UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
QUARTERLY REPORT PURSUANT TO
Section 13 or 15(d) of the
SECURITIES AND EXCHANGE ACT of 1934
For the QUARTERLY Period Ended
February 29, 2008
Commission File Number
000-29385
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 15, 2008 Issuer had
265,360,250 outstanding shares of Common Stock.
INDEX
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements 2
Consolidated Balance Sheet (Unaudited) at February 29, 2008,
Audited November 30, 2007. 2
Consolidated Statements of Operations (Unaudited) for the three
months ended February 29, 2008 and February 28, 2007 and from
inception (December 24, 1997) to February 29, 2008. 3
Consolidated Statements of Cash Flows (Unaudited) for the three
months ended February 29, 2008 and February 28, 2007 and from
inception (December 24, 1997) to February 29, 2008. 4
Notes to the Consolidated Financial Statements (Unaudited) 5
Item 2. Plan of Operations
Item 3. Controls and procedures 12
PART II. Other Information
Item 2. Sale of Unregistered Securities 13
Item 6. Exhibits and Reports on Form
SIGNATURES 13
1
Millenia Hope Inc.
(A Development Stage Company)
Consolidated Balance Sheets
February 28, 2008, November 30, 2007
Assets Feb. 29, 2008 Nov. 30, 2007
Current Assets (Unaudited) (Audited)
Cash $ 7,701 $ -
Accounts Receivable 543,456 178,837
Inventories & Work in Progress 66,952 68,477
Prepaid expenses & Deposits 279,167 329,411
Tax Credits Receivable 1,161,847 979,000
------------------------------------
Total Current Assets 2,059,123 1,555,725
Property & Equipment (net) 569,810 624,042
------------------------------------
$ 2,628,933 $ 2,179,767
====================================
Liabilities & Stockholders' (Deficit)
Current Liabilities
Bank Advances $ - $ 31,196
Accounts Payable and Accrued Liabilities 2,753,279 2,169,755
Loans payable-related party 414,646 527,358
Notes payable 3,011,705 2,339,123
Deferred Revenue 20,000
Lease inducements 88,940 93,940
------------------------------------
Total Current Liabilities 6,288,570 5,161,372
------------------------------------
Convertible notes payable (net) 938,463 819,270
------------------------------------
Total Liabilities 7,227,033 5,980,642
Stockholders' (Deficit)
Preferred Stock, $0.0001 par value 80,000,000 - -
share authorized-0 shares issued and outstanding
Common Stock, $.0001 par value; 390,000,000 shares authorized,
252,510,250 issued and outstanding November 30, 3007
260,010,250 issued and outstanding Feb. 29, 2008 26,001 25,251
Paid in Capital 27,570,915 27,519,170
(Deficit) Accumulated During the Development Stage (32,195,016) (31,345,297)
------------------------------------
(4,598,100) (3,800,876)
------------------------------------
$ 2,628,933 $ 2,179,767
====================================
See the accompanying notes to the consolidated financial statements.
2
Millenia Hope Inc.
(A Development Stage Company)
Consolidated Statements of Operations Three months ended
February 29, 2008 and February 28, 2007, and
the Period From Inception (December 24, 1997) to February 29, 2008
(Unaudited)
Three months Three months
ended ended Inception to
February 29, February 28, February 29,
2008 2007 2008
---- ---- ----
Revenues $ 541,943 $ 359,387 $ 3,823,396
Cost of Sales 1,525 - 798,174
------------- ------------- -------------
Gross Profit 540,418 359,387 3,025,322
------------- ------------- -------------
selling, general and administrative
Biotech Wages 154,412 169,279 1,877,263
Administrative Salaries 352,570 35,425 6,367,331
Marketing 5,336 81,079 6,343,701
Development (113,129) 945,427 7,146,771
Patent rights - - 1,005,827
Selling, general and administrative 732,693 503,949 8,631,150
------------- ------------- -------------
1,131,882 1,735,159 31,372,043
------------- ------------- -------------
Operating (Loss) (591,464) (1,375,772) (28,346,721)
------------- ------------- -------------
Other income (expense)
Gain on disposition of subsidiary - - 1,360,782
Interest Income - - 131,323
Interest expense (235,456) (169,503) (2,339,923)
Loss on Bond Conversions (22,800) - (290,633)
Write Off Inventory - - (65,443)
Write-off of leasehold improvements - - (2,663)
Write-off of notes receivable, related parties - - (629,739)
Write-off of other assets - - (2,799,999)
------------- ------------- -------------
(258,256) (169,503) (4,636,295)
------------- ------------- -------------
Net (Loss) $ (849,720) $ (1,545,275) $ (32,983,016)
===========================================================
Per share information - basic and diluted:
Weighted Average Number of Common
Shares Outstanding 256,410,250 212,576,876
============= =============
(Loss) Per Common Share $ (0.00) $ (0.01)
============= =============
See the accompanying notes to the consolidated financial statements.
3
Millenia Hope Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows Three months ended
February 29, 2008 and February 28, 2007 and
the Period From Inception (December 24, 1997) to February 29, 2008
(Unaudited)
Three Months Ended Three Months Ended Inception to
February 29, February 28, February 29,
2008 2007 2008
---- ---- ----
Operating Activities
Cash (used in) operating activities (475,962) (519,306) (8,823,934)
------------ ------------ ------------
Financing Activities
Bank Overdraft (31,195) - -
Advances from related parties (112,712) 142,229 1,841,077
Proceeds from convertible note payable - - 2,000,000
Payments on convertible note payable - (95,622) (315,371)
Proceeds from notes payable 627,570 227,101 2,728,404
Payments on notes payable - - (81,000)
Issuance of capital stock for cash - 318,131 3,040,101
Contribution to paid in capital - - 1,318,347
------------ ------------ ------------
Cash provided by financing activities 483,663 591,839 10,531,558
------------ ------------ ------------
Investing activities
Additions to fixed assets - (16,597) (855,908)
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) (1,699,923)
------------ ------------ ------------
Increase (decrease) in cash 7,701 55,936 7,701
Cash and cash equivalents
Beginning of period - 2,582 -
------------ ------------ ------------
End of period $ 7,701 $ 58,518 7,701
============ ============ ============
Supplemental Cash Flow Information
Cash Paid for Income Taxes $ - $ - $ -
============ ============ ============
Cash Paid for Interest $ - $ - $ 257,144
============ ============ ============
Issuance of capital stock for convertible note repayment $ 6,969 $ 19,332 $ 199,022
============ ============ ============
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
============ ============ ============
See the accompanying notes to the financial statements.
4
MILLENIA HOPE INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2008
(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 consolidated financial statements and footnotes thereto of Millenia Hope
Inc. as of November 30, 2007, 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 inter-company 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
$ 849,720 for the three months ended February 29, 2008 as well as reporting net
5
losses of $32,983,016 from inception (December 24, 1997). As reported on the
consolidated statements of cash flows, the Company had deficit cash flows from
operating activities of $475,962, for the three months ended February 29, 2008
and has reported deficit cash flows from operating activities of $ 8,823,934
from inception (December 24, 1997). To date, these losses and cash flow
deficiencies have been financed principally through the sale of common stock
$3,040,101 and term debt $6,173,110, 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 as well as revenue from several ongoing drug discovery contracts of
its subsidiary company.
Note 4 STOCKHOLDERS' EQUITY
During the period ended February 29, 2008, the Company issued 7,500,000 common
shares, under an SB-2 Registration Statement, in payment of $75,000 of
Convertible Note debt.
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 $976,847 US, the amount to be received by Millenia Hope
Pharmaceuticals for the fiscal year ended November 30, 2007 and an additional
$185,000 for the period ended February 29, 2008.
Note 6 SUBSEQUENT EVENTS
Between March 1, 2008 and April 15, 2008, the company issued 4,750,000 common
shares, under an SB-2 Registration Statement, in payment of $17,250 of
Convertible Note debt and 600,000 shares of Common Stock, pursuant to Regulation
S, in settlement of consulting services valued at $1,800..
6
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/AIDS. 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).
7
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.
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. In March 2007, the NIH granted Millenia Hope
and its group of researchers a 5 year, $4.5 million grant. This large grant
validates the significance of the RNase H treatment.
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 April 15, 2008, 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. Millenia is working
diligently to conclude orders for MALAREX/MMH(TM)18, in at least 2 major markets
during fiscal 2008. We 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 % - 2% ($100 - $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.
8
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.
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.
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 2006 and continuing in
2007 and 2008, MH-B has signed plant-based product agreements, and received
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. in Q3 of 2007, we signed a contract with the world's largest
purveyor of taste items, Synomex Corp.
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.
On December 13, 2007 Mr. Jacky Quan resigned as an officer and Director of the
Company to pursue other interests.
On January 31, 2008, we signed a Letter of Intent, with Loubac Top Envirnmental
Inc. to make a reverse acquisition of their outstanding shares (publicly traded
on the NEX market), in consideration for certain Patents and Rights that we own.
This is only a LOI and regulatory and due diligence work is still needed to
reach the preliminary agreement stage, and we will need our debtholder and our
shareholders approval of this deal, when and if consummated.
As of April 15, 2008, we are in negotiations to purchase a HIV-CCR5 patent for
approx. $3 million US, to be paid in a combination of restricted common shares
of Millenia Hope and cash in whatever ratio is agreed to by the respective
parties. This deal also has not finished its due diligence stage.
9
Three months ended February 29, 2008 compared to February 28, 2007.
In 2008 our subsidiary MH-B had revenue of $537,528 and income in 2007 of
$359,387.
In 2007 we had $1,735,159 of operating expenses vs. $1,131,882 in 2008, broken
down as follows:
Comparative figures 3 months ended February 28, 2008 and 2007
2006
Stock Non-Stock
Compensation Expense Total
------------ ------- -----
Biotech Wages & R&D Exp - $ 41,283 $ 41,283
Admin salaries - $ 352,570 $ 352,570
Consulting - $ 29,836 $ 29,836
Marketing - $ 5,336 $ 5,336
Other S, G and A - $ 702,857 $ 702,857
----------- ----------- -----------
$ - $ 1,131,882 $ 1,131,882
=========== =========== ===========
2007
Stock Non-Stock
Compensation Expense Total
------------ ------- -----
Biotech Wages & R&D Exp $ 487,750 $ 626,956 $1,114,706
Admin salaries $ 27,225 $ 8,200 $ 35,425
Consulting $ 141,775 $ 80,081 $ 221,856
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 2008 of $154,412 and $169,279 in 2008.
We incurred net R&D expenses of $(113,129) during the 2008 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). 2008 represented other development costs and expected
research tax credits of $(185,000), primarily generated by our salary
expenditures.
In 2007, we paid our principal officers $35,425 in salaries and $352,570 in
2008. $340,000 of salaries were accrued in 2008 for this quarter, as opposed to
no accrued in 2007. All salaries were set up annually for the year 2007 at
year-end only.
We had consulting fees of $221,856 in 2007 and $29,836 in 2008. Decreased cash
flow did not allow for expenditures in this area in 2008.
We had marketing expenses of $5,336 in year 2008 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.
10
General and administrative expenses were $702,857 for 2008 and $282,093 in 2007.
This represented an increase of $420,764 due to the fact that higher interest
charges on our borrowed funds and much larger one time finance charges to
receive theses 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 $591,464 for the quarter
ended February 29, 2008.
Liquidity and Capital Resources
At February 29, 2008 the Company had negative working capital of $4,232,572.
Additional capital and/or borrowings will be necessary. Management anticipates
generating revenue through the sales of Malarex/MMH(TM) 18 during this fiscal
year. Management anticipates its consolidated net cash needs at $3,000,000 for
the fiscal year ending November 30, 2008.
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 COO CERTIFICATIONS
Appearing immediately following the Signatures section of this Quarterly Report
there are two separate Forms of "Certification" of the CEO and COO. 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.
12
Part II other information
Item 2: Sales of Unregistered securities
Date of Title of Number Consideration Exemption from
Sale Security Sold Received Registration claimed
((b) Reports on Form 8-K
Changes in Officers and Directors
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 15, 2008 By: /s/ Leonard Stella
CEO
13