750 $ 457,677 $ 945,427
Marketing $ - $ 81,079 $ 81,079
Other S, G and A $ 70,668 $ 211,425 $ 282,093
---------- ---------- ----------
$ 727,418 $1,007,741 $1,735,159
========== ========== ==========
We had Biotech wages in 2007 of $169,279 and no Biotech wages in 2006.
In 2007, we paid our principal officers $35,425 in salaries and $103,880 in
2006. Higher salaries were paid in 2006 reflecting a healthier cash flow .
We had consulting fees of $221,856 in 2007 and approximately the same, $236,010,
in 2006.
We had marketing expenses of $143,282 in year 2006 and $81,079 in 2007. Our
decreased expenses are due to a greater concentration of in-house marketing
activities in advancing the platform of our subsidiary company.
We incurred development costs of $624,305 during the 2006 period as compared to
$945,427 for 2007. 2007 represented costs of $225,000 of deferred compensation,
$1,062,000 to acquire the rights and interests in 3 weight related compounds,
developmental work by our subsidiary of $125,000 and expected research tax
credits of $ (470,000). 2006 represented the expensing of deferred stock
compensation of $390,000 from 2005 work and $175,000 for newly started projects
in HIV/AIDS and our Hope Village project, and other development costs.
General and administrative expenses were $59,876 for 2006 and $282,093 in 2007.
This represented an increase of $222,217 due to the fact that in we included all
the consolidated expenses of 2 companies in 2007 and not 2006 and higher
interest charges on our borrowed funds.
As a result of the foregoing we incurred an operating loss of $1,375,772 for the
quarter ended February 28 2007, compared to a loss of $1,085,893 for the quarter
ended February 28, 2006.
Liquidity and Capital Resources
At February 28, 2007 the Company had negative working capital of $1,658,916.
Additional capital and/or borrowings will be necessary. Management anticipates
generating revenue through the sales of Malarex/MMH(TM) 18 during this fiscal
year. The officers and directors of the Company have indicated their commitment
to fund the operations of the organization during the next fiscal year until the
organization can generate sufficient cash flow from operations to meet current
operating expenses and overhead. Management anticipates its consolidated net
cash needs at $2,500,000 for the fiscal year ending November 30, 2007.
11
Item 3. CONTROLS AND PROCEDURES
QUARTERLY EVALUATION OF THE COMPANY'S DISCLOSURE CONTROLS AND INTERNAL CONTROLS.
As of the close of the period covered by this Quarterly Report on Form 10-QSB,
the Company evaluated the effectiveness of the design and operation of its
"disclosure controls and procedures" (Disclosure Controls) and its "internal
controls and procedures for financial reporting" (Internal Controls). This
evaluation (the Controls Evaluation) was done under the supervision and with the
participation of management, including our Chief Executive Officer (CEO). Rules
adopted by the SEC require that in this section of the Quarterly Report we
present the conclusion of the CEO about the effectiveness of our Disclosure
Controls and Internal Controls based on and as of the date of the Controls
Evaluation. Based upon that evaluation, the Chief Executive Officer and its
Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company requires to be included in this Quarterly Report on form
10-QSB. There have been no changes in the Company's internal controls or in
other factors which could significantly affect internal controls subsequent to
the date the Company carried out its evaluation.
CEO and CFO CERTIFICATIONS
Appearing immediately following the Signatures section of this Quarterly Report
there are two separate Forms of "Certification" of the CEO and CFO. The first
form of Certification is required in accord with section 302 of the
Sarbanes-Oxley Act of 2002 (the Section 302 Certification). This section of the
Quarterly report which you are currently reading is the information concerning
the Controls Evaluation referred to in the Section 302 Certificate and this
information should be read in conjunction with the Section 302 Certification for
a more complete understanding of the topics presented.
DISCLOSURE CONTROLS AND INTERNAL CONTROLS
Disclosure Controls are procedures that are designed with the objective of
ensuring that information required to be disclosed in our reports foiled under
the Securities Exchange Act of 1934 (Exchange Act), such as this Quarterly
Report is recorded, processed, summarized and reported within the time period
specified.
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Part II other information
Item 2: Sales of Unregistered securities
Date of Title of Number Consideration Exemption from
Sale Security Sold Received Registration claimed
Dec 1, 2006 common stock 2,400,000 $ 31,680 Regulation S
Dec. 11, 2006 common stock 8,750,000 $ 262,500 Regulation S
in settlement
of services
Dec. 11, 2006 common stock 8,352,000 $ 98,013 Regulation S
Jan. 3, 2007 common stock 1,350,000 $ 49,000 Regulation S
in settlement
of services
Jan. 3, 2007 common stock 1,730,000 $ 25,560 Regulation S
Jan 12, 2007 common stock 500,000 $ 14,910 Regulation S
Jan. 17, 2007 common stock 250,000 $ 22,500 Regulation S
in settlement
of services
Feb. 8, 2007 common stock 975,000 $ 97,500 Regulation S
in settlement
of services
Feb. 8, 2007 common stock 4,587,539 $ 147,968 Regulation S
((b) Reports on Form 8-K
None
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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.
Millenia Hope Inc.
(Registrant)
Dated April 20, 2007 By: /s/ Leonard Stella
----------------------
Leonard Stella
CEO
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