01-12584
(Commission
File Number)
|
13-3808303
(IRS
Employer Identification No.)
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12(b) under the Exchange Act (17
CFR
240.14a-12(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
|
PRODUCT
|
THERAPEUTIC
INDICATION
|
STAGE
OF DEVELOPMENT
|
COPREXA
Ô
(oral
tetrathiomolybdate)
|
Neurologic
Wilson’s Disease
|
Phase
III Clinical Trial (complete)
NDA
in preparation
|
COPREXA
Ô
(oral
tetrathiomolybdate)
|
Refactory
Idiopathic Pulmonary Fibrosis (IPF)
|
Phase
IIa Clinical Trial
(complete)
|
COPREXA
Ô
(oral
tetrathiomolybdate)
|
Primary
Biliary Cirrhosis (PBC)
|
Phase
II Clinical Trial
(on-going)
|
TRIMESTA
Ô
(oral
estriol)
|
Relapsing-Remitting
Multiple Sclerosis
|
Phase
IIb Clinical Trial
|
Anti-CD4
802-2
|
Prevention
of Severe Graft Vs. Host Disease
|
Phase
I/II Clinical Trial
(ongoing)
|
Anti-CD4
802-2
|
Autoimmune
Diseases
|
Preclinical
studies
|
CORRECTAÔ
(clotrimazole
enema)
|
Refractory
Acute Pouchitis
|
Phase
II Clinical Trial
(ongoing)
|
EFFIRMA™
(oral
flupirtine)
|
Fibromyalgia
|
Phase
II Clinical Trial
(planned)
|
SOLOVAX™
(MS
T-cell vaccine)
|
Multiple
Sclerosis Vaccine
|
Phase
II Clinical Trial
(complete)
|
· |
continue
to undertake pre-clinical development and clinical trials for our
product
candidates;
|
· |
seek
regulatory approvals for our product
candidates;
|
· |
implement
additional internal systems and
infrastructure;
|
· |
lease
additional or alternative office facilities;
and
|
· |
hire
additional personnel, including members of our management
team.
|
· |
continuing
to undertake pre-clinical development and clinical
trials;
|
· |
participating
in regulatory approval processes;
|
· |
formulating
and manufacturing products; and
|
· |
conducting
sales and marketing activities.
|
· |
delay
commercialization of, and our ability to derive product revenues
from, our
product candidates;
|
· |
impose
costly procedures on us; and
|
· |
diminish
any competitive advantages that we may otherwise
enjoy.
|
· |
unforeseen
safety issues;
|
· |
determination
of dosing issues;
|
· |
lack
of effectiveness during clinical
trials;
|
· |
slower
than expected rates of patient
recruitment;
|
· |
inability
to monitor patients adequately during or after treatment;
and
|
· |
inability
or unwillingness of medical investigators to follow our clinical
protocols.
|
· |
the
perception of members of the health care community, including physicians,
regarding the safety and effectiveness of our
drugs;
|
· |
the
cost-effectiveness of our product relative to competing
products;
|
· |
availability
of reimbursement for our products from government or other healthcare
payers; and
|
· |
the
effectiveness of marketing and distribution efforts by us and our
licensees and distributors, if any.
|
· |
developing
drugs;
|
· |
undertaking
pre-clinical testing and human clinical
trials;
|
· |
obtaining
FDA and other regulatory approvals of
drugs;
|
· |
formulating
and manufacturing drugs; and
|
· |
launching,
marketing and selling drugs.
|
· |
The
drug approval process required by the FDA under the Food, Drug,
and
Cosmetic Act generally involves:
|
· |
Preclinical
laboratory and animal tests;
|
· |
Submission
of an IND, prior to commencing human clinical
trials;
|
· |
Adequate
and well-controlled human clinical trials to establish safety and
efficacy
for intended use;
|
· |
Submission
to the FDA of a NDA; and
|
· |
FDA
review and approval of a NDA.
|
Name
|
Age
|
Position
|
Steve
H. Kanzer, CPA, Esq.
|
42
|
Chairman
and Chief Executive Officer
|
Charles
L. Bisgaier, Ph.D.
|
52
|
President
and Director
|
Jeffrey
J. Kraws
|
41
|
Vice
President, Business Development and Director
|
A.
Joseph Rudick, M.D.
|
49
|
Chief
Medical Officer and Director
|
Nicholas
Stergis, M.S.
|
32
|
Chief
Operating Officer and Director
|
John
S. Althaus, M.S., M.B.A.
|
52
|
Vice
President, Advanced Technology
|
Jeff
Wolf, Esq.
|
41
|
Director
|
Principal
Stockholders Table
|
|||
Name
of Owner
|
Shares
Owned
|
Percentage
of Shares Outstanding (1)(2)
|
|
Accredited
Venture Capital, LLC (1)
|
23,756,955
|
63.80%
|
|
Steve
H. Kanzer (1)
|
23,756,955
|
63.80%
|
|
Firebird
Capital (2)
|
4,459,648
|
12.57%
|
|
Nicholas
Stergis (3)
|
4,065,876
|
11.70%
|
|
Charles
Bisgaier, Ph.D. (4)
|
612,028
|
1.75%
|
|
Jeffrey
J. Kraws (5)
|
363,160
|
*
|
|
A.
Joseph Rudick, M.D. (6)
|
81,318
|
*
|
|
Jeffrey
Wolf, Esq. (7)
|
32,527
|
*
|
|
All
officers and directors as a group (6 persons)
|
28,891,864
|
83.17%
|
(1) |
Consist
of 21,259,138 shares of common stock and a warrant to purchase
2,497,817
shares of common stock issued to Accredited Venture Capital, LLC,
a
company in which Pharmainvestors, LLC, is the managing member and
a
partial beneficial owner. Steve H. Kanzer is the Managing Member
of
Pharmainvestors, LLC. As such, Mr. Kanzer may be considered to have
control over the voting and disposition of those shares. Mr. Kanzer
disclaims beneficial ownership of those shares, except to the extent
of
his pecuniary interest. Excludes an unvested option to purchase
250,000
shares of common stock at $2 per share (which will vest if Mr.
Kanzer
raises at least $10 million in this financing), which will vest
annually
over three years. Excludes Placement Agent warrants to purchase
common
stock. Mr. Kanzer’s business address is 3985 Research Park Drive, Suite 4,
Ann Arbor, MI 48108.
|
(2) |
Consists
of 1,486,549 of shares of common stock and 743,275 warrants to
purchase
common stock issued to Firebird Global Master Fund, Ltd and 1,486,549
of
shares of common stock and 743,275 warrants to purchase common
stock
issued to Firebird Global Master Fund II,
Ltd.
|
(3) |
Consists
of 4,065,876 shares of common stock issued to Mr. Stergis. Excludes
Placement Agent warrants to purchase common stock. Mr. Stergis’s business
address is 801 Brickell Avenue, 9th Floor, Miami, Florida
33131.
|
(4) |
Consists
of 166,063 vested options to purchase common stock, 148,655 shares
of
common stock and 74,327 warrant to common stock issued to Bisgaier
Family
LLC, a company Dr. Bisgaier is the managing member; 148,655 shares
of
common stock and 74,327 warrant to common stock issued to two trusts
for
which Dr. Bisgaier has control of. Excludes 1,826,681 unvested
options to common stock vesting over three years. Dr. Bisgaier’s business
address is 3985 Research Park Drive, Suite 4, Ann Arbor, MI
48108.
|
(5) |
Assumes
the exercise of a vested option to purchase 343,160 shares of our
common
stock. This option is exercisable within 60 days of the date of
this
filing. Excludes an unvested option to purchase 343,160 common
stock which
will vest annually over three years. Mr. Kraws’s business address is 800
Third Avenue, 17th
Fl., New York, NY 10022.
|
(6) |
Includes
an option to purchase 81,318 shares of common stock. This does
not include
an option to purchase 691,235 shares of common stock, vesting annually
over three years if Dr. Rudick raises at least $10 million in gross
proceeds to Pipex and Dr. Rudick completes the EPI acquisition.
This
option is not exercisable within 60 days of the date of this report.
Dr.
Rudick’s business address is 150 Broadway, Suite 1800, New York, NY
10128.
|
(7) |
Assumes
the exercise of an option to purchase 32,527 shares of our common
stock.
This option is exercisable within 60 days of the date of this report.
Mr.
Wolf’s business address is c/o Seed-One Ventures, LLC, 1205 Lincoln
Road,
Suite 216, Miami Beach, Florida
33139.
|
Page(s)
|
||
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6-29
|
ASSETS
|
||||
Current
Assets
|
||||
Cash
|
$
|
1,157,790
|
||
Total
Current Assets
|
1,157,790
|
|||
Equipment,
net of accumulated depreciation of $2,260
|
282,130
|
|||
Total
Assets
|
$
|
1,439,920
|
||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||
Current
Liabilities
|
||||
Accounts
payable
|
$
|
214,374
|
||
Loans
payable - related party
|
1,929,384
|
|||
Total
Current Liabilities
|
2,143,758
|
|||
Commitments
and Contingencies (See Note 6)
|
||||
Stockholders'
Deficit
|
||||
Series
A, convertible preferred stock, $0.001 par value;
5,000,000
|
||||
shares
authorized, issued and outstanding
|
5,000
|
|||
Series
B, convertible preferred stock, $0.001 par value;
10,000,000
|
||||
shares
authorized, none issued and outstanding
|
-
|
|||
Common
stock, $0.001 par value; 10,000,000 shares authorized,
|
||||
1,450,000
shares issued and outstanding
|
1,450
|
|||
Additional
paid-in capital
|
3,203,980
|
|||
Deficit
accumulated during the development stage
|
(3,914,268
|
)
|
||
Total
Stockholders' Deficit
|
(703,838
|
)
|
||
Total
Liabilities and Stockholders' Deficit
|
$
|
1,439,920
|
For
the year ended December 31,
|
For
the
Period
from
January
8, 2001
(Inception)
to
|
|||||||||
2005
|
2004
|
December
31, 2005
|
||||||||
Operating
Expenses
|
||||||||||
Research
and development
|
$
|
946,065
|
$
|
349,551
|
$
|
2,167,514
|
||||
General
and administrative
|
285,701
|
221,612
|
1,280,105
|
|||||||
Compensation
|
87,444
|
31,333
|
263,766
|
|||||||
Merger
costs
|
37,500
|
-
|
37,500
|
|||||||
Total
Operating Expenses
|
1,356,710
|
602,496
|
3,748,885
|
|||||||
Loss
from Operations
|
(1,356,710
|
)
|
(602,496
|
)
|
(3,748,885
|
)
|
||||
Other
Income (Expense)
|
||||||||||
Interest
income
|
868
|
3
|
26,600
|
|||||||
Other
expense
|
-
|
-
|
(1,733
|
)
|
||||||
Total
Other Income, net
|
868
|
3
|
24,867
|
|||||||
Net
Loss
|
$
|
(1,355,842
|
)
|
$
|
(602,493
|
)
|
$
|
(3,724,018
|
)
|
|
Less:
Preferred stock dividend - subsidiary
|
$
|
(190,250
|
)
|
$
|
-
|
$
|
(190,250
|
)
|
||
Net
Loss Applicable to Common Shareholders
|
$
|
(1,546,092
|
)
|
$
|
(602,493
|
)
|
$
|
(3,914,268
|
)
|
|
Net
Loss Per Share - Basic and Diluted
|
$
|
(1.07
|
)
|
$
|
(0.42
|
)
|
$
|
(2.70
|
)
|
|
Weighted
average number of shares outstanding
|
||||||||||
during
the year/period - basic and diluted
|
1,450,000
|
1,450,000
|
1,450,000
|
Series
A, convertible preferred stock
$0.001
Par Value
|
Common
Stock
$0.001
Par Value
|
Additional
|
Deficit
accumulated
during
|
Total
|
||||||||||||||||||
Number
of
Shares
|
Amount
|
Number
of
Shares
|
Amount
|
Paid-in
Capital
|
development
stage
|
Stockholders'
Deficit
|
||||||||||||||||
Issuance
of common stock to founders as compensation
($0.0002/share)
|
-
|
$
|
-
|
1,450,000
|
$
|
1,450
|
$
|
(1,100
|
)
|
$
|
-
|
$
|
350
|
|||||||||
Issuance
of preferred stock to founder for cash ($0.06/share)
|
5,000,000
|
5,000
|
-
|
-
|
295,000
|
-
|
300,000
|
|||||||||||||||
Issuance
of stock to founder for cash - subsidiaries
|
-
|
-
|
-
|
-
|
550,250
|
-
|
550,250
|
|||||||||||||||
Net
loss for the period ended December 31, 2001
|
-
|
-
|
-
|
-
|
-
|
(277,868
|
)
|
(277,868
|
)
|
|||||||||||||
Balance,
December 31, 2001
|
5,000,000
|
5,000
|
1,450,000
|
1,450
|
844,150
|
(277,868
|
)
|
572,732
|
||||||||||||||
Issuance
of stock for compensation - subsidiary
|
-
|
-
|
-
|
-
|
67
|
-
|
67
|
|||||||||||||||
Issuance
of stock for consulting services - subsidiary
|
-
|
-
|
-
|
-
|
52
|
-
|
52
|
|||||||||||||||
Grant
of stock options for consulting services - subsidiary
|
-
|
-
|
-
|
-
|
5,890
|
-
|
5,890
|
|||||||||||||||
Net
loss for the year ended December 31, 2002
|
-
|
-
|
-
|
-
|
-
|
(768,508
|
)
|
(768,508
|
)
|
|||||||||||||
Balance,
December 31, 2002
|
5,000,000
|
5,000
|
1,450,000
|
1,450
|
850,159
|
(1,046,376
|
)
|
(189,767
|
)
|
|||||||||||||
Grant
of stock options for compensation - subsidiary
|
-
|
-
|
-
|
-
|
17,984
|
-
|
17,984
|
|||||||||||||||
Net
loss for the year ended December 31, 2003
|
-
|
-
|
-
|
-
|
-
|
(719,307
|
)
|
(719,307
|
)
|
|||||||||||||
Balance,
December 31, 2003
|
5,000,000
|
5,000
|
1,450,000
|
1,450
|
868,143
|
(1,765,683
|
)
|
(891,090
|
)
|
|||||||||||||
Issuance
of common stock for cash - subsidiary
|
-
|
-
|
-
|
-
|
50
|
-
|
50
|
|||||||||||||||
Grant
of stock options for consulting services - subsidiary
|
-
|
-
|
-
|
-
|
10,437
|
-
|
10,437
|
|||||||||||||||
Net
loss for the year ended December 31, 2004
|
-
|
-
|
-
|
-
|
-
|
(602,493
|
)
|
(602,493
|
)
|
|||||||||||||
|
||||||||||||||||||||||
Balance,
December 31, 2004
|
5,000,000
|
5,000
|
1,450,000
|
1,450
|
878,630
|
(2,368,176
|
)
|
(1,483,096
|
)
|
|||||||||||||
Transfer
of Solovax equity to Pipex
|
-
|
-
|
-
|
-
|
300,290
|
-
|
300,290
|
|||||||||||||||
Grant
of stock options for consulting services
|
-
|
-
|
-
|
-
|
59,960
|
-
|
59,960
|
|||||||||||||||
Grant
of stock options for compensation
|
-
|
-
|
-
|
-
|
10,493
|
-
|
10,493
|
|||||||||||||||
Recognition
of deferred compensation - subsidiary
|
-
|
-
|
-
|
-
|
14,057
|
-
|
14,057
|
|||||||||||||||
Issuance
of Series B, convertible preferred stock for cash -
subsidiary
|
-
|
-
|
-
|
-
|
1,902,500
|
-
|
1,902,500
|
|||||||||||||||
Direct
offering costs in connection with sale of
|
||||||||||||||||||||||
Series
B, convertible preferred stock - subsidiary
|
-
|
-
|
-
|
-
|
(152,200
|
)
|
-
|
(152,200
|
)
|
|||||||||||||
|
||||||||||||||||||||||
10%
in-kind Series B, convertible
|
||||||||||||||||||||||
preferred
stock dividend - subsidiary
|
-
|
-
|
-
|
-
|
190,250
|
(190,250
|
)
|
-
|
||||||||||||||
Net
loss for the year ended December 31, 2005
|
-
|
-
|
-
|
-
|
-
|
(1,355,842
|
)
|
(1,355,842
|
)
|
|||||||||||||
Balance,
December 31, 2005
|
5,000,000
|
$
|
5,000
|
1,450,000
|
$
|
1,450
|
$
|
3,203,980
|
$
|
(3,914,268
|
)
|
$
|
(703,838
|
)
|
For
the year ended December
31,
|
For
the
Period
from
January
8, 2001(Inception) to
|
|||||||||
2005
|
2004
|
December
31, 2005
|
||||||||
Cash
Flows From Operating Activities:
|
||||||||||
Net
Loss
|
$
|
(1,355,842
|
)
|
$
|
(602,493
|
)
|
$
|
(3,724,018
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operations
|
||||||||||
Stock
based consulting
|
59,960
|
10,437
|
76,354
|
|||||||
Stock
based compensation
|
24,550
|
-
|
42,936
|
|||||||
Depreciation
|
2,260
|
-
|
2,260
|
|||||||
Changes
in operating assets and liabilities:
|
||||||||||
Increase
(Decrease) in:
|
||||||||||
Accounts
payable
|
186,963
|
(194,628
|
)
|
214,964
|
||||||
Net
Cash Used In Operating Activities
|
(1,082,109
|
)
|
(786,684
|
)
|
(3,387,504
|
)
|
||||
Cash
Flows From Financing Activities:
|
||||||||||
Proceeds
from issuance of Series B, convertible preferred stock -
subsidiary
|
1,902,500
|
-
|
1,902,500
|
|||||||
Direct
offering costs in connection with issuance
|
||||||||||
of
Series B, convertible preferred stock - subsidiary
|
(152,200
|
)
|
-
|
(152,200
|
)
|
|||||
Proceeds
from issuance of preferred stock - subsidiaries
|
-
|
50
|
1,150,000
|
|||||||
Proceeds
from loans payable - related party
|
684,553
|
785,281
|
1,844,994
|
|||||||
Repayments
of loans payable - related party
|
(200,000
|
)
|
-
|
(200,000
|
)
|
|||||
Net
Cash Provided by Financing Activities
|
2,234,853
|
785,331
|
4,545,294
|
|||||||
Net
Increase (Decrease) in Cash
|
1,152,744
|
(1,353
|
)
|
1,157,790
|
||||||
Cash
at Beginning of year/period
|
5,046
|
6,399
|
-
|
|||||||
Cash
at End of year/period
|
$
|
1,157,790
|
$
|
5,046
|
$
|
1,157,790
|
||||
Supplemental
disclosure of cash flow information:
|
||||||||||
Cash
paid for interest
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Cash
paid for taxes
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Supplemental
disclosure of non-cash investing and financing
activities:
|
||||||||||
On
December 31, 2004, EPI issued 825,000 shares of common stock to
acquire
|
||||||||||
a
91.61% ownership in CD4. (See Note 1(C))
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
On
July 31, 2005, Solovax transferred 96.9% of its equity to Pipex
(See Note
1(C))
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
On
December 31, 2005, EPI transferred 65.47% of its equity to Pipex
(See Note
1(C))
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
During
2005, Pipex acquired property and equipment in exchange for
|
||||||||||
a
loan with a related party. (See Note 3)
|
$
|
284,390
|
$
|
-
|
$
|
284,390
|
||||
During
2005, EPI declared a 10% in-kind dividend on its
|
||||||||||
Series
B, convertible preferred stock. (See Note 4(C) (1))
|
$
|
190,250
|
$
|
-
|
$
|
190,250
|
1. |
Pipex
- license
and develop pharmaceutical products to treat various human diseases.
|
2. |
Solovax-
developing
a proprietary vaccine technology to treat certain autoimmune
diseases.
|
3. |
EPI
- license
and develop pharmaceutical products to treat various human diseases.
EPI
is also developing three clinical stage drug candidates for the treatment
of autoimmune diseases.
|
4. |
CD4
- developing
various proprietary vaccine technologies to treat certain autoimmune
diseases.
|
Total
loans/ (repayments) per year
|
Amount
|
|||
Year
ended December 31, 2001 - loans
|
$
|
-
|
||
Year
ended December 31, 2002 - loans
|
130,520
|
|||
Year
ended December 31, 2003 - loans
|
244,640
|
|||
Year
ended December 31, 2004 - loans
|
785,281
|
|||
Year
ended December 31, 2005 - loans
|
968,943
|
|||
Year
ended December 31, 2005 - repayments
|
(200,000
|
)
|
||
Balance,
December 31, 2005
|
$
|
1,929,384
|
Exercise
price
|
$
|
0.03
- $0.20
|
||
Expected
dividends
|
0
|
%
|
||
Expected
volatility
|
200
|
%
|
||
Risk
free interest rate
|
3.03%
- 4.52
|
%
|
||
Expected
life of option
|
5-10
years
|
Exercise
price
|
$
|
1.10
|
||
Expected
dividends
|
0
|
%
|
||
Expected
volatility
|
200
|
%
|
||
Risk
free interest rate
|
4.00
|
%
|
||
Expected
life of warrants
|
10
years
|
1.
|
Stock
options -
|
235,000
|
|||
2.
|
Stock
options - related party
|
35,000
|
|||
3. |
Stock
warrants -
|
0
|
|||
4. |
Stock
warrants - related party
|
0
|
|||
5. |
Valuation
pursuant to SFAS No. 123R -
|
$
|
70,453
|
1.
|
Stock
options -
|
0
|
|||
2.
|
Stock
options - related party
|
0
|
|||
3.
|
Stock
warrants -
|
0
|
|||
4.
|
Stock
warrants - related party
|
0
|
|||
5.
|
Valuation
pursuant to SFAS No. 123R -
|
$
|
0
|
1.
|
Stock
options -
|
292,500
|
|||
2.
|
Stock
options - related party
|
262,500
|
|||
3.
|
Stock
warrants -
|
171,225
|
|||
4.
|
Stock
warrants - related party
|
144,590
|
|||
5.
|
Valuation
pursuant to SFAS No. 123R -
|
$
|
21,551
|
1.
|
Stock
options -
|
30,000
|
|||
2.
|
Stock
options - related party
|
0
|
|||
3.
|
Stock
warrants -
|
0
|
|||
4.
|
Stock
warrants - related party
|
0
|
|||
5.
|
Valuation
pursuant to SFAS No. 123R -
|
$
|
27,526
|
Number
of
Options
|
Weighted
Average Exercise Price
|
||||||
Stock
Options
|
|||||||
Balance
at December 31, 2003
|
-
|
$
|
-
|
||||
Granted
|
-
|
$
|
-
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
-
|
$
|
-
|
||||
Balance
at December 31, 2004
|
-
|
$
|
-
|
||||
Granted
|
235,000
|
$
|
0.10
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
-
|
$
|
-
|
||||
Balance
at December 31, 2005
|
235,000
|
$
|
0.10
|
||||
Options
exercisable at December 31, 2005
|
235,000
|
$
|
0.10
|
||||
Weighted
average fair value of options granted during 2005
|
$
|
0.10
|
Options
Outstanding
|
Options
Exercisable
|
||||||||||||
Range
of Exercise Price
|
Number
Outstanding
at
December
31, 2005
|
Weighted
Average Remaining
Contractual
Life
|
Weighted
Average Exercise Price
|
Number
Exercisable
at
December
31, 2005
|
Weighted
Average Exercise Price
|
||||||||
$
|
0.10
|
235,000
|
9.36
Years
|
$
|
0.10
|
235,000
|
|
$ |
0.10
|
Number
of
Options/Warrants
|
Weighted
Average Exercise Price
|
||||||
Stock
Options/Warrants
|
|||||||
Balance
at December 31, 2003
|
-
|
$
|
-
|
||||
Granted
|
292,500
|
$
|
0.04
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
-
|
$
|
-
|
||||
Balance
at December 31, 2004
|
292,500
|
$
|
0.04
|
||||
Granted
|
171,225
|
$
|
1.10
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
-
|
$
|
-
|
||||
Balance
at December 31, 2005
|
463,725
|
$
|
0.43
|
||||
Options/Warrants exercisable at December 31, 2005 |
257,479
|
$ |
0.75
|
||||
Weighted average fair value of options granted during 2005 |
|
$ |
1.10
|
Options/Warrants
Outstanding
|
Options/Warrants
Exercisable
|
||||||||||||
Range
of Exercise Price
|
Number
Outstanding
at
December
31, 2005
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average Exercise Price
|
Number
Exercisable
at
December
31, 2005
|
Weighted
Average
Exercise
Price
|
||||||||
$
|
0.03
|
262,500
|
8.71
Years
|
$
|
0.03
|
56,254
|
$
|
0.03
|
|||||
$
|
0.10
|
30,000
|
8.76
Years
|
$
|
0.10
|
30,000
|
$
|
0.10
|
|||||
$
|
1.10
|
171,225
|
9.42
Years
|
|
$
|
1.10
|
171,225
|
|
1.10
|
||||
463,725
|
9.19
Years
|
$
|
0.43
|
257,479
|
$
|
0.75
|
Number
of
Options
|
Weighted
Average Exercise Price
|
||||||
Stock
Options
|
|||||||
Balance
at December 31, 2003
|
80,736
|
$
|
0.12
|
||||
Granted
|
10,000
|
$
|
0.20
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
(60,736
|
)
|
$
|
0.10
|
|||
Balance
at December 31, 2004
|
30,000
|
$
|
0.20
|
||||
Granted
|
-
|
$
|
-
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
-
|
$
|
-
|
||||
Balance
at December 31, 2005
|
30,000
|
$
|
0.20
|
||||
Options exercisable at December 31, 2005 |
30,000
|
$ |
0.20
|
||||
Weighted average fair value of options granted during 2005 | $ |
-
|
Options
Outstanding
|
Options
Exercisable
|
||||||||||||
Range
of Exercise Price
|
Number
Outstanding
at December 31, 2005
|
Weighted
Average Remaining Contractual Life
|
Weighted
Average Exercise Price
|
Number
Exercisable
at December 31, 2005
|
Weighted
Average Exercise Price
|
||||||||
$
|
0.20
|
30,000
|
2.48
Years
|
$
|
0.20
|
30,000
|
$
|
0.20
|
2006:
|
$
|
733,500
|
||
2007:
|
748,500
|
|||
2008:
|
455,163
|
|||
2009:
|
15,000
|
|||
2010:
|
15,000
|
|||
Thereafter:
|
80,000
|
|||
Total:
|
$
|
2,047,163
|
2005
|
2004
|
||||||
Computed
“expected” tax expense (benefit) - Federal
|
$
|
(435,632
|
)
|
$
|
(193,581
|
)
|
|
Computed
“expected” tax expense (benefit) - State
|
(
74,571
|
)
|
(
33,137
|
)
|
|||
Change
in valuation allowance
|
510,203
|
226,718
|
|||||
$
|
-
|
$
|
-
|
Deferred
tax assets:
|
||||
Non-deductible
stock based compensation
|
$
|
(
39,467
|
)
|
|
Net
operating loss carryforward
|
(1,361,881
|
)
|
||
Total
gross deferred tax assets
|
(1,401,348
|
)
|
||
Less
valuation allowance
|
1,401,348
|
|||
Net
deferred tax assets
|
$
|
-
|
Expected
dividends
|
0
|
%
|
||
Expected
volatility
|
200
|
%
|
||
Risk
free interest rate
|
4.44
|
%
|
||
Expected
life of options
|
5
years
|
Expected
dividends
|
0
|
%
|
||
Expected
volatility
|
200
|
%
|
||
Risk
free interest rate
|
4
|
%
|
||
Expected
life of warrants
|
3
years
|
Expected
dividends
|
0
|
%
|
||
Expected
volatility
|
200
|
%
|
||
Risk
free interest rate
|
4.57
|
%
|
||
Expected
life of options
|
3
years
|
(A) |
Office
Employee
|
Expected
dividends
|
0
|
%
|
||
Expected
volatility
|
200
|
%
|
||
Risk
free interest rate
|
4.44
|
%
|
||
Expected
life of warrants
|
3
years
|
Page(s)
|
|
1
|
|
2
|
|
3
|
|
4
|
|
5-16
|
ASSETS
|
||||
Current
Assets
|
||||
Cash
|
$
|
625,783
|
||
Total
Current Assets
|
625,783
|
|||
Equipment,
net of accumulated depreciation of $16,411
|
295,501
|
|||
Total
Assets
|
$
|
921,284
|
||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||
Current
Liabilities
|
||||
Accounts
payable
|
$
|
152,616
|
||
Loans
payable - related party
|
2,509,733
|
|||
Total
Current Liabilities
|
2,662,349
|
|||
Commitments
and Contingencies
|
||||
Stockholders'
Deficit
|
||||
Series
A, convertible preferred stock, $0.001 par value;
5,000,000
|
||||
shares
authorized, issued and outstanding
|
5,000
|
|||
Series
B, convertible preferred stock, $0.001 par value;
10,000,000
|
||||
shares
authorized, none issued and outstanding
|
||||
Common
stock, $0.001 par value; 10,000,000 shares authorized,
|
||||
1,450,000
shares issued and outstanding
|
1,450
|
|||
Additional
paid-in capital
|
3,588,692
|
|||
Deficit
accumulated during the development stage
|
(5,336,207
|
)
|
||
Total
Stockholders' Deficit
|
(1,741,065
|
)
|
||
Total
Liabilities and Stockholders' Deficit
|
$
|
921,284
|
For
the six months
ended
June 30,
|
For
the Period
from
January
8, 2001
(Inception)
to
|
|||||||||
2006
|
2005
|
June
30, 2006
|
||||||||
Operating
Expenses
|
||||||||||
Research
and development
|
736,255
|
213,361
|
$
|
2,903,769
|
||||||
General
and administrative
|
292,617
|
53,783
|
1,572,722
|
|||||||
Compensation
|
190,317
|
33,627
|
454,083
|
|||||||
Merger
costs
|
12,500
|
-
|
50,000
|
|||||||
Total
Operating Expenses
|
1,231,689
|
300,771
|
4,980,574
|
|||||||
Loss
from Operations
|
(1,231,689
|
)
|
(300,771
|
)
|
(4,980,574
|
)
|
||||
Other
Income (Expense)
|
||||||||||
Interest
income
|
-
|
602
|
26,600
|
|||||||
Other
expense
|
-
|
-
|
(1,733
|
)
|
||||||
Total
Other Income, net
|
-
|
602
|
24,867
|
|||||||
Net
Loss
|
$
|
(1,231,689
|
)
|
$
|
(300,169
|
)
|
$
|
(4,955,707
|
)
|
|
Less:
Preferred stock dividend - subsidiary
|
(190,250
|
)
|
(190,250
|
)
|
$
|
(380,500
|
)
|
|||
Net
Loss Applicable to Common Shareholders
|
$
|
(1,421,939
|
)
|
$
|
(490,419
|
)
|
$
|
(5,336,207
|
)
|
|
Net
Loss Per Share - Basic and Diluted
|
$
|
(0.98
|
)
|
$
|
(0.34
|
)
|
$
|
(3.68
|
)
|
|
Weighted
average number of shares outstanding
|
||||||||||
during
the period - basic and diluted
|
1,450,000
|
1,450,000
|
1,450,000
|
Series
A, convertible preferred stock
$0.001
Par Value
|
Common
Stock
$0.001
Par Value
|
Additional
|
Deficit
accumulated
during
|
Total
|
||||||||||||||||||
Number
of
|
Number
of
|
Paid-in
|
development
|
Stockholders'
|
||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
stage
|
Deficit
|
||||||||||||||||
Issuance
of common stock to founders as compensation
($0.0002/share)
|
-
|
$
|
-
|
1,450,000
|
$
|
1,450
|
$
|
(1,100
|
)
|
$
|
-
|
$
|
350
|
|||||||||
Issuance
of preferred stock to founder for cash ($0.06/share)
|
5,000,000
|
5,000
|
-
|
-
|
295,000
|
-
|
300,000
|
|||||||||||||||
Issuance
of stock to founder for cash - subsidiaries
|
-
|
-
|
-
|
-
|
550,250
|
-
|
550,250
|
|||||||||||||||
Net
loss for the period ended December 31, 2001
|
-
|
-
|
-
|
-
|
-
|
(277,868
|
)
|
(277,868
|
)
|
|||||||||||||
Balance,
December 31, 2001
|
5,000,000
|
5,000
|
1,450,000
|
1,450
|
844,150
|
(277,868
|
)
|
572,732
|
||||||||||||||
Issuance
of stock for compensation - subsidiary
|
-
|
-
|
-
|
-
|
67
|
-
|
67
|
|||||||||||||||
Issuance
of stock for consulting services - subsidiary
|
-
|
-
|
-
|
-
|
52
|
-
|
52
|
|||||||||||||||
Grant
of stock options for consulting services - subsidiary
|
-
|
-
|
-
|
-
|
5,890
|
-
|
5,890
|
|||||||||||||||
Net
loss for the year ended December 31, 2002
|
-
|
-
|
-
|
-
|
-
|
(768,508
|
)
|
(768,508
|
)
|
|||||||||||||
Balance,
December 31, 2002
|
5,000,000
|
5,000
|
1,450,000
|
1,450
|
850,159
|
(1,046,376
|
)
|
(189,767
|
)
|
|||||||||||||
Grant
of stock options for compensation - subsidiary
|
-
|
-
|
-
|
-
|
17,984
|
-
|
17,984
|
|||||||||||||||
Net
loss for the year ended December 31, 2003
|
-
|
-
|
-
|
-
|
-
|
(719,307
|
)
|
(719,307
|
)
|
|||||||||||||
Balance,
December 31, 2003
|
5,000,000
|
5,000
|
1,450,000
|
1,450
|
868,143
|
(1,765,683
|
)
|
(891,090
|
)
|
|||||||||||||
Issuance
of common stock for cash - subsidiary
|
-
|
-
|
-
|
-
|
50
|
-
|
50
|
|||||||||||||||
Grant
of stock options for consulting services - subsidiary
|
-
|
-
|
-
|
-
|
10,437
|
-
|
10,437
|
|||||||||||||||
Net
loss for the year ended December 31, 2004
|
-
|
-
|
-
|
-
|
-
|
(602,493
|
)
|
(602,493
|
)
|
|||||||||||||
Balance,
December 31, 2004
|
5,000,000
|
5,000
|
1,450,000
|
1,450
|
878,630
|
(2,368,176
|
)
|
(1,483,096
|
)
|
|||||||||||||
Transfer
of Solovax equity to Pipex
|
-
|
-
|
-
|
-
|
300,290
|
-
|
300,290
|
|||||||||||||||
Grant
of stock options for consulting services
|
-
|
-
|
-
|
-
|
59,960
|
-
|
59,960
|
|||||||||||||||
Grant
of stock options for compensation
|
-
|
-
|
-
|
-
|
10,493
|
-
|
10,493
|
|||||||||||||||
Recognition
of deferred compensation - subsidiary
|
-
|
-
|
-
|
-
|
14,057
|
-
|
14,057
|
|||||||||||||||
Issuance
of Series B, convertible preferred stock for cash -
subsidiary
|
-
|
-
|
-
|
-
|
1,902,500
|
-
|
1,902,500
|
|||||||||||||||
Direct
offering costs in connection with sale of
|
||||||||||||||||||||||
Series
B, convertible preferred stock - subsidiary
|
-
|
-
|
-
|
-
|
(152,200
|
)
|
-
|
(152,200
|
)
|
|||||||||||||
10%
in-kind Series B, convertible
|
||||||||||||||||||||||
preferred
stock dividend - subsidiary
|
-
|
-
|
-
|
-
|
190,250
|
(190,250
|
)
|
-
|
||||||||||||||
Net
loss for the year ended December 31, 2005
|
-
|
-
|
-
|
-
|
-
|
(1,355,842
|
)
|
(1,355,842
|
)
|
|||||||||||||
Balance,
December 31, 2005
|
5,000,000
|
5,000
|
1,450,000
|
1,450
|
3,203,980
|
(3,914,268
|
)
|
(703,838
|
)
|
|||||||||||||
10%
in-kind Series B, convertible
|
||||||||||||||||||||||
preferred
stock dividend - subsidiary
|
-
|
-
|
-
|
-
|
190,250
|
(190,250
|
)
|
-
|
||||||||||||||
Grant
of stock options for compensation
|
-
|
-
|
-
|
-
|
194,462
|
-
|
194,462
|
|||||||||||||||
Net
loss for the period ended June 30, 2006
|
-
|
-
|
-
|
-
|
-
|
(1,231,689
|
)
|
(1,231,689
|
)
|
|||||||||||||
Balance,
June 30, 2006 - unaudited for six months ended June 30,
2006
|
5,000,000
|
$
|
5,000
|
1,450,000
|
$
|
1,450
|
$
|
3,588,692
|
$
|
(5,336,207
|
)
|
$
|
(1,741,065
|
)
|
For
the six months ended June
30,
|
For
the Period
from
January
8, 2001
(Inception)
to
|
|||||||||
2006
|
2005
|
June
30, 2006
|
||||||||
Cash
Flows From Operating Activities:
|
||||||||||
Net
Loss
|
(1,231,689
|
)
|
(300,169
|
)
|
(4,955,707
|
)
|
||||
Adjustments
to reconcile net loss to net cash used in operations
|
||||||||||
Stock
based consulting
|
-
|
-
|
76,354
|
|||||||
Stock
based compensation
|
194,462
|
5,424
|
237,398
|
|||||||
Depreciation
|
14,151
|
-
|
16,411
|
|||||||
Changes
in operating assets and liabilities:
|
||||||||||
Increase
(Decrease) in:
|
||||||||||
Accounts
payable
|
(61,758
|
)
|
-
|
153,206
|
||||||
Net
Cash Used In Operating Activities
|
(1,084,834
|
)
|
(294,745
|
)
|
(4,472,338
|
)
|
||||
Cash
Flows From Investing Activities:
|
||||||||||
Purchase
of property and equipment
|
(27,522
|
)
|
(3,192
|
)
|
(27,522
|
)
|
||||
Net
Cash Provided by Investing Activities
|
(27,522
|
)
|
(3,192
|
)
|
(27,522
|
)
|
||||
Cash
Flows From Financing Activities:
|
||||||||||
Proceeds
from issuance of Series B, convertible preferred stock -
subsidiary
|
-
|
1,902,500
|
1,902,500
|
|||||||
Direct
offering costs in connection with issuance
|
||||||||||
of
Series B, convertible preferred stock - subsidiary
|
-
|
(152,200
|
)
|
(152,200
|
)
|
|||||
Proceeds
from issuance of preferred stock - subsidiaries
|
-
|
-
|
1,150,000
|
|||||||
Proceeds
from loans payable - related party
|
600,349
|
-
|
2,445,343
|
|||||||
Repayments
of loans payable - related party
|
(20,000
|
)
|
(90,361
|
)
|
(220,000
|
)
|
||||
Net
Cash Provided by Financing Activities
|
580,349
|
1,659,939
|
5,125,643
|
|||||||
Net
Increase (Decrease) in Cash
|
(532,007
|
)
|
1,362,002
|
625,783
|
||||||
Cash
at Beginning of year/period
|
$
|
1,157,790
|
$
|
5,046
|
-
|
|||||
Cash
at End of year/period
|
$
|
625,783
|
$
|
1,367,048
|
$
|
625,783
|
||||
Supplemental
disclosure of cash flow information:
|
||||||||||
Cash
paid for interest
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Cash
paid for taxes
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Supplemental
disclosure of non-cash investing and financing
activities:
|
||||||||||
On
December 31, 2004, EPI issued 825,000 shares of common stock
to
acquire a 91.61% ownership in CD4. (See Note
1(A))
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
On
July 31, 2005, Solovax transferred 96.9% of its equity to Pipex
(See Note
1(A))
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
On
December 31, 2005, EPI transferred 65.47% of its equity to Pipex
(See Note
1(A))
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
During
2005, Pipex acquired property and equipment in exchange for
|
||||||||||
a
loan with a related party. (See Note 3)
|
$
|
-
|
$
|
-
|
$
|
284,390
|
||||
During
2006 and 2005, EPI declared a 10% in-kind dividend on its
|
||||||||||
Series
B, convertible preferred stock. (See Note 6(C))
|
$
|
190,250
|
$
|
190,250
|
$
|
380,500
|
Total
loans/ (repayments) per year/period
|
Amount
|
|||
Year
ended December 31, 2001 - loans
|
$
|
-
|
||
Year
ended December 31, 2002 - loans
|
130,520
|
|||
Year
ended December 31, 2003 - loans
|
244,640
|
|||
Year
ended December 31, 2004 - loans
|
785,281
|
|||
Year
ended December 31, 2005 - loans
|
968,943
|
|||
Year
ended December 31, 2005 - repayments
|
(
200,000
|
)
|
||
Six
months ended June 30, 2006 - loans
|
600,349
|
|||
Six
months ended June 30, 2006 - repayments
|
(
20,000
|
)
|
||
Balance,
June 30, 2006
|
$
|
2,509,733
|
Expected
dividends
|
0
|
%
|
||
Expected
volatility
|
200
|
%
|
||
Risk
free interest rate
|
4.44
|
%
|
||
Expected
life of options
|
5
years
|
Expected
dividends
|
0
|
%
|
||
Expected
volatility
|
200
|
%
|
||
Risk
free interest rate
|
4
|
%
|
||
Expected
life of warrants
|
3
years
|
Expected
dividends
|
0
|
%
|
||
Expected
volatility
|
200
|
%
|
||
Risk
free interest rate
|
4.57
|
%
|
||
Expected
life of options
|
3
years
|
Expected
dividends
|
0
|
%
|
||
Expected
volatility
|
200
|
%
|
||
Risk
free interest rate
|
4.44
|
%
|
||
Expected
life of warrants
|
3
years
|
(D) |
Options
and Warrants Rollforward Schedule and Related
Data
|
Number
of
Options
|
Weighted
Average Exercise Price
|
||||||
Stock
Option
|
|||||||
Balance
at December 31, 2004
|
-
|
$
|
-
|
||||
Granted
|
235,000
|
$
|
0.10
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
-
|
$
|
-
|
||||
Balance
at December 31, 2005
|
235,000
|
$
|
0.10
|
||||
Granted
|
903,643
|
$
|
1.48
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
(15,000
|
)
|
$
|
(1.00
|
)
|
||
Balance
at June 30, 2006
|
1,123,643
|
$
|
1.19
|
||||
Options
exercisable at June 30, 2006
|
437,170
|
$
|
0.31
|
||||
Weighted
average fair value of options granted
during 2006
|
$
|
1.48
|
Options
Outstanding
|
Options
Exercisable
|
||||||||||||
Range
of Exercise Price
|
Number
Outstanding
at
June
30, 2006
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average Exercise Price
|
Number
Exercisable
at June 30, 2006
|
Weighted
Average
Exercise
Price
|
||||||||
$
|
0.10
|
446,000
|
7.80
Years
|
$
|
0.10
|
355,153
|
$
|
0.10
|
|||||
$
|
1.00
|
65,000
|
2.59
Years
|
$
|
1.00
|
65,000
|
$
|
1.00
|
|||||
$
|
2.00
|
612,643
|
2.92
Years
|
$
|
2.00
|
17,017
|
$
|
2.00
|
|||||
1,123,643
|
5.61
Years
|
$
|
1.19
|
437,170
|
$
|
0.31
|
Number
of
Options/Warrants
|
Weighted
Average Exercise Price
|
||||||
Stock
Options/Warrants
|
|||||||
Balance
at December 31, 2004
|
292,500
|
$
|
0.04
|
||||
Granted
|
171,225
|
$
|
1.10
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
-
|
$
|
-
|
||||
Balance
at December 31, 2005
|
463,725
|
$
|
0.43
|
||||
Granted
|
-
|
$
|
-
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
-
|
$
|
-
|
||||
Balance
at June 30, 2006
|
463,725
|
$
|
0.43
|
||||
Options exercisable at June 30, 2006 |
257,479
|
$ |
0.75
|
||||
Weighted average fair value of options granted during 2006 | $ |
-
|
Options/Warrants
Outstanding
|
Options/Warrants
Exercisable
|
||||||||||||
Range
of Exercise Price
|
Number
Outstanding
at
June
30, 2006
|
Weighted
Average Remaining
Contractual
Life
|
Weighted
Average Exercise Price
|
Number
Exercisable
at June 30, 2006
|
Weighted
Average
Exercise
Price
|
||||||||
$
|
0.03
|
262,500
|
8.21
Years
|
$
|
0.03
|
56,254
|
$
|
0.03
|
|||||
$
|
0.10
|
30,000
|
8.26
Years
|
$
|
0.20
|
30,000
|
$
|
0.20
|
|||||
$
|
1.10
|
171,225
|
8.92
Years
|
$
|
1.10
|
171,225
|
1.10
|
||||||
463,725
|
8.69
Years
|
$
|
0.43
|
257,479
|
$
|
0.75
|
Number
of
Options
|
Weighted
Average Exercise Price
|
||||||
Stock
Options
|
|||||||
Balance
at December 31, 2004
|
30,000
|
$
|
0.20
|
||||
Granted
|
-
|
$
|
-
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
-
|
$
|
-
|
||||
Balance
at December 31, 2005
|
30,000
|
$
|
0.20
|
||||
Granted
|
-
|
$
|
-
|
||||
Exercised
|
-
|
$
|
-
|
||||
Forfeited
|
-
|
$
|
-
|
||||
Balance
at June 30, 2006
|
30,000
|
$
|
0.20
|
||||
Options exercisable at June 30, 2006 | 30,000 | $ |
0.20
|
||||
Weighted average fair value of options granted during 2006 | $ |
-
|
Options
Outstanding
|
Options
Exercisable
|
|||||||||||
Range
of Exercise Price
|
Number
Outstanding
at June 30, 2006
|
Weighted
Average Remaining Contractual Life
|
Weighted
Average Exercise Price
|
Number
Exercisable
at June 30, 2006
|
Weighted
Average Exercise Price
|
|||||||
$
|
0.20
|
30,000
|
1.99
Years
|
$
|
0.20
|
30,000
|
$
|
0.20
|
(A) |
Office
Space
|
Expected
dividends
|
0
|
%
|
||
Expected
volatility
|
200
|
%
|
||
Risk
free interest rate
|
4.99
|
%
|
||
Expected
life of warrants
|
3
years
|