10-Q 1 grupo10q12312008.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2008 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File No. 000-30603 HIV-VAC, INC. ------------- (Exact name of registrant as specified in its charter) Nevada 86-0876846 ------ ---------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 14 Laurel Blvd, Collingwood, Ontario Canada L9Y 5A8 ----------------------------------- (Address of principal executive offices, Including zip code) (705) 446-7242 -------------- Registrant's telephone number, including area code Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |_| No |X| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes |_| No |_| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act: (Check one): Large accelerated filer |_| Accelerated filer |_| Non-accelerated filer |_| Smaller reporting company |X| Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes |_| No |X| The issuer has two classes of stock with 10,430,652 common shares and 300,000 preferred "B" outstanding as of September 30, 2011. HIV-VAC INC. (A Development Stage Company) INDEX TO UNAUDITED CONDENSED FINANCIAL STATEMENTS PAGE ---- PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONDENSED BALANCE SHEET AS OF DECEMBER 2008 (UNAUDITED) 3 CONDENSED STATEMENTS OF OPERATIONS THREE MONTHS ENDED DECEMBER 31, 2008 AND 2007 PERIOD FROM JANUARY 10, 1997 (DATE OF INCEPTION) TO DECEMBER 31, 2008 (UNAUDITED) 4 CONDENSED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED DECEMBER 31, 2008 AND 2007 AND PERIOD FROM JANUARY 10, 1997 (DATE OF INCEPTION) TO DECEMBER 31, 2008 (UNAUDITED) 5-6 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 7-10 ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 11 AND RESULTS OF OPERATIONS ITEM 4. CONTROLS AND PROCEDURES 12 PART II-- OTHER INFORMATION 13 ITEM 1. LEGAL PROCEEDINGS 13 ITEM 1A RISK FACTORS 13 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 13 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 13 ITEM 4. REMOVED OR RESERVED 13 ITEM 5. OTHER INFORMATION 13 ITEM 6. EXHIBITS 13 Exhibit 31.1 Exhibit 32.1 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS HIV-VAC, INC. (A Development Stage Company) BALANCE SHEETS (Unaudited) ASSETS December 31, September 30, 2008 2008 ------------ ------------- Current Assets Cash and equivalents $ 841 $ 897 ------------ ------------- Total current assets 841 897 ------------ ------------- Furniture and equipment, net 4,154 4,289 ------------ ------------- Total assets $ 4,995 $ 5,186 ============ ============= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities Accrued liabilities: Related parties 539,078 538,899 Accrued Liabilities 194,471 184,971 Accounts payable 74,749 92,508 ------------ ------------- Total Current Liabilities 808,298 $ 816,378 ------------ ------------- Stockholders' Equity (Deficit) Preferred stock, $0.01 par value; 10,000,000 shares authorized Series A, non-preferential; 10,000 issued and Outstanding 100 100 Series B, convertible, non-preferential; 1,000,000 and -0- shares issued and outstanding, respectively 3,000 3,000 Common stock, $0.001 par value; 500,000,000 shares authorized; 9,830,652 and 9,830,652 shares issued and outstanding, respectively 9,831 9,831 Additional paid in capital 6,434,160 6,434,160 Deficit accumulated during the development stage (7,172,771) (7,162,226) Accumulated other comprehensive loss (77,623) (96,057) ------------ ------------- Total stockholders' equity (deficit) (803,303) (811,192) ------------ ------------- Total liabilities and stockholders' equity (deficit) $ 4,995 $ 5,186 ============ ============= See accompanying notes to unaudited condensed financial statements. 3 HIV-VAC, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS FOR THE QUARTERS ENDED DECEMBER 31, 2008, 2007 AND FOR THE PERIOD FROM JANUARY 10, 1997 (INCEPTION) TO DECEMBER 31, 2008 Period from January 10, 1997 Quarter Quarter (Inception) Ended Ended to December 31, December 31, December 31, 2008 2007 2008 ------------ ------------ ------------ Expenses Write down of intangible asset -- 53,963 53,963 Patent fees -- 24,489 2,045,239 Research and development costs 5,230 5,024 1,798,500 General and administrative 5,180 4,680 800,482 Depreciation and amortization 135 156 175,300 Legal fees -- -- 1,500,028 Licensing fees -- -- 635,500 Loss from disposal of assets -- -- 30,195 ------------ ------------ ------------ 10,545 88,312 7,039,207 ------------ ------------ ------------ Loss from operations (10,545) (88,312) (7,039,207) ------------ ------------ ------------ Other Income (Expense) Other expenses -- -- (261,162) Interest income -- 566,005 569,779 ------------ ------------ ------------ Total other income (expense) -- 566,005 308,617 ------------ ------------ ------------ Loss from continuing operations (10,545) 477,693 (6,730,590) Loss from discontinued operations -- -- (432,181) ------------ ------------ ------------ Net profit (loss) (10,545) 477,693 (7,162,771) ============ ============ ============ Foreign Currency Translation Adjustment (18,576) 1,863 (77,622) ------------ ------------ ------------ Comprehensive Loss (29,121) 479,556 (7,240,393) ============ ============ ============ Profit(Loss) per weighted number of outstanding shares- basic and diluted $ 0.00 $ 0.05 ============ ============ Weighted average number of common shares outstanding during period - basic and diluted 9,830,653 9,830,653 ============ ============ See accompanying notes to unaudited condensed financial statements. 4

HIV-VAC, INC. (A Development Stage Company) ~~STATEMENT~~CONDENSED STATEMENTS OF ~~OPERATIONS~~CASH FLOWS FOR THE THREE MONTHS ENDED ~~JUNE~~DECEMBER 30, 2008 &AND 2007, ~~THE NINE MONTHS ENDED JUNE 30, 2008 & 2007~~ AND FOR THE PERIOD FROM JANUARY 10, 1997 (INCEPTION) TO ~~JUNE~~DECEMBER 3031, 2008 (UNAUDITED) Period from January 10, 1997 ~~Three~~(Inception) ~~Months~~For ~~Ended~~the ~~Nine~~Three Months ~~Ending~~Ended ~~(Inception)~~to ------------------------ ----~~--------------------~~ toDecember ~~June 30~~31, ~~June~~December 3031, ~~June~~December 3031, ~~June 30, June 30,~~ 2008 ~~2007~~ 2008 2007 ~~2008~~ ---------- --~~--------~~ ---------- --~~--------~~ ------------ ~~Expenses~~Cash ~~Patent~~Flows ~~fees~~From --Operating ~~24,488~~Activities: 24Net profit (loss) $ (7,~~489~~162,771) 70$ (10,~~487~~545) 2$ 477,~~045,239~~693 ~~Research~~Adjustments ~~and~~to ~~development~~reconcile ~~costs~~net ~~4,990~~loss ~~4,981~~to ~~15,012~~net ~~14,868~~cash ~~1,787,380~~used ~~General~~in operating activities: Amortization and ~~administrative~~depreciation 4175,~~680~~300 ~~4,501~~135 ~~14,040~~157 ~~14,221~~Officers' ~~789~~compensation capitalized 100,~~122~~000 ~~Depreciation~~-- ~~and~~-- ~~amortization~~Other ~~156~~expenses ~~4,034~~relating ~~54,432~~to ~~12,103~~Noveaux ~~228,971~~and ~~Legal~~LifePlan ~~fees~~acquisitions 261,163 -- -- Issuance of stock for services 2,439,300 -- -- ~~1,500,028~~Issuance ~~Licensing~~of stock for licensing fees 2,135,500 -- -- Issuance of stock for directors and officers compensation 110,100 -- -- ~~635~~Issuance of stock for note payable 140,~~500~~000 ~~Loss~~-- -- Gain on ~~disposal~~forgiveness of ~~assets~~debt (566,005) -- (566,005) (Decrease) in notes payable (140,000) -- -- Write-down of intangible asset 53,963 -- 3053,~~195~~963 Increase (decrease) in accrued liabilities 744,124 10,175 9,516 ------------ ------------ ------------ Net Cash Used in Operating Activities (1,709,326) (235) (187) ------------ ------------ ~~9,826~~------------ ~~38,004~~Cash ~~107,973~~Flow ~~111,679~~From 7Investing Activities: Purchase of patent rights (85,~~016,435~~000) -- -- Purchase of furniture and equipment (48,416) -- -- Purchase of treasury stock (11,767) -- -- Cash acquired in acquisition 120,272 -- -- ---- -------- -- ---------- ------------ ~~Loss~~Net ~~from~~Cash ~~operations~~Used ~~(9,826)~~in ~~(38,004)~~Investing ~~(107,973)~~Activities (~~111~~13,~~679~~144) ~~(7,016,435)~~ -- -- ------ ------ ---- -------- -- ---------- Cash Flows from Financing Activities: Proceeds from issue of preferred stock series B 10,000 -- -- Proceeds from issuance of common stock 689,164 -- --~~---~~ ~~Other~~Purchase ~~Income~~of treasury stock (~~Expense~~11,767) ~~Other expenses~~ -- -- Proceeds from notes payable 140,000 -- -- ~~(261~~Proceeds from advances from related parties 539,~~162)~~078 ~~Other~~179 ~~Income~~179 Proceeds from sale of treasury stock and warrants 15,000 -- -- ~~566,005~~Payment of stockholder's loan (272) -- ~~569~~-- Proceeds from additional paid in capital 342,~~779~~108 -- -- ------ ------ ---- -------- -- ---------- Net Cash Provided by Financing Activities 1,723,311 179 179 ----------- -- -- -- -- ~~308,617~~ ------ ---- -------- Net increase (decrease) in cash 841 (56) (8) Cash and equivalents at beginning of period -- 897 952 ------------ ------------ ------------ ~~Loss~~Cash ~~from~~and ~~continuing~~equivalents ~~operations~~at (9end of period $ 841 $ 841 $ 944 ============ ============ ============ See accompanying notes to unaudited condensed financial statements. 5 HIV-VAC,~~826)~~ INC. (~~38,004~~A Development Stage Company) ~~458~~CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 30,~~032~~ ~~(111~~2008 AND 2007 AND FOR THE PERIOD FROM JANUARY 10,~~679)~~ 1997 (6INCEPTION) TO DECEMBER 31,~~707,818~~ 2008 (UNAUDITED) ~~Loss~~Period from ~~Discontinued~~January ~~Operations~~10, 1997 (Inception) For the Three Months Ended to -- -- -- -- ~~(432,181)~~ ---------- ---------- December 31, December 31, December 31, 2008 2008 2007 ------------ ------------ ------------ ~~Net~~Supplemental ~~loss~~Disclosure ~~(9,826)~~of ~~(38,004)~~Cash ~~458,032~~Flow ~~(111,679)~~Information: (7Cash paid during the period for: Issuance of common shares for Noveaux merger $ 106,~~139,999)~~525 $ -- $ -- ========== ==~~========~~ ========== ==~~========~~ ============ ~~Foreign~~Issuance ~~Currency~~of ~~Translation~~common ~~Adjustment~~shares ~~(--)~~for ~~(13,312)~~LifePlan ~~1,974~~merger ~~(38,255)~~$ ~~(105~~50,~~362)~~000 ~~Comprehensive~~$ ~~Loss~~-- ~~(9,826)~~$ ~~(51,216)~~-- ~~(460,006)~~============ ~~(149,934) (7,245,361)~~ ============ ============ Preferred B stock dividend $ 10,000 $ -- $ -- ============ ============ ============ ~~Loss~~Forgiveness ~~per weighted average share~~ of ~~common~~stockholder ~~stock~~debt ~~outstanding - basic and diluted~~ $ ~~(0.00)~~7,227 $ ~~(0.00)~~-- $ ~~(0.05)~~-- ~~$ (0.02)~~ ========== == ======== ==== ====== ======~~====~~ ~~Weighted~~Cancellation ~~average number~~ of ~~common~~treasury ~~shares~~stock ~~outstanding~~$ ~~during~~(8,767) ~~period~~$ -- ~~basic~~$ ~~and~~-- ~~diluted 9,830,652 9,830,652 9,830,652 9,830,652~~ ========== == ======== ==== ====== ======~~====~~

See accompanying notes to unaudited condensed financial statements. 6 HIV-VAC, INC. (A DEVELOPMENT STAGE ENTERPRISE) NOTES TO CONDENSED FINANCIAL STATEMENTS DECEMBER 31, 2008. (UNAUDITED) The unaudited condensed financial statements of HIV-VAC, Inc. included herein have been prepared by HIV-VAC pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information or footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of HIV-VAC's management, the accompanying unaudited condensed financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial information included herein. These financial statements should be read in conjunction with HIV-VAC's audited financial statements contained in its Annual Report on Form 10-K for the year ended September 30, 2008. NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Operations: HIV-VAC, Inc. (the "Company"), formerly known as Personna Records, Inc. (Personna) was incorporated on January 10,1997 in the State of Nevada. Personna (originally known as Sonic Records, Inc.) was engaged in the production and distribution of musical records. In April 1998, Personna merged with Nouveaux Corporation whereby Personna became the surviving corporation. The Company changed its name to Grupo International Inc on September 30, 2010. Development Stage Enterprise: HIV-VAC Inc reverted to a development stage enterprise when it disposed of its music recording assets (March 1999) and commenced the research and development of its HIV vaccine. The Company's principal activities since March 1999 have included defining and conducting research programs, conducting animal clinical trials, raising capital and researching ways to enhance the company's intellectual property. The Company has not yet commenced human trials. Going Concern: The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced recurring losses since inception and has negative net working capital and cash flows from operations. For the years ended September 30, 2008 , the Company experienced a net gain of $445,805, after accounting for a gain on the forgiveness of debt amounting to $566,005. For the year ended December 31, 2007, the Company recorded a loss of $153,870 The Company's ability to continue as a going concern is contingent upon its ability to secure additional financing, initiate sale of its product, and attain profitable operations. Management is pursuing various sources of equity financing. Although the Company plans to pursue additional financing, there can be no assurance that the Company will be able to secure financing or obtain financing on terms beneficial to the Company. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. Fixed Assets: Fixed assets are stated at cost. Maintenance and repairs are expensed in the period incurred; major renewals and betterments are capitalized. When items of property are sold or retired, the related costs are removed from the accounts and any gain or loss is included in income. Depreciation is computed using the diminishing balance method using 15%pa for office equipment and 10% pa for office furniture. Intangible Assets: Intangible assets consisted of licensing rights. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. The licensing rights were returned to the license holder effective December 1, 2007. The Company recognized an impairment loss for the book value of the intangible asset at that time. Cash and Cash Equivalents: For purposes of the cash flow statement, the Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. 7 HIV-VAC, INC. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Fair Value of Financial Instruments: The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. Income Taxes: The Company accounts for income taxes under Financial Accounting Standards Board of Financial Accounting Standards No. 109, "Accounting for Income Taxes." Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. No current or deferred income tax expense or benefit were recognized due to the Company not having any material operations for the periods ended December 31, 2008 and 2007. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates of assets and liabilities and disclosure of contingent assets and liabilities at the date of the finical statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Net Loss Per Common Share: Basic and diluted net loss per common share for the periods ended December 31 2008, and 2007 are computed based on the weighted average common shares outstanding as defined by Statement of Financial Accounting Standards No. 128, "Earnings Per Share". Common stock equivalents have not been included in the computation of diluted loss per share since the effect would be anti-dilutive. Foreign Currency: Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are charged or credited to other comprehensive income. Recent Accounting Announcements: The Company has reviewed the recent accounting pronouncements and has determined that there are no recent accounting pronouncements that will have a material effect on the Company's financial statements. Stock Issued For Services: The company enters into transactions in which goods or services are the consideration received for the issue of equity instruments. The value of these transactions are measured and accounted for, based on the fair value of the equity instrument issued or the value of the services, whichever is more reliably measurable. The services are expensed in the periods that they are rendered. NOTE 2 - FIXED ASSETS Fixed Assets consisted of the following: December 31, September 30, 2008 2008 ------------- ------------- Furniture $ 936 $ 936 Equipment 47,480 47,840 ------------- ------------- 48,416 48,416 Less accumulated depreciation (44,262) (44,127) ------------- ------------- Net $ 4,154 $ 4,289 ============= ============= Depreciation expense for the three months ended December 31, 2008 and the year ended September 30, 2008, was $135 and $722 respectively. 8 HIV-VAC, INC. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 4 - LICENSING AGREEMENT On March 15, 1999, the Company entered into an agreement with Intracell Vaccines Limited (Intracell) whereby the Company issued 57,500 shares of Common Stock, 10,000 Preferred Stock and $85,000 for an aggregate amount of $185,000 in exchange for the worldwide licensing rights to an AIDS/HIV vaccine developed by The University of Birmingham, UK. The Company also agreed to make advance minimum royalty payments of $80,500 to the University of Birmingham Research and Development Limited commencing January 1, 2002. The minimum payments are for the duration of the patents. The Company had not made any payments as at the date of this report. In April 6, 1999, this agreement was amended to include an anti-dilution clause which provided for Intracell and its shareholders to maintain an equity position of 60% of the common shares of the Company until the company had raised $5 million. Specifically, when the Company issues stock to others, the anti-dilution clause requires the Company to issue additional stock to Intracell so that Intracell maintains its 60% interest in the Company. The Company failed to attract financing as agreed under the agreement with Intracell Vaccine Ltd, and on August 7, 2001 the Company amended the agreement with Intracell , whereby Intracell agreed to waive its right to terminate the assignment of license agreement provided that the Company issue an additional 3,000,000 of its common shares to Intracell and 7,500,000 options to purchase shares of common stock of the Company. Such options expired on September 1, 2007. The market value of the shares issued to Intracell which amounted to $1.5 million was expensed to patent fees. Because it was unlikely that the company would commercialize the patents prior to their expiration in 2011, the Company terminated the license agreement with the University of Birmingham on December 01, 2007. Under the termination agreement, the University agreed to waive past royalty payments outstanding in the amount of $566,005. NOTE 5 - STOCKHOLDERS' EQUITY No shares were issued by the Company during the quarters ended December 31, 2008 and December 31, 2007 reporting period NOTE 6 - COMMITMENTS AND CONTINGENCIES Royalty Payments under Licensing Agreement - The Company was committed to make minimum royalty payments of (pound)50,000 ($80,500) per annum, in advance to the University of Birmingham Research and Development Limited, commencing January 1, 2002. The Company did not make any of the payments. The License agreement was mutually terminated on December 01, 2007. Under the agreement, the licensor agreed to forgo $ 566,005 in license fees. The Company is committed to pay the licensor a cancellation fee of $47,741 when funds become available. 9 HIV-VAC, INC. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 7 - INCOME TAXES Due to net operating losses and the uncertainty of realization, no tax benefit has been recognized for operating losses. At December 31, 2008, net operating losses of approximately $6,000,000 are available for carry forward against future years' taxable income and begin expiring in the year 2014. The Company's ability to utilize its net operating loss carry forwards is uncertain and thus no valuation reserve has been provided against the Company's net deferred tax assets. NOTE 8 - RELATED PARTY TRANSACTIONS The Company accrued $9,000 in directors fees for certain controlling stockholders for the three month period ended December 31, 2008 and $8,000 for the three months ended December 31, 2007. As of December 31, 2008 and September 30, 2007, the balance due to related party stockholders arising from the normal course of business was $539,078 and $538,999 respectively. NOTE 9 - SUBSEQUENT EVENTS a) On August 23, 2010, the Company entered into an irrevocable agreement to acquire 80% of the issued and outstanding share capital of Richard Y Lange, a Mexican corporation, through the issue of 8,000,000 of the Company's common shares valued at $0.25 per common share. Under the agreement, Richard Y Lange warrants that shareholders equity in Richard Y Lange will not be less than 70,000,000 pesos ($5,995,000). Richard Y Lange is involved in construction, property development and product distribution. It also owns a block plant and a sand pit. The agreement will close as soon as Richard Y Lange has verified its assets through audit or as agreed to by the parties. The Company represents, at Closing, there will be 10,421,916 common shares and 300,000 Preferred "B" shares outstanding. Thus the Company has agreed to reduce the number of common shares by 8,736. b) The Company changed its name to Grupo International Inc. on September 2, 2010. 10 ITEM 2. MANAGAMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Plan of Operation We were incorporated in January of 1997, and do not have any significant operating history or financial results. In 2000 we began our vaccine development and marketing operations, including the pre-clinical testing in Russia of our proposed vaccine designed to combat HIV/AIDS, building an infrastructure and general research.. To date, we have been unable to obtain the funding that we need to move forward to a phase I trial. We returned the License that we held for the vaccine back to the licensor, as the license expires in 2011 and we did not believe that we would be able to commercialize the vaccine prior to the expiration of the patents. Under the termination agreement, the licensor agreed to forgo $566,005 in outstanding royalty payments, and the Company agreed to pay a cancelation fee of $34,357 when funds become available. Research and development costs for the three months ended December 31, 2008 increased by $106 from $5,024 for the three months ended December 31, 2007 to $5,230 for the three months ended December 31, 2008. The increase in expenditure was due to a weaker US dollar. Administrative expenditure increased by $500 from $4,680 for the three months ended December 31, 2007 to $5,180 for the three months ended 31 December 2008. For the quarter ended December 31, 2007, we incurred a gain of $566,005 from the forgiveness of debt by the licensor. We also incurred an impairment charge of $53,963 on the intangible assets. We achieved a loss of $10,545 or $(0.00) per share based on 9,830,653 weighted average shares outstanding for the quarter ended December 31, 2008 compared to a gain of $477,693 or $0.05 per share based on 9,830,653 weighted average shares outstanding for the quarter ended December 31, 2007. We did not conduct any operations of a commercial nature during the period from January 10, 1997 (date of inception) to December 31, 2008. Through December 31, 2008 we have relied on advances of approximately $539,078 from our principal stockholders, trade payables of approximately $549,653, proceeds of $1,196,000 from the sale of common stock and the issue of stock for fees and/or services in the amount of $4,665,600 to support our limited operations. As of December 31, 2008, we had $841 of cash and cash equivalents. Operations for the three months ended December 31, 2008 have been financed through a loan from related parties and an increase in payables. We seek additional equity or debt financing of up to $7 million which we plan to use to use for working capital and to continue implementing pre-clinical and Phase I/II testing of our proposed vaccine. If we do not get sufficient financing, we will not be able to continue as a going concern and we may have to curtail or terminate our operations and liquidate our business (see Note 1 to financial statements). Our business plan requires at least $6,000,000 to implement, and cannot be implemented until funding for this amount has been achieved. If the funding is achieved, we plan, in the first year, to implement a PhaseI/II trial with the Medical Control Agency in The United Kingdom through the application for a CTX exemption to commence a Phase I/II trial. We plan to apply for a CTX exemption using the Clade B strain of the virus as soon as a vaccine using the local Clade B strain is made available. The manufacture of the vaccine will be contracted out and the Company is currently evaluating various different manufacturers in Russia, the UK and the USA. We also plan, subject to financing, in the future, to initiate further trials in Russia, in conjunction with The Russia Federal Aids Center, a department of The Central Institute of Epidemiology, Moscow, Russia. We intend to institute studies of the efficacy of the vaccine in non-human primates in parallel or preceding Phase I trials of the vaccine in human subjects in Moscow, Russia. We expect the regulatory approval process to take up to six months to complete. The proposed vaccine could be manufactured in Russia, under the supervision and quality control of various parties within and without Russia, including the Federal Russia AIDS Centre in Moscow and laboratories in Birmingham and London, U.K. In addition, and subject to financing, we anticipate initiating a Phase I/II trial in Sub-Sahara Africa using the local African HIV sub-type. These trials will be done in conjunction with local Government and would commence after a satisfactory pre-clinical trial has completed the evaluation of toxicity and immunogenicity of the local strain. However, we cannot initiate the pre-clinical or Phase I/II trials until such time as we have raised at least $6 million, which is the minimum amount we anticipate we will need for these trials. Furthermore, in addition to restrictions due to lack of funding, we also need to manufacture a batch of the vaccine to initiate these trials. We cannot manufacture a batch until we have an agreement in place with a country in Africa that is prepared to work with us. It is estimated that these pre-clinical trials would take approximately twelve months to complete once we have an agreement in place. If these trials take place, we intend to invite the Division of AIDS of National Institute of Allergy and Infectious Diseases to monitor the African trials. 11 No trials are currently scheduled to take place in the United States. However, it is our intention to invite the National Institute of Health (NIH) through the offices of The Division of AIDS (DIADS) to assist in the planning and execution of the trials and monitor the trials described above. The results of the proposed trials in Russia and/or Africa and the UK cannot be predicted. We estimate that we will require approximately $6 million to $7 million to conduct our vaccine development activities through the next two years. This amount will be used to pay for vaccine manufacture, vaccine trial costs and testing, equipment and corporate overhead. We are hoping to raise a minimum of $6 million through one or more private offerings pursuant to Rule 506 or Regulation D or through an offshore offering pursuant to Regulation S; however, nothing in this quarterly report shall constitute an offer of any securities for sale. Such shares if sold will not have been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. In addition we are looking at other financing methods including finding joint venture partners who might provide substantial funding to the project or the granting of sub-licenses on payment of upfront fees with the payment of on-going royalties on sales. We are also looking for grants from governments and organisations involved in HIV work. We are also looking at the possibility of acquiring other technologies which might assist in financing. If we are unable to raise $6 million, we will most likely cease all activity related to our vaccine development and marketing, or at the very least, proceed on a reduced scale. We have to date relied on a small number of investors to provide us with financing for the commencement of our development program, including Intracell Vaccines Limited. Amounts owed to these individuals are payable upon demand. Subject to financing, we expect to purchase approximately $500,000 in equipment in the next two years to be used for research and expanding testing laboratories. In addition, with available funding, we expect to hire an additional fifteen employees for both research and administrative support over the next five years. Item 3. Controls and Procedures. (a) Disclosure controls and procedures . Within 90 days before filing this report, the Company evaluated the effectiveness of the design and operation of its disclosure controls and procedures. The Company's disclosure controls and procedures are the controls and other procedures that it designed to ensure that it records, processes, summarizes and reports in a timely manner the information it must disclose in reports that it files with or submits to the Securities and Exchange Commission. Kevin W. Murray, the Company's Chief Executive Officer and Chief Financial Officer, supervised and participated in this evaluation. Based on this evaluation, Mr. Murray concluded that, as of the date of their evaluation, the Company's disclosure controls and procedures were effective. (b) Internal controls. Since the date of the evaluation described above, there have not been any significant changes in the Company's internal accounting controls or in other factors that could significantly affect those controls. 12 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We are not currently subject to any legal proceedings or claims. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS No securities were issued during the period under review. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits: Exhibits required to be attached by Item 601 of Regulation S-B are listed below: 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K: No reports on Form 8-K were filed during the period covered by this Form 10Q-SB. 13 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be Signed on its behalf by the undersigned, thereunto duly authorized, this 30th day of September 2011. HIV-VAC, INC. /s/ Kevin W. Murray ----------------------------- Kevin W. Murray President and CEO 14

HIV-VAC, INC. (A Development Stage Company) CONDENSED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED JUNE 30, 2008 AND 2007 AND FOR THE PERIOD FROM JANUARY 10, 1997 (INCEPTION) TO JUNE 30, 2008 (UNAUDITED) Period from January 10, 1997 (Inception) For the Nine Months Ended to -------------------------- June 30, June 30, June 30, 2008 2008 2007 ----------- ----------- ----------- Cash Flows From Operating Activities: Net loss $(7,139,999) 458,032 (111,679) Adjustments to reconcile net loss to net cash used in operating activities: Amortization and depreciation 175,009 470 12,104 Officers' compensation capitalized 100,000 -- -- Other expenses relating to Noveaux acquisition 261,163 -- -- Issuance of stock for services 2,439,300 -- -- Issuance of stock for licensing fees 2,135,500 -- -- Issuance of stock for directors and officers compensation 110,100 -- -- Issuance of option for note payable 140,000 -- -- Increase in prepaid expenditure -- 24,489 (27,467) Gain on forgiveness of debt (566,005) (566,005) -- (Decrease) in notes payable (140,000) -- -- Write-down of intangible asset 53,963 53,963 -- Increase in current liabilities 722,586 28,503 126,343 ----------- ----------- ----------- Net Cash Used in Operating Activities (1,708,383) (548) (699) ----------- ----------- ----------- Cash Flow From Investing Activities: Purchase of patent rights (85,000) -- -- Purchase of furniture and equipment (48,416) -- -- Cash acquired in acquisition 120,272 -- -- ----------- ----------- ----------- Net Cash Used in Investing Activities (13,144) -- -- ----------- ----------- ----------- Cash Flows from Financing Activities: Proceeds from issue of preferred stock series B 10,000 -- -- Proceeds from issuance of common stock 689,164 -- -- Purchase of treasury stock (11,767) -- -- Proceeds from notes payable 140,000 -- -- Proceeds from advances from related parties 538,238 539 719 Proceeds from sale of treasury stock and warrants 15,000 -- -- Payment of stockholder's loan (272) -- -- Proceeds from additional paid in capital 342,108 -- -- ----------- ----------- ----------- Net Cash Provided by Financing Activities 1,722,471 539 719 ----------- ----------- ----------- Net increase (decrease) in cash 944 (8) 20 Cash and equivalents at beginning of period -- 952 924 ----------- ----------- ----------- Cash and equivalents at end of period $ 944 $ 944 $ 944 =========== =========== =========== See accompanying notes to unaudited condensed financial statements. 5 HIV-VAC, INC. (A Development Stage Company) CONDENSED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED JUNE 30, 2008 AND 2007 AND FOR THE PERIOD FROM JANUARY 10, 1997 (INCEPTION) TO JUNE 30, 2008 (UNAUDITED) Period from January 10, 1997 (Inception) For the Nine Months Ended to -------------------------- June 30, June 30, June 30, 2008 2008 2007 ----------- ----------- ----------- Supplemental Disclosure of Cash Flow Information: Issuance of common shares for Noveaux merger $ 106,525 $ -- $ -- =========== =========== =========== Issuance of common shares for LifePlan merger $ 50,000 $ -- $ -- =========== =========== =========== Preferred B stock dividend $ 10,000 $ -- $ -- =========== =========== =========== Forgiveness of stockholder debt $ 7,227 $ -- $ -- =========== =========== =========== Cancellation of Treasury stock $ (8,767) $ -- $ -- =========== =========== ===========

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