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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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X
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For
the quarter period ended
September 30, 2012
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or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ___________ to __________
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Commission file number
000-50156
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MOLECULAR PHARMACOLOGY (USA) LIMITED
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(Exact name of registrant as specified in its charter)
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NEVADA
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71-0900799
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Drug Discovery Centre
284 Oxford Street, Leederville 6007 Perth, Western Australia
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(Address of principal executive offices)
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(Zip Code)
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011-61-8-9443-3011
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(Registrant's telephone number, including area code)
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Not Applicable
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(Former name, former address and formal fiscal year, if changed since last report)
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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.
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Yes
x
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No
o
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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 (§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).
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Not applicable - Issuer does not have a Web site
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Yes
o
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No
o
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Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non accelerated filer, or a small reporting company. See the definitions of
"large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
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Large Accelerated Filer
o
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Accelerated Filer
o
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Non-Accelerated Filer
o
(Do not check if a smaller reporting company)
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Smaller Reporting Company
x
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i
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
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Yes
o
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No
x
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
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Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court
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Yes
o
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No
x
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APPLICABLE ONLY TO CORPORATE ISSUERS:
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Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date.
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111,553,740 common shares issued and outstanding as of November
7, 2012.
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ii
MOLECULAR
PHARMACOLOGY (USA) LIMITED
Form 10-Q
September 30, 2012
Table of Contents
iii
PART 1 - FINANCIAL INFORMATION
Item 1. Interim Consolidated Financial Statements
.
The
information in this report for the three months ended September 30, 2012, is
unaudited but includes all adjustments (consisting only of normal recurring
accruals, unless otherwise indicated) which Molecular Pharmacology (USA) Limited
("
Molecular USA
" or the "
Company
") considers necessary for a fair
presentation of the financial position, results of operations, changes in
stockholders' deficiency and cash flows for those periods.
The interim
consolidated financial statements should be read in conjunction with Molecular
USA's consolidated financial statements and the notes thereto contained in
Molecular USA's Audited Financial Statements for the year ended June 30, 2012,
in the Form 10K filed with the SEC on August 22, 2012.
Interim
results are not necessarily indicative of results for the full fiscal year.
The unaudited
interim consolidated financial statements start on the next page.
1
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Interim Consolidated Financial Statements
(Expressed in U.S. Dollars)
(Unaudited)
30 September 2012
2
Molecular Pharmacology (
USA) Limited
(A Development Stage Company)
Interim Consolidated
Balance Sheets
(Expressed in U.S. Dollars)
(Unaudited)
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As at
30 September
2012
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As at
30 June
2012
(Audited)
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$
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$
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Assets
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Current
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Cash and cash equivalents
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11,443
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2,572
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Amounts receivable
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6,848
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5,110
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18,291
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7,682
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Equipment
(Note 4)
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1,073
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1,159
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19,364
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8,841
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Liabilities
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Current
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Accounts payable and accrued liabilities (Note
5)
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18,300
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19,252
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Due to related parties
(Note 6)
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2,163,953
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2,069,448
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2,182,253
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2,088,700
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Stockholders' deficiency
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Capital stock
(Note 7)
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Authorized
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300,000,000 common shares, par value $0.001
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Issued and outstanding
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30
September 2012 - 111,553,740 common shares, par value $0.001
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30 June
2012 - 111,553,740 common shares, par value $0.001
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111,554
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111,554
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Additional paid-in capital
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106,707
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106,707
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Cumulative translation
adjustment
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(477,006)
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(446,072)
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Deficit, accumulated during
the development stage
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(1,904,144)
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(1,852,048)
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(2,162,889)
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(2,079,859)
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19,364
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8,841
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Nature and Continuance of
Operations
(Note 1)
On behalf of
the Board:
/s/
Jeffery Edwards
Director 9;
Jeffery
Edwards
The accompanying notes are an integral part
of these interim consolidated financial statements.
3
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Interim Consolidated
Statements of Operations
(Expressed in U.S. Dollars)
(Unaudited)
|
For the
period from
the date of inception on
14 July 2004
to
September 30
2012
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For the
three month
period
ended
30 September
2012
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For the
three month
period
ended
30 September
2011
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$
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$
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$
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Expenses
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Advertising and promotion
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23,739
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-
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-
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Amortization (Note 4)
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6,777
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86
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113
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Analysis
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33,947
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-
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-
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Consulting (Note 6)
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1,323,621
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33,480
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18,464
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Office and miscellaneous (Note 6)
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227,527
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8,994
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4,445
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Professional fees
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368,760
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9,177
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4,250
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Public relations
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3,656
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-
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-
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Rent (Note 6)
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27,759
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-
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-
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Salaries and benefits
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44,464
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-
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-
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Transfer agent and filing fees
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17,172
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-
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-
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Travel
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111,693
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359
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-
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Net loss
before other items
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(2,189,115)
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(52,096)
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(27,272)
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Other items
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Export market development grants
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69,629
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-
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-
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Interest income
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2,322
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-
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-
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Research and development tax
refund
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213,020
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-
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-
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|
|
|
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Net loss for
the period
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(1,904,144)
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(52,096)
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(27,272)
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Basic and diluted loss per common share
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(0.001)
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(0.001)
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|
|
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Weighted
average number of common shares used in per share calculations
|
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|
111,553,740
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111,553,740
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|
|
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Comprehensive
loss
|
|
|
|
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Net loss for the period
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(1,904,144)
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(52,096)
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(27,272)
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Foreign currency translation
adjustment
|
(477,006)
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(30,934)
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158,568
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Total
comprehensive loss for the period
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(2,381,150)
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(83,030)
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131,296
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Basic and
diluted comprehensive loss per common share
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(0.001)
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0.001
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The accompanying notes are an integral part
of these interim consolidated financial statements.
4
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Interim Consolidated Statements of Cash Flows
(Expressed
in U.S. Dollars)
(Unaudited)
|
For the
period from
the date of inception on
14 July 2004
to
30 September
2012
|
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For the
three month
period
ended
30 September
2012
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For the
three month
period
ended
30 September
2011
|
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$
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$
|
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$
|
Cash flows used in operating
activities
|
|
|
|
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Net loss for the period
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(1,904,144)
|
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(52,096)
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(27,272)
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Adjustments to reconcile loss
to net cash
used by operating activities
|
|
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Amortization
|
6,777
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|
86
|
|
113
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Write-down of intangible assets
|
1,278
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-
|
|
-
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Changes in operating assets and
liabilities
|
|
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|
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Increase in amounts receivable
|
(4,622)
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(1,738)
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(636)
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Decrease in accounts payable and
accrued liabilities
|
(29,117)
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|
(952)
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|
(2,943)
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|
|
|
|
|
|
(1,929,828)
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(54,700)
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(30,738)
|
|
|
|
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Cash flows
from investing activities
|
|
|
|
|
|
Purchase of equipment
|
(7,850)
|
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-
|
|
-
|
Purchase of intangible assets
|
(1,278)
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|
-
|
|
-
|
Cash acquired on the purchase of
Molecular Pharmacology (USA) Limited
|
37,163
|
|
-
|
|
-
|
|
|
|
|
|
|
|
28,035
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|
-
|
|
-
|
|
|
|
|
|
|
Cash flows
from (used in) financing activities
|
|
|
|
|
|
Common shares issued for cash
|
234,497
|
|
-
|
|
-
|
Increase (decrease) in due to
related parties
|
2,155,745
|
|
94,505
|
|
(125,486)
|
|
|
|
|
|
|
|
2,390,242
|
|
94,505
|
|
(125,486)
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash
|
(477,006)
|
|
(30,934)
|
|
158,568
|
|
|
|
|
|
|
Increase in
cash and cash equivalents
|
11,443
|
|
8,871
|
|
2,344
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
-
|
|
2,572
|
|
8,675
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
11,443
|
|
11,443
|
|
11,019
|
Supplemental Disclosures with
Respect to Cash Flows
(Note 10)
The accompanying notes are an integral part
of these interim consolidated financial statements.
5
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Interim Consolidated Statements of Changes
in Stockholders' Deficiency
(Expressed
in U.S. Dollars)
(Unaudited)
|
Number of common shares issued
|
|
Capital stock
|
|
Additional paid-in capital
|
|
Deficit, accumulated during the development stage
|
|
Cumulative translation adjustment
|
|
Stockholders' deficiency
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
Balance at 14
July 2004 (inception)
|
294
|
|
-
|
|
1
|
|
-
|
|
-
|
|
1
|
Net loss
for the period
|
-
|
|
-
|
|
-
|
|
(128,488)
|
|
-
|
|
(128,488)
|
Cumulative translation
adjustment
|
-
|
|
-
|
|
-
|
|
-
|
|
(6,536)
|
|
(6,536)
|
Balance at 31
October 2004
|
294
|
|
-
|
|
1
|
|
(128,488)
|
|
(6,536)
|
|
(135,023)
|
Common
shares issued for cash - January 2005
|
87,999,706
|
|
88,000
|
|
146,496
|
|
-
|
|
-
|
|
234,496
|
Net loss
for the year
|
-
|
|
-
|
|
-
|
|
(387,667)
|
|
-
|
|
(387,667)
|
Cumulative translation
adjustment
|
-
|
|
-
|
|
-
|
|
-
|
|
(161)
|
|
(161)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31
October 2005
|
88,000,000
|
|
88,000
|
|
146,497
|
|
(516,155)
|
|
(6,697)
|
|
(288,355)
|
Acquisition of Molecular
Pharmacology (USA) Limited - Recapitalization May 2006
|
43,553,740
|
|
43,554
|
|
(59,790)
|
|
-
|
|
-
|
|
(16,236)
|
Cancellation of common shares - July
2006
|
(20,000,000)
|
|
(20,000)
|
|
20,000
|
|
-
|
|
-
|
|
-
|
Net loss for the year
|
-
|
|
-
|
|
-
|
|
(508,260)
|
|
-
|
|
(508,260)
|
Cumulative translation
adjustment
|
-
|
|
-
|
|
-
|
|
-
|
|
(16,222)
|
|
(16,222)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31
October 2006
|
111,553,740
|
|
111,554
|
|
106,707
|
|
(1,024,415)
|
|
(22,919)
|
|
(829,073)
|
Net loss for the period
|
-
|
|
-
|
|
-
|
|
(377,131)
|
|
-
|
|
(377,131)
|
Cumulative translation
adjustment
|
-
|
|
-
|
|
-
|
|
-
|
|
(105,436)
|
|
(105,436)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30
June 2007
|
111,553,740
|
|
111,554
|
|
106,707
|
|
(1,401,546)
|
|
(128,355)
|
|
(1,311,640)
|
Net income for the year
|
-
|
|
-
|
|
-
|
|
62,296
|
|
-
|
|
62,296
|
Cumulative translation
adjustment
|
-
|
|
-
|
|
-
|
|
-
|
|
(166,483)
|
|
(166,483)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30
June 2008
|
111,553,740
|
|
111,554
|
|
106,707
|
|
(1,339,250)
|
|
(294,838)
|
|
(1,415,827)
|
Net loss for the year
|
-
|
|
-
|
|
-
|
|
(94,336)
|
|
-
|
|
(94,336)
|
Cumulative translation
adjustment
|
-
|
|
-
|
|
-
|
|
-
|
|
219,034
|
|
219,034
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30
June 2009
|
111,553,740
|
|
111,554
|
|
106,707
|
|
(1,433,586)
|
|
(75,804)
|
|
(1,291,129)
|
Net loss for the year
|
-
|
|
-
|
|
-
|
|
(117,220)
|
|
-
|
|
(117,220)
|
Cumulative
translation
adjustment
|
-
|
|
-
|
|
-
|
|
-
|
|
(78,521)
|
|
(78,521)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30
June 2010
|
111,553,740
|
|
111,554
|
|
106,707
|
|
(1,550,806)
|
|
(154,325)
|
|
(1,486,870)
|
Net loss for the year
|
-
|
|
-
|
|
-
|
|
(121,860)
|
|
-
|
|
(121,860)
|
Cumulative translation
adjustment
|
-
|
|
-
|
|
-
|
|
-
|
|
(357,962)
|
|
(357,962)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30
June 2011
|
111,553,740
|
|
111,554
|
|
106,707
|
|
(1,672,666)
|
|
(512,287)
|
|
(1,966,692)
|
Net loss for the year
|
-
|
|
-
|
|
-
|
|
(179,382)
|
|
-
|
|
(179,382)
|
Cumulative translation
adjustment
|
-
|
|
-
|
|
-
|
|
-
|
|
66,215
|
|
66,215
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30
June 2012
|
111,553,740
|
|
111,554
|
|
106,707
|
|
(1,852,048)
|
|
(446,072)
|
|
(2,079,859)
|
Net loss for the period
|
-
|
|
-
|
|
-
|
|
(52,096)
|
|
-
|
|
(52,096)
|
Cumulative translation
adjustment
|
-
|
|
-
|
|
-
|
|
-
|
|
(30,934)
|
|
(30,934)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30
September 2012
|
111,553,740
|
|
111,554
|
|
106,707
|
|
(1,904,144)
|
|
(477,006)
|
|
(2,162,889)
|
The accompanying
notes are an integral part of these interim consolidated financial statements.
6
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed
in U.S. Dollars)
(Unaudited)
30 September 2012
1.
Nature and
Continuance of Operations
Molecular
Pharmacology (USA) Limited (the "Company") was incorporated in the state of
Nevada on 1 May 2002 under the name Blue Hawk Ventures, Inc. The Company
changed its name to Molecular Pharmacology (USA) Limited on 29 August 2005. At
the same time, the Company completed a four for one forward split of its issued
and outstanding share capital and altered its authorized share capital to
300,000,000 shares of common stock with a par value of $0.001 per share.
The
Company is a development stage enterprise, as defined in
Accounting Standards Codification
(the
"Codification" or "ASC") 915-10, "
Development
Stage Entities
". The Company is devoting all of its present efforts
to securing and establishing a new business and its current planned principle
operations have not commenced. Accordingly, no revenue has been derived during
the organization period.
Up until
the fall of 2005, the Company was in the business of mineral exploration and
development of a mineral property. The Company allowed the option on its
mineral claim to lapse in the fall of 2005.
On 13
October 2005, the Company acquired the exclusive distribution rights to
distribute, market, promote, detail, advertise and sell certain "Licensed
Products" through Molecular Pharmacology Pty. Ltd. (formerly Molecular
Pharmacology Limited) ("MPLA") (Note 9). MPLA was incorporated under the laws
of Australia and converted to a proprietary company on 29 October 2009. MPLA is
a wholly owned subsidiary company of PharmaNet Group Limited ("PharmaNet"), an
Australian company listed on the Australian Stock Exchange.
Since
then, the Company has engaged in organizational and start up activities,
including developing a new business plan, recruiting new directors, scientific
advisors and key scientists, making arrangements for laboratory facilities and
office space and raising additional capital. The Company has generated no
revenue from product sales. The Company does not have any pharmaceutical
products currently available for sale, and none are expected to be commercially
available for some time, if at all. The Licensed Products must first undergo
pre-clinical and human clinical testing in the United States before they may be
sold commercially.
The
Company completed a share purchase agreement on 8 May 2006 with PharmaNet (the
"Purchase Agreement"). Under the terms of the Purchase Agreement the Company
acquired 100% of the issued and outstanding shares of MPLA. The Company, in
exchange for 100% of the issued and outstanding shares of MPLA, issued PharmaNet
an aggregate total of 88,000,000 common shares of the Company on the closing of
the transaction. The issuance of 88,000,000 common shares of the Company
constituted an acquisition of control of the Company by PharmaNet. The
transaction has been accounted for as a recapitalization of the Company (Note
2).
MPLA was
incorporated on 14 July 2004 under the laws of Australia. The accompanying
interim consolidated financial statements are the historical financial
statements of MPLA.
On 15
March 2007, the Board of Directors approved a change in the Company's financial
year end from 31 October to 30 June. The decision to change the fiscal year end
was intended to assist the financial community in its analysis of the business
and in comparing the Company's financial results to others in the industry, and
to synchronize the Company's fiscal reporting with MPLA.
7
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim
Consolidated Financial Statements
(Expressed in U.S. Dollars)
(Unaudited)
30 September
2012
The
Company's interim consolidated financial statements as at 30 September 2012 and
for the three month period then ended have been prepared on a going concern
basis, which contemplates the realization of assets and settlement of
liabilities and commitments in the normal course of business. The Company has a
net loss of $52,096 for the three month period ended 30 September 2012 (30
September 2011 - $27,272, cumulative - $1,904,144) and has a working capital deficit of $9 at 30
September 2012 (30 June 2012 -
$11,570).
Management
cannot provide assurance that the Company will ultimately achieve profitable
operations or become cash flow positive, or raise additional debt and/or equity
capital. Management believes that the Company's capital resources should be
adequate to continue operating and maintaining its business strategy during the
fiscal year ending 30 June 2013. However, if the Company is unable to raise
additional capital in the near future, due to the Company's liquidity problems,
management expects that the Company will need to curtail operations, liquidate
assets, seek additional capital on less favorable terms and/or pursue other
remedial measures. These interim consolidated financial statements do not
include any adjustments related to the recoverability and classification of
assets or the amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.
At 30
September 2012, the Company has suffered losses from development stage
activities to date. Although management is currently attempting to implement
its business plan, and is seeking additional sources of equity or debt
financing, there is no assurance these activities will be successful. These
factors raise substantial doubt about the ability of the Company to continue as
a going concern. The interim consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
2.
Significant
Accounting Policies
The following is a
summary of significant accounting policies used in the preparation of these
interim consolidated financial statements.
Basis of presentation
These
interim consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America ("U.S. GAAP") applicable for a development stage company for financial information and
are expressed in U.S. dollars.
Principles of consolidation
These
interim consolidated financial statements include the accounts of MPLA since its
incorporation on 14 July 2004 and the Company since the reverse acquisition on 8
May 2006 (Note 1). All intercompany balances and transactions have been
eliminated.
Cash and cash equivalents
Cash and cash
equivalents include highly liquid investments with original maturities of three
months or less.
8
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed
in U.S. Dollars)
(Unaudited)
30 September 2012
Segments of an enterprise and related information
ASC 280, "
Segment
Reporting
"
establishes guidance for the way that public
companies report information about operating segments in annual financial
statements and requires reporting of selected information about operating
segments in interim financial statements issued to the public. It also
establishes standards for disclosures regarding products and services,
geographic areas and major customers. ASC 280 defines operating segments as
components of a company about which separate financial information is available
that is evaluated regularly by the chief operating decision maker in deciding
how to allocate resources and in assessing performance.
Foreign currency translation
The Company's functional and
reporting currency is U.S. dollars.
The interim consolidated
financial statements of the Company are translated to U.S. dollars
in accordance with ASC 830, "
Foreign
Currency Matters
". Assets and liabilities denominated in
foreign currencies are translated using the exchange rate prevailing at 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
.
The Company has not,
to the date of these interim consolidated financial statements, entered into
derivative instruments to offset the impact of foreign currency fluctuations.
Equipment
Equipment is recorded at
cost and amortization is provided over its estimated economic life at the rate
of 15% declining balance.
Income taxes
Deferred
income taxes are reported for timing differences between items of income or
expense reported in the interim consolidated financial statements and those
reported for income tax purposes in accordance with ASC 740,
"Income Taxes"
, which requires the
use of the asset/liability method of accounting for income taxes. Deferred
income taxes and tax benefits 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 bases, and for tax
losses and credit carry-forwards. 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. The Company provides for deferred taxes for the estimated future tax
effects attributable to temporary differences and carry-forwards when
realization is more likely than not.
Comprehensive
income (loss)
ASC 220, "
Comprehensive
Income
", establishes standards for the reporting and disclosure of
comprehensive income (loss) and its components in the financial statements. As
at 30 September 2012, the Company has items that represent a comprehensive loss
and, therefore, has included a schedule of comprehensive loss in the interim
consolidated financial statements.
9
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed
in U.S. Dollars)
(Unaudited)
30 September 2012
Basic and diluted net income
(loss) per share
The
Company computes net income (loss) per share in accordance with ASC 260, "
Earnings
per Share
". ASC 260 requires presentation of both basic and diluted
earnings per share ("EPS") on the face of the income statement. Basic EPS is
computed by dividing net income (loss) available to common shareholders
(numerator) by the weighted average number of shares outstanding (denominator)
during the period. Diluted EPS gives effect to all potentially dilutive common
shares outstanding during the period using the treasury stock method and
convertible preferred stock using the if-converted method. In computing diluted
EPS, the average stock price for the period is used in determining the number of
shares assumed to be purchased from the exercise of stock options or warrants.
Diluted EPS excludes all potentially dilutive shares if their effect is
anti-dilutive.
Stock-based compensation
Effective
1 January 2006, the Company adopted the provisions of ASC 718, "
Compensation
- Stock Compensation
", which establishes accounting for equity
instruments exchanged for employee services. Under the provisions of ASC 718,
stock-based compensation cost is measured at the grant date, based on the
calculated fair value of the award, and is recognized as an expense over the
employees' requisite service period (generally the vesting period of the equity
grant). The Company adopted ASC 718 using the modified prospective method, which
requires the Company to record compensation expense over the vesting period for
all awards granted after the date of adoption, and for the unvested portion of
previously granted awards that remain outstanding at the date of adoption.
Accordingly, the financial statements for the periods prior to 1 January 2006
have not been restated to reflect the fair value method of expensing share-based
compensation. The adoption of ASC 718 does not change the way the Company
accounts for share-based payments to non-employees, with guidance provided by
ASC 505-50, "
Equity-Based Payments to
Non-Employees
".
Comparative figures
Certain
comparative figures have been adjusted to conform to the current period's
presentation.
3.
Changes in
Accounting Policies
In
December 2011, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") No. 2011-12,
"Comprehensive Income"
. This ASU
effectively defers the changes in ASU No. 2011-05,
"Presentation of Comprehensive Income"
that relate to the presentation of reclassification adjustments out of
accumulated other comprehensive income. ASU No. 2011-12 should be applied
retrospectively and is effective for fiscal years, and interim periods within
those years, beginning after 15 December 2011. As ASU No. 2011-12 relates only
to the presentation of comprehensive income, the adoption of this update did not
have a material effect on the Company's interim consolidated financial
statements.
10
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed
in U.S. Dollars)
(Unaudited)
30 September 2012
In June
2011, the FASB issued ASU No. 2011-05,
"Presentation of Comprehensive Income"
. This ASU presents an entity
with the option to present the total of comprehensive income, the components of
net income, and the component of other comprehensive income either in a single
continuous statement of comprehensive income or in two separate but consecutive
statements. In both choices, an entity is required to present each component of
other comprehensive income along with a total for other comprehensive income,
and a total amount for comprehensive income. This update eliminates the option
to present the components of other comprehensive income as part of the statement
of changes in stockholders' equity (deficiency). The amendments in this update
do not change the items that must be reported in other comprehensive income or
when an item of other comprehensive income must be reclassified to net income. ASU No. 2011-05 should be applied retrospectively and is effective for fiscal
years, and interim periods within those years, beginning after 15 December
2011. As ASU No. 2011-05 relates only to the presentation of comprehensive
income, the adoption of this update did not have a material effect on the
Company's interim consolidated financial statements.
In May
2011, the FASB issued ASU No. 2011-04,
"Fair
Value Measurement"
to amend the accounting and disclosure
requirements on fair value measurements. This ASU limits the
highest-and-best-use measure to nonfinancial assets, permits certain financial
assets and liabilities with offsetting positions in market or counterparty
credit risks to be measured at a net basis, and provides guidance on the
applicability of premiums and discounts. Additionally, this update expands the
disclosure on Level 3 inputs by requiring quantitative disclosure of the
unobservable inputs and assumptions, as well as description of the valuation
processes and the sensitivity of the fair value to changes in unobservable
inputs. ASU No. 2011-04 is to be applied prospectively and is effective during
interim and annual periods beginning after 15 December 2011. The adoption of
this update did not have a material effect on the Company's interim consolidated
financial statements.
4
.
Equipment
|
|
|
Accumulated amortization
|
|
Net Book Value
|
|
|
Cost
|
|
As at
30 September
2012
|
|
As at
30 June
2012
(Audited)
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
Office equipment
|
|
7,850
|
|
6,777
|
|
1,073
|
|
1,159
|
During the
three month period ended 30 September 2012, the total additions to equipment
were $Nil (30 September 2011 - $Nil).
5.
Accounts Payable and
Accrued Liabilities
Accounts
payable and accrued liabilities are non-interest bearing, unsecured and have
settlement dates within one year.
11
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed
in U.S. Dollars)
(Unaudited)
30 September 2012
6.
Due to
Related Parties and Related Party Transactions
As at 30 September 2012, the
amount due to related parties includes $1,000 payable to a director of the
Company (30 June 2012
-
$1,000). This balance is non-interest bearing, unsecured and has no fixed terms
of repayment.
As at 30 September 2012, the
amount due to related parties includes $34,429 payable to a company owned by a
director of the Company or an officer of PharmaNet (30 June 2012
-
$22,846). This balance is non-interest bearing, unsecured and has no fixed
terms of repayment.
As at 30 September 2012, the
amount due to related parties includes $1,723 payable to a company owned by a
director of the Company or an officer of PharmaNet (30 June 2012
-
$1,101). This balance is non-interest bearing, unsecured and has no fixed terms
of repayment.
As at 30 September 2012, the
amount due to related parties includes $7,856 payable to a company owned by a
director of the Company or an officer of Pharmanet (30 June 2012 - $7,741).
This balance is non-interest bearing, unsecured and has no fixed terms of
repayment.
As at 30 September 2012, the
amount due to related parties includes $2,118,945 payable to PharmaNet (30 June
2012
-
$2,036,760).
This balance is non-interest bearing, unsecured and has no fixed terms of
repayment.
During the three month period
ended 30 September 2012, a director of the Company or an officer of PharmaNet,
and their controlled entities were paid or accrued consulting fees of $10,226 (
30
September 2011
- $18,464,
cumulative - $872,822).
During the three month period
ended 30 September 2012, a director of the Company or an officer of PharmaNet,
and their controlled entities were paid or accrued consulting and/or
administrative fees of $7,540 (
30 September 2011
-
$Nil, cumulative - $50,886) by the Company.
During the three month period
ended 30 September 2012, a director of the Company or an officer of PharmaNet,
and their controlled entities were paid or accrued consulting fees of $21,435
(30 September 2011 - $Nil, cumulative - $42,720) by the Company.
During the three month period
ended 30 September 2012, a director of the Company or an officer of PharmaNet,
and their controlled entities were paid or accrued office and miscellaneous
expenses of $Nil (30 September 2011 - $3,936, cumulative - $4,481) by the
Company.
During the three month period
ended 30 September 2012, a director of the Company or an officer of PharmaNet,
and their controlled entities were paid or accrued consulting fees of $Nil (30
September 2011 - $Nil; cumulative - $41,928) by the Company.
During the three month period
ended 30 September 2012, a director of the Company or an officer of PharmaNet,
and their controlled entities were paid or accrued office and miscellaneous
expenses of $Nil (
30 September 2011
-
$Nil; cumulative
-
$80,468) by the Company.
12
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed
in U.S. Dollars)
(Unaudited)
30 September 2012
During the three month period
ended 30 September 2012, a director of the Company or an officer of PharmaNet,
and their controlled entities were paid or accrued rental fees of $Nil (
30
September 2011
- $Nil; cumulative
- $12,987) by the Company.
Transactions comprising the amount
due to PharmaNet are as follows:
|
|
For the
three month
period ended
30 September
2012
|
|
For the
year
ended
30 June
2012
(Audited)
|
|
|
$
|
|
$
|
|
|
|
|
|
Opening balance, beginning of period
|
|
2,036,760
|
|
1,896,625
|
Funds transferred to the Company by PharmaNet
|
|
51,940
|
|
170,790
|
Expenses paid by PharmaNet on behalf of the Company
|
|
-
|
|
33,852
|
Foreign currency translation adjustment
|
|
30,245
|
|
(64,507)
|
|
|
|
|
|
Balances, end of period
|
|
2,118,945
|
|
2,036,760
|
The average amount due to
PharmaNet for the three month period ended 30 September 2012 was $1,929,149 (30
June 2012 - $1,816,134).
7.
Capital Stock
Authorized
The total
authorized capital is 300,000,000 common shares with a par value of $0.001 per
common share.
Issued and outstanding
The total
issued and outstanding capital stock is 111,553,740 common shares with a par
value of $0.001 per common share.
13
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed
in U.S. Dollars)
(Unaudited)
30 September 2012
8
.
Income Taxes
Income tax
expense differs from the amount that would result from applying the federal
income tax rate to earnings before income taxes. These differences result from
the following items:
|
|
|
|
For the
three month
period ended
30 September
2012
|
|
For the
three month
period ended
30 September
2011
|
|
|
|
|
$
|
|
$
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
|
(52,096)
|
|
(27,272)
|
|
|
|
|
|
|
|
Federal income tax rates
|
|
|
|
34.0%
|
|
34.0%
|
|
|
|
|
|
|
|
Income tax recovery based on the above rates
|
|
|
|
(17,713)
|
|
(9,272)
|
|
|
|
|
|
|
|
Increase (decrease) due to:
|
|
|
|
|
|
|
Difference between U.S. and foreign tax rates
|
|
|
|
1,681
|
|
921
|
Change in valuation allowance
|
|
|
|
22,018
|
|
(22,788)
|
Foreign exchange and other
|
|
|
|
(5,986)
|
|
31,139
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
-
|
|
-
|
The
composition of the Company's deferred tax assets as at 30 September 2012 and 30
June 2012 are as follows:
|
|
As at
30 September
2012
|
|
As at
30 June
2012
(Audited)
|
|
|
$
|
|
$
|
|
|
|
|
|
Net income tax operating loss
carryforward
|
|
2,173,649
|
|
2,101,601
|
|
|
|
|
|
Deferred tax assets
|
|
682,766
|
|
660,748
|
Less:
Valuation allowance
|
|
(682,766)
|
|
(660,748)
|
|
|
|
|
|
Net deferred tax asset
|
|
-
|
|
-
|
14
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed
in U.S. Dollars)
(Unaudited)
30 September 2012
The
Company has non-capital loss carry-forwards of approximately $2,173,649 that may
be available for tax purposes. The loss carry-forwards are all in respect to
U.S. and Australian operations and expire as follows:
|
$
|
2022
|
20,402
|
2023
|
46,992
|
2024
|
27,717
|
2025
|
14,187
|
2026
|
261,311
|
2027
|
111,155
|
2028
|
75,463
|
2029
|
57,882
|
2030
|
48,765
|
2031
|
43,836
|
2032
|
49,005
|
2033
|
10,068
|
No expiry
|
1,406,866
|
|
|
|
2,173,649
|
A full
valuation allowance has been recorded against the potential deferred tax assets
associated with all the loss carry-forwards as their utilization is not
considered more likely than not at this time.
9.
Distribution
Agreement
The
Company has the exclusive distribution rights, through MPLA, to distribute,
market, promote, detail, advertise and sell certain Licensed Products, with
metallo-polypeptide analgesic as an active ingredient, in the United States
(excluding its territories and possessions) (Note 1). If, and when necessary,
the Company will obtain all necessary regulatory approvals for the Licensed
Products and incorporate the Licensed Products in the United States.
15
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed
in U.S. Dollars)
(Unaudited)
30 September 2012
10.
Supplemental
Disclosures with Respect to Cash Flows
|
|
For the
period from
the date of inception on
14 July 2004
to
30 September
2012
|
For the
three
month
period
ended
30 September
2012
|
For the
three
month
period
ended
30 September
2011
|
|
|
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
Cash paid during the
period for interest
|
|
|
|
-
|
|
-
|
|
-
|
Cash paid during the
period for income taxes
|
|
|
|
-
|
|
-
|
|
-
|
Common shares issued on acquisition of MPLA
|
|
|
|
16,236
|
|
-
|
|
-
|
Amounts receivable acquired on recapitalization of the Company
|
|
|
|
2,226
|
|
-
|
|
-
|
Accounts payable assumed on recapitalization of the Company
|
|
|
|
54,624
|
|
-
|
|
-
|
Due to related party assumed on recapitalization of the Company
|
|
|
|
1,000
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
11.
Segmented
Information
Details on
a geographic basis as at and for the three month period ended 30 September 2012
are as follows:
|
|
Australia
|
|
U.S.A.
|
|
Total
|
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
Assets
|
|
19,364
|
|
-
|
|
19,364
|
|
|
|
|
|
|
|
Loss for the period
|
|
(42,028)
|
|
(10,068)
|
|
(52,096)
|
Details on
a geographic basis as at and for the year ended 30 June 2012 are as follows:
|
|
Australia
|
|
U.S.A.
|
|
Total
|
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
Assets
|
|
8,841
|
|
-
|
|
8,841
|
|
|
|
|
|
|
|
Loss for the year
|
|
(130,377)
|
|
(49,005)
|
|
(179,382)
|
16
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed
in U.S. Dollars)
(Unaudited)
30 September 2012
Details on
a geographic basis as at and for the three month period ended 30 September 2011
are as follows:
|
|
Australia
|
|
U.S.A.
|
|
Total
|
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
Assets
|
|
19,756
|
|
-
|
|
19,756
|
|
|
|
|
|
|
|
Loss for the period
|
|
(23,022)
|
|
(4,250)
|
|
(27,272)
|
12.
Financial Instruments
The
carrying values of cash and cash equivalents and accounts payable approximate
fair value due to the short term maturity of these financial instruments.
Credit
Risk
Financial
instruments that potentially subject the Company to credit risk consists of cash
and cash equivalents. The Company deposits cash and cash equivalents with high
credit quality financial institutions as determined by rating agencies. As
a result, credit risk is considered insignificant.
Currency
Risk
The
Company's subsidiary is located in Australia. As a result, a significant portion
of the Company's assets, liabilities and expenses were denominated in the
Australian dollar and were therefore subject to fluctuation in exchange rates.
The Company's objective
in managing its foreign currency risk is to minimize its net exposures to
foreign currency cash flows by holding most of its cash and cash equivalents in
Australian dollars. The Company monitors and forecasts the values of net
foreign currency cash flow and balance sheet exposures and from time to time
could authorize the use of derivative financial instruments such as forward
foreign exchange contracts to economically hedge a portion of foreign currency
fluctuations.
If the
Australian dollar had weakened (strengthened) against the U.S. dollar, with all
other variables held constant, by 100 basis points (1%) at period end, the impact
on net loss and other comprehensive loss would have been $21,447 higher ($21,447
lower).
The
Company has not, to the date of these interim consolidated financial statements,
entered into derivative instruments to offset the impact of foreign currency
fluctuations.
Interest
Rate Risk
The
Company has non-interest paying cash balances and no interest-bearing debt.
It is management's opinion that the Company is not exposed to significant
interest risk arising from these financial instruments.
17
Molecular Pharmacology (USA) Limited
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed
in U.S. Dollars)
(Unaudited)
30 September 2012
Liquidity Risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting
obligations associated with its financial liabilities. The Company is reliant
upon PharmaNet as its sole source of cash. The Company has received financing
from PharmaNet in the past; however, there is no assurance that it will be able
to do so in the future.
18
Item
2. Management's Discussion and Analysis
of Financial Condition and Results of Operations.
THE FOLLOWING ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL
CONDITION OF MOLECULAR USA FOR THE FIRST QUARTER PERIOD ENDED SEPTEMBER 30, 2012 AND SHOULD BE READ IN CONJUNCTION WITH MOLECULAR
USA'S INTERIM CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO CONTAINED ELSEWHERE IN THE FORM 10-Q.
Our interim consolidated financial statements are stated in United
States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Overview
We were incorporated in the state of Nevada on May 1, 2002. Up until
the fall of 2005, Molecular USA was in the business of mineral exploration and development of a mineral property.
On October 13, 2005, Molecular USA entered into a distribution and
supply agreement with Molecular Pharmacology Pty. Ltd. (formerly Molecular Pharmacology Limited)("
MPLA
"). MPLA
is incorporated under the laws of Australia and at the time was a wholly owned subsidiary company of PharmaNet Group Limited, an
Australian company listed on the Australian Stock Exchange. Under the terms of the distribution and supply agreement, Molecular
USA received the exclusive distribution rights to distribute, market, promote, detail, advertise and sell certain "
Licensed
Products
", as defined in the agreement, with metallo-polypeptide analgesic as an active ingredient, in the United States
(excluding its territories and possessions).
On May 9, 2006, Molecular USA announced that it has acquired 100%
of the issued and outstanding share capital of MPLA. The transaction was originally announced by Molecular USA in a press release
dated November 29, 2005 and was subsequently approved by a majority of the stockholders of the Company at a stockholders meeting
held on April 21, 2006. As a result of the transaction, PharmaNet Group Limited
("
PharmaNet
"), the former parent
company of MPLA, now controls approximately 79% of Molecular USA's issued and outstanding share capital. The transaction between
the parties closed in escrow with an effective closing date of May 8, 2006. The business of MPLA is now the business of Molecular
USA.
Our Current Business
Molecular USA through its wholly owned subsidiary MPLA is in the
business of developing and commercializing a new analgesic and anti-inflammatory molecule known as Tripeptofen. Tripeptofen is
likely to appear in a new group of products suitable for the treatment of common every-day pain. As an analgesic and anti-inflammatory
drug, Tripeptofen is unusual due to its rapid speed of action and its topical or rub-on application.
The majority of over-the-counter anti-pain and anti-inflammatory
products sold for the treatment of acute localized pain are based on non-steroidal anti-inflammatory drugs or NSAIDs. The majority
of such products are slow acting and provide only mild pain relief.
The NSAID group has come under additional pressure and increasing
medical alarm, as many drugs in this class have been found to set-back the recovery of certain conditions and treatments for which
they were marketed. Moreover, NSAIDs are associated with severe gastro-intestinal side-effects. This has left a niche in an industry
under-served by new products and ingredients.
MPLA's business strategy is to exploit the fast and locally acting,
low side effects, and recovery-enhancing properties of its new drug group and to market this as a new ingredient, enabling pharmaceutical
companies to develop and market effective and safer products suited to a broad range of common everyday pain.
19
Licensed Products
Molecular USA has exclusive distribution rights to distribute, market,
promote, advertise and sell certain "
Licensed Products
", with metallo-polypeptide analgesic and anti-inflammatory activity
as an active ingredient, in the United States (excluding its territories and possessions) from its wholly owned subsidiary company
MPLA.
The Licensed Products include all products in all dosage forms,
formulations, line extensions and package configurations using or otherwise incorporating any aspect or production method of metallo-polypeptide
analgesic and anti-inflammatory activity as an active ingredient marketed by MPLA or its affiliates under the trade name Tripeptofen
or any other trade names or trademarks used by MPLA relating to the product and any improvements to such formulations or dosages
as may hereafter be distributed by MPLA or its affiliates in the territory during the term of the distribution and supply agreement
between Molecular USA and MPLA for the topical application for human use only, and specifically excludes:
·
dermatological
or cosmetic use, or tissue repair or tissue regeneration effect;
·
any use or
application of the Licensed Product in non-human groups or species; and
·
Thermalife
cream, presently owned by PharmaNet, the parent company of MPLA.
All Licensed Products must first obtain regulatory clearance in
the United States before they may be marketed and sold by Molecular USA in that territory. Regulatory approval, commencement of
the Master Drug File ("
MDF
") and market approval are the focus of an ongoing program expected to continue over the next 18 to 24
months.
MPLA has an exclusive license from Cambridge Scientific Pty Ltd
of Australia. This license is restricted to a "field of use" defined in the license documentation. Cambridge Scientific
Pty Ltd. may grant other licenses to third parties outside the "field of use" the subject of the licenses granted to
MPLA.
Patents & Trademarks
Molecular USA and its subsidiary MPLA, regard their intellectual
property rights, such as copyrights, trademarks, trade secrets, practices and tools, as important to the success of their company.
To protect their intellectual property rights, Molecular USA relies on a combination of patent, trademark and copyright law, trade
secret protection, confidentiality agreements and other contractual arrangements with their employees, affiliates, clients, strategic
partners, acquisition targets and others. Effective patent, trademark, copyright and trade secret protection may not be available
in every country in which the combined company intends to offer its products. The steps taken by Molecular USA and MPLA to protect
their intellectual property rights may not be adequate. Third parties may infringe or misappropriate the combined company's intellectual
property rights or the combined company may not be able to detect unauthorized use and take appropriate steps to enforce its rights.
In addition, other parties may assert infringement claims against the combined company. Such claims, regardless of merit, could
result in the expenditure of significant financial and managerial resources. Further, an increasing number of patents are being
issued to third parties regarding these processes. Future patents may limit the combined company's ability to use processes covered
by such patents or expose the combined company to claims of patent infringement or otherwise require the combined company to seek
to obtain related licenses. Such licenses may not be available on acceptable terms. The failure to obtain such licenses on acceptable
terms could have a negative effect on the combined company's business.
To protect
their intellectual property rights, MPLA relies on a combination of license and
patent applications held by Cambridge Scientific Pty Ltd
which includes
"Analgesic and
Anti-Inflammatory Composition" comprising USA patent application in completion
plus PCT Provisional Specification having the same name designated as Serial No.
11/059580.
These patent applications embody all the current
Analgesic and Anti-inflammatory assets. MPLA will also rely on the exclusive
nature of its license, trademark and copyright law, trade secret protection,
confidentiality agreements and other contractual arrangements as it may execute
from time to time.
Management
of Molecular USA and MPLA believes that MPLA's products, trademarks, and other
proprietary rights do not infringe on the proprietary rights of third parties.
20
Marketing
Molecular USA plans to market its Licensed Products, when approved,
through existing pharmaceutical distributors and by collaborative dealings with major companies active in the United States and
Europe.
In addition, Molecular USA plans to explore opportunities for direct
sales, out-licensing and the integration of the company's proprietary anti-inflammatory and analgesic components in products
already distributed through various international markets.
Molecular USA expects that these activities may even help fund the
development costs of the Licensed Products in the United States.
Manufacturing
& Supply
Molecular USA and MPLA have no manufacturing facilities. MPLA is
required to supply Molecular USA with all Licensed Products under the distribution and supply agreement entered into by the parties
in October 2005. It is likely MPLA will enter into arrangements with various
Good Manufacturing Practice ("
GMP
") certified formulation and manufacturers of the
Licensed Products for clinical trial and sales purposes. These formulations and the manufacturing facilities must comply with regulations
and current good laboratory practices (or CGLPs), and current GMPs, enforced by the Food and Drug
Administration ("
FDA
").
Molecular USA plans to continue MPLA's practice to outsource formulation and
manufacturing for its clinical trials and potential commercialization after the
acquisition of MPLA by Molecular USA.
Molecular USA has not entered into any supply agreements.
Competition
Molecular USA and MPLA compete in the segment of the pharmaceutical
market that treats pain and inflammation, which is highly competitive. We face significant competition from most pharmaceutical
companies as well as biotechnology companies that are also researching and selling products designed to treat pain and inflammation.
Many of our competitors have significantly greater financial, manufacturing, marketing and product development resources than we
do. Large pharmaceutical companies in particular have extensive experience in clinical testing and in obtaining regulatory approvals
for drugs. These companies also have significantly greater research capabilities than we do. In addition, many universities and
private and public research institutes are active in neurological research, some in direct competition with us. These companies,
as well as academic institutions, governmental agencies and other public and private organizations conducting research, also compete
with Molecular USA and MPLA in recruiting and retaining highly qualified scientific personnel and consultants and may establish
collaborative arrangements with competitors of Molecular USA.
Molecular USA's competition will be determined in part by the potential
indications for which the MPLA's products are developed and ultimately approved by regulatory authorities.
Molecular USA knows of other companies and institutions dedicated
to the development of anti-pain and anti-inflammatory pharmaceuticals similar to those being developed by MPLA and licensed to
Molecular USA. Many of Molecular USA's competitors, existing or potential, have substantially greater financial and technical resources
and therefore may be in a better position to develop, manufacture and market pharmaceutical products. Many of these competitors
are also more experienced with regard to preclinical testing, human clinical trials and obtaining regulatory approvals. The current
or future existence of competitive products may also adversely affect the marketability of Molecular USA's products.
21
Governmental Regulation
FDA Regulation
.
Pharmaceutical products are subject to extensive pre- and post-marketing
regulation by the FDA, including regulations that govern the testing,
manufacturing, safety, efficacy, labeling, storage, record-keeping, advertising
and promotion of the products under the Federal Food, Drug and Cosmetic Act and
the Public Health Services Act, and by comparable agencies in most foreign
countries. The process required by the FDA before a new drug may be marketed in
the U.S. generally involves the following: completion of pre-clinical laboratory
and animal testing; submission of an investigational new drug application ("
IND
"),
which must become effective before clinical trials may begin; performance of
adequate and well controlled human clinical trials to establish the safety and
efficacy of the proposed drug's intended use; and approval by the FDA of a New
Drug Application ("
NDA
").
The activities required before a pharmaceutical agent may be marketed
in the United States begin with pre-clinical testing. Pre-clinical tests include laboratory evaluation of potential products and
animal studies to assess the potential safety and efficacy of the product and its formulations. The results of these studies and
other information must be submitted to the FDA as part of an IND application, which must be reviewed and approved by the FDA before
proposed clinical testing can begin. Clinical trials involve the administration of the investigational new drug to healthy volunteers
or to patients under the supervision of a qualified principal investigator. Clinical trials are conducted in accordance with Good
Clinical Practices under protocols that detail the objectives of the study, the parameters to be used to monitor safety and the
efficacy criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND application. Further, each clinical
study must be conducted under the auspices of an independent institutional review board. The institutional review board will consider,
among other things, ethical factors and the safety of human subjects.
Typically, human clinical trials are conducted in three phases that
may overlap. In Phase 1, clinical trials are conducted with a small number of subjects to determine the early safety profile and
pharmacology of the new therapy. In Phase 2, clinical trials are conducted with groups of patients afflicted with a specific disease
in order to determine preliminary efficacy, optimal dosages and expanded evidence of safety. In Phase 3, large scale, multicenter,
comparative clinical trials are conducted with patients afflicted with a target disease in order to provide enough data for the
statistical proof of efficacy and safety required by the FDA and others.
The results of the pre-clinical and clinical testing, together with
chemistry and manufacturing information, are submitted to the FDA in the form of an NDA for a pharmaceutical product in order to
obtain approval to commence commercial sales. In responding to an NDA, the FDA may grant marketing approvals, request additional
information or further research, or deny the application if it determines that the application does not satisfy its regulatory
approval criteria. Patient-specific therapies may be subject to additional risk with respect to the regulatory review process.
FDA approval for a pharmaceutical product may not be granted on a timely basis, if at all, or if granted may not cover all the
clinical indications for which approval is sought or may contain significant limitations in the form of warnings, precautions or
contraindications with respect to conditions of use.
Satisfaction of FDA premarket approval requirements for new drugs
typically takes several years, and the actual time required may vary substantially based upon the type, complexity and novelty
of the product or targeted disease. Government regulation may delay or prevent marketing of potential products for a considerable
period of time and impose costly procedures upon our activities. Success in early stage clinical trials or with prior versions
of products does not assure success in later stage clinical trials. Data obtained from clinical activities are not always conclusive
and may be susceptible to varying interpretations that could delay, limit or prevent regulatory approval.
22
Once approved, the FDA may withdraw the product approval if compliance
with pre- and post-marketing regulatory standards is not maintained or if problems occur after the product reaches the marketplace.
In addition, the FDA may require post-marketing studies, referred to as Phase 4 studies, to monitor the effect of an approved product,
and may limit further marketing of the product based on the results of these post-market studies. The FDA has broad post-market
regulatory and enforcement powers, including the ability to levy fines and civil penalties, suspend or delay issuance of approvals,
seize or recall products, or withdraw approvals.
Facilities used to manufacture drugs are subject to periodic inspection
by the FDA, Drug Enforcement Agency and other authorities where applicable, and must comply with the FDA's Current Good Manufacturing
regulations. Failure to comply with the statutory and regulatory requirements subjects the manufacturer to possible legal or regulatory
action, such as suspension of manufacturing, seizure of product or voluntary recall of a product. Adverse experiences with the
product must be reported to the FDA and could result in the imposition of market restriction through labeling changes or in product
removal. Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning
safety or efficacy of the product occur following approval.
With respect to post-market product advertising and promotion, the
FDA imposes a number of complex regulations on entities that advertise and promote pharmaceuticals, which include, among other
things, standards and regulations relating to direct-to-consumer advertising, off-label promotion, industry sponsored scientific
and educational activities, and promotional activities involving the Internet. The FDA has very broad enforcement authority under
the Federal Food, Drug and Cosmetic Act, and failure to abide by these regulations can result in penalties including the issuance
of a warning letter directing the entity to correct deviations from FDA standards, a requirement that future advertising and promotional
materials be pre-cleared by the FDA, and state and federal civil and criminal investigations and prosecutions.
Research facilities are subject to various laws and regulations
regarding laboratory practices, the experimental use of animals, and the use and disposal of hazardous or potentially hazardous
substances in connection with the research in question. In each of these areas, as above, the government has broad regulatory and
enforcement powers, including the ability to levy fines and civil penalties, suspend or delay issuance of approvals, seize or recall
products, and withdraw approvals, any one or more of which could have a material adverse effect upon us.
Other
Government Regulations
. In addition to laws and regulations enforced by the FDA, research of Molecular USA's products
in the United States are subject to regulation under National Institutes of Health guidelines, as well as under the Controlled
Substances Act, the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the
Resource Conservation and Recovery Act and other present and potential future federal, state or local laws and regulations, as
research and development of its products involves the controlled use of hazardous materials, chemicals, viruses and various radioactive
compounds.
In addition to regulations in the United States, Molecular USA's
products are subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of its
Licensed Products. Whether or not Molecular USA obtains FDA approval for a product, Molecular USA or its subsidiaries must obtain
approval of a product by the comparable regulatory authorities of foreign countries before it can commence clinical trials or marketing
of the product in those countries. The approval process varies from country to country, and the time may be longer or shorter than
that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement
vary greatly from country to country.
23
Sarbanes-Oxley Act of 2002.
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002
("
SOA
"). The SOA imposes a wide
variety of new requirements on both U.S. and non-U.S. companies, that file or
are required to file periodic reports with the Securities and Exchange
Commission (the "
SEC
") under the
Securities Exchange Act of 1934. Many of these new requirements will affect
Molecular USA and its board of directors. For instance, under the SOA Molecular
USA is required to:
·
form an audit committees in compliance with the SOA;
·
have Molecular USA's chief executive officer and chief financial officer certify its financial statements;
·
ensure Molecular USA's directors and senior officers forfeit all bonuses or other incentive-based compensation and
profits received from the sale of Molecular USA's securities in the twelve month period following initial publication of
any of Molecular USA's financial statements that later require restatement;
·
disclose any off-balance sheet transactions as required by the SOA;
·
prohibit all personal loans to directors and officers;
·
insure directors, officers and 10% holders file their Forms 4's within two days of a transaction;
·
adopt a code of ethics and file a Form 8-K whenever there is a change or waiver of this code; and
·
insure Molecular USA's auditor is independent as defined by the SOA.
The SOA has required us
to review our current procedures and policies to determine whether they comply
with the SOA and the new regulations promulgated thereunder. We will continue to
monitor our compliance with all future regulations that are adopted under the
SOA and will take whatever actions are necessary to ensure that we are in
compliance.
Environmental Compliance
The nature of Molecular USA's and MPLA's business does
not require special environmental or local government approval. Molecular USA and MPLA are compliant with all environmental laws.
The cost of such compliance is minimal for the company.
Employees
Molecular USA currently has no employees and instead relies on outside
contractors.
Immediate Business Plans
The Company, through its subsidiary MPLA, plans to continue to pursue
the various levels of the international regulatory approval processes. Applications and product opportunities for Tripeptofen are
believed to be broad and cover a range of commercial fields, each with distinct pre-market requirements. The international drug
development team, global resources and local know-how will allow MPLA to seek the most time and cost effective regulatory pathways
for each product and market sector.
On commercial development, MPLA will focus on consolidating the
regulatory pathway work in order to prioritize the path to market. Jeff Edwards will work to set-out the strategies designed to
maximize the multi-jurisdictional capabilities of MPLA's development teams.
24
Reports to Security Holders
We are required to file annual
reports on Form 10-K and quarterly reports on Form 10-Q with the SEC on a
regular basis, and will be required to timely disclose certain material events
(e.g., changes in corporate control; acquisitions or dispositions of a
significant amount of assets other than in the ordinary course of business; and
bankruptcy) in a current report on Form 8-K.
Although our Internet site
www.mpl-usa.com does not contain our reports, you may read and copy any
materials we file with the SEC at their Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Additionally, the SEC maintains an Internet site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC.
Results of Operation
For the
quarter ended September 30, 2012.
Rev
enues
REVENUE
- Molecular USA has not generated any revenues for the quarter ended September 30, 2012, or since inception.
COMMON
STOCK
- Molecular USA has not issued any shares during the most recent quarter. As of the date of November
7,
2012, Molecular USA has 111,553,740 common shares issued and outstanding.
Expenses
SUMMARY
-
Total expenses were $52,096 for the three month period ended September 30,
2012. Expenses had increased during this past three month period as compared to
the three month period ended September 30, 2011 - $27,272. A total of $2,189,115
in expenses has been incurred by Molecular USA since inception on
July 14,
2004
through to September 30,
2012. The increase in costs over this three month period has occurred as the
result of Molecular USA's wholly owned subsidiary increasing its consulting
fees. The costs can be subdivided into the following categories.
-
Office Expenses and
Rent
: $8,994 in office
expenses (for administrative costs) were incurred for the three month period
ended
September 30, 2012,
as compared to $4,445 for the three month period ended September 30, 2011,
while a total of $227,527 was incurred in the period from inception on
July 14, 2004
to September
30, 2012. All contributed expenses are reported as contributed costs with a
corresponding credit to additional paid-in capital.
-
Consulting and Analysis
Costs
: Molecular USA
relies on consultants and other third parties to conduct the majority of its
research. For the three month period ended September 30, 2012, $33,480 in
consulting and analysis expenses were incurred as compared to $18,464 during
the three month period ended
September 30, 2011.
We have incurred a total of $1,357,621 in consulting and analyst fees since our
inception on
July 14, 2004
to
September 30, 2012
.
-
Advertising and
Promotion Fees
:
Molecular USA has spent no money in this area this year. During the three
month period ended
September 30, 2012,
we spent $Nil on advertising and public relations and $Nil for three month
period ended September 30, 2011. A total of $23,739 has been incurred in this
area during the period from inception on
July 14, 2004
to
September 30,
2012
.
-
Professional Fees
:
Molecular USA incurred $9,177 in professional fees for the three month period
ended on September 30,
2012,
as compared to $4,250
for the three month period ended September 30, 2011. From inception to
September 30, 2012
, we have
incurred a total of $368,760 professional fees mainly spent on legal and
accounting matters.
-
Travel Costs
:
Molecular USA incurred $359 in travel costs for the three month period ended
September 30, 2012, as compared to $Nil for the three month period ended
September 30, 2011
and
$111,693 has been
incurred in the period from inception on
July 14, 2004
to
September 30,
2012
.
-
Salaries and Benefit
Costs
: Molecular USA and
its subsidiary rely primarily on outside consultants and not salaried
employees. As a result, Molecular USA incurred $Nil in salaries and benefits
for the three month period ended September 30, 2012 and $Nil in salaries and
benefits during the three month period ended September, 2011. For the period
July
14, 2004
(inception) through
September 30, 2012
,
Molecular USA has spent a total of $44,464 on salaries and benefits.
25
Molecular
USA continues to carefully control its expenses and overall costs as it moves
forward with the development of its new business plan. Molecular USA does not
have any employees and engages personnel through outside consulting
contracts
or agreements or other such arrangements.
Income Tax Provision
:
We have losses carried forward for income tax purpose to September 30, 2012.
There are no current or deferred tax expenses for the three month period ended
September 30, 2012, due to our loss position. We have fully reserved for any
benefits of these losses. The deferred tax consequences of temporary
differences in reporting items for financial statement and income tax purposes
are recognized as appropriate.
Liquidity and Capital Resources
During the three month
period ended September 30, 2012, Molecular USA satisfied its working capital
needs by borrowing cash from its parent company PharmaNet. As of September 30,
2012, the Company had cash and cash equivalents on hand in the amount of $11,443
($2,572 - June 30, 2012) and current payable and accrued liabilities of $18,300
($19,252 - June 30, 2012). As of September 30, 2012, Molecular USA currently
owes its parent company PharmaNet, $2,118,945, an additional $45,008 to other
related parties, and $18,300 to non-related parties. Given the proposed
business activities of Molecular USA and its subsidiary, management does not
expect that the current level of cash on hand will be sufficient to fund its
operation for the next twelve month period.
To achieve our goals and
objectives for the next 12 months, we plan to raise additional capital through
private placements of our equity securities and future financing from our
majority shareholder PharmaNet.
We plan to use any
additional funds that we might be successful in raising for development, as well
as for strategic acquisition of existing businesses that complement our market
niche, and general working capital purposes.
If we are unsuccessful
in obtaining new capital, our ability to seek and consummate strategic
acquisitions to build our company internationally and to expand of our business
development and marketing programs could be adversely affected.
Off-Balance Sheet Arrangement
As of September 30, 2012, Molecular USA did
not have any off-balance sheet arrangements.
Research and Development
Since the acquisition of MPLA, Molecular USA has maintained MPLA's
research and development program to:
-
Refine and prove-up its proprietary active ingredients and to commence
the processes that will lead to the issue of a Master Drug File registration of its products;
-
Define the mode of action and potential of Tripeptofen in both
in vitro, animal and human studies;
-
Gain Australian regulatory and marketing approval;
-
Gain European regulatory approval; and
-
Commence application for American regulatory approval.
26
MPLA is in the business
of developing and commercializing a new analgesic and anti-inflammatory molecule
known as Tripeptofen. Tripeptofen is likely to appear in a new group of products
suitable for the treatment of common every-day pain. As an analgesic and
anti-inflammatory drug, Tripeptofen is unusual due to its rapid speed of action
and its topical or rub-on application.
On April 19, 2006, Molecular USA
announced the filing of a new patent, Tissue Disruption Treatment and
Composition for Use (US Patent number 11218382). The patent describes a
proprietary process for the manufacture of topical biological secondary injury
mediators (B-SIMs) that should have local, rather than systemic, effects and may
be significantly less expensive to manufacture than conventional B-SIMs. MPLA is
developing its B-SIMs to stop the tissue disruption that occurs after injury by
suppressing the body's reactions, such as inflammation and damage/death of
otherwise uninjured cells that are triggered in response to primary injury.
The first conditions targeted by MPLA will be the musculoskeletal
injuries. The use of a B-SIM in these markets represents a new approach to one of the world's largest over the counter drug
markets and includes indications such as joint inflammation, musculoskeletal pain, overuse and strain injuries, burns and even
surgical and cosmetic procedures. MPLA's proprietary, industrially scalable peptide-ligand bond exchange (PLBE) B-SIM manufacturing
process involves the disassociation of proteins, rather than the far more costly process of assembling B-SIMs one sequence at a
time. The patent was lodged in the name of Cambridge Scientific Pty Ltd; however, Molecular USA holds the worldwide exclusive license
to manufacture, commercialize, market and distribute topical anti-inflammatory and analgesic products based on the proprietary
MPL-TL compound.
Molecular USA is still working on the projections regarding the
necessary expenditure and time frame involved in pursuing this research and development program. Any such program will also be
subject to Molecular USA raising the necessary funds to advance such a program.
Capital Expenditure Commitments
Capital expenditures for the three month period ended September
30, 2012, amounted to $Nil. Molecular USA does not anticipate any significant purchase or sale of equipment over the next 12 months.
Changes
in Accounting Policies
In December
2011, the Financial Accounting Standards Board ("
FASB
")
issued Accounting Standards Update ("
ASU
")
No. 2011-12, "
Comprehensive Income
".
This ASU effectively defers the changes in ASU No. 2011-05, "
Presentation
of Comprehensive Income
" that relate to the presentation of
reclassification adjustments out of accumulated other comprehensive income. ASU
No. 2011-12 should be applied retrospectively and is effective for fiscal years,
and interim periods within those years, beginning after December 15, 2011. As
ASU No. 2011-12 relates only to the presentation of Comprehensive Income, the
adoption of this update did not have a material effect on the Company's
interim consolidated financial statements.
In June 2011, the FASB issued ASU No. 2011-05,
"Presentation of Comprehensive Income"
.
This ASU presents an entity with the option to present the total of
comprehensive income, the components of net income, and the component of other
comprehensive income either in a single continuous statement of comprehensive
income or in two separate but consecutive statements. In both choices, an
entity is required to present each component of other
27
comprehensive income along with a total for other comprehensive income, and a
total amount for comprehensive income. This update eliminates the option to
present the components of other comprehensive income as part of the statement of
changes in stockholders' equity/deficit. The amendments in this update do not
change the items that must be reported in other comprehensive income or when an
item of other comprehensive income must be reclassified to net income. ASU No.
2011-05 should be applied retrospectively and is effective for fiscal years, and
interim periods within those years, beginning after 15 December 2011. As ASU
No. 2011-05 relates only to the presentation of Comprehensive Income, the
adoption of this update did not have a material effect on the Company's interim
consolidated financial statements.
In May
2011, the FASB issued ASU No. 2011-04,
"Fair
Value Measurement"
to amend the accounting and disclosure
requirements on fair value measurements. This ASU limits the
highest-and-best-use measure to nonfinancial assets, permits certain financial
assets and liabilities with offsetting positions in market or counterparty
credit risks to be measured at a net basis, and provides guidance on the
applicability of premiums and discounts. Additionally, this update expands the
disclosure on Level 3 inputs by requiring quantitative disclosure of the
unobservable inputs and assumptions, as well as description of the valuation
processes and the sensitivity of the fair value to changes in unobservable
inputs. ASU No. 2011-04 is to be applied prospectively and is effective during
interim and annual periods beginning after 15 December 2011. The adoption of
this update did not have a material effect on the Company's interim consolidated
financial statements.
Critical Accounting Policies and Estimates
Our quarterly interim consolidated financial statements and accompanying
notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements
requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses.
These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding
the basis and nature of the estimates and assumptions involved with the following aspects of our interim consolidated financial
statements is critical to an understanding of our financials.
Stock-based
compensation
Effective January 1, 2006, the Company adopted the provisions of
ASC 718,
"Compensation - Stock Compensation"
, which establishes accounting for equity instruments exchanged
for employee services. Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the
calculated fair value of the award, and is recognized as an expense over the employees' requisite service period (generally
the vesting period of the equity grant). The Company adopted ASC 718 using the modified prospective method, which requires the
Company to record compensation expense over the vesting period for all awards granted after the date of adoption, and for the unvested
portion of previously granted awards that remain outstanding at the date of adoption. Accordingly, the financial statements for
the periods prior to January 1, 2006 have not been restated to reflect the fair value method of expensing share-based compensation.
The adoption of ASC 718 does not change the way the Company accounts for share-based payments to non-employees, with guidance provided
by ASC 505-50,
"Equity-Based Payments to Non-Employees".
Item 3. Quantitative and Qualitative Disclosures About Market
Risk.
Interest Rate Risk
Due to the short-term nature of our interest bearing assets, which
consist primarily of cash and cash equivalents and no restricted cash, we believe that our exposure to interest rate market risk
will not significantly affect our operations.
28
Foreign Currency Risk
Our head office and lab operations are based in Australia. Accordingly,
we have been subject to exposure from adverse movements in foreign currency exchange rates. To date, the effect of changes in foreign
currency exchange rates on revenue and operating expenses has not been material as we have had no revenue and limited operations.
Operating expenses incurred by our foreign subsidiaries were denominated in local currencies. We have not used financial instruments
to hedge these operating expenses.
Item 4. Controls and Procedures.
(a) Evaluation of
disclosure controls and procedures
Disclosure controls are controls and procedures that are designed
to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the SEC's rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by a company in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to the company's management, including its principal executive and
principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure.
Our
management carried out an evaluation (with the participation of our
Chief Executive Officer ("
CEO
")
and Chief Financial Officer ("
CFO
")
), of the effectiveness of the design and operation of our disclosure controls
and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 ("
Exchange
Act
"). Based upon that evaluation,
the Corporation's CEO and CFO have concluded that the Company's disclosure
controls and procedures were effective as of September 30, 2012.
(b) Internal control over financial reporting
Management's annual report on internal control over financial
reporting
Management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control
over financial reporting is intended to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting should
include those policies and procedures that:
·
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of our assets;
·
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with applicable GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management
and the Board of Directors; and
·
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of
our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
As
required by Rule 13a-15(c) promulgated under the Exchange Act, Management, with
the participation of CEO and CFO, evaluated the effectiveness of our internal
control over financial reporting as of September 30, 2012. Management's
assessment took into consideration the size and complexity of the company and
was based on criteria set forth by the Committee of Sponsoring Organizations of
the Treadway Commission in Internal Control over Financial Reporting - Guidance
for Smaller Public Companies. In performing the assessment, Management has
concluded that our internal control over financial reporting was effective as of
September 30, 2012.
29
Attestation report of the registered public accounting firm
This quarterly report
does not include an attestation report of the Company's registered public
accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered
public accounting firm pursuant to temporary rules of the SEC that permit the
Company to provide only management's report in this quarterly report.
Changes in internal control over financial reporting
Based on the evaluation
as of September 30, 2012, Jeffery Edwards, our President, CEO and CFO have
concluded that there were no significant changes in our internal controls over
financial reporting or in any other areas that could significantly affect our
internal controls subsequent to the date of his most recent evaluation,
including corrective actions with regard to significant deficiencies and
material weaknesses.
30
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We know of no material, active or pending legal proceedings against
our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which
any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material
interest adverse to our interest.
Item 1A. Risk Factors.
As a "smaller reporting company" as defined by Item 10(f)
of Regulation S-K, the Company is not required to provide information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Recent Sale of Unregistered Securities
Not Applicable.
Use of Proceeds from Unregistered Securities
Not Applicable.
Item 3.
Defaults Upon Senior Securities
.
Not Applicable.
Item 4.
Mine Safety Disclosures.
Not Applicable.
Item 5.
Other Information
.
No items to disclose.
31
Item 6.
Exhibits
.
Exhibit
Number
|
Exhibit Title
|
3.1
|
Articles of Incorporation as Amended (incorporated by reference to exhibit 3.1 to our Form 10-SB Registration Statement filed on January 23, 2003).
|
3.2
|
Article of Amendment dated August 29, 2005
|
3.3
|
Bylaws as Amended (incorporated by reference to exhibit 3.2 to our Form 10-SB Registration Statement filed on January 23, 2003).
|
31.1
|
Certificate of CEO as Required by Rule 13a-14(a)/15d-14
|
31.2
|
Certificate of CFO as Required by Rule 13a-14(a)/15d-14
|
32.1
|
Certificate of CEO and CFO as Required by Rule 13a-14(b) and Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
November 7, 2012.
|
MOLECULAR PHARMACOLOGY (USA) LIMITED
|
|
BY:
|
/s/ Jeffery
Edwards
|
|
|
Jeffery Edwards, President, Chief Executive Officer, Chief Financial Officer and a Member of the Board of Directors
|
32
Grafico Azioni Molecular Pharmacology (PK) (USOTC:MLPH)
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