10-Q 1 grupo10q06302009.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 June 30, 2009 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| There were 10,430,652 shares of common stock outstanding, and 300,000 shares of preferred series "B" stock 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 JUNE 2009 (UNAUDITED) 3 CONDENSED STATEMENTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2009 AND 2008 PERIOD FROM JANUARY 10, 1997 (DATE OF INCEPTION) TO JUNE 30, 2009(UNAUDITED) 4 CONDENSED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED JUNE 30, 2009 AND 2008 AND PERIOD FROM JANUARY 10, 1997 (DATE OF INCEPTION) TO JUNE 30, 2009 (UNAUDITED) 5-6 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 7-11 ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 12 AND RESULTS OF OPERATIONS ITEM 4. CONTROLS AND PROCEDURES 13 PART II-- OTHER INFORMATION 15 ITEM 1. LEGAL PROCEEDINGS 15 ITEM 1A RISK FACTORS 15 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 15 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 15 ITEM 4. REMOVED OR RESERVED 15 ITEM 5. OTHER INFORMATION 15 ITEM 6. EXHIBITS 15 Exhibit 31.1 Exhibit 32.1 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS HIV-VAC, INC. (A Development Stage Company) BALANCE SHEET (Unaudited) ASSETS June 30, September 30, 2009 2008 ------------ ------------ Current Assets Cash and equivalents $ 872 $ 897 ------------ ------------ Total current assets 872 897 ------------ ------------ Furniture and Equipment, Net (Note 3) 3,882 4,289 ------------ ------------ Total assets $ 4,754 $ 5,186 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts Payable 86,796 92,508 Accrued Liabilities 213,471 184,971 Related Parties (Note 8) 539,467 538,899 ------------ ------------ Total Current Liabilities 839,734 $ 816,378 ------------ ------------ Stockholders' 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 1,000.000 shares issued and outstanding, respectively 3,000 3,000 Common stock, $0.001 par value; 500,000,000 shares authorized; 9,831,652 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 (7,193,977) (7,162,226) Accumulated other comprehensive loss (88,094) (96,057) ------------ ------------ Total stockholders' deficit (834,980) (811,192) ------------ ------------ Total liabilities and stockholders' deficit $ 4,754 $ 5,186 ============ ============ See accompanying notes to unaudited condensed financial statements. 3

HIV-VAC, INC. (A Development Stage Company) ~~CONDENSED~~STATEMENT ~~STATEMENTS~~ OF ~~CASH~~OPERATIONS ~~FLOWS~~ FOR THE THREE MONTHS ENDED ~~DECEMBER~~JUNE 30, 2009 & 2008, ~~AND~~THE ~~2007~~NINE MONTHS ENDED JUNE 30, 2009 & 2008 AND FOR THE PERIOD FROM JANUARY 10, 1997 (INCEPTION) TO ~~DECEMBER~~JUNE 3130, ~~2008~~2009 (UNAUDITED) Period from January 10, 1997 ~~(Inception)~~Three ~~For~~Months ~~the~~Ended ~~Three~~Nine Months ~~Ended~~Ending to(Inception) ------------------------ ------------------------ ~~December~~to 31June 30, ~~December~~June 3130, ~~December~~June 3130, June 30, June 30, 2009 2008 2009 2008 ~~2007~~2009 ---------- -- -------- ---------- ---------- ----------- ~~Cash~~Expenses ~~Flows~~Research ~~From~~and ~~Operating~~development ~~Activities:~~costs ~~Net~~5,329 ~~profit~~4,990 ~~(loss) $ (7~~15,~~162,771)~~774 ~~$ (10~~15,~~545)~~012 ~~$ 477~~1,~~693~~799,043 ~~Adjustments~~General ~~to reconcile net loss to net cash used in operating activities: Amortization~~ and ~~depreciation~~administrative ~~175~~5,~~300~~210 ~~135~~4,680 ~~157~~15,570 ~~Officers'~~14,040 ~~compensation~~830,873 ~~capitalized~~Legal ~~100,000~~fees -- -- ~~Other~~-- ~~expenses~~-- ~~relating~~1,500,028 toLicensing ~~Noveaux~~fees ~~and LifePlan acquisitions 261,163~~ -- -- ~~Issuance of stock for services 2,439,300~~ -- -- ~~Issuance~~635,500 ofPatent ~~stock for licensing~~ fees ~~2,135,500~~-- -- -- ~~Issuance~~24,489 of2,045,239 ~~stock~~Loss ~~for~~on ~~directors~~disposal ~~and~~of ~~officers~~assets ~~compensation 110,100~~ -- -- ~~Issuance of stock for note payable 140,000~~ -- -- ~~Gain~~30,195 onDepreciation ~~forgiveness~~and ofamortiszation ~~debt~~135 ~~(566,005)~~156 --407 ~~(566~~54,~~005)~~432 ~~(Decrease)~~175,572 inWrite ~~notes~~down ~~payable~~of ~~(140,000)~~intangible assets -- -- ~~Write~~-~~down~~- ~~of intangible asset 53,963~~ -- 53,963 ~~Increase~~Gain ~~(decrease)~~on inforgiveness ~~accrued~~of ~~liabilities~~debt ~~744,124 10,175 9,516~~ -- -- --~~------~~ (566,005) (566,005) ------------ ------------ ~~Net Cash Used in Operating Activities (1,709,326) (235) (187)~~ ------------ ------------ ------------ ~~Cash~~10,674 ~~Flow~~9,826 ~~From~~31,751 ~~Investing Activities: Purchase of patent rights~~ (85458,~~000~~032) 6,504,408 -- -- ~~Purchase of furniture and equipment (48,416)~~ -- -- ~~Purchase of treasury stock (11,767)~~ -- -- ~~Cash acquired in acquisition 120,272~~ -- -- ---- -------- -- ---------- ------------ ~~Net~~Loss ~~Cash~~from ~~Used~~operations in(10,674) ~~Investing~~(9,826) ~~Activities~~(31,751) 458,032 (136,~~144~~504,408) -- -- ------ ------ ---- -------- -- ---------- ~~Cash Flows from Financing Activities: Proceeds from issue of preferred stock series B 10,000~~ -- -- ~~Proceeds from issuance of common stock 689,164~~ -- ----- ~~Purchase~~Other ofIncome ~~treasury stock~~ (~~11,767~~Expense) Other expenses -- -- ~~Proceeds from notes payable 140,000~~ -- -- ~~Proceeds from advances from related parties 539~~(261,~~078~~162) ~~179 179 Proceeds from sale of treasury stock and warrants 15,000~~ -- -- ~~Payment of stockholder's loan (272)~~ -- -- ~~Proceeds from additional paid in capital 342~~3,~~108~~774 -- -- ------ ------ ---- -------- -- ---------- ~~Net Cash Provided by Financing Activities 1,723,311 179 179~~ ----------- -- -- -- -- (257,388) ------ ---- -------- ~~Net increase (decrease) in cash 841 (56) (8) Cash and equivalents at beginning of period~~ -- ~~897 952~~ ------------ ------------ ------------ ~~Cash~~Loss ~~and~~from ~~equivalents~~continuing atoperations ~~end of period $ 841 $ 841 $ 944 ============ ============ ============ See accompanying notes to unaudited condensed financial statements. 5 HIV-VAC, INC.~~ (~~A Development Stage Company) CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 30, 2008 AND 2007 AND FOR THE PERIOD FROM JANUARY~~ 10,674) ~~1997~~ (~~INCEPTION~~9,826) ~~TO DECEMBER~~ (31, ~~2008 (UNAUDITED~~751) ~~Period from January 10~~458,032 ~~1997~~ (~~Inception~~6,761,796) ~~For~~Loss ~~the~~from ~~Three~~Discontinued ~~Months~~Operations ~~Ended to~~ -- -- -- -- (432,181) ---------- ---------- ~~December 31, December 31, December 31, 2008 2008 2007~~ ------------ ------------ ------------ ~~Supplemental~~Net ~~Disclosure~~loss of(10,674) ~~Cash~~(9,826) ~~Flow~~(31,751) ~~Information:~~458,032 ~~Cash paid during the period for: Issuance of common shares for Noveaux merger $ 106~~(7,~~525~~193,977) ~~$ -- $ --~~ ========== == ======== ========== ========== =========== ~~Issuance~~Foreign ofCurrency ~~common~~Translation ~~shares~~Adjustment ~~for~~(12,170) ~~LifePlan~~(0) ~~merger~~7,963 $1,974 50(88,~~000~~093) $Comprehensive --Loss $(22,844) --(9,826) ~~============~~(23,788) 460,006 (7,282,070) ============ ============ ~~Preferred B stock dividend $ 10,000 $ -- $ --~~ ============ ============ ============ ~~Forgiveness~~Loss per weighted average share of ~~stockholder~~common ~~debt~~stock outstanding - basic and diluted $ ~~7,227~~(0.00) $ --(0.00) $ --(0.00) $ 0.05 ========== == ======== ==== ====== ========== ~~Cancellation~~Weighted average number of ~~treasury~~common ~~stock~~shares $outstanding ~~(8,767)~~during $period -- $basic --and diluted 9,830,652 9,830,652 9,830,652 9,830,652 ========== == ======== ==== ====== ==========

See accompanying notes to unaudited condensed financial statements. 4

See accompanying notes to unaudited condensed financial statements. 6 HIV-VAC, INC. (A DEVELOPMENT STAGE ENTERPRISE) NOTES TO CONDENSED FINANCIAL STATEMENTS JUNE 30, 2009. (UNAUDITED) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 September 30, 2008, 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. 7 HIV-VAC, INC. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED 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. 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: Deferred tax assets and liabilities are recorded for differences between the financial statement and tax basis of the asset and liabilities that will result in taxable deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period. 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 June 30, 2009, and 2008 are computed based on the weighted average common shares outstanding. 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. Segment Reporting ASC Topic 280 "Segment Reporting" establishes standards for the manner in which public enterprises report segment information about operating segments. The Company has determined that its operations primarily involve one reportable segment. 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. 8 HIV-VAC, INC. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 2 - FIXED ASSETS Fixed Assets consisted of the following: June 30, September 30, 2009 2008 ------------- ------------- Furniture $ 936 $ 936 Equipment 47,480 47,480 ------------- ------------- 48,416 48,416 Less accumulated depreciation (44,534) (44,127) ------------- ------------- Net $ 3,882 $ 4,289 ============= ============= Depreciation expense for the nine months ended June 30, 2009 and the year ended September 30, 2008, was $407 and $626 respectively NOTE 3 - STOCKHOLDERS' EQUITY No stock was issued during the reporting period. NOTE 4 - ADVANCES FROM RELATED PARTIES June 30, Sept 30, 2009 2008 ------------- ------------- Intracell Vacinnes Limited ("Intracell") $ 457,406 $ 457,406 Directors and officers of the Company 82,061 81,493 ------------- ------------- $ 539,467 $ 538,899 ============= ============= Intracell is a related party to the Company by virtue of the Company's controlling shareholders owning Intracell. These advances are non-interest bearing, unsecured and have no specified terms for repayment. NOTE 5 - RELATED PARTY TRANSACTIONS The following table summarizes the Company's related party transactions, that occurred in the normal course of operations for the year, which are measured at the exchange amount agreed to by the related parties: June 30, June 30, 2009 2008 ------------- ------------- Directors and officers compensation $ 27,000 $ 24,000 ============= ============= 9 HIV-VAC, INC. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 6 - FINANCIAL INSTRUMENTS a) Fair Value The carrying amount of cash, accounts payable, accrued liabilities, and advances from related parties approximate fair values due to the short term nature of these items. The financial instruments of the Company have been classified into levels using a fair value hierarchy. Level 1 valuation is determined by unadjusted quoted prices in active markets for identical assets and liabilities. The Company's cash of $872 is classified into Level 1. Level 2 valuation is based upon inputs other than quoted prices included in level 1 that are observable for the instrument either directly or indirectly. The Company's accounts payable of $86,796, accrued liabilities of $213,471 and advances from related parties of $539,467 are classified into level 2. Level 3 valuation is for assets or liabilities that are not based on observable market data. b) Currency Risk While the reporting currency is in the U.S. Dollar, 7% of expenses for the period ended are denominated in U.K. pound (2008 - 24% of expenses). As at March 31, 2009, 10% of liabilities are originally denominated in U.K. pound (2008 - 11% of liabilities). The Company is exposed to foreign exchange risk as the results of operations may be affected by fluctuations in the exchange rates between U.S. dollar and U.K. pound. NOTE 7 - INCOME TAXES June 30, Sept 30, 2009 2008 ------------- ------------- Temporary differences $ 14,876 $ 14,562 Loss carryforwards 2,070,603 1,885,254 Allowance for valuation (2,085,479) (1,899,816) ------------- ------------- $ -- $ -- ============= ============= Potential benefits of net operating losses have not been recognized in these financial statements because the Company can not be assured it is more likely than not it will utilize the net operating losses carried forward in future years. The Company's tax returns have not yet been filed and when they are filed will be subject to audits and potential penalties and reassessments by taxation authorities. The outcome of audits can not be reasonably determined and the potential impact on the financial statements is not determinable. 10 HIV-VAC, INC. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 8 - 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. 11 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. We have only recently begun 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 continuing our research. Research and development costs for the three months ended June 30, 2009 increased by $339 from $,4,990 for the three months ended June 30, 2008 to $5,329 for the three months ended June 30, 2009. The reduction in costs was a result of a increase in accrued director costs. Administrative expenditure increased $530 from $4,680 for the quarter ended June 30, 2008 to $5,210 for the quarter ended June 30, 2009. The increase in expenditure was mainly due to an increase in subscription costs. We received no interest income during the quarters ended June 30, 2009 and June 30, 2008. We incurred a net loss of $10,674 or $(0.01) per share based on 9,830,653 weighted average shares outstanding for the quarter ended June 30, 2009 compared to $9,826 or $(0.01) per share based on 9,830,653 weighted average shares outstanding for the quarter ended June 30, 2008. Research and development costs for the nine months ended June 30, 2009 increased by $762 from $15,012 for the nine months ended June 30, 2008 to $ 15,774 for the nine months ended June 30, 2009. The increase in expenditure is a result of an increased accred director fees offset by a reduction in premesis costs. General and Administration expenditure increased by $1,530 from $14,040 for the nine months ended June 30, 2008 to $15,570 for the nine months ended June 30, 2009. Patent fees expense reduced by $24,489 from $24,489 for the nine months ended June 30, 2009 to $nil for the quarter ended June 30,2008. The reduction in patent fees was due to the Company returning the licensing rights to the licensor in December 01, 2007. The gain on the forgiveness of debt for the nine months ended June 30, 2008 resulted from the Company returning the licensing rights, and the lincensor waivig outstanding royalty paymets. We incurred a loss of $31,151 or $(0.01) per share based on 9,830,653 weighted average shares outstanding for the nine months ended June 30, 2007 compared to a gains of $458,032 or $(0.04) per share based on 9,830,653 weighted average shares outstanding for the nine months ended June 30, 2008. We did not conduct any operations of a commercial nature during the period from January 10, 1997 (date of inception) to June 30, 2009. We have relied on advances of approximately $539,467 from our principal stockholders, trade payables of approximately $551,229, 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 June 30, 2009, we had $872 of cash and cash equivalents. Operations for the nine months ended June 30, 2009 have been financed through payables, and a loan from Intracell Vaccines Limited. We seek additional equity or debt financing of up to $7 million which we plan 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). Subject to financing, our business plan for the next year will consist of implementing 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. 12 Our business plan requires at least $6,000,000 to implement, and cannot be implemented until funding for this amount has been achieved. When the funding has been 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 will 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. 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 future 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 over 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 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. 13 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. Mr 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. 14 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 None 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 15 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 16

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