MILLENIA HOPE INC.
(Exact name of Small Business Issuer as Specified in its Charter)
DELAWARE 98-0213828
(state or other Jurisdiction of (I.R.S Employer
Incorporation or Organization) Identification No.)
4055 Ste Catherine st. suite 142, Montreal, Quebec H3Z 3J8
(Address of Principal Executive Offices)
(514) 846-5757
Issuer's Telephone Number Including Area Code)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: At February 29, 2000 Issuer had
outstanding 10,774,220 shares of Common Stock.
<PAGE>
INDEX
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet (Unaudited) at February 29, 2000.
Statement of operations (Unaudited) for the three months ended
February 29, 2000 and February 28, 1999 and from inception
(December 24, 1997) to February 29, 2000.
Statements of cash flows (Unaudited) for the three months ended
February 29, 2000 and February 28, 1999 and from inception
(December 24, 1997) to February 29, 2000.
Notes to the Financial Statements (Unaudited)
Item 2. Plan of Operations
PART II. Other Information
Item 2. Sale of Unregistered Securities
Item 6. Exhibits and Reports on Form
SIGNATURES
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
BALANCE SHEET
AT FEBRUARY 29, 2000
(UNAUDITED)
Assets
------
Current Assets
Cash and cash equivalents $ 5,663
-------
Total current assets 5,663
Property and equipment, net 42,722
-------
Total assets 48,385
=======
Liabilities and Shareholder's Equity
------------------------------------
Current Liabilities
Accounts payable and accrued liabilities 196,153
Other current liabilities 20,350
-----------
Total current liabilities 216,503
Shareholder's Equity
Common Stock, $.0001 par value; authorized 1,077
70,000,000 shares; issued and outstanding 10,774,220
Warrants 1,393,247
Paid in Capital 2,010,908
Cost of Treasury Shares 100
Deficit accumulated during the development stage (3,573,450)
-----------
Total Shareholder's Equity (168,118)
Total liabilities and shareholder's equity $ 48,385
===========
Read the accompanying notes to
financial statements, which is an integral part of this financial statement.
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF OPERATIONS
FOR THE 3 MONTHS ENDED FEBRUARY 29, 2000 AND FEBRUARY 28, 1999
(UNAUDITED) AND THE PERIOD FROM INCEPTION
(DECEMBER 24, 1997) TO FEBRUARY 28, 2000.
<TABLE>
<CAPTION>
INCEPTION
3 months ended (Dec. 24, 1997)
Feb. 29, 2000 Feb 28, 1999 Feb.29, 2000
---------------- ---------------- ----------------
<S> <C> <C> <C>
Revenue:
Licensing fees $ 7.500 $ 5.000 $ 35.000
Operating expenses:
Marketing -- -- 1.514.215
Patent Rights -- -- 1.005.827
Other Development Costs -- -- 218.515
Travel -- -- 122.000
Rent 19.100 19.100 156.750
Selling, general and administrative expenses 29.502 9.860 441.505
Total operating expenses 48.602 33.960 3.458.812
Loss before other income (expense) (41.102) (28.960) (3,423,812)
Other income (expense):
Interest expense (27.770) (16.458) (149.639)
Total other income (expense) (27.770) (16.458) (149.639)
Net Loss (68.872) (45.418) (3,573,451)
================ ================ ================
Basic weighted average common shares outstanding 10,992,72 10,100,000 10.734.308
================ ================ ================
Basic Loss per common share $ (0.0063) $ (0.0045) $ (0.3329)
================ ================ ================
</TABLE>
Read the accompanying notes to financial statements, which is an integral part
of this financial statement.
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF CASH FLOWS
FOR THE 3 MONTHS ENDED FEBRUARY 29, 2000 AND FEBRUARY 28, 1999
AND THE PERIOD FROM THE INCEPTION
(DECEMBER 24, 1997) TO FEBRUARY 29, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Inception
Three Months (December 24, 1997)
Ended February 29, through
------------------------------------
2000 1999 February 29, 2000
--------------- --------------- -------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (68,872) $ (40,418) $ (3,573,450)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 3,514 3,641 33,278
Issuance of stock for marketing services - - 1,514,215
Issuance of note for other development costs - - 192,831
(subsequently converted to warrants)
Interest expense settled with issuance of note 27,770 - 27,770
(subsequently converted to warrants)
Changes in Operating assets and liabilities:
Accounts Payable and Accrued Liabilities 39,853 (65,026) 216,503
--------------- --------------- -------------------------
Net cash provided by/(used in) operating activities 2,265 (101,803) (1,588,853)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and equipment - - (76,000)
--------------- --------------- -------------------------
Net cash provided by/(used in) investing activities - - (76,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Notes payable, principally related parties (net of discount) (51,205) 89,878 1,172,648
Issuance of stock 50,670 - 497,870
--------------- --------------- -------------------------
Net cash provided by/(used in) financing activities (535) 89,878 1,670,517
--------------- --------------- -------------------------
Net increase (decrease) in cash and cash equivalents 1,730 (11,925) 5,663
Cash and cash equivalents, beginning of period 3,933 21,000 -
--------------- --------------- -------------------------
Cash and cash equivalents, end of period $ 5,663 $ 9,075 $ 5,663
=============== =============== =========================
</TABLE>
Supplemental Schedule of noncash investing and financing activities:
On February 28, 2000, the company issued 4,644,156 warrants to settle the
following related party notes:
Notes payable (principally related parties) (net of discount) 1,172,648
Long -term debt, less current portion (net of discount) 104,031
Current portion of long term debt ( net of discount) 88,800
Current year interest expense 27,770
-----------
1,393,249
<PAGE>
MILLENIA HOPE INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
FEBRUARY 29, 2000
NOTE 1 -BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Millenia
Hope Inc. have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB and Article 10 of Regulation S-X. The financial statements reflect all
adjustments consisting of normal recurring adjustments which, in the opinion of
management, are necessary for a fair presentation of the results for the periods
shown. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.
These financial statements should be read in conjunction with the audited
financial statements and footnotes thereto included in Millenia Hope Inc.'s
Registration Statement on Form 10SB (Registration No. 000-29385) as filed with
the Securities and Exchange Commission.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and that effect the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
NOTE 2 - REVENUE RECOGNITION
The company currently recognizes revenue in the form of
licensing/distributor fees which are recorded over the life of the licensing
agreement using the straight line method. Currently the company has one
agreement with a term of 5 years commencing on January , 1999.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition," which
provides guidance on the recognition, presentation and disclosure of revenue in
financial statements filed with the SEC. SAB 101 outlines the basic criteria
that must be met to recognize revenue and provide guidance for disclosures
related to revenue recognition policies. Management believes that Millenia Hope
Inc.'s revenue recognition practices are in conformity with the guidelines of
SAB 101.
NOTE 3 - NET LOSS PER 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.
NOTE 4 - 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
$68,872 for the three months ended February 29, 2000 as well as reporting net
losses of $3,573,450 from inception (December 24, 1997) to February 29, 2000. As
reported on the statement of cash flows, the Company incurred negative cash
flows from operating activities of $1,588,853 from inception (December 24,
1997). To date, these losses and cash flow deficiencies have been financed
principally through the sale of common stock ($497,870) and short term debt
($1,172,648) 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.
NOTE 5 - STOCKHOLDER'S EQUITY
In February 1998, the company issued in accordance with it private
placement offering exempt from registration requirements under section 4(2) of
the Securities Act of 1933, as amended, and Rule 504 of Regulation D sold
6,100,000 units (each unit consisting of one (1 share of common stock and (1)
warrant) at a price of $0.07 per unit. Each warrant entitles the registered
holder thereof to purchase at any time from the date of the offering until the
close of business February 11, 2001, one share of common stock at a price of
$0.09. On January 17, 2000, the company issued 563,000 shares of common stock at
a price of $0.09 per share to individuals who exercised their warrants.
On February 28, 2000, the company issued 4,644,156 warrants to settle the
following related party notes:
Current portion of long term debt (net of discount) $ 88,800
Notes payable (principally related parties)(net of discount) 1,172,648
Long-term debt, less current portion (net of discount) 104,031
Current year interest expense 27,770
----------
$1,393,249
==========
On January 20, 2000, one of the founders of the corporation who was invited
to participate at the inception of the corporation based upon on his ability in
the area of investor relations agreed to return his 1,000,000 shares to the
company for cancellation due to changed personal circumstances in which he was
unable to devote significant time and effort to the company. These shares have
been classified as treasury shares.
<PAGE>
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.
Some of the statements hereunder 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.
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 next.
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. The company is waiting for the final
approval of the Department of Health for MALAREX to be sold in Cameroun.
Management believes that 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 waiting for the in-vivo testing to be concluded. If this step is
successful then final approval of the ministry of Health and Welfare would
be needed to commence sales of MALAREX.
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.
<PAGE>
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.
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, however,
the officers and certain shareholders have committed to fund the operations of
the company during the net twelve months until the company can generate
sufficient cash flow from operations to meet current operating expenses and
overhead.
Liquidity and cash flow needs of the company
From December 1st, 1999 to February 28th, 2000 the company incurred operating
expenses of $ 41,102 and interest expenses in the amount of $27,770 while
recording net cash revenues of $7,500. From March 1st, 2000 to November 30th,
2000, the fiscal year end, the company anticipates that its net cash flow needs
will be $123,000 primarily to cover day to day operating expenses. These funds
will be covered by revenue received and any shortfalls will be met by the
officers and certain shareholders as previously outlined.
<PAGE>
On February 22, 2000 Dr. David Mulder joined the Board of Directors of Millenia
Hope as its Vice-Chairman of the Board. Dr Mulder, a physician with expertise in
several disciplines, was the former chairman of Montreal's McGill University
department of surgery and the surgeon-in-chief at the Montreal General Hospital
for 21 years. Dr Mulder has held leading positions in several important medical
associations, including presidency of the Canadian Association of Thoracic
Surgeons and the Canadian Surgical Association.
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.
<PAGE>
Part II other information
Item 2: Sales of Unregistered securities
Date of Title of Number Consideration Exemption from
Sale Security Sold Received Registration claimed
1/17/2000 Common 563,000 $ 50,670 Regulation S
Shares
2/28/2000 Warrants 4,644,156 conversion of Regulation S
exercisable $ 1,393,247
at $1.00 per of debt
share until
11/30/2002
<PAGE>
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27. Financial Data Schedule (2/29/00)
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Millenia Hope Inc.
(Registrant)
Dated: April 14, 2000 By: /s/ Leonard Stella
-----------------------
President and Treasurer
