FORM 10-SB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the
Securities Exchange Act of 1934
MILLENIA HOPE, INC.
(Name of Small Business Issuer in its charter)
Delaware 98-0213828
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
4055 St. Catherine St., Suite 142, Montreal, Quebec H3Z 3J8
(Address of principal executive offices) (Zip Code)
(514) 846-5757
(Issuer's Telephone Number)
(514) 935-9758
(Issuer's Fax Number)
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- --------------------------------- ----------------------------------
- --------------------------------- ----------------------------------
Securities to be registered under Section 12(g) of the Act:
Common Stock
(Title of Class)
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PART I.
Item 1. Description of Business.
(a) Business Development
Millenia Hope Inc. ("Millenia", or the "Company"), a Delaware corporation, was
organized on December 24, 1997. The Company has not been involved with any
bankruptcy, receivership or similar proceedings. The Company has not had any
material reclassification, merger, consolidation, or purchase or sale of a
significant amount of assets not in the ordinary course of business.
(b) Business of Issuer
MILLENIA was formed to further develop and distribute an anti-malarial drug
formerly known as "ASPIDOS" now called MALAREX(R) (the "Product").
Millenia's goal as a biopharmaceutical corporation is to both purchase and
develop patented drugs dealing with infectious diseases specifically, but not
exclusively, anti-malarial agents. To date, the company has had no sales.
Further, internally generated funds are not sufficient to fund the operation of
the company for the upcoming fiscal year. However, the officer and certain
shareholders have committed to fund the operations of the company for the next
fiscal year. (See note 6 of the financial statements)
MALARIA, THE DISEASE
Malaria is predominant in four regions of the world:
Africa
India
South East Asia
Central and South America
Malaria parasites have been with us since the dawn of time. The current belief
today is that they probably originated in Africa (along with mankind) and
fossils of mosquitoes up to 30 million years old show that the vector for
malaria was present well before the earliest recorded history.
Malaria is one of the most debilitating diseases in the developing world today.
Once thought to be virtually eradicated, malaria has resurfaced to affect over
500 million people annually. And that is only the reported cases. It is
suspected that the reported cases may represent less than one third of actual
existing cases. It is now known that mosquitoes have not only been able to
develop an immunity to the chemical insecticides used to control breeding but,
they have also developed resistance to many of the anti-malarial drugs on the
market today.
Malaria is a disease that is caused by a parasite. This parasite spends most of
its life in the red blood cells of humans. Female mosquitoes are the primary
transmittal agent for these parasites. The parasites are ingested by the female
mosquito when feeding on an infected person's blood and then spread when biting
another person. Once inside the mosquito, the parasites migrate to the salivary
glands where they are free to be transmitted with the next bite.
Four species of malaria parasites cause disease in humans:
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Plasmodium vivax
P. Malariae
P. Falciparum
P. Ovale.
P. Falciparum is the most common and causes the majority of deaths, accounting
for approximately 90% of African and about 50% of South East Asia / Latin
America malaria cases. P Falcparum is the fom of malaria that Millenia Hope is
working to combat, accounting for approximately 55-60% or 275-300 million of the
known cases of malaria.
Touching some 500 million people each year, per the World Health Organization
information of 1999, the effect that malaria has on the world is truly
devastating, particularly on women. Malaria accounts for almost 3 million
deaths, a large portion of which are children. Children are dying from malaria
at the rate of 20,000 a week. Malaria has often been regarded as a women's issue
as it is well documented that women in developing countries spend the vast
majority of their time collecting firewood and water, cooking meals and caring
for the children, leaving them more exposed and vulnerable to the disease. Women
also work outside the home, often as the main breadwinner. Yet when children are
sick, mothers lose valuable earnings that impact the entire family's well being.
Malaria is a major cause of death in first-time mothers.
Estimated lost work time for people affected with malaria is over US$ 2 billion
annually and if the trend is not reversed will soon be more than US$ 3 billion.
A single bout of malaria is estimated to cost a sum equivalent to 10-20 working
days in India or Africa.
CURRENTLY AVAILABLE TREATMENTS
In the pursuit of the eradication of malaria, scientists and researchers have
developed many different drugs to battle the parasite. As the parasite develops
a resistance to one drug, researchers must continue to look for other
combinations that will be effective in controlling the disease.
Quinine, a natural product from the bark of the cinchona tree, was one of the
first treatments for malaria and appeared in the 17th century. It is still
effective but can be toxic. Quinine remained the drug of choice for treatment
and prevention until 1942 when it was replaced by chloroquine. With widespread
chloroquine resistance, quinine together with artemether have once again become
an important treatment for malaria.
Chloroquine (Aralen), was first used in the 1940's and is a weekly treatment.
Today it is manufactured by all the major pharmaceutical companies. The first
cases of resistance were found in South America and South East Asia in the early
60's and it is now practically ineffective almost everywhere. However it is
still the most widely used anti-malarial treatment in Africa as it is the
cheapest drug available.
Sulfadoxone/pyrimethamine (Fansidar), was developed in the 1960's. The treatment
consists of three doses taken together in one day. Today, this drug is
manufactured by a number of pharmaceutical companies; the Fansidar trademark
belongs to Hoffman LaRoche. Despite widespread resistance in South East Asia and
parts of South America, it is starting to become the first line of treatment in
some African countries where chloroquine resistance is even more widespread.
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Mefloquine (Lariam), was developed by the U.S. army in the early 1980's and
commercialized by Hoffman LaRoche. Resistance has been observed since the early
1980's, particularly in the South East Asian countries.
Halofantrine, was also developed by the U.S. army and marketed by SmithKline
Beecham. In the 1990's, cross-resistance with mefloquine and side effects
(sometimes severe) have been observed.
Artemisinins, (derived from an ancient Chinese herbal remedy) comprise a family
of products. The two compounds most widely used, mainly in South East Asia, are
artemether and artesunate, They are not widely used in the developed world in
part due to toxicity fears. Due to the high rate of treatment failures,
artemisinins are now also being combined with mefloquine.
In addition to the above, there have been other drugs tested and used over the
years in the fight against malaria. Many were the forerunners of one of more of
the above. Currently many drugs based on new compounds are being tested along
with possible vaccines. The aforementioned information was reported in the
Malaria Foundation Fact Pack.
Based on our analysis of the problems listed by the Malaria Foundation Fact
Pack, it can be seen that all of the above families of anti-malarial agents have
the same problem in common: the resistance developed by malaria to a greater or
lesser degree to each of the above mentioned drugs.
There is insufficient research into novel drug targets. Current new options are
based on the same three families of compounds (the quinolines, antifolates, and
artemesinin derivatives) all of which have records of resistance and or
ineffectiveness.
PRODUCT HISTORY
Although Millenia is a relatively new company, the existence of the natural
components of Malarex are not. Known by the Brazilian natives as "Taheebo", the
Pau Pereira is a tropical rain foresttree that exists in over 100 different
species. These trees, having healing properties, were used by indigenous
medicine men in Brazil.
Being a tree that has evolved in tropical rain forests, the Pau Periera does not
rot when stored at ambient temperatures. Pau Periera was used for an assortment
of applications. The tree's bark was invariably the potion used by the natives
in their therapeutic practices. It was administered by infusion, was chewed and
was even applied in poultices.
Testing of the plant's useful properties was conducted in 1877 when a French
researcher, Bochefontaine, first extracted a yellowish amorphous alkaloid from
the bark of a tree. He determined that the bark of the tree was rich in
alkaloids that have anti-viral properties. No specific research was done on this
extract to establish its anti-malarial properties until the last decade and
half.
Studies carried out in 1987 by research teams of the American Academy of
Naturopathic Medicine operating in Mexico, determined that the natural Pau
Periera extract, when administered in appropriate form and dosage, is capable of
functioning as an effective immune-modulator. Once its efficacy became known,
the teams systematically subjected the substance to generic biochemical studies
over the next several years.
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In order to evolve a standardized and genetically useful plant-based remedy a
carefully refined extract had to be formulated through the stages of
development. Each of them was designed to preserve undiminished the
bioavailability of its biogenetic components.
The final refined process using the species of tropical rainforest tree called
Peschiera Fuelsiaefolia, found in Brazil and Madagascar, was eventually
accomplished by the research team of Silvia Rossi and Guiseppe Motta operating
in Europe in 1997. After having sold all rights to MALAREX to Millenia on
January 7th, 1998, Mr. Motta joined the company as its VP of research.
MALAREX exhibited positive results when administered to malaria patients.
Extracted from natural sources, MALAREX is not a synthetically derived drug.
MALAREX has had successful tests in the treatment and prevention of malaria and
is continuing with further ongoing tests to allow it to receive final approval
for consumer usage.
MALAREX
Based on our testing of MALAREX we have found that it is a product that needs no
excipients and/or chemicals in any manufacturing stages whether in capsule form
or as an injectable solution.
Throughout in-vitro (test-tube) and in-vivo (live trials) tests carried out by
University of Rome, the World Health Organization (WHO) and the Institute of
Superior Health of Italy, no undesirable side effects were detected. When
treated with MALAREX there has no need to take post treatment vitamins and/or
"olygoelements" additives for restructuring the immune system.
The natural extract Vocamine (the core component of MALAREX), with the plant's
active principles intact, is non-toxic so that recommended dosages should not
produce any side effects. Moreover, because of its immune-modulatory properties,
the extract is non-allergenic and non habit forming. MALAREX is still undergoing
clinical trials and the company is still waiting for the approval of the
respective contry's health authorities to begin selling the product.
PRODUCTION
MALAREX (Vocamine) is produced in two forms, capsules and injectables. Because
there is a high number of malaria cases in infants, capsules are sometimes not a
viable alternative. Generally, the capsules are recommended from the age of four
years and older and injections are recommended for the new born and children
under four years of age.
Negotiations are being held with an international pharmaceutical company to have
MALAREX produced in Brazil one of the major sources of the raw material,
Peschiera Fuchsiaefolia, needed to produce MALAREX.. Sufficient raw material
exists to ensure the supply required to meet and surpass our current sales
objectives and to meet expected demand for the foreseeable future. In addition,
continued research and development of the extract is ongoing with indications
that the extract can be produced in an even more concentrated form that will
require smaller and fewer doses in the near future.
STRYCHNOS
As per the business statement of the company (see business of issuer pg. 1). On
June 1, 1999 the company acquired from Mr. Silvio Rossi one of the
co-discoverers of MALAREX, the patent rights to the anti-malarial agent
STRYCHNOS MYTROIDES (to be known as STRYCHNOS). The
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alkaloids of STRYCHNOS MYTROIDES are extracted by drying and making into a
powder the stem barks of STRYCHNOS MYTROIDES. Exhaustive extraction is done by
repeated maceration it is then processed to yield crude tertiary alkaloids. Once
the process has been completed the alkaloids of STRYCHNOS MYTROIDES are used in
combination with Chloroquine to greatly enhance the in vivo effectiveness of
this drug against currently CQ-resistant strains of malaria Plasmodim
Falciparum. They also enhanced in vivo Chloroquine activity against a resistant
strain of Plasmodium Yoellii.
STRYCHNOS has gone through rigorous testing by both Italian and African
researchers over a period of years. Due to the serious resistance being
currently encountered by Chloroquine, still the most popular anti-malarial drug
on the African continent, the ability of STRYCHNOS as an adjuvant to Chloroquine
to ameliorate some of the above mentioned problem is a promising development.
The company intends to continue research in this area both to increase the
efficacy of STRYCHNOS as an adjuvant to Chloroquine and to get certification
from the Department of Health of various African countries so as to bring
another weapon to bear in the fight against malaria.
MARKET SIZE
According to the World Health Organization (1999), malaria risks of varying
degrees exist in 100 countries and territories. Estimates of populations at risk
within these 100 countries total in excess of 2.3 billion people or 40% of the
world's population.
The WHO 1999 estimates 1.5-2.7 million deaths from malaria. In addition to the
reported cases of contracted malaria, control programs dispense medication for
the prevention of malaria in the amount of a further 70 million plus complete
treatments annually.
The WHO estimates that for each clinical case reported, there exists at least
one, possibly two, that are unreported. Relative to the enormous number of
infected humans, it would be virtually impossible to eradicate the disease
altogether. If the disease was better controlled prevention, rather than
treatment, would become the dominant control factor.
Estimates of expenditures on treatment for the control and prevention of malaria
are in excess of US$10 Billion annually. The World Bank, per its figures,
allocates US$ 2.5 Billion to third world countries for malaria treatment.
DISTRIBUTION AND PRICING
Millenia's objective is to see that MALAREX is made available to as many people
as possible; as quickly as possible. In order to accomplish this goal, it is
Millenia's intention to initially focus on the production aspects of the product
and have it distributed where possible within already existing distribution
networks. Through an aggressive pricing strategy, Millenia intends on making
MALAREX available at prices that are less than the cost of other drugs currently
used in the treatment of malaria.
PATENTS AND LICENSES
Proprietary protection is an integral part of Millenia's strategy. The
commercial success of products, especially in the pharmaceutical industry, is
highly dependant upon their uniqueness being protected by patents. To this end
Millenia has not only purchased the patent rights and all other rights to
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MALAREX and STRYCHNOS; it has also secured all research and development data and
notes pertaining to the above noted drugs from the commencement of initial
research to synthesis of the drug. In the future, as other products are
developed and come on line or are purchased, Millenia will take all necessary
steps to see that its product have the full measure of legal protection.
Furthermore; should there be any questions of infringement on its proprietary
rights, Millenia will be aggressive in asserting its legal position.
Currently, its 2 anti-Malarial drugs, MALAREX and STRYCHNOS, are protected under
patent applications filed covering their development. In 1997 Mr. Leonard Stella
through his professional contacts in the medical/pharmaceutical industry was
introduced to the work of Mr. Sylvio Rossi and Mr. Guiseppe Motta,
co-discoverers of Vocamine as the core component of MALAREX. Subsequent to
meetings and discussions it was agreed that Millenia would buy all rights to
this product. This included but was not exclusive of Italian Patent
applications, PCT (international) Patent Applications, all patents derived from
the aforementioned, all priority rights and all commercial and non-commercial
rights without limitation. No residual rights belong to the co-discoverers.
MALAREX Italian patent Application - registered on March 26, 1998 for use as an
anti-malarial agent and any seconary medicinal uses that may be found in the
course of testing or further research. PCT (International) Patent Application
for the same usage filed on March 25, 1999. STRYCHNOS Italian Patent Application
- - registered on June 1, 1999 for use as an anti-malarial agent specifically, but
not limited to, for usage as an adjuvant to Chloroquine in fighting malaria. The
three Patent applications, mentioned above, have all been approved for study of
their technical merits. This is the first stage acceptance culminating in the
full patent being issued. While the company feels it is probable (high) that, at
the end of the process, patents will be issued, no assurance can be given that
any patents will ever be actually issued.
TEST RESULTS
Alkaloids of Vocagana, an extract of the vocamine family were shown to have a
therepeutic effect upon some medical maladies as early as 1958, specifically
cardiovascular problems as seen in the February 11, 1958 U.S. Patent 2823204.
Also, as reported in a study in the Journal of Natural Products Vol. 57 November
1994, under the auspices of the College of Pharmacy of the University of
Illinois at Chicago, Vocamine acted to enhance the growth inhibition of
multi-drug resistant cytotoxic cells present in certain malignant diseases such
as Hodgkins.
In-Vitro testing of Vocamine, under the auspices of the Institute of Superior
Health of Rome, conducted by researchers Elena Federici, Giovianna Palazzino and
headed by Dr. Corrado Galeffi of the Institute of Superior Health of Rome and
Prof. Marcello Nicoletti of Department of Plant Biology at La Sapeinza,
University of Rome aided by Dr. Pierre Olliafo of Unisante, Geneva, the WHO and
Dr. L. Turchetto, as per the report of the Institute of Superior Health in Rome
1997 with successful results.
In-Vitro tests were performed by Dr. Francesco de Chiara of the Clinica
Ospedale diAnchilo in Nampula, Mozambigue, under the auspices of the Ministry of
Health and Wellbeing of Mozambigue, per his report of April 20, 1998 with
positive results. In the same report is In-Vivo study of 74 Mozamicans with
malaria who were treated via sub-sutaneous injections using a suction and
incubation method (names of all patients are in his report). Clinical Results -
within 24 hours clinical symptoms of malaria (fever, vomiting, diarrhea, joint
pains etc.) disappeared and within 4 days the patients, having followed a 3 day
treatment regimen, showed a 90% rate of complete recovery.
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In-Vivo testing done by Dr. Phillipe Rosoanaivo, scientific director of the
Malgache Institute of Applied Research in Aniananarivo, Madagascar, under its
own auspices, on December 14, 1998 with the report of the successful results
being sent to Prof. Albert Rako To-Rat Simamanga of the Institute of France. The
report stated that it had tested Vocamine at 10mg/kg and received excellent
reduction in parasitic levels. More complete information can be obtained by
request of the institutions that conducted the tests.
GOVERNMENT REGULATIONS
In order to safeguard their citizens, governments around the globe require
extensive proof that a new drug is completely safe, within statistical
parameters, before allowing it into the marketplace. Millenia, being cognizant
of the above and of its own responsibility to the public, has collated the
extensive laboratory and research data as well as the human trial tests for
MALAREX pursuant to its receiving the designation as a prescription drug.
Currently, MALAREX is in the middle of its clinical trial with the government of
India's Directorate of Health (see plan of operation). Having reviewed the
previous research data and test results, the Directorate of Health accepted
MALAREX for both in vitro and in vivo testing. As this process is already under
way and taking into account the results of its previous clinical trials, the
company expects to receive its certification in due course. Several other
countries, Cameroun and Equatorial Guinea, (see plan of operation) are also in
the process of running of clinical trials. A similar regimen is intended to be
used with STRYCHNOS in order to gain its certification.
PRODUCT LIABILITY
Any drug or pharmaceutical product poses, by its nature, some level of risk.
Since drugs are widely disseminated among populations, all precautions must be
taken to ensure that the potential risk of any drug is kept to the barest
minimum. Since MALAREX and STRYCHNOS are all natural products and not chemically
produced, their potentially damaging side effects are minimized. This does not
mean that no side effects might occur, even with the most rigorous testing
standard applied, but rather that by their nature these 2 compounds are
inherently less susceptible. This being noted, once the company receives the
designation as an allopathic drug it intends to take out appropriate liability
and product insurance with a major casualty insurer commensurate with the
statistical risk factors.
Acquisitions
The Company has no specific acquisition plans at this time.
Compensation of Officers
The only officer receiving any cash compensation is the Chairman who will
receive an annual salary of $36,000.
Compensation of Directors
No Director of the Company receives any compensation for his service on the
Board.
Employees
At the current time the following six officers of the company are its only
employees:
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Mr. Leonard Stella - President \ Treasurer - Director.
Oversees all accounting functions, Bank accounts, financial statements, cash
flow projections etc. and is involved with overall the scientific coordination
as well as long term strategic planing - full time devoted to the company -
Montreal resident.
Mr. Ronald La Penna - VP Personnel - Director.
Involved with future staffing planning, smooth runs of office functions -
Devotes 2 days a week to the company - Montreal resident, president of Aqua
Boost - specialty water distributor.
Dr. Alain Soucy - Chairman of the Board of Directors - Director.
Is researching new projects and ideas and evaluating ongoing projects - chairs
the board meetings and is involved with the scientific planning - Donates 1 day
a week to the company - Resident outside of the city of Montreal in Silleray.
Dr. George Haligua - VP Finance - Director.
Involved with long range financial planing and shareholder relations - donates 1
1\2 days a week to the company - Montreal resident - President of Dasher
Computer Wholesale.
Mr Dominique Morisot - CEO - Director involved in the overall running of
the company, future strategic planning and specifically oversees the progress of
opening up new areas for MALAREX and the reception of their government
accreditation. Devotes full time - Resident of Geneva, Switzerland - Frequently
commutes to Montreal.
Mr. Thomas Bourne - Secretary
Responsible for minute book, corporate filings, shareholder lists etc. Devotes 1
day every 2 or 3 weeks as needed. Resident of Boca Raton, Florida and is a self
employed financial manager.
Mr. Guiseppe Motta - VP Research.
Does not actually work for company, but has a verbal agreement with the company
to allow it first right of refusal on any of his research findings. Resident of
Turin, Italy - Plant Researcher at the University of Rome.
In addition to its six officers, as part of its lease, the Company has
access to secretarial services. None of the Company's employees belong to a
union and the Company believes that its relations with its employees are good.
The company knows of no conflict of interest between any of its officers and the
company.
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 "may," "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 may differ
significantly from the results discussed in the forward-looking statements. You
are cautioned not to place undue reliance on any forward-looking statements.
Item 2. 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.
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The business objectives of Millenia are twofold.
First and foremost is to establish MALAREX as an accepted control agent for the
treatment and prevention of malaria throughout the world. Not only do we believe
that MALAREX is an effective anti-malarial drug, it will also be made available
at prices that are adapted to the realities of the third world market. The
availability and pricing of MALAREX will hopefully ensure its acceptability and
use in the fight against malaria. To this end the company has entered into
clinical trials of MALAREX with the following three countries:
o On October 5th, 1999 India's Directorate of Health accepted MALAREX for
both in-vitro (test-tube) and in-vivo (live trials) testing. On February
28th, 2000 the in-vitro tests were successfully completed and the in-vivo
tests are scheduled to be run within the next six to nine months.
o On January 13th, 2000 Cameroun's department of Health accepted MALAREX for
both in-vitro and in-vivo testing. As of February 17th, 2000 the above
testing was successfully concluded. Management feels that based on the
above sales of MALAREX should commence within the next six months in
Cameroun.
o On January 26th, 2000 the Ministry of Health and Welfare of Equatorial
Guinea accepted MALAREX for both in-vitro and in-vivo testing. As of
February 27th, 2000 the in-vitro testing was successfully concluded and we
are awaiting the in-vivo testing to be concluded. All of the above tests
were run under the respective Health departments of those countries and the
actual testing was carried out by their Government designated laboratories.
Millenia has adopted an extremely conservative sales forecast. In the face of
anti-malarial drug resistance, the need for more effective treatments will
continue to intensify. Once a network of local manufacturers and distributors
capable of producing and supplying MALAREX are in place, the demand for MALAREX
should increase commensurately.
It is estimated the demand for MALAREX will increase as it becomes an accepted
choice in the fight against malaria. Once it has proven its effectiveness and
availability, it could be among the leaders in the field. Despite this positive
conviction, Millenia chooses to remain conservative in its sales estimation as
it strives to attain its goal of 2% of the marketplace in five years.
Achieving these modest levels will ensure both the viability and profitability
for both the Company and its shareholders.
Secondly, Millenia is committed to ongoing research and development to expand
the efficacy of MALAREX and its derivatives in fighting infectious diseases. To
this end, the company has a verbal agreement with one of its officers Mr.
Guiseppe Bertelli Motta, VP of research and a co-discoverer of MALAREX whose
profession is botanical research, that it will have the first right of refusal
on all the research carried on by him. As cash flow improves, further funding
will be commited to research and development.
As an integral part of this development, Millenia hopes to establish long term
relationships with other major organizations such as Rotary Against Malaria
(RAM), World Health Organization and the Centers for Disease Controls. It is
through these relationships that Millenia feels that they can best support the
efforts of such organizations to solve the problem of malaria by building an
infrastructure necessary to control this disease.
As the Company has not yet begun to sell the Product, it is difficult for
management to evaluate the growth curve of Product sales. However, given the
potential market size and the need for viable and effective drugs, the Company
believes that it will not have a problem generating sales thereby creating
positive cash flow once the Product is approved.
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The Company intends to use the Internet for advertising as that currently allows
the greatest visibility for very small costs. In fact, the Company believes that
it will be able to obtain free access on certain websites looking for products
such as the Company's.
At present the only significant cash outlay of the Company is for rent as well
as legal and accounting fees incurred by the Company as it prepares this filing
and filings associated with being a reporting company (quarterly unaudited
reports, annual reports, etc.). There is currently insufficient funds to
adequately provide for the Company's needs over the next twelve months.
The Company intends to continue conducting product research and development as
mentioned previously. The Company will, in the future, retain marketing and
public relations consultants as necessary, and hire support staff when warranted
by its sales volume on an as needed basis.
Item 3. Description of Property.
The Company leases its corporate offices at 4055 St. Catherine Street, Suite
142, Montreal, Quebec at annual rental of US $79,325 pursuant to the terms of a
five year lease commencing December 27, 1997. The lease also provides for a five
year renewal option at an annual rent of US $83,291.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of December 31, 1999, certain information
concerning the ownership of the Company's Common Stock by: (i) each person who
is known by the Company to own beneficially 5% or more of the outstanding shares
of common stock; (ii) each of the Company's directors; and (iii) the name of
each executive officer, both in respect to the number of shares owned by each
person and the percentage of the outstanding shares represented thereby that
also sets forth such information for directors and executive officers as a
group. Except as otherwise indicated, the stockholders listed in the table have
sole voting and investment powers with respect to the shares indicated. Pursuant
to the rules of the Securities and Exchange Commission, shares of common stock
which an individual or a group has a right to acquire within 60 days of December
31, 1999 pursuant to the exercise of presently exercisable or outstanding
options, warrants or conversion privileges are deemed to be outstanding for the
purpose of computing the percentage ownership of such individual or group, but
are not deemed to be outstanding for the purpose of computing the percentage
ownership of any other person shown in the table. Information with respect to
beneficial ownership is based upon the shareholder list provided by the
Company's transfer agent.
Name and Address Amount and Nature.
of Beneficial Owner of Beneficial Owner Percent of Class
- ------------------- ------------------- ----------------
Tom Bourne 1,000,000 8.9
7755 Texas Trail
Boca Raton, FL
Pierre & Finane 1,000,000 8.9
Pierre Jean Mercier
38-A De Malagnon
CH 1108 Geneva
Switzerland
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Andrew Gaudet 1,000,000 8.9
P.O. Box 1492
Boca Raton, FL
Richgold Corporations SA 1,075,000 9.6
P.O. Box 1754 Panama CA
Republic of Panama (1)
Skyline Holdings Inc. 900,000 8.0
Roger Levesque
4055 St. Catherine West
Suite 133, Westmount
Terotex Enterprises 750,000 6.7
Jean Vincent Roy
4055 St. Catherine,
Suite 132
Montreal
George Haligua (2) (3) 170,000 1.5
Ronald Lapenna (2) (3) 80,000 *
Dominique Morisot (2) (4) 50,000 1.3
Guseppe B. Motta 25,000 *
Leonard Stella (3) (4) 70,000 *
Alain Soucy 100,000 *
All Directors and
Executive Officers as
a Group (5 persons) (5) 495,000 4.4
- ----------
* Less than 1%
(1) Includes 100,000 shares held by an affiliated entity.
(2) Uses Company address.
(3) Includes 50,000 currently exercisable stock options.
(4) Consists of currently exercisable stock options.
(5) Includes 220,000 currently exercisable stock options.
(6) Includes 100,000 stock options
<PAGE>
Item 5. Directors, Executive Officers, Promoters and Control Persons.
(a) Directors and Executive Officers.
Name Age Position
- ---- --- --------
Leonard Stella 38 President/Treasurer - Director
Ronald Lapenna 56 VP Personnel - Director
Alain Soucy 65 Chairman of the Board of Directors - Director
George Haligua 42 VP Finance - Director
Dominique Morisot 48 CEO - Director
Thomas Bourne 55 Secretary
Guiseppe Bertelli Motta 56 VP Research, Board Advisory Committee
Dr. Alain Soucy, Chairman of the Board of Directors. Dr. Soucy received his
Bachelor in Engineering from Laval University and his Doctorate in Engineering
from Universite de Grenoble in France in 1963. From 1984 to 1988 he headed up
the Institute of Superior Technology. From 1988 through 1998 he was the director
general of INRS (Institut National de la Recherche Scientifique) a broad
discipline based research institute where he oversaw a rise in both research
income and graduate student participation. The INRS is Quebec's leading research
institute in the following nine scientific areas: Water, Earth, Marine, Energy
and Material, Telecommunications, Urban Studies, Social, Health and
Biotechnology. Concurrent with this posting, Dr. Soucy was also the director
general of the Armond Frappier Institute, one of the leading pharmaceutical
research facilities in Canada. Among his other projects is overseeing
(1975-1984) all programs and environmental studies associated with the James Bay
hydro electric development in Northern Quebec, one of the world's largest
electricity generating facilities. He has sat on over two dozen Boards of
Research Institutes and is a member of a dozen professional associations.
M. Leonard Stella, President/Treasurer, Director. Mr. Stella has a Bachelor
of Arts from McGill University, and received his Masters of Arts in
Administration from Concordia University in 1986. In 1987 Mr. Stella founded and
operated a residential and commercial property developer, Dominion Certified
Development. In 1991, he founded Trans-Immobilia, a residential property company
that he continues to run. In 1998 he became one of the founding partners and
holds the position of president and treasurer of the Company.
Mr. Dominique Morisot, CEO, Director. Mr. Morisot has extensive contacts
through Europe and Asia. Although born in France, he is a long term resident of
Geneva, and for 30 years has consulted to many companies overseeing the
marketing and development of new territories as well as selling of products and
projects in various lines of business. He brings to the Company an extensive
knowledge of the overseas marketplace, and is an important source of information
for potential products for the Company.
Dr. George Haligua, VP Finance, Director. Dr. Haligua received his Bachelor
of Commerce from Haute Etude Commercial in Paris in 1977 and his Doctorate in
Finance from l'Institue de Technologie in Basil, Switzerland in 1979. From
1980-82 he was a Vice-President at the Banque Nationale de Paris. During his
tenure at Hunter Financial Group (1983-86), an Investment Bank headquartered in
Calgary, Canada, he was promoted from 1st Vice-President to running the company
as President and CEO. From 1986-91, he was the President and CEO of United
Financial Corp. one of Canada's leading investment groups and fund managers
operating out of their Vancouver office. Since 1992 he has founded and runs
several computer and computer related corporations principally Dasher Computer
Wholesalers of Toronto, Ontario.
Mr. Ronald Lapenna, VP Personnel, Director. Mr. Lapenna has extensive
experience in the field of human resources and administration having served in
this capacity for various levels of the Canadian Government, both federal and
municipal. At the municipal level from 1980-1990, Mr. Lapenna created and
managed the first integrated public security service for one of
<PAGE>
Montreal's top municipalities. At the federal level, from 1991-1993, he worked
under the Minister of Transportation in creating specialized programs for
airport personnel. Since 1993 he has run his own consulting firm, Penna &
Associates. In 1999 he took on the added responsibility as President of Aqua
Boost, a progressive manufacturer of specialized and bottled waters.
Mr. Thomas Bourne, Secretary. Mr. Bourne is a professional financial
manager and advisor, having received his accreditation as a CA, a member of the
Order of Chartered Accountants of Canada. He has had vast experience in dealing
with the Banking and Investment circles having been for many years the Chief
Investment Officer of one of Ontario, Canada's largest Credit unions. Over the
past ten years, he has shifted his base of operations to the state of Florida
where he practices in Boca Raton, as an independent financial consultant.
Mr. Guiseppe Bertelli Motta, VP Research, Board Advisory Committee. Mr.
Motta is one of the co-discoverers of the use of Vocamine as the active
ingredient in Malarex, Millenia's premier anti-malarial drug. As a leading
Italian botanical researcher, Mr. Motta together with Professor Silvio Rossi did
the painstaking research required in taking a natural compound and having it's
efficacy as a pharmaceutical agent bourne out. Mr. Motta, using his expert
knowledge of the wide spectrum of flora and fauna, is aggressively working on
several extracts as the basis of other natural remedies both for malaria and
other infectious diseases. Mr. Motta has been involved with the University of
Roma as a researcher for more than the past 5 years.
(b) Significant Employees
None
(c) Family Relationships
There are no family relationships among directors or executive officers of the
Company.
(d) Involvement in Certain Legal Proceedings.
None.
Item 6. Executive Compensation.
(a) General
Commencing December 1, 1999, the Company has agreed to pay Dr. Alain Soucy, its
Chairman of the Board of Directors, an annual salary of $36,000.
<PAGE>
(b) Summary Compensation Table
SUMMARY COMPENSATION TABLE
Name and Long-term
Principal Position Year Salary Bonus Compensation: Options(1)
- ------------------ ---- ------ ----- ------------------------
Alain Soucy 1999 0 0 100,000 options(1)
Chairman
Leonard Stella 1999 0 0 210,000 options(2)
President, Treasurer
& Director
Dominique Morisot 1999 0 0 150,000 options(2)
CEO
& Director
Ronald Lapenna 1999 0 0 50,000 options(3)
VP-Personnel
& Director
George Haligua
VP Finance
& Director 1999 0 0 50,000 options(3)
(1) Exercisable commencing August 30, 2000 at $.30 per share until December
31, 2003.
(2) Vest equally over 3 years commencing January 29, 2000. Exercisable at
$1.50 per share until December 31, 2003.
(3) Vested on January 29, 2000. Exercisable at $1.50 per share until
December 31, 2003.
(c) Options/SAR Grants Table
OPTION GRANTS IN LAST FISCAL YEAR
(Individual Grants)
<TABLE>
<CAPTION>
% of Options Exercise Price
Name Number of Options Granted (1999) (per share) Expiration
- ---- ----------------- -------------- -------------- ----------
<S> <C> <C> <C> <C>
Alain Soucy 100,000 17.85% $ .30 12/31/03
Leonard Stella 210,000 37.50% $1.50 12/31/03
Dominique Morisot 150,000 26.78% $1.50 12/31/03
Ronald Lapenna 50,000 8.93% $1.50 12/31/03
George Haligua 50,000 8.93% $1.50 12/31/03
</TABLE>
(d) Aggregated Option/SAR Exercises and Fiscal Year End Option/SAR Value Table
None
(e) Long Term Incentive Plan ("LTIP") Awards Table
None
<PAGE>
(f) Compensation of Directors
No Director receives any compensation for serving on the Board.
(g) Employment Contracts and Termination of Employment, and Change-in-Control
Arrangements
The Company has no employment contracts with any of its executive officers. Dr.
Alain Soucy serves as Chairman of the Company for $36,000 annually. There are no
provisions for cash compensation to be paid to any executive officer or director
of the Company now, or upon the termination of their services. As indicated
above, certain officers received stock options as compensation.
(h) Report on Repricings of Options/SARs
None.
Item 7. Certain Relationships and Related Transactions.
The Company issued, on June 15, 1998, an unsecured long term note in the amount
of $192,830 with imputed interest of 8% bearing annual payments of $44,400 for
five years and a final payment of $33,600. The Note is to Guiseppe Motta and
Silvio Rossi. Mr. Motta is an officer of the Company.
The company issued, on March 30, 1998 a promissory note to Claude Villenueve, a
shareholder, which is unsecured and bears interest in the amount of 8% per
annum. The amount at November 30, 1999 including interest is $1,043,464 and has
no maturity date.
The company signed an agreement, on May 31, 1998, to reimburse Claude
Villenueve, a shareholder, for auto expenditures at a rate of $1,040 per month.
On January 9, 1998, the company entered into an agreement with L'Espoir Du
Millenaire Inc. whereby L'Espoir Du Millenaire Inc. has exclusive marketing and
distributor rights for the product Malarex. The agreement is for 5 years and
requires L'Espoir Du Millenaire Inc. to make annual payments of $30,000 to the
Company for the exclusive rights. The agreement also allows for renewal of the
exclusivity for an additional 5 years provided that certain sales quotos have
been met. L'Espoir Du Millenaire Inc. is owned Mr. Claude Villenueve, a
shareholder of the Company. Mr Claude Villeneuve, a shareholder owning less than
5% of the total outstanding shares of the company, agreed to provide unsecured
debt, to aid the company's cash flow problem, at a good rate. Further, Mr
Villeneuve, having handled many projects in the past and bearing in mind the
extra incentive he possesses as a shareholder to increase the value of the
company took on the position of marketing and distributing MALAREX. Mr
Villeneuve has extensive international contacts and has assembled a team of
competent sales professionals and experts in the biomedical field to accomplish
this endeavor. The company believes that all the above transactions have been
made at prevailing market rates and with solid business judgment.
Item 8. Legal Proceedings
None
<PAGE>
Item 9. Market Price for Common Equity and Related Stockholder Matters.
(a) Market Information
The Company's Common Stock is currently quoted for trading on the OTC Bulletin
Board under the symbol MLHP. The following table sets forth the range of
quarterly, high and low sale prices for the Company's Common Stock from the
inception of quotation during the fourth quarter of 1998 and for 1999. The
quotations represent inter-dealer quotations without adjustment for retail
markups, markdowns or commissions, and may not necessarily represent actual
transactions.
Common Stock
High Low
---- -----
1998
----
Fourth Quarter (initial trading) $1.50 $ .25
1999
----
First Quarter $1.75 $ .50
Second Quarter $2.00 $1.12
Third Quarter $2.50 $ .75
Fourth Quarter $1.45 $ .43
Of the 11,211,220 shares of common stock outstanding, 4,000,000 are
currently subject to the resale restrictions and limitations of Rule 144. In
general, under Rule 144 as currently in effect, subject to the satisfaction of
certain other conditions, a person, including an affiliate, or persons whose
shares are aggregated with affiliates, who has owned restricted shares of common
stock beneficially for at least one year is entitled to sell, within any
three-month period, a number of shares that does not exceed 1% of the total
number of outstanding shares of the same class. In the event the shares are sold
on an exchange or are reported on the automated quotation system of a registered
securities association, you could sell during any three-month period the greater
of such 1% amount or the average weekly trading volume as reported for the four
calendar weeks preceding the date on which notice of your sale is filed with the
SEC. Sales under Rule 144 are also subject to certain manner of sale provisions,
notice requirements and the availability of current public information about us.
A person who has not been an affiliate for at least the three months immediately
preceding the sale and who has beneficially owned shares of common stock for at
least two years is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above.
(b) Holders
As of December 31, 1999, there were 180 holders of the Company's common stock.
(c) Dividends
<PAGE>
The Company has had no earnings to date, nor has the Company declared any
dividends to date. The payment by the Company of dividends, if any, in the
future, rests within the discretion of its Board of Directors and will depend,
among other things, upon the Company's earnings, its capital requirements and
its financial condition, as well as other relevant factors. The Company has not
declared any cash dividends since inception, and has no present intention of
paying any cash dividends on its Common Stock in the foreseeable future, as it
intends to use earnings, if any, to generate growth.
Item 10. Recent Sales of Unregistered Securities.
In December 1997 the company sold 4,000,000 shares of Founders stock at $0.00505
for a total of $20,200. In February 1998 the Company sold 6,100,000 shares of
Common Stock at a price of $.07 per share. The company settled on this price
after weighing its need for initial funding, inherent risk of all new ventures
and funds being paid for shares of this type of enterprise. Also issued were
6,100,000 warrants exercisable at $0.09 per share until May 31,2001. These
shares were sold and issued pursuant to the exemption from registration
contained in Regulation D, Rule 504.
In March 1999 the Company issued an aggregate of 1,111,220 shares of Common
Stock to four persons as compensation for marketing services valued at
$1,514,215. These shares were issued pursuant to the exemption contained in
Regulation S of sales to non - U.S. persons.
Item 11. Description of Securities.
(a) Common or Preferred Stock
The Company is authorized to issue 70,000,000 shares of Common Stock,
$0.0001 par value, of which 11,211,220 shares were issued and outstanding as of
the date hereof. Each outstanding share of Common Stock is entitled to one (1)
vote, either in person or by proxy, on all matters that may be voted upon the
owners thereof at meetings of the stockholders.
The holders of Common Stock (i) have equal ratable rights to dividends from
funds legally available therefor, when and if declared by the Board of Directors
of the Company; (ii) are entitled to share ratably in all of the assets of the
Company available for distribution to holders of Common Stock upon liquidation,
dissolution or winding up of the affairs of the Company; (iii) do not have
preemptive, subscription or conversion rights, or redemption or sinking fund
provisions applicable thereto; and (iv) are entitled to one non-cumulative vote
per share on all matters on which stockholders may vote at all meetings of
stockholders.
Holders of Shares of Common Stock of the Company do not have cumulative
voting rights, which means that the individuals holding Common Stock with voting
rights to more than 50% of eligible votes, voting for the election of directors,
can elect all directors of the Company if they so choose and, in such event, the
holders of the remaining shares will not be able to elect any of the Company's
directors.
(b) Debt Securities.
The Company has not issued any debt securities to date.
(c) Other securities to be Registered
<PAGE>
None.
Item 12. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law, as amended, authorizes the
Company to Indemnify any director or officer under certain prescribed
circumstances and subject to certain limitations against certain costs and
expenses, including attorney's fees actually and reasonably incurred in
connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which a person is a party by reason of being
a director or officer of the Company if it is determined that such person acted
in accordance with the applicable standard of conduct set forth in such
statutory provisions. The Company's Certificate of Incorporation contains
provisions relating to the indemnification of director and officers and the
Company's By-Laws extends such indemnities to the full extent permitted by
Delaware law.
The Company may also purchase and maintain insurance for the benefit of any
director or officer which may cover claims for which the Company could not
indemnify such persons.
Item 13. Financial Statements.
The financial statements are included at the end of this Registration Statement,
prior to the signature page.
Item 14. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.
On February 23, 1999, the Company dismissed Francesca Albano its auditor for the
fiscal year ended November 30, 1998. Their report did not contain an adverse
opinion or disclaimer of opinion nor was it modified as to uncertainty, audit
scope or accounting principles. The decision to change accountants was made by
the Board of Directors based upon the Company's decision to pursue becoming a
reporting company and the need to appoint independent auditors qualified to
submit reports for filing with the SEC. There were no disagreements with the
former auditor which if not resolved would have caused it to make reference to
such disagreement in connection with its report. On March 2, 1999 the company
engaged Mark Cohen C.P.A to be its new auditor.
Item 15. Financial Statements and Exhibits.
(a) List of Financial Statements filed herewith.
Independent Auditors' Report
Balance Sheet (11/30/99 and 11/30/98)
Statement of Income (Years ended 11/30/99 and 11/30/98)
Statement of Shareholders' Equity (Year ended 11/30/99)
Statement of Cash Flows (Years ended 11/30/99 and 11/30/98)
Summary of Significant Accounting Policies
Notes to the Finance Statements
(b) List of Exhibits.
3.1 Certificate of Incorporation*
3.2 By-Laws*
4.1 Form of Stock Certificate*
10.1 Purchase Agreement for Vocamine*
10.2 Purchase Agreement for Research Data*
10.3 Purchase Agreement for Strychonos*
10.4 Distribution Agreement with L'Espair Du Millenaire Inc.
27 Financial Data Schedule
<PAGE>
Mark Cohen C.P.A.
1772 East Trafalgar Circle
Hollywood, Fl 33020
(954) 922 - 6042
INDEPENDENT AUDITORS' REPORT
Board of Directors
Millenia Hope Inc.
We have audited the accompanying balance sheet of Millenia Hope Inc. (a company
in the development stage) as of November 30, 1999 and the related statements of
operations, shareholders' equity (deficiency) and cash flows for the year ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits. The financial statements of Millenia Hope Inc. as of November 30,
1998 were audited by other auditors whose report dated January 27,1999,
expressed an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Millenia Hope Inc. at November
30, 1999, and the results of its operations and its cash flows for the year then
ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has experienced an operating loss that raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 6. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/Mark Cohen
Mark Cohen C.P.A.
A Sole Proprietor Firm
Hollywood, Florida
January 21, 2000
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
BALANCE SHEET
NOVEMBER 30, 1999 AND 1998
Assets
1999 1998
Current Assets
Cash and cash equivalents $ 3,933 $ 21,000
Total current assets 3,933 21,000
Property and equipment, net 46,236 60,800
Other assets 1,054,800 747,300
Total assets 1,104,969 829,100
========= =======
Liabilities and Shareholder's Equity
Current Liabilities
Accounts payable 165,200 256,700
Current portion of long term debt 44,600
Notes payable (principally related parties) 1,264,965 692,000
Other current liabilities 11,450 -
Total current liabilities 1,486,215 948,700
Long -term debt, less current portion 211,000 255,600
Shareholder's Equity
Common Stock, $.0001 par value; authorized 1,121 1,010
70,000,000 shares; issued and outstanding
11,211,220 in 1999 and 10,100,000 in 1998
Paid in Capital 1,960,104 446,190
Deficit accumulated during the development stage (2,553,470) (822,400)
Total Shareholder's Equity (592,246) (375,200)
Total liabilities and shareholder's equity $1,104,969 $ 829,100
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF INCOME
FOR THE YEARS ENDED NOVEMBER 30, 1999 AND 1998
FROM INCEPTION (DECEMBER 24, 1997) THROUGH NOVEMBER 30, 1999
<TABLE>
<S> <C> <C>
Years Ended
November 30, 1999 November 30, 1998
---------------------------- ---------------------
Revenue:
Licensing Fees $ 27,500 $ -
Operating Expenses:
Selling, general and administrative expenses 1,695,278 790,400
----------------------- ----------------------
Loss before other income (expense) (1,667,778) (790,400)
Other income (expense):
Interest expense (63,292) (32,000)
----------------------- ----------------------
Total other income (expense) (63,292) (32,000)
----------------------- ----------------------
Net Loss (1,731,070) (822,400)
======================= ======================
Basic weighted average common shares outstanding 11,052,384 10,100,000
======================= ======================
Basic Loss per common share $ (0.1566) $ (0.0814)
======================= ======================
</TABLE>
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED NOVEMBER 30, 1999
<TABLE>
<S> <C> <C> <C> <C>
Accumulated
Deficit during
Common Paid in Development
Shares Amount Capital Stage
----------------- -------------- -------------- ----------------
Balance, beginning December 01, 1997: - $ - $ - $ -
Proceeds from December 1997 private placement 4,000,000 400 19,800
Proceeds from February 1998 private placement 6,100,000 610 426,390
Net loss year ended November 30, 1998 (822,400)
----------------- -------------- -------------- ----------------
Balance at November 30, 1998 10,100,000 1,010 446,190 (822,400)
March 21, 1999 issuance of shares 1,111,220 111 1,513,914
Net loss year ended November 30, 1999 (1,731,070)
----------------- -------------- -------------- ----------------
Balance, ending November 30, 1999: 11,211,220 $1,121 $1,960,104 $(2,553,470)
================= ============== ============== ================
</TABLE>
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED NOVEMBER 30, 1999 AND 1998
FROM INCEPTION (DECEMBER 24, 1997) THROUGH NOVEMBER 30, 1999
<TABLE>
<S> <C> <C>
Years Ended
1999 1998
---------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $(1,731,070) $(822,400)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 14,564 15,200
Changes in Operating assets and liabilities:
Accounts Payable and Accrued Liabilities (80,050) 256,700
---------------- --------------
Net cash provided by/(used in) operating activities (1,796,556) (550,500)
CASH FLOWS FROM INVESTING ACTIVITIES:
Patent rights (307,500) (747,300)
Purchase of Property and equipment (76,000)
---------------- --------------
Net cash provided by/(used in) investing activities (307,500) (823,300)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Notes payable, principally related parties 572,964 692,000
Long term debt - 255,600
Issuance of stock 1,514,025 447,200
---------------- --------------
Net cash provided by/(used in) financing activities 2,086,989 1,394,800
---------------- --------------
Net increase (decrease) in cash and cash equivalents (17,067) 21,000
Cash and cash equivalents, beginning of period 21,000 -
---------------- --------------
Cash and cash equivalents, end of period $ 3,933 $ 21,000
================ ==============
</TABLE>
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Years
Ended NOVEMBER 30, 1999 AND 1998
Basis of accounting:
Millenia Hope Inc. prepares its financial statements in accordance with
generally accepted accounting principles. This basis of accounting involves
the application of accrual accounting; consequently, revenues and gains are
recognized when earned, and expenses and losses are recognized when
incurred. Financial statement items are recorded at historical cost and may
not necessarily represent current values.
Management estimates:
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,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Certain amounts included in the financial statements are
estimated based on currently available information and management's judgment
as to the outcome of future conditions and circumstances. Changes in the
status of certain facts or circumstances could result in material changes to
the estimates used in the preparation of financial statements and actual
results could differ from the estimates and assumptions. Every effort is
made to ensure the integrity of such estimates.
Fair value of financial instruments:
The carrying amounts of cash and equivalents, accounts receivable, accounts
payable and accrued liabilities approximate their fair values because of the
short duration of these instruments.
Impairment of long-lived assets:
Long-lived assets and certain identifiable intangibles held and used by the
Company are reviewed for possible impairment whenever events or
circumstances indicate the carrying amount of an asset may not be
recoverable. Intangible assets have been written down to their net estimated
realizable value.
Cash and cash equivalents:
The Company considers all highly liquid investments with original maturities
of ninety days or less to be cash and cash equivalents. Such investments are
valued at quoted market prices.
Property, equipment and depreciation:
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the double declining balance method over the
estimated useful lives when the property and equipment is placed in service.
Amortization of leasehold improvements is computed using the straight line
method over the estimated useful life as follows:
Estimate Useful Life
(In Years)
Office Furniture and Equipment 10
Leashold Improvements 5
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
YEARS ENDED NOVEMBER 30, 1999 AND 1998
The cost of fixed assets retired or sold, together with the related
accumulated depreciation, are removed from the appropriate asset and
depreciation accounts, and the resulting gain or loss is included in net
earnings.
Patents
Patents are recorded at cost, less accumulated amortization. Patents are
amortized to operations using the straight-line method over a ten year term,
which is less than the legal patent term. Amortization on patents will begin
when the company commences operations.
Per share amounts:
Loss per share is computed by dividing net loss by the weighted average
number of shares outstanding throughout the year.
Recent Accounting Pronouncements:
The Statement of Financial Accounting Standards Board (SFAS) No. 130,
"Reporting Comprehensive Income," was issued by the Financial Accounting
Standards Board (FASB) in June 1997. This Statement establishes standards
for the reporting and display of comprehensive income and its components.
Comprehensive income including, among other things, foreign currency
translation adjustments and unrealized gains and losses on certain
investments in debt and equity securities. Also in June 1997, the FASB
issued SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
Information." This Statement establishes standards for reporting information
about operating segments in annual financial statements, and requires that
an enterprise report selected information about operating segments in
interim reports issued to shareholders. Both of these Statements are
effective for fiscal periods beginning after December 15, 1997. The Company
does not expect the adoption of these statements to have a material impact
on its financial condition or results of operations.
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO THE FINANCIAL STATEMENTS YearS
Ended nOVEMBER 30, 1999 AND 1998
1. Organization and business
Millenia Hope Inc. was incorporated in the State of Delaware on December
24, 1997. The Company participates in the treatment and prevention of
malaria. Through its acquisition of the patent rights for Malarax and
Strychnos, the company will further develop and distribute Malarax as the
dominant control agent for the treatment and prevention of malaria
throughout the world. Although there is no assurance that the patent will
ever be issued, management feels the likelihood of issuance is probable
(high) due to the positive test results attained in clinical studies.
2. Concentrations of credit risk
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash, cash equivalents
and accounts receivable. The credit risk associated with cash and cash
equivalents is considered low due to the credit quality of the financial
institutions. The Company maintains, when appropriate, an allowance for
uncollectible receivables. Therefore, no additional credit risk beyond
amounts provided for collection losses is believed inherent in the
Company's receivables and to date have been within management's
expectations.
3. Details of financial statement components
1999 1998
---------- ----------
Property and Equipment:
Furniture and Fixtures $ 15,900 $ 15,900
Leasehold Improvements 60,100 60,100
---------- ----------
76,000 76,000
Accumulated Depreciation/Amortization 29,764 15,200
---------- ----------
Property, and Equipment, net $ 46,236 $ 60,800
Other Assets:
Patent rights
Patent rights - Malarex $ 747,300 $ 747,300
(Purchased January 7, 1998)
Patent rights - Strychnos 258,527
---------- ----------
(Purchased June 1, 1999) $1,005,827 747,300
The purchase of the patents rights included the Italian application, PCT
applications which extends the patent globally and all priority rights
associated with the patent. All of these components were purchased in a
lump sum package which was determined to be their fair market value on the
purchased dates. The transactions were at arm's length. No portion of these
amounts relate to trademarks.
Other Current Liabilities:
Deferred Revenue $ 2,500 $ --
Accrued Expenses 8,950 --
------- --------
$11,450 $ --
<PAGE>
4 Note Payables:
Note Payable - Silvio Rossi $ 180,389 $ --
unsecured, discounted for 8%
imputed interest, maturing
May 31, 2002
Related Party:
Promissory Note Payable - C. Villenueve, 1,043,464 692,000
---------- ----------
a shareholder, unsecured, interest at 8% $1,223,853 $ 692,000
per annum, no maturity date
5 Long-term debt
Promissory Note - Giuseppe Motta and $ 161,811 $ 255,600
Silvio Rossi, unsecured, discounted for 8%
Imputed interest; annual payments of $44,400
for 5 years and a final payment of $33,600
Less current portion of long term debt 31,019 --
---------- ----------
$ 192,830 $ 255,600
6. Commitments, contingencies and litigation
Office rent agreement:
On December 27, 1997, the company entered into an office rent agreement
with 9033-0176 Quebec Inc. for office space. This agreement also includes
the full usage of all office equipment and receptionist. This agreement is
for a term of 5 year and the annual rental amount is $79,325.
Auto Reimbursement
The company has agreed to reimburse Claude Villenueve, a shareholder, each
month an amount of $1,040 relating to auto expenses used in the course of
business.
Going Concern:
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. The company reported a net loss
of $1,676,351 for the year ended November 30, 1999 and has reported net
losses of $2,498,751 from inception (December 24, 1997) to November 30,
1999. As reported on the statement of cash flows, the Company incurred
negative cash flows from operating activities of $227,622 for the year
ended November 30, 1999 and has reported deficient cash flows from
operating activities of $778,122 from inception (December 24, 1997). To
date, these losses and cash flow deficiencies have been financed
principally through the sale of common stock ($447,200) and short term debt
($1,416,682) which is 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 develop a management team,
maintain reporting compliance and establish long term relationships with
other major organizations to develop and distribute the product Malarax.
Management anticipates generating revenue through the sales of Malarax
during the next fiscal year. The major shareholder's of the organization
have committed 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.
<PAGE>
7. Comprehensive income (loss)
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
130, "Reporting Comprehensive Income". SFAS 130 establishes standards for
the reporting and display of comprehensive income (loss) and its components
in the financial statements. The adoption of this statement did not result
in a change in the Company's disclosure.
8. Related Parties
As discussed in Note 4, the company has a promissory note with Claude
Villenueve, a shareholder, which is unsecured and bearing interest in the
amount of 8% annum. The amount at November 30, 1999 including interest is
$1,043,464 and has no maturity date.
As discussed in Note 6, the company has an agreement to reimburse Claude
Villenueve, a shareholder , monthly for auto expenditures a standard amount
of $1,040.
On January 9, 1998, the company entered into an agreement with L'Espoir Du
Millenaire Inc. whereby L'Espoir Du Millenaire Inc. has exclusive marketing
and distributor rights for the product Malarax. The agreement is for 5
years and requires L'Espoir Du Millenaire Inc. to make annual payments of
$30,000 to Millenia Hope Inc. for the exclusive rights. The agreement also
allows for renewal of the exclusivity for an additional 5 years provided
that certain sales quotos have been met. L'Espoir Du Millenaire Inc. is
owned Mr. Claude Villenueve, a shareholder in Millenia Hope Inc.
9. Income Taxes
The Company did not provide any current or deferred United States federal,
state or foreign income tax provision or benefit for the period presented
because it has experienced operating losses since inception. The Company
has provided a full valuation allowance on the deferred tax asset,
consisting primarily of net operating loss carryforwards, because of
uncertainty regarding its realizability.
10. Shareholders' Equity
In March 1999, the Company issued 1,111,220 shares of common stock in
settlement of marketing agreements established with organizations who will
develop and market the Company and its product Malarex globally. The total
marketing cost was $1,514,215. The company's share value on that date was
trading on the OTC Bulletin Board at $1.3627. The transaction was at arm's
length with third parties.
11. Warrants and Options
In 1998, the Company, in accordance with it private placement memorandum to
sell 6,100,000 units (each unit consisting of one (1) share of common stock
and one (1) warrant), sold 6,100,000 shares of common stock. Each warrant
entitles the registered holder thereof to purchase at any time from the
date for a period of three (3) years, one share of common stock at a price
of $0.09. As of November 30, 1999, 6,100,000 warrants were outstanding.
<PAGE>
Warrants and Options (continued):
On January 29, 1999 the company granted 210,000 options to its President,
Leonard Stella. The options vest 70,000 per year over a three year period.
The options are exercisable at $1.50 per share and expire on December 31,
2003. The total dollar value of the options at the date of grant was
$315,000. The fair market value of the company's stock which was tradable
on the OTC Bulleting Board was $1.50.
On January 29, 1999 the company granted 150,000 options to its Chief
Executive Officer, Dominique Morisot. The options vest 50,000 per year over
a three year period. The options are exercisable at $1.50 per share and
expire on December 31, 2003. The total dollar value of the options at the
date of grant was $225,000. The fair market value of the company's stock
which was tradable on the OTC Bulleting Board was $1.50.
On January 29, 1999 the company granted 50,000 options to its Vice
President Human Resource, Ronald Lapenna. The options vest after one year.
The options are exercisable at $1.50 per share and expire on December 31,
2003. The total dollar value of the options at the date of grant was
$75,000. The fair market value of the company's stock which was tradable on
the OTC Bulleting Board was $1.50.
On January 29, 1999 the company granted 50,000 options to its Vice
President Finance, George Haligua. The options vest after one year. The
options are exercisable at $1.50 per share and expire on December 31, 2003.
The total dollar value of the options at the date of grant was $75,000. The
fair market value of the company's stock which was tradable on the OTC
Bulleting Board was $1.50.
On August 30, 1999, the Company granted 100,000 options to its chairman of
the Board, Dr. Alain Soucy. The options vest after one year. The options
are exercisable at $0.30 per share and expire on December 31, 2003. The
total dollar value of the options at the date of grant was $30,000. The
fair market value of the company's stock which was tradable on the OTC
Bulleting Board was $.30.
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation". The Company has determined that it will continue
to account for employee stock-based compensation under Accounting
Principles Board No. 25 and elect the disclosure-only alternative under
SFAS No. 123. The fair value of a share of nonvested stock is measured at
the market price of a share on the grant date. The proforma effect to net
income and earnings per share is reflected as follows:
<TABLE>
<CAPTION>
Inception
December 24, 2997
Year ended Through
November 30, 1999 November 30, 1999
----------------- -----------------
<S> <C> <C>
Net Income after proforma effect $ (2,396,351) $(2,498,751)
Earnings per share after proforma effect $ (0.2168) $ (0.2329)
</TABLE>
12. Earnings (Loss) per common share
Basic earnings (loss) per share is computed using the weighted-average
number of common shares outstanding during the period. Options and warrants
are not considered since considering such items would have an antidilutive
effect.
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES YEARS
Ended NOVEMBER 30, 1999 AND 1998
Basis of accounting:
Millenia Hope Inc. prepares its financial statements in accordance with
generally accepted accounting principles. This basis of accounting involves
the application of accrual accounting; consequently, revenues and gains are
recognized when earned, and expenses and losses are recognized when
incurred. Financial statement items are recorded at historical cost and may
not necessarily represent current values.
Management estimates:
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,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Certain amounts included in the financial statements are
estimated based on currently available information and management's judgment
as to the outcome of future conditions and circumstances. Changes in the
status of certain facts or circumstances could result in material changes to
the estimates used in the preparation of financial statements and actual
results could differ from the estimates and assumptions. Every effort is
made to ensure the integrity of such estimates.
Fair value of financial instruments:
The carrying amounts of cash and equivalents, accounts receivable, accounts
payable and accrued liabilities approximate their fair values because of the
short duration of these instruments.
Cash and cash equivalents:
The Company considers all highly liquid investments with original maturities
of ninety days or less to be cash and cash equivalents. Such investments are
valued at quoted market prices.
Property, equipment and depreciation:
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the double declining balance method over the
estimated useful lives when the property and equipment is placed in service.
Estimate Useful Life
(In Years)
Office Furniture and Equipment 10
Leashold improvements are amortized over their estimated useful lives or the
estimated useful lives of the leasehold improvements, whichever is shorter.
The cost of fixed assets retired or sold, together with the related
accumulated depreciation, are removed from the appropriate asset and
depreciation accounts, and the resulting gain or loss is included in net
earnings.
Intangibles:
Intangibles represent patent rights are recorded at cost, less accumulated
amortization. Patent rights are amortized to operations using the
straight-line method over a ten year term, which is less than the legal
patent term of 17 years. Amortization of patent rights which is considered a
capitalized R&D-related asset is charged to R&D expense. Amortization on
patents rights will begin when the company commences operations. Intangibles
held and used by the Company are reviewed and evaluated for possible
<PAGE>
impairment whenever events or changes in circumstances indicate the carrying
amount of an asset may not be recoverable through the estimated undiscounted
future cash flows resulting from the use of these assets. When any such
impairment exists, the related assets will be written down to fair value.
This policy is in accordance with SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of."
Recent Accounting Pronouncements:
The Statement of Financial Accounting Standards Board (SFAS) No. 130,
"Reporting Comprehensive Income," was issued by the Financial Accounting
Standards Board (FASB) in June 1997. This Statement establishes standards
for the reporting and display of comprehensive income and its components.
Comprehensive income including, among other things, foreign currency
translation adjustments and unrealized gains and losses on certain
investments in debt and equity securities. Also in June 1997, the FASB
issued SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
Information." This Statement establishes standards for reporting information
about operating segments in annual financial statements, and requires that
an enterprise report selected information about operating segments in
interim reports issued to shareholders. Both of these Statements are
effective for fiscal periods beginning after December 15, 1997. The Company
does not expect the adoption of these statements to have a material impact
on its financial condition or results of operations.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
MILLENIA HOPE INC.
Date: 4/19/00 /s/ Alain Soucy
--------------------------- ----------------------------------------
Alain Soucy, Chairman
Date: 4/19/00 /s/ Leonard Stella
--------------------------- ----------------------------------------
Leonard Stella, President and Director
Date: 4/19/00 /s/ Dominique Morisot
--------------------------- ----------------------------------------
Dominique Morisot, CEO and Director
Date: 4/19/00 /s/ George Haligua
--------------------------- ----------------------------------------
George Haligua, VP Finance and Director
(Principal Financial Officer)
Date: 4/19/00 /s/ Ronald Lapenna
--------------------------- ----------------------------------------
Ronald Lapenna, VP Personnel and Director
<PAGE>
Index to Exhibits
-----------------
3.1 Certificate of Incorporation*
3.2 By-Laws*
4.1 Form of Stock Certificate*
10.1 Purchase Agreement for Vocamine*
10.2 Purchase Agreement for Research Data*
10.3 Purchase Agreement for Strychonos*
10.4 Distribution Agreement with L'Espair Du Millenaire Inc.
27 Financial Data Schedule
- ----------
* To be filed by Amendment
<PAGE>
FRANCESCA ALBANO C.P.A.
4055 Ste Catherine West
suite 133
Westmount, Quebec
H3Z 3J8
Tel:(514) 941-5445
Fax:(514) 935-5824
- --------------------------------------------------------------------------------
February 23, 1999
Mr. Leonard Stella
Treasurer
Millenia Hope Inc.
4055 Ste Catherine St
suite 142
Montreal, Qc. H3Z 3J8
Dear Mr. Stella:
This is to confirm that the client-auditor relationship between Millenia
Hope Inc. and Francesca Albano C.P.A. has ceased.
Yours truly,
Francesca Albano C.P.A.
<PAGE>
FRANCESCA ALBANO C.P.A.
4055 Ste Catherine West
Suite 133
Westmount, Quebec
H3Z 3J8
Tel: (514) 941-5445
Fax: (514) 935-5824
- --------------------------------------------------------------------------------
Independent Auditors Report
To the Board of Directors
Millenia Hope Inc.
I have audited the accompanying balance sheet of Millenia Hope Inc. as of
November 30, 1998 and the related statements of loss and deficit, shareholder's
equity, and cash flows for the year then ended. These financial statements, are
the responsibility of the company's management. My responsibility is to express
an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides reasonable basis for my opinion.
In my opinion, the financial statements referred to the above present fairly, in
all material respects, the financial position of Millenia Hope Inc. as of
November 31, 1998 and the results of its operations and its cash flow for the
year then ended in conformity with generally accepted accounting principles.
Francesca Albano C.P.A.
January 27th, 1999
