SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 10-Q
____________________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 ( d ) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2009
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 ( d ) OF THE EXCHANGE ACT
For the transition period from ____________ to____________
Commission File No. 000-49655
LIPIDVIRO TECH, INC.
(Exact name of registrant as specified in its charter)
Nevada |
87-0678927 |
(State or Other Jurisdiction of |
(I.R.S. Employer Identification No.) |
incorporation or organization) |
|
4685 S. Highland Drive, Suite #202
Salt Lake City, Utah 84117
(Address of Principal Executive Offices)
(801) 278-9424
(Registrants telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ X ] No [ ]
1
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date: October 19, 2009 - 1,305,344 shares of common stock.
PART I
Item 1. Financial Statements
The financial statements of LipidViro Tech, Inc., a Nevada corporation (the Company, we, our or us), required to be filed with this 10-Q Quarterly Report were prepared by management and commence below, together with related notes. In the opinion of management, the financial statements fairly present the financial condition of the Company.
2
LIPIDVIRO TECH, INC.
(A Development Stage Company)
SEPTEMBER 30, 2009 CONDENSED FINANCIAL STATEMENTS
TABLE OF CONTENTS
|
PAGE |
|
|
Unaudited Condensed Balance Sheets, September 30, 2009 and December 31, 2008 |
4 |
|
|
Unaudited Condensed Statements of Operations, For the Three and Nine Months Ended September 30, 2009 and 2008 and For the Period From Inception On May 6, 2003 Through September 30, 2009 |
5 |
|
|
Unaudited Condensed Statements of Cash Flows, For the Nine Months Ended September 30, 2009 and 2008 and For the Period From Inception On May 6, 2003 Through September 30, 2009 |
6 |
|
|
Notes to the Unaudited Condensed Financial Statements |
7 8 |
3
LIPIDVIRO TECH, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
ASSETS
|
September 30, 2009 (Unaudited) |
|
December 31, 2008 | ||
CURRENT ASSETS |
$ |
- |
|
$ | - |
TOTAL ASSETS |
$ | - |
|
$ | - |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) | |||||
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
Accounts payable |
$ | 46,153 |
| $ |
41,540 |
Accounts payable subject to indemnification |
| 178,112 |
|
|
178,112 |
Related party loans |
|
79,796 |
|
| 49,513 |
Total Current Liabilities |
| 304,061 |
|
|
269,165 |
|
|
|
|
|
|
STOCKHOLDERS EQUITY (DEFICIT): |
|
|
|
|
|
Common stock, $0.001 par value, 150,000,000 shares authorized, 1,305,344 shares issued and outstanding |
| 1,305 |
|
|
1,305 |
Capital in excess of par value |
| 4,852,612 |
|
|
4,852,612 |
Deficit accumulated during the development stage |
|
(5,157,978) |
|
| (5,123,082) |
Total Stockholders Equity (Deficit) |
|
(304,061) |
|
| (269,165) |
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) |
$ |
- |
|
$ | - |
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
LIPIDVIRO TECH, INC.
(A Development Stage Company)
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
|
|
|
|
|
For the Period From Inception on May 6, 2003 Through September 30, 2009 | |||||||||
|
For the Three Months Ended September 30, |
|
For the Nine Months Ended September 30, |
| ||||||||||
|
2009 |
|
2008 |
|
2009 |
|
2008 |
| ||||||
REVENUE | $ |
- |
|
$ | - |
|
$ | - |
| $ |
- |
|
$ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting |
| - |
|
|
- |
|
| - |
|
| 608 |
|
|
564,269 |
Employee compensation |
| - |
|
|
- |
|
| - |
|
| 13,437 |
|
|
322,598 |
Professional fees |
| 6,496 |
|
|
24,745 |
|
| 30,843 |
|
| 91,846 |
|
|
392,185 |
Other general and administrative |
|
175 |
|
| - |
|
| 175 |
|
| - |
|
| 101,457 |
Total Operating Expenses |
|
6,671 |
|
| 24,745 |
|
| 31,018 |
|
| 105,891 |
|
| 1,380,509 |
OPERATING LOSS |
|
(6,671) |
|
| (24,745) |
|
|
(31,018) |
|
| (105,891) |
|
| (1,380,509) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related party interest expense |
|
(1,527) |
|
| (16,038) |
|
| (3,878) |
|
| (46,317) |
|
| (1,569,890) |
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
| (8,198) |
|
|
(40,783) |
|
| (34,896) |
|
| (152,208) |
|
|
(2,950,399) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME TAXES |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
LOSS FROM CONTINUING OPERATIONS |
| (8,198) |
|
| (40,783) |
|
|
(34,896) |
|
| (152,208) |
|
| (2,950,399) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DISCONTINUED OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations of discontinued research business |
| - |
|
|
242,882 |
|
| - |
|
| 134,920 |
|
|
(2,207,579) |
Income tax expense |
|
- |
|
| - |
|
| - |
|
| - |
|
| - |
INCOME (LOSS) FROM DISCONTINUED OPERATIONS |
|
- |
|
| 242,882 |
|
| - |
|
| 134,920 |
|
| (2,207,579) |
NET INCOME (LOSS) |
$ | (8,198) |
|
$ | 202,099 |
|
$ | (34,896) |
|
$ | (17,288) |
|
$ |
(5,157,978) |
BASIC AND DILUTED INCOME (LOSS) PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations | $ |
(0.01) |
| $ |
(0.03) |
|
$ | (0.03) |
| $ |
(0.12) |
|
|
|
Discontinued Operations |
|
- |
|
| 0.18 |
|
| - |
|
| 0.11 |
|
|
|
Net income (loss) |
$ |
(0.01) |
|
$ | 0.15 |
|
$ | (0.03) |
|
$ | (0.01) |
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING |
1,305,344 |
|
1,305,136 |
|
1,305,344 |
|
1,303,241 |
|
|
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
5
LIPIDVIRO TECH, INC.
(A Development Stage Company)
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
|
|
| For the Period From Inception on May 6, 2003 Through September 30, 2009 | |||||
|
For the Nine Months Ended September 30, |
| ||||||
|
2009 |
|
2008 |
| ||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net income (loss) |
$ | (34,896) |
| $ |
(17,288) |
|
$ | (5,157,978) |
Adjustments to reconcile net income (loss) to net cash used by operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
| - |
|
|
465 |
|
| 3,393 |
Expense costs related to unsuccessful financing transaction |
| - |
|
|
- |
|
| 31,900 |
Gain on settlement of debt |
| - |
|
|
(250,082) |
|
| (250,082) |
Imputed interest expense |
| - |
|
|
- |
|
| 42,377 |
Noncash expenses paid by a shareholder |
| - |
|
|
- |
|
| 6,900 |
Noncash expenses paid by issuance of common stock |
| - |
|
|
- |
|
| 1,346,919 |
Noncash services paid by issuance of common stock |
| - |
|
|
90,500 |
|
| 1,239,726 |
Noncash services paid by grant of warrants |
| - |
|
|
35,243 |
|
| 1,460,695 |
Net increase (decrease) in operating liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
| 4,613 |
|
|
54,827 |
|
| 337,338 |
Related party loans accrued interest |
| 3,878 |
|
|
23,858 |
|
| 91,323 |
Related party accrued interest |
|
- |
|
| 22,458 |
|
| 90,020 |
Net Cash Used by Operating Activities |
|
(26,405) |
|
| (40,019) |
|
| (757,469) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Cash of LTU |
| - |
|
| (25) |
|
|
(25) |
Payments for property and equipment |
| - |
|
|
- |
|
| (3,675) |
Payments for definite-life intangible assets |
| - |
|
|
- |
|
| (33,632) |
Payments for goodwill |
|
- |
|
| - |
|
| (269,006) |
Net Cash Used by Investing Activities |
|
- |
|
| (25) |
|
| (306,338) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from related party loans |
| 26,405 |
|
|
38,518 |
|
| 706,164 |
Payments on related party loans |
| - |
|
|
- |
|
| (8,700) |
Proceeds from capital contributions |
| - |
|
|
1,480 |
|
| 34,133 |
Proceeds from common stock issuances |
| - |
|
|
- |
|
| 293,700 |
Proceeds from sale of warrants |
|
- |
|
| - |
|
| 38,510 |
Net Cash Provided by Financing Activities |
|
26,405 |
|
| 39,998 |
|
| 1,063,807 |
NET INCREASE (DECREASE) IN CASH |
| - |
|
| (46) |
|
|
- |
CASH AT BEGINNING OF PERIOD |
|
- |
|
| 46 |
|
| - |
CASH AT END OF PERIOD |
$ | - |
|
$ | - |
|
$ | - |
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
Cash paid during the period for: |
|
|
|
|
|
|
|
|
Interest |
$ | - |
| $ |
- |
|
$ | - |
Income taxes |
$ | - |
| $ |
- |
|
$ | - |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Liabilities settled by disposition of LTU with $25 in cash, $282 in net property and equipment, $290,317 in goodwill, and $19,074 in accounts payable at the time of disposition |
$ | - |
| $ |
1,209,297 |
| $ |
1,209,297 |
Liabilities settled by transferring patents of $34,637 |
$ | - |
| $ |
284,719 |
| $ |
284,719 |
Definite-life intangible asset fees accrued in accounts payable |
$ | - |
| $ |
- |
|
$ | 1,005 |
Deferred financing costs paid through issuance of common stock |
$ | - |
| $ |
- |
|
$ | 31,900 |
Common stock repurchased through issuance of $600,000 note payable and $1 paid by a shareholder |
$ | - |
| $ |
- |
|
$ | 600,001 |
Common stock issued to purchase minority interest |
$ | - |
| $ |
- |
|
$ | 21,311 |
The accompanying notes are an integral part of these unaudited condensed financial statements.
6
LIPIDVIRO TECH, INC.
(A Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared by the Company in accordance with Article 8 of U.S. Securities and Exchange Commission Regulation S-X. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2009 and 2008 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2008 audited financial statements. The results of operations for the periods ended September 30, 2009 and 2008 are not necessarily indicative of the operating results for the full year.
NOTE 2 GOING CONCERN
The Companys financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. At September 30, 2009, the Company had incurred losses since inception, had no revenue-generating activities, had negative cash flows from operating activities, and had current liabilities in excess of current assets. These factors create an uncertainty about the Companys ability to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 DISCONTINUED OPERATIONS
Operations of the research business have been reclassified in the statements of operations for all periods presented. The following is a summary of the results of operations of the discontinued research business.
|
For the Nine Months Ended September 30, |
|
For the Period From Inception on May 6, 2003 Through September 30, 2009 | |||||
|
2009 |
|
2008 |
| ||||
Revenue | $ |
- |
|
$ | - |
| $ |
- |
General and administrative |
| - |
|
|
(2,130) |
|
| (47,246) |
Research and development |
| - |
|
| (113,078) |
|
|
(2,410,307) |
Gain on settlement of debt |
| - |
|
|
250,082 |
|
| 250,082 |
Interest income |
| - |
|
| - |
|
|
23 |
Foreign currency transaction gain (loss) |
| - |
|
|
46 |
|
| (131) |
Income taxes |
| - |
|
| - |
|
| - |
Net income (loss) |
$ | - |
|
$ | 134,920 |
|
$ | (2,207,579) |
NOTE 4 RELATED PARTY TRANSACTIONS
Related Party Loans During the nine months ended September 30, 2009, shareholders or entities controlled by them loaned $26,405 to the Company. At September 30, 2009, the Company owed a total of $79,796 to related parties, all of which accrues interest at 8% per annum and is due on demand. During the nine months ended September 30, 2009 and 2008, the Company accrued interest expense on related party loans totaling $3,878 and $23,858, respectively.
7
LIPIDVIRO TECH, INC.
(A Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 INCOME TAXES
At September 30, 2009, the Company has available unused federal net operating loss carryovers of approximately $141,000 which may be applied against future taxable income and which expire in 2028 and 2029. The Company has decided that there is only a remote likelihood of any future operations of the Company generating taxable income in the state of Utah. Therefore, the Company has eliminated the deferred tax asset of approximately $4,500 corresponding to the approximately $106,000 unused Utah net operating loss carryover from the prior year.
The amount of and ultimate realization of the benefits from the net operating loss carryovers for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company and other future events, the effects of which cannot be determined. Additionally, if there are substantial changes in the Companys ownership, there may be an annual limitation on the amount of net operating loss carryovers that can be utilized. Because of the uncertainty surrounding the realization of the net operating loss carryovers, the Company has established a valuation allowance equal to the tax effect of the loss carryovers and, therefore, no deferred tax asset has been recognized in the financial statements. The net deferred tax assets are approximately $21,100 and $20,400 as of September 30, 2009 and December 31, 2008, respectively, with an offsetting valuation allowance of the same amount, resulting in a change in the valuation allowance of approximately $700 during the nine months ended September 30, 2009.
NOTE 6 SUBSEQUENT EVENTS
The Company evaluated events subsequent to September 30, 2009 through October 29, 2009, which is the date that the September 30, 2009 financial statements were issued. Previously, the Company evaluated events subsequent to September 30, 2008 through October 30, 2008, which is the date that the September 30, 2008 financial statements were issued.
In October 2009, shareholders or entities controlled by them loaned an additional $1,000 to the Company.
8
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
Forward-looking Statements
Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words may, would, could, should, expects, projects, anticipates, believes, estimates, plans, intends, targets or similar expressions.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.
Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.
Plan of Operation
Our plan of operation for the next 12 months is to: (i) consider guidelines of industries in which we may have an interest; (ii) adopt a business plan regarding engaging in the business of any selected industry; and (iii) to commence such operations through funding and/or the acquisition of a going concern engaged in any industry selected.
During the next 12 months, our only foreseeable cash requirements will relate to the payment of our Securities and Exchange Commission and Exchange Act reporting filing expenses, including associated legal and accounting fees; costs incident to reviewing or investigating any potential business venture; and maintaining our good standing as a corporation in our state of organization. We anticipate that these funds will be provided to us in the form of loans from Jenson Services. There are no written agreements requiring Jenson Services to provide these cash resources; and to the extent funds are provided, such funds will bear no interest (though an interest expense of 8% has been imputed on funds advanced) and will be due on demand. As of the date of this Quarterly Report, we have not actively begun to seek any business or acquisition candidate.
Results of Operations
During the quarters ended September 30, 2009, and 2008, we had losses from continuing operations of $8,198 and $40,783 and income from discontinued operations of $0 and $242,882 for a net income and (loss) of ($8,198) and $202,099, respectively.
For the nine months ended September 30, 2009 and 2008, we had losses from continuing operations of $34,896 and $152,208 and income from discontinued operations of $0 and $134,920 for a net loss of $(34,896) and $(17,288), respectively.
Liquidity
We have no current cash resources. During the nine months ended September 30, 2009, we received related party loans totaling $26,405, to pay our ongoing expenses.
During the next 12 months, our only foreseeable cash requirements will relate to the payment of our Securities and Exchange Commission and Exchange Act reporting filing expenses, including associated legal and accounting fees; costs incident to reviewing or investigating any potential business venture; and maintaining our good standing as a corporation in the State of Nevada. We do not have any cash reserves to pay for our administrative expenses for the next 12 months. In the event that additional funding is required in order to keep us in good standing, we may attempt to raise such funding through loans or through additional sales of our common stock.
9
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not required.
Item 4T. Controls and Procedures.
Evaluation of disclosure controls and procedures
Our management, with the participation of our chief executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Based on that evaluation, our chief executive officer and principal financial officer concluded that, as of September 30, 2009, our disclosure controls and procedures were, subject to the limitations noted above, effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules, regulations and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting
Our management, with the participation of the chief executive officer and principal financial officer, has concluded there were no significant changes in our internal controls over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 1A. Risk Factors.
Not required.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None; not applicable.
None; not applicable.
Item 6. Exhibits.
Exhibit No. Identification of Exhibit
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
LIPIDVIRO TECH, INC.
Date: |
October 29, 2009 |
|
By: |
/s/Thomas J. Howells |
|
|
|
| Thomas J. Howells, President, Chief Executive Officer and Director |
|
|
|
|
|
Date: |
October 29, 2009 |
|
By: |
/s/Shelley Goff |
|
|
|
| Shelley Goff, Treasurer and Director |
11