Full Press Release Details
DEVELOPMENT STAGE COMPANY)
The Years Ended December 31, 2006 and 2005 and
The Period From July 24, 1998 (Inception) Through December 31,
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
DEVELOPMENT STAGE COMPANY)
| Report of Independent Registered Public Accounting Firm | 1 | |||
| Financial Statements: | ||||
| Balance Sheet | 2 | |||
| Statements of Operations | 3 | |||
| Statements of Stockholders' Deficit | 4-6 | |||
| Statements of Cash Flows | 7 | |||
| Notes to Financial Statements | 8 |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Directors and Stockholders
audited the accompanying balance sheet of Trans-Pharma Corporation (a
development stage company) (the "Company") as of December 31, 2006 and the
related statements of operations, stockholders' deficit and cash flows for each
of the years in the two-year period then ended, and the period from July 24,
1998 (inception) to December 31, 2006. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements based on our audits.
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company has
determined that it is not required to have, nor were we engaged to perform,
audit of its internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Trans-Pharma Corporation (a
development stage company) as of December 31, 2006 and the results of its
operations and its cash flows for each of the years in the two-year period
ended, and the period from July 24, 1998 (inception) to December 31, 2006 in
conformity with accounting principles generally accepted in the United States
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. As discussed in Note 2 to the financial statements,
the Company has incurred recurring operating losses, has a deficit accumulated
during the development stage and has not recognized any revenue as of December
31, 2006. These factors, among others, raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 2. The financial statements do
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amount and classification
liabilities that may result form the outcome of this uncertainty.
2007, except for Note 7, as to which the date is September 11, 2007
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DEVELOPMENT STAGE COMPANY)
| December 31, 2006 | ||||
| ASSETS | ||||
| Current assets: | ||||
| Cash | $ | 542 | ||
| Prepaid expenses | 5,696 | |||
| $ | 6,238 | |||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 173,692 | ||
| Accrued interest | 12,251 | |||
| Notes payable to stockholders | 226,300 | |||
| Total current liabilities | 412,243 | |||
| Commitments and contingencies | ||||
| Stockholders' deficit: | ||||
| Common stock, $0.001 par value; 100,000,000 shares authorized, 24,200,000 shares outstanding | 24,200 | |||
| Additional paid-in capital | 2,362,800 | |||
| Deficit accumulated during the development stage | (2,793,005 | ) | ||
| Total stockholders' deficit | (406,005 | ) | ||
| $ | 6,238 |
report of independent registered public accounting firm and
notes to financial statements
DEVELOPMENT STAGE COMPANY)
| For The Years Ended December 31, | For The Period From July 24, 1998 (Inception) Through December 31, | |||||||||
| 2006 | 2005 | 2006 | ||||||||
| Operating expenses: | ||||||||||
| Payroll and related | $ | 400,000 | $ | 400,000 | $ | 2,300,000 | ||||
| Selling, general and administrative | 175,180 | 136,423 | 481,937 | |||||||
| Operating loss | (575,180 | ) | (536,423 | ) | (2,781,937 | ) | ||||
| Other income (expense): | ||||||||||
| Interest expense | (9,052 | ) | (3,199 | ) | (12,251 | ) | ||||
| Interest income | - | - | 1,183 | |||||||
| Total other expense, net | (9,052 | ) | (3,199 | ) | (11,068 | ) | ||||
| Net loss | $ | (584,232 | ) | $ | (539,622 | ) | $ | (2,793,005 | ) | |
| Basic and diluted loss per common share | $ | (0.03 | ) | $ | (0.05 | ) | $ | (2,793,005 | ) | |
| Weighted average common shares outstanding | 22,967,123 | 10,549,597 |
report of independent registered public accounting firm and
notes to financial statements
DEVELOPMENT STAGE COMPANY)
OF STOCKHOLDERS' DEFICIT
The Years Ended December 31, 2006 and 2005 and
The Period From July 24, 1998 (Inception) Through December 31,
| Additional | Deficit Accumulated | Total | ||||||||||||||
| Common Stock | Paid-in | During the | Stockholders' | |||||||||||||
| Shares | Amount | Capital | Development Stage | Deficit | ||||||||||||
| Balance, July 24, 1998 (Inception) | - | $ | - | $ | - | $ | - | $ | - | |||||||
| Estimated fair value of services contributed by stockholders | - | - | 100,000 | - | 100,000 | |||||||||||
| Net loss | - | - | - | (100,000 | ) | (100,000 | ) | |||||||||
| Balance, December 31, 1998 | - | - | 100,000 | (100,000 | ) | - | ||||||||||
| Estimated fair value of services contributed by stockholders | - | - | 200,000 | - | 200,000 | |||||||||||
| Net loss | - | - | - | (204,000 | ) | (204,000 | ) | |||||||||
| Balance, December 31, 1999 | - | - | 300,000 | (304,000 | ) | (4,000 | ) | |||||||||
| Issuance of common stock for cash | 6,000,000 | 6,000 | - | - | 6,000 | |||||||||||
| Estimated fair value of services contributed by stockholders | - | - | 200,000 | - | 200,000 | |||||||||||
| Net loss | - | - | - | (213,092 | ) | (213,092 | ) | |||||||||
| Balance, December 31, 2000 | 6,000,000 | 6,000 | 500,000 | (517,092 | ) | (11,092 | ) | |||||||||
| Estimated fair value of services contributed by stockholders | - | - | 200,000 | - | 200,000 | |||||||||||
| Net loss | - | - | - | (208,420 | ) | (208,420 | ) | |||||||||
| Balance, December 31, 2001 | 6,000,000 | 6,000 | 700,000 | (725,512 | ) | (19,512 | ) |
DEVELOPMENT STAGE COMPANY)
OF STOCKHOLDERS' DEFICIT - CONTINUED
The Years Ended December 31, 2006 and 2005 and
The Period From July 24, 1998 (Inception) Through December 31,
| Additional | Deficit Accumulated | Total | ||||||||||||||
| Common Stock | Paid-in | During the | Stockholders' | |||||||||||||
| Shares | Amount | Capital | Development Stage | Deficit | ||||||||||||
| Estimated fair value of services contributed by stockholders | - | - | 200,000 | - | 200,000 | |||||||||||
| Net loss | - | - | - | (228,217 | ) | (228,217 | ) | |||||||||
| Balance, December 31, 2002 | 6,000,000 | 6,000 | 900,000 | (953,729 | ) | (47,729 | ) | |||||||||
| Estimated fair value of services contributed by stockholders | - | - | 200,000 | - | 200,000 | |||||||||||
| Net loss | - | - | - | (207,196 | ) | (207,196 | ) | |||||||||
| Balance, December 31, 2003 | 6,000,000 | 6,000 | 1,100,000 | (1,160,925 | ) | (54,925 | ) | |||||||||
| Estimated fair value of services contributed by stockholders | - | - | 400,000 | - | 400,000 | |||||||||||
| Net loss | - | - | - | (508,226 | ) | (508,226 | ) | |||||||||
| Balance, December 31, 2004 | 6,000,000 | 6,000 | 1,500,000 | (1,669,151 | ) | (163,151 | ) | |||||||||
| Capital contributions | - | - | 14,200 | - | 14,200 | |||||||||||
| Issuance of common stock for cash | 15,700,000 | 15,700 | - | - | 15,700 | |||||||||||
| Exercise of stock options | 100,000 | 100 | - | - | 100 | |||||||||||
| Estimated fair value of services contributed by stockholders | - | - | 400,000 | - | 400,000 | |||||||||||
| Net loss | - | - | - | (539,622 | ) | (539,622 | ) | |||||||||
| Balance, December 31, 2005 | 21,800,000 | 21,800 | 1,914,200 | (2,208,773 | ) | (272,773 | ) |
DEVELOPMENT STAGE COMPANY)
OF STOCKHOLDERS' DEFICIT - CONTINUED
The Years Ended December 31, 2006 and 2005 and
The Period From July 24, 1998 (Inception) Through December 31,
| Additional | Deficit Accumulated | Total | ||||||||||||||
| Common Stock | Paid-in | During the | Stockholders' | |||||||||||||
| Shares | Amount | Capital | Development Stage | Deficit | ||||||||||||
| Capital contributions | - | - | 48,600 | - | 48,600 | |||||||||||
| Exercise of stock options | 2,400,000 | 2,400 | - | - | 2,400 | |||||||||||
| Estimated fair value of services contributed by stockholders | - | - | 400,000 | - | 400,000 | |||||||||||
| Net loss | - | - | - | (584,232 | ) | (584,232 | ) | |||||||||
| Balance, December 31, 2006 | 24,200,000 | $ | 24,200 | $ | 2,362,800 | $ | (2,793,005 | ) | $ | (406,005 | ) |
report of independent registered public accounting firm and
notes to financial statements
DEVELOPMENT STAGE COMPANY)
| For The Years Ended December 31, | For The Period From July 24, 1998 (Inception) Through December 31, | |||||||||
| 2006 | 2005 | 2006 | ||||||||
| Cash flows from operating activities: | ||||||||||
| Net loss | $ | (584,232 | ) | $ | (539,622 | ) | $ | (2,793,005 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
| Estimated fair value of contributed services | 400,000 | 400,000 | 2,300,000 | |||||||
| Changes in operating assets and liabilities: | ||||||||||
| Prepaid expenses | (1,998 | ) | 981 | (5,696 | ) | |||||
| Accounts payable | 121,516 | 46,650 | 173,692 | |||||||
| Accrued interest | 9,052 | 3,199 | 12,251 | |||||||
| Net cash used in operating activities | (55,662 | ) | (88,792 | ) | (312,758 | ) | ||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from notes payable to stockholders | - | 30,000 | 226,300 | |||||||
| Capital contributions | 48,600 | 14,200 | 62,800 | |||||||
| Proceeds from purchase of common stock | - | 15,700 | 21,700 | |||||||
| Proceeds from exercise of stock options | 2,400 | 100 | 2,500 | |||||||
| Net cash provided by financing activities | 51,000 | 60,000 | 313,300 | |||||||
| Net change in cash | (4,662 | ) | (28,792 | ) | 542 | |||||
| Cash, beginning of period | 5,204 | 33,996 | - | |||||||
| Cash, end of period | $ | 542 | $ | 5,204 | $ | 542 | ||||
| Supplemental disclosure of cash flow information: | ||||||||||
| Cash paid during the year for interest | $ | - | $ | - | ||||||
| Cash paid during the year for income taxes | $ | - | $ | - | ||||||
| Non-cash financing activity: | ||||||||||
| Conversion of advances to notes payable to stockholders | $ | - | $ | 196,300 |
report of independent registered public accounting firm and
notes to financial statements
DEVELOPMENT STAGE COMPANY)
TO FINANCIAL STATEMENTS
The Years Ended December 31, 2006 and 2005 and
The Period From July 24, 1998 (Inception) Through December 31,
1 - ORGANIZATION AND NATURE OF OPERATIONS
and Nature of Operations
Corporation (the "Company") was formed as a C Corporation under the laws of the
State of Nevada on July 24, 1998 ("Inception"). The Company is based in San
Company is in the pharmaceutical industry and holds a U.S. patent that covers
the Transdel technology for transdermal drug delivery. The patent was
contributed by the founders upon formation of the Company. The Company's lead
topical drug candidate, Ketotransdel , utilizes the proprietary Transdel cream
formulation to facilitate the passage of ketoprofen, a non-steroidal
anti-inflammatory drug ("NSAID"), through the epidermis and into underlying
tissues. Ketotransdel provides an alternative to oral administration of
cyclooxygenase-2 selective NSAIDs ("COX-2 inhibitors") and non-selective NSAIDs,
which when administered orally are associated with increased risk of adverse
cardiovascular events, gastrointestinal and other adverse complications. The
Company has successfully completed a clinical trial for acute soft-tissue pain
and soreness with Ketotransdel . The Company presently intends to conduct
additional clinical studies and pharmacological and toxicological studies of
Ketotransdel . The Company plans to obtain approval from the Food and Drug