Attached files
file | filename |
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EX-32.1 - VIRIDAX CORP | v190519_ex32-1.htm |
EX-31.2 - VIRIDAX CORP | v190519_ex31-2.htm |
EX-31.1 - VIRIDAX CORP | v190519_ex31-1.htm |
EX-32.2 - VIRIDAX CORP | v190519_ex32-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
Quarterly
Report Under Section 13 or 15(d)
of the
Securities Exchange Act of 1934
for the
quarterly period ended January 31, 2010
Commission
File Number
0-33473
VIRIDAX
CORPORATION.
(Name of
Small Business Issuer in its charter)
FLORIDA
|
65-1138291
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification No.)
|
|
Incorporation
or organization)
|
270 NW 3rd
Court
|
33432-3720
|
|
Boca
Raton, Florida
|
(Zip
Code)
|
|
(Address
of principal executive offices)
|
Issuer’s
Telephone: (561) 368-1427
——————————————
Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days. Yes ¨ No x
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T(§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). ¨ Yes ¨ No
Indicate
by checkmark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer”, “accelerated filer”, and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Smaller
reporting company x
Indicate
by checkmark whether registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes ¨ No
x
APPLICABLE
ONLY TO CORPORATE ISSUERS
As of the
date of this filing there are 24,349,090 shares
of common
stock outstanding.
PART I FINANCIAL
INFORMATION
ITEM
1.
|
FINANCIAL
STATEMENTS
|
Unaudited
financial statements for Viridax Corporation as of the fiscal quarter ended
January 31, 2010 are submitted in compliance with Article 8-03 of Regulation
S-X.
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
|
OVERVIEW
Viridax Corporation (Viridax) is a
biopharmaceutical discovery and development company formed to expedite the
commercialization of new technologies and products for the treatment of
bacterial infectious diseases, especially antibiotic-resistant
infections. The bacteriophage-based technologies under development by
Viridax specifically target bacterial pathogens that incite resistant infections
in substantial human populations.
In particular, the Company is
developing specific bacteriophage products for the treatment of bacterial
infections incited by Staphylococcus aureus and
other Staphylococcal species encountered in the community setting and as
nosocomial (hospital-acquired) agents. Many strains of Staphylococcus aureus and
other Staphylococcal species are now resistant to most commercially-available
antibiotics. The health threat and economic consequences of common
Staph infections are now catastrophic areas of both the developing and the
developed world.
Because Viridax is a developmental
company, it has no products or services currently available to the public for
commercial purposes.
The Company has no operating
revenue. It is wholly dependent at this time upon the receipt of
capital investment to fund its continuing activities. At this time,
the only sources of this capital investment comes from the sale of its Class A
Preferred Stock.
Viridax
currently has two employees, Richard C. Honour, President and Richard E. Herman,
Vice President, Research and Development. No compensation has been paid during
the period ended January 31, 2010. As of January 31, 2010, accrued compensation
to Richard C. Honour was $131,356 and will be paid as cash flow requirements
permit.
(1)
|
Liquidity
|
The
Company is wholly dependent upon the sales of an offering of
3,000,000 shares of Class A Preferred Stock at a net price to Viridax
of $3.50 per share, which such offering is being conducted primarily
in Germany, Austria, Switzerland, and other European countries. In
view of the current global financial crisis there is no reasonable expectation
that sales of preferred shares in the near future will be sufficient to sustain
the corporation as a going concern. Although the Company has sales
representatives in Europe conducting sales activities, it has no means to
measure or project the results of these sales efforts.
2
(2)
|
Capital
Resources
|
The
Company has a Cooperative Research and Development Agreement with the
Agricultural Research Service (ARS) of the United States Department of
Agriculture, which has a period of March 1, 2009 through January 10,
2011.
The
overall objective of this Agreement is to join the resources and expertise of
ARS and Viridax Corporation to evaluate and commercialize previously
ARS-developed novel, multi-domain, antimicrobials that will target Staphylococus
aureaus. The objective is to target S.aureus for treating bovine
mastitis and human respiratory infections.
This
Agreement calls for a payment amount of $150,000, payable in three installments
of $50,000 each. The Company is now delinquent in meeting these
payment obligations and presently does not have sufficient cash on hand to
continue this Agreement on operative terms. It plans on continuing
the relationship with ARS as additional funds become available.
The
Company has no immediate plans for further development of its products until
additional funding requirements are obtained. In addition to continuing its
sales of preferred shares, the Company is making various applications to obtain
grants and similar sources of funding.
(3)
|
Results
of Operations
|
Not applicable.
(4)
|
Off-balance
sheet arrangements
|
Not applicable.
(5)
|
Tabular
disclosure of contractual
obligations
|
Not required.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
report contains forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act. We have based
these forward-looking statements largely on our current expectations and
projections about future events and financial trends affecting the financial
condition of our business. These forward looking statements are
subject to a number of risks, uncertainties and assumptions, including, among
other things:
3
|
·
|
Our
ability to obtain capital;
|
|
·
|
Our
ability to fully implement our business
plan;
|
|
·
|
General
economic and business conditions, both nationally and in our
markets;
|
|
·
|
Our
expectations and estimates concerning future financial performance,
financing plans and the impact of
competition;
|
|
·
|
Anticipated
trends in our business;
|
|
·
|
Other
risk factors set forth under “Other Risk Factors” in this
report.
|
In
addition, in this report, we use words or phrases such as “high value”, “plans,”
“expects,” “future,” “intends,” and similar expressions to identify
forward-looking statements.
We
undertake no obligation to update publicly or revise any forward-looking
statements, whether as a result of new information, future events or otherwise
after the date of this report. In light of these risks and
uncertainties, the forward-looking events and circumstances discussed in this
report may not occur and actual results could differ materially from those
anticipated or implied in the forward-looking statements.
ITEM
3
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
The Company receives U.S. dollars in
exchange for the sale of its Class A Preferred Stock in Europe. This
price ($3.50 net proceeds to the Company) is constant.
There is no market price for the
Viridax stock. None of the Company stock is publicly
traded. Consequently the Company has no interest rate risk, foreign
currency exchange rate risk, equity price risk, or otherwise.
ITEM
4
|
CONTROLS
AND PROCEDURES
|
The
Company maintains disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) promulgated under the Exchange Act) that are designed to
ensure that information required to be disclosed in the company's Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.
Under the supervision and with the
participation of management, including the Chief Executive Officer, as the
primary Executive Officer, we evaluated the effectiveness of the design and
operation of our disclosure controls and procedures (as defined in Rule
13a-15(c) and 15d-15(e) ) under the Exchange Act of 1934, as amended (the
“Exchange Act”)). Based on that evaluation, our Chief Executive Officer and
Chief Financial Officer have concluded that, as of the end of the
period covered by this report, our disclosure controls and procedures are
effective in recording, processing, summarizing and reporting, on a timely
basis, information required to be disclosed by us in the reports we file or
submit under the Exchange Act.
4
During the period covered by this
Quarterly Report on Form 10-Q, there was no change in our internal control over
financial reporting (as defined in Rule 13a-15(f) and 15d-15(f)) under the
Exchange Act that materially affected or is reasonably likely to materially
affect, our internal control over financial reporting. Our principal
executive and financial officers concluded that our disclosure controls and
procedures were effective in ensuring that information required to be disclosed
by our Company in the reports that it files or submits under the Act is
accumulated and communicated to the issuer’s management, including
its principal executive and principal financial officer or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.
This
quarterly report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this quarterly report.
5
PART
II
ITEM
1.
|
LEGAL
PROCEEDINGS
|
|
Not
applicable
|
ITEM
1A.
|
RISK
FACTORS
|
|
Not
applicable
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
On March 31, 2006, the Board of
Directors of Viridax Corporation approved the efforts of the Company in filing
with the German Federal Financial Supervisory Authority (BaFin) a sales
prospectus providing for the sale of up to the authorized limit of 3,000,000
shares of its Class A Preferred Stock, par value $ 1.00 per share, pursuant to
the rules and requirements of Regulation S as promulgated by the United States
Securities and Exchange Commission. Pursuant to the terms of that prospectus,
East Slope Funding Corp., a Colorado corporation, has been designated as the
Escrow Agent to receive the gross proceeds as paid by a given subscriber wherein
the net sum of US $3.50 per share is retained by the Company and deliver a copy
of the purchaser's subscription agreement. As of the date of this filing, under
this arrangement, and within exemptions from the requirements of the prospectus,
358,529 shares have been sold for net cash proceeds to the Company totaling
$1,254,852,
net of a conversion of 2500 preferred shares to common totaling
$8750. Final
approval of the prospectus by the BaFin was obtained September 4,
2006. This approval was renewed by the BaFin on March 4,
2009.
In December 2008, the Agency Agreement
referred to above was transferred to East Slope Funding Corporation of Florida,
a Florida corporation, the sole shareholder and president of which are minority
stockholders of the Company. The president of this company is also a director of
the Company.
The Company claimed an exemption from
registration under Regulation S based upon the following facts: (1) the offer
and sale of the shares to each individual purchaser was an offshore transaction
because each purchaser was a resident of Germany at the time of the transaction
and located within that country, (2) there were no directed selling efforts and
no activities were undertaken to condition the market. The Company comes within
the Category 2 safe harbor as set forth in Rule 903(c)(2) because the sale of
the preferred stock complies with the general conditions of Rule 903(a) and (b)
and the stock certificates bear restrictive legends that meet the Regulation S
selling restrictions in terms of transactional restrictions and offering
restrictions.
6
The Class
A Preferred Stock is non-cumulative and non-voting. Each share of Preferred
Stock is convertible to Common Stock as follows: (1) if the owner wishes to
exchange the certificate within one year from the date of purchase, that owner
shall receive four shares of Common Stock for each one share of Preferred Stock,
(2) if the owner wishes to exchange the certificate after owning it for a period
longer than one year but less than two years, the owner shall receive 4.4 shares
of Common Stock for each one share of Preferred Stock, (3) if the owner wishes
to exchange the certificate after owning it for a period longer than two years
but less than three years, the owner shall receive 4.6 shares of Common Stock
for each one share of Preferred Stock, and (4) if the owner wishes to exchange
the certificate after owning it for three years, that owner shall receive five
shares of Common Stock for each one share of Preferred Stock. Once an owner has
owned the Preferred Stock for three years, the option to convert to Common Stock
must be exercised within 30 days thereafter or the conversion option shall
lapse.
ITEM 3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
Not
applicable
ITEM 4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
Not
applicable
ITEM 5.
|
OTHER
INFORMATION
|
Not
applicable
ITEM 6.
|
EXHIBITS
|
Exhibit Number
|
Page Number
|
Description
|
||
3(i)(a)
|
*Articles
of Incorporation of
|
|||
Media
Advisory Group, Inc.
|
||||
3(i)(b)
|
*Certification
of Reinstatement
|
|||
3(i)(c)
|
*Articles
of Amendment changing name to I & E Tropicals, Inc.
|
|||
3(i)(d)
|
**Articles
of Amendment changing name to Viridax Corporation
|
|||
3(ii)
|
*Bylaws
of Viridax Corporation
|
|||
10
|
**Asset
Purchase Agreement
|
|||
10
|
***Research
Agreement
|
|||
10
|
****Research
Agreement
|
|||
14
|
**Code
of Ethics
|
|||
31.1
|
E-1
|
Certification
by President
|
||
31.2
|
E-3
|
Certification
by Chief Financial Officer
|
||
32.1
|
E-5
|
Certification,
18 U.S.C.
|
||
32.2
|
|
E-6
|
|
Certification,
18 U.S.C.
|
*Incorporated
by reference to Form 10-SB/12G, filed 1/7/02.
**Incorporated
by reference to Form 10-KSB, filed on 6/27/05.
***Incorporated
by reference to Form 10-KSB, filed on 8/13/07.
****Incorporated
by reference to Form 10-K, filed on 6/21/10.
7
SIGNATURES
In accordance with 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.
Dated: July
13, 2010
|
By:
|
/s/ Richard C.
Honour
|
|
Name: Richard
C. Honour
|
|||
Title: President
|
In accordance with the Exchange Act,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Richard C. Honour
|
President
and Director
|
|
Richard
C. Honour
|
||
/s/ Ledyard H. DeWees
|
Secretary
|
|
Ledyard
H. DeWees
|
||
/s/ Michael C. Maloney
|
Director
|
|
Michael
C. Maloney
|
||
/s/ Kenneth E. Lehman
|
Chief Financial Officer | |
Kenneth
E. Lehman
|
Director |
8
VIRIDAX
CORPORATION
(A
Development Stage Company)
BALANCE
SHEETS
January 31
|
April 30
|
|||||||
2010
|
2009
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
|
$ | - | $ | 859 | ||||
Notes
receivable and accrued interest - related
|
||||||||
parties,
net of allowance for doubtful accounts
|
||||||||
of
$15,826
|
3,831 | 3,729 | ||||||
Prepaid
expenses
|
- | 25,342 | ||||||
Total
Current Assets
|
3,831 | 29,930 | ||||||
COMPUTER
AND LABORATORY EQUIPMENT - NET
|
21,811 | 27,985 | ||||||
OTHER
ASSET
|
||||||||
Bacteriophage
material
|
1,795,000 | 1,795,000 | ||||||
TOTAL
ASSETS
|
$ | 1,820,642 | $ | 1,852,915 | ||||
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Cash
overdraft
|
$ | 172 | $ | - | ||||
Note
payable - bank
|
41,000 | 49,000 | ||||||
Accounts
payable and accrued expenses
|
201,009 | 198,629 | ||||||
Note
payable and accrued interest
|
||||||||
-
related parties
|
14,525 | 8,033 | ||||||
Total
Current Liabilities
|
256,706 | 255,662 | ||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Class
A non-cumulative, convertible
|
||||||||
preferred
stock, $1 par value, 3,000,000
|
||||||||
shares
authorized, 350,429 and 334,929
|
||||||||
shares
issued and outstanding, respectively
|
350,429 | 334,929 | ||||||
Common
stock, $.001 par value, 50,000,000
|
||||||||
shares
authorized, 24,349,090 shares issued
|
||||||||
and
outstanding
|
24,349 | 24,349 | ||||||
Additional
paid-in capital
|
3,528,617 | 3,489,317 | ||||||
Deficit
accumulated during the development stage
|
(2,339,459 | ) | (2,251,342 | ) | ||||
Total
Stockholders' Equity
|
1,563,936 | 1,597,253 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 1,820,642 | $ | 1,852,915 |
Read
accompanying Notes to Financial Statements.
F-1
VIRIDAX
CORPORATION
(A
Development Stage Company)
STATEMENTS
OF OPERATIONS
(Unaudited)
Period From
|
||||||||||||||||||||
July 1, 1998
|
||||||||||||||||||||
Three Months
|
Nine Months
|
(Inception)
|
||||||||||||||||||
Ended January 31,
|
Ended January 31,
|
To January 31,
|
||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
||||||||||||||||
REVENUE
|
$ | - | $ | - | $ | - | $ | - | $ | 735 | ||||||||||
EXPENSES
|
||||||||||||||||||||
General
and administrative
|
25,323 | 125,157 | 88,117 | 416,448 | 2,135,194 | |||||||||||||||
Impairment
of bacteriophage material
|
- | - | - | - | 205,000 | |||||||||||||||
Total
expenses
|
25,323 | 125,157 | 88,117 | 416,448 | 2,340,194 | |||||||||||||||
NET
(LOSS)
|
$ | (25,323 | ) | $ | (125,157 | ) | $ | (88,117 | ) | $ | (416,448 | ) | $ | (2,339,459 | ) | |||||
(LOSS)
PER SHARE
|
$ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.02 | ) | ||||||||
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
24,349,090 | 24,349,090 | 24,349,090 | 24,349,090 |
Read
accompanying Notes to Financial Statements.
F-2
VIRIDAX
CORPORATION
(A
Development Stage Company)
STATEMENTS
OF CASH FLOWS
(Unaudited)
Period From
|
||||||||||||
Nine
|
Nine
|
July 1,1998
|
||||||||||
Months Ended
|
Months Ended
|
(Inception)
|
||||||||||
January 31,
|
January 31,
|
to January 31,
|
||||||||||
2010
|
2009
|
2010
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
(loss)
|
$ | (88,117 | ) | $ | (416,448 | ) | $ | (2,339,459 | ) | |||
Adjustments
to reconcile net (loss) to net cash
|
||||||||||||
(used
in) operating activities:
|
||||||||||||
Depreciation
|
6,174 | 6,957 | 21,646 | |||||||||
Impairment
of bacteriophage material
|
- | - | 205,000 | |||||||||
Bad
debt - note receivable
|
- | - | 15,826 | |||||||||
Common
shares issued for services rendered
|
- | - | 5,000 | |||||||||
Conversion
of accrued interest to additional
|
||||||||||||
paid-in
capital
|
- | - | 576 | |||||||||
(Increase)
in accrued interest receivable
|
(102 | ) | (118 | ) | (2,070 | ) | ||||||
Decrease
in prepaid expenses
|
25,342 | 54,171 | - | |||||||||
Increase
in accrued interest payable
|
492 | - | 525 | |||||||||
Increase
in accounts payable and accrued expenses
|
2,930 | 161,038 | 229,459 | |||||||||
NET
CASH (USED IN) OPERATING ACTIVITIES
|
(53,281 | ) | (194,400 | ) | (1,863,497 | ) | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Purchase
of computer and laboratory equipment
|
- | (6,213 | ) | (43,457 | ) | |||||||
Increase
in note receivable - related parties
|
- | - | (38,700 | ) | ||||||||
Repayment
of notes receivable - related parties
|
- | 9,813 | 21,113 | |||||||||
Increase
in loans receivable - stockholder
|
- | - | (12,000 | ) | ||||||||
Repayment
of loans receivable - stockholder
|
- | - | 4,000 | |||||||||
NET
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
|
- | 3,600 | (69,044 | ) |
Read
accompanying Notes to Financial Statements.
F-3
(A
Development Stage Company)
STATEMENTS
OF CASH FLOWS (CONTINUED)
(Unaudited)
Period From
|
||||||||||||
Nine
|
Nine
|
July 1,1998
|
||||||||||
Months Ended
|
Months Ended
|
(Inception)
|
||||||||||
January 31,
|
January 31,
|
to January 31,
|
||||||||||
2010
|
2009
|
2010
|
||||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Cash
overdraft
|
172 | - | 172 | |||||||||
Issuance
of common stock
|
- | 507,425 | ||||||||||
Issuance
of preferred stock, net
|
54,250 | 150,500 | 1,235,248 | |||||||||
Payments
on stock subscription receivable
|
- | - | 113,476 | |||||||||
Proceeds
of notes payable - bank
|
18,000 | - | 68,000 | |||||||||
Repayment
of notes payable - bank
|
(26,000 | ) | - | (27,000 | ) | |||||||
Proceeds
of note payable - related party
|
6,000 | - | 20,000 | |||||||||
Repayment
of note payable - related party
|
- | - | (6,000 | ) | ||||||||
Proceeds
of note payable
|
- | - | 5,000 | |||||||||
Increase
in amount due to stockholder
|
- | - | 16,220 | |||||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
52,422 | 150,500 | 1,932,541 | |||||||||
NET
(DECREASE) IN CASH
|
(859 | ) | (40,300 | ) | - | |||||||
CASH
– BEGINNING
|
859 | 41,429 | - | |||||||||
CASH
– ENDING
|
$ | - | $ | 1,129 | $ | - | ||||||
SUPPLEMENTAL
DISCLOSURES OF NON-CASH INVESTING
|
||||||||||||
AND
FINANCING ACTIVITIES:
|
||||||||||||
Common
shares issued for services rendered.
|
$ | - | $ | - | $ | 5,000 | ||||||
Common
shares issued for purchase
|
||||||||||||
of
bacteriophage material.
|
$ | - | $ | - | $ | 2,000,000 | ||||||
Conversion
of notes payable and accrued interest and
|
||||||||||||
net
stockholders loans to additional paid-in capital.
|
$ | - | $ | - | $ | 13,796 | ||||||
Accounts
payable paid on behalf of Company by
|
||||||||||||
stockholder.
|
$ | 550 | $ | - | $ | 28,450 | ||||||
Conversion
of preferred shares for common.
|
$ | - | $ | - | $ | 8,750 |
Read
accompanying Notes to Financial Statements.
F-4
VIRIDAX
CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JANUARY
31, 2010
NOTE 1.
|
ORGANIZATION
|
Viridax Corporation
was incorporated on July 1, 1998 under the laws of the State of Florida as Media
Advisory Group, Inc. and on August 6, 2001 changed its name to I & E
Tropicals, Inc. On April 5, 2005, the company amended its Articles of
Incorporation to change its name to Viridax Corporation. With the acquisition of
the bacteriophage material on April 24, 2005, the Company is pursuing its plan
to expedite the bacteriophage material’s commercialization. This bacteriophage
material is expected to be used for the treatment of bacterial infections
incited by Staphylococcus
aureus and other Staphlylococcus species. The Company has decided to
discontinue its original business plan for the importing and exporting of exotic
marine life. The company’s headquarters is in Boca Raton, Florida.
The
Company has insignificant revenue to date. Since its inception, the Company has
been dependent upon the receipt of capital investment or other financing to fund
its continuing activities. In addition to the normal risks associated with a new
business venture, there can be no assurance that the Company’s product
development will be successfully completed or that it will be a commercial
success.
F-5
VIRIDAX
CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JANUARY
31, 2010
NOTE 2.
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
|
Basis of
Presentation
The
accompanying condensed financial statements are unaudited. These statements have
been prepared in accordance with the rules and regulations of the Securities and
Exchange Commission (SEC). Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations. In the opinion of management, all adjustments (which
include only normal recurring adjustments) considered necessary for a fair
presentation have been included. These financial statements should be read in
conjunction with the Company’s financial statements and notes thereto for the
year ended April 30, 2009, included in the Company’s Form 10-K as filed
with the SEC. The
results of operations and cash flows for the period are not necessarily
indicative of the results of operations or cash flows that can be expected for
the year ending April 30, 2010.
(Loss) Per
Share
(Loss)
per share is computed by dividing net (loss) for the period by the weighted
average number of common shares outstanding. The effect of the conversion of the
preferred stock is excluded from the calculation of net loss per share as the
effect was anti-dilutive.
Use of
Estimates
Management
uses estimates and assumptions in preparing financial statements in accordance
with generally accepted accounting principles. Those estimates and assumptions
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities, and the reported revenues and expenses.
Accordingly, actual results could vary from the estimates that were assumed in
preparing the financial statements and those differences could be
material.
F-6
VIRIDAX
CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JANUARY
31, 2010
NOTE 2.
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
Fair Value of Financial
Instruments
The
carrying amounts of the Company’s financial instruments including notes
receivable and note payable – related parties, note payable -
bank and accounts payable and accrued expenses approximate fair value
due to the relatively short period to maturity for these
instruments.
Recent Accounting
Pronouncements
In
October 2009, the Financial Accounting Standards Board (“FASB”) issued an
Accounting Standard Update (“ASU”) No. 2009-13, which addresses the
accounting for multiple-deliverable arrangements to enable vendors to account
for products or services separately rather than as a combined unit and modifies
the manner in which the transaction consideration is allocated across the
separately identified deliverables. The ASU significantly expands the disclosure
requirements for multiple-deliverable revenue arrangements. The ASU will be
effective for the first annual reporting period beginning on or after
June 15, 2010, and may be applied retrospectively for all periods presented
or prospectively to arrangements entered into or materially modified after the
adoption date. Early adoption is permitted, provided that the guidance is
retroactively applied to the beginning of the year of adoption. The Company does
not expect the adoption of ASU No. 2009-13 to have any effect on its financial
statements upon its required adoption on January 1, 2011.
F-7
VIRIDAX
CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JANUARY
31, 2010
NOTE 3.
|
PREPAID
EXPENSES
|
Commencing
March 1, 2009, the Company entered into an agreement with an agency of the
United States Department of Agriculture to continue the laboratory work
necessary to evaluate and commercialize the bacteriophage material for a fee of
$150,000. A deposit of $50,000 was paid with the balance due in three monthly
installments. These installments have not been paid as scheduled, however,
during the nine months ended January 31, 2010, a total of $25,000 has been paid.
The original agreement ended February 28, 2010 but was extended to January 10,
2011. The fee is being expensed over the remaining term of the agreement. As of
January 31, 2010 and April 30, 2009, prepaid expense relating to this agreement
was $0 and $25,342, respectively. As of January 31, 2010 and April 30, 2009,
included in accounts payable was $532 and $0 relating to this agreement. For the
three and nine months ended January 31, 2010, the amount expensed was $16,958
and $50,874, respectively.
F-8
VIRIDAX
CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JANUARY
31, 2010
NOTE 4.
|
RELATED
PARTY TRANSACTIONS
|
Notes Receivable and Accrued
Interest
The total
notes receivable - related parties balance as of January 31,
2010 and April 30, 2009 includes accrued interest of $1,431 and $1,329,
respectively.
Notes Payable and Accrued
Interest
During
the nine months ended January 31, 2010, the Company received additional advances
totaling $6,000. These advances are unsecured, bear interest at 5% per annum and
are due on demand. As of January 31, 2010 and April 30, 2009, total notes
payable - related parties includes accrued interest of $525 and $33,
respectively.
Legal and Consulting
Fees
During the three months
ended January 31, 2010 and 2009, $0 and $15,000 was charged by a
stockholder for legal services rendered,
respectively. For the nine months ended
January 31, 2010 and 2009, $2,000 was paid and $45,000 was charged,
respectively.
During
the nine months ended January 31, 2010, the Company paid $2,000 to its
vice-president of research and development for consulting services
rendered.
During
the nine months ended January 31, 2010, the Company paid $2,000 to its president
for grant and patent application services rendered.
F-9
VIRIDAX
CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JANUARY
31, 2010
NOTE 5.
|
CAPITAL
STOCK
|
|
Preferred
Stock
|
The Company has 3,000,000
shares of Class A non-cumulative, convertible preferred stock of $1 par value
authorized. The preferred shares are non-cumulative, non-voting and
convertible to common shares during the first 3 years under the following
schedule: shares converted within the first year of purchase shall receive 4
shares of common for every share of preferred; shares converted within the
second year after purchase shall receive 4.4 shares of common for every share of
preferred; shares converted within the third year after purchase shall receive
4.6 shares of common for every share of preferred; after 3 years of ownership,
the shareholder hall receive 5 shares of common for every share of preferred,
but the right to convert must be exercised within 30 days after the third year
anniversary of purchase or the conversion right will lapse.
On April 1, 2006,
the Company entered into an Agency Agreement for the sale of up to 3,000,000
shares of the Company’s Class A Preferred Stock. The stock is being offered for
sale in Germany and elsewhere in Europe at $7 per share ($3.50 per share net
proceeds to the Company), as determined by the Company’s management, such sale
being exempt from registration under Regulation S of the Securities Act of
1933. During the
nine months ended January 31, 2010, 15,500 preferred shares were sold for net
proceeds totaling $54,250.
As of
January 31, 2010 and April 30, 2009, 350,429 and 334,929 preferred shares
were issued and outstanding. Subsequent to January 31, 2010, 8,100 preferred
shares were sold for net proceeds totaling $28,350.
F-10
VIRIDAX
CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JANUARY
31, 2010
NOTE 5.
|
CAPITAL
STOCK
(CONTINUED)
|
Common
Stock
The
Company has 50,000,000 shares of $.001 par value common stock authorized. Shareholders of common
stock have one vote per share.
As of
January 31, 2010, 24,349,090 shares of common stock were issued and outstanding.
Subsequent to January 31, 2010, the Company issued 2,200,000 common shares in a
private sale at $.01 per share, as determined by the Company’s management, such
sale being exempt from registration under Regulation S of the Securities Act of
1933.
NOTE 6.
|
SUBSEQUENT
EVENTS
|
Subsequent
to January 31, 2010, repayments of the note payable – bank was
$8,000.
On April
30, 2010, the Company received proceeds of a loan totaling $20,000. The loan is
unsecured, bears interest at 2% per annum and is due on
demand.
F-11
VIRIDAX
CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JANUARY
31, 2010
NOTE 7.
|
GOING
CONCERN
|
As
reflected on the balance sheet, the Company is still in the development stage
with an accumulated deficit of $2,339,459, and since inception, a negative cash
flow from operations of $1,863,497. These factors raise substantial doubt about
its ability to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on its ability to raise additional
capital. The financial statements do not include any adjustments that might be
necessary should the Company be unable to continue as a going
concern.
Management
has secured continued approval from the German exchange for the sale
of preferred stock and is continuing to pursue other contracts and/or grants to
secure additional funding. Management believes that the direction it is taking
will secure additional funding and that the Company will be able to continue as
a going concern.
F-12