U. S. Securities and Exchange Commission Washington, D. C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2005 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 For the transition period from to ----------------- --------------- Commission File No. 000-49655 --------- LIPIDVIRO TECH, INC. -------------------- (Exact Name of Small Business Issuer as specified in its Charter) Nevada 87-0678927 ------ ---------- (State or Other Jurisdiction of (I.R.S. Employer I.D. No. incorporation or organization) 1338 South Foothill Blvd. #126 Salt Lake City, Utah 84108 -------------------------- (Address of Principal Executive Offices) Issuer's Telephone Number: (801) 583-9900 -------------- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS N/A Check whether the Registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes No APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the Registrant's classes of common equity, as of the latest practicable date: May 14, 2005 Common Voting Stock - 10,031,863 shares Transitional Small Business Disclosure Format (Check one): Yes X No ITEM 1 Financial Statements The Financial Statements of the Registrant required to be filed with this 10-QSB Quarterly Report were prepared by management and commence below, together with related Notes. In the opinion of management, the Financial Statements fairly present the financial condition of the Registrant. LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2005 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] CONTENTS PAGE Unaudited Condensed Consolidated Balance Sheets, March 31, 2005 and December 31, 2004 2 Unaudited Condensed Consolidated Statements of Operations, for the three months ended March 31, 2005 and from inception on May 6, 2003 through March 31, 2005 3 Unaudited Condensed Consolidated Statements of Cash Flows, for the three months ended March 31, 2005 and from inception on May 6, 2003 through March 31, 2005 4 Notes to Unaudited Condensed Consolidated Financial Statements 5 - 13 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] Condensed Balance Sheets ASSETS March 31, December 31, 2005 2004 ___________ ___________ (Unaudited) Current Assets Cash $ 1,862 $ 0 ___________ ___________ Total Current Assets 1,862 0 ___________ ___________ Property & Equipment, net 2,310 2,471 ___________ ___________ Other Assets Definite Life Intangible Assets 34,226 29,489 Goodwill 290,318 290,318 ___________ ___________ Total Other Assets 324,544 319,807 ___________ ___________ $ 328,716 $ 322,278 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Bank Overdraft 0 1,023 Accounts payable 140,025 159,063 Shareholder advances 249,000 202,500 ___________ ___________ Total Current Liabilities 389,025 362,586 ___________ ___________ Total Liabilities 389,025 362,586 ___________ ___________ Commitments 0 0 Stockholders' Equity Common stock, authorized 150,000,000 shares of $.001 Par value, Issued and outstanding 10,031,862 shares 10,032 10,032 Additional Paid in Capital 344,352 344,352 Deficit accumulated during the development stage (414,693) (394,692) ___________ ___________ Total Stockholders' Equity (60,309) (40,308) ___________ ___________ Total Liabilities and Stockholders' Equity $ 328,716 $ 322,278 =========== =========== The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] Condensed Statements of Operations (Unaudited) For the Three Months Ended From Inception March 31, on May 6, 2003 2005 2004 Through March 31, 2005 ____________ ____________ ______________________ Revenue $ 0 $ 0 $ 0 Operating Expenses General and administrative expenses 12,315 12,097 165,570 Research & development 7,686 24,793 249,146 ____________ ____________ _________________ Total Operating Expenses 20,001 36,890 414,716 ____________ ____________ _________________ Net Operating Income (Loss) (20,001) (36,890) (414,716) Other Income 0 0 23 ____________ ____________ _________________ Total Other Income 0 0 23 ____________ ____________ _________________ Net Income (Loss) $ (20,001) $ (36,890)$ (414,693) ============ ============ ================= Net Income (Loss) Per Share $ (.00) $ (.00)$ (0.04) ============ ============ ================= Weighted Average Shares Outstanding 10,031,862 9,999,076 9,513,110 ============ ============ ================= The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] Condensed Statements of Cash Flows (Unaudited) For the Three Months Ended From Inception March 31, on May 6, 2003 2005 2004 Through March 31, 2005 ____________ ____________ ______________________ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ (20,001) $ (36,890)$ (414,693) Adjustments to reconcile net loss to net cash provided by operations: Depreciation & Amortization 552 115 1,856 Non-cash expenses paid by issuance of common stock 0 0 750 Non-cash services paid by issuance of common stock 0 0 113 Changes in assets and liabilities: (Increase) Decrease in prepaid expenses 0 (1,139) 0 Increase (Decrease) in Bank Overdraft (1,023) 0 0 Increase (Decrease) in accounts payable (19,038) 12,787 140,026 ____________ ____________ _____________ Net Cash Provided (Used) by Operating Activities (39,510) (25,127) (271,948) ____________ ____________ _____________ CASH FLOWS FROM INVESTING ACTIVITIES: Payments for property & equipment 0 (960) (3,263) Payments for definite-life intangible assets (5,128) (3,826) (35,131) Payments for goodwill 0 0 (269,006) ____________ ____________ _____________ Net Cash Provided (Used) by Investing Activities (5,128) (4,786) (307,400) ____________ ____________ _____________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from shareholder advances 46,500 30,000 249,000 Proceeds from issuance of common stock 0 0 293,700 Proceeds from sale of warrants 0 0 38,510 ____________ ____________ _____________ Net Cash Provided (Used) by Financing Activities 46,500 30,000 581,210 ____________ ____________ _____________ NET INCREASE (DECREASE) IN CASH AND EQUIVALENT 1,862 87 1,862 ____________ ____________ _____________ CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 0 3,702 0 ____________ ____________ _____________ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,862 $ 3,789 $ 1,862 ============ ============ ============ Cash paid For: Interest $ 0 $ 0 $ 0 ============ ============ ============ Income taxes $ 0 $ 0 $ 0 ============ ============ ============ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization - LipidViro Tech, Inc. ("Parent") was organized under the laws of the State of California on October 19, 1954 as Anticline Uranium, Inc. In October 2001, Parent changed its domicile from California to Nevada by merging with and into a wholly owned subsidiary with the same name and the Nevada entity being the surviving entity. In January 2004, Parent changed its name to LipidViro Tech, Inc. On June 24, 2003, Subsidiary acquired 95.9% of the outstanding stock of Parent pursuant to a Share Purchase Agreement. The agreement called for Subsidiary to pay $65,718 to the former shareholders of Parent for 5,000,000 shares of Parent's common stock wherein Parent became a 95.9% owned subsidiary of Subsidiary [See Note 3]. On January 14, 2004, Parent issued 9,818,750 shares of its common stock for all 9,818,750 outstanding shares of Subsidiary's common stock wherein Subsidiary became a wholly owned subsidiary of Parent in a transaction which has been accounted for as a downstream merger [See Note 2]. Accordingly, the equity transactions have been restated to reflect the recapitalization of Subsidiary and the operations of Parent prior to June 24, 2003 have been eliminated. The financial statements reflect the operations of Subsidiary from its inception. Lipidviro Tech Inc. ("Subsidiary") was organized under the laws of the State of Utah on May 6, 2003. LipidViro Tech, Inc. and Subsidiary ("the Company") plans to research and market substances and compounds for antiviral and antibacterial purposes. The Company has not generated any revenues from their planned principal operations and is considered a development stage company as defined in Statement of Financial Accounting Standards No. 7. The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors. Condensed Financial Statements - The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2005 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2004 audited financial statements. The results of operations for the periods ended March 31, 2005 are not necessarily indicative of the operating results for the full year. Consolidation - The consolidated financial statements include the accounts of Parent and Parent's wholly owned Subsidiary. All significant intercompany transactions have been eliminated in consolidation. Cash and Cash Equivalents - The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents. F-5 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued] Property and Equipment - Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized upon being placed in service. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets of five years. In accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", the Company periodically reviews their property and equipment for impairment. Website Costs - The Company has adopted the provisions of Emerging Issues Task Force 00-2, "Accounting for Web Site Development Costs." Costs incurred in the planning stage of a website are expensed as research and development while costs incurred in the development stage are capitalized and amortized over the life of the asset, estimated to be five years. As of March 31, 2005, the Company has capitalized a total of $2,830 of website costs which are included in property and equipment. The Company did not incur any planning costs and did not record any research and development costs for the three months ended March 31, 2005. Intangible Assets - The Company accounts for their intangible assets in accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets". SFAS No. 142 establishes three classifications for intangible assets including definite-life intangible assets, indefinite-life intangible assets and goodwill and requires different accounting treatment and disclosures for each classification. In accordance with SFAS No. 142, the Company periodically reviews their intangible assets for impairment. No impairment was recorded during the three months ended March 31, 2005. Research and Development - Research and development costs are expensed as incurred. The Company expensed $7,686 in research and development costs during the three months ended March 31, 2005. Income Taxes - The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" [See Note 8]. Minority Interest - From June 24, 2003 through January 14, 2004, Subsidiary owned 95.9% of Parent. The net loss of Parent applicable to the non-controlling minority interest was not allocated to the minority interests as there was no obligation of the non-controlling minority interests to share in such losses. On January 14, 2004, Subsidiary acquired the minority interest in a downstream merger [See Note 2]. Loss Per Share - The computation of loss per share is based on the weighted average number of shares outstanding during the period presented in accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share" [See Note 11]. F-6 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued] Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimated. Recently Enacted Accounting Standards - Statement of Financial Accounting Standards ("SFAS") No. 151, "Inventory Costs - an amendment of ARB No. 43, Chapter 4", SFAS No. 152, "Accounting for Real Estate Time-Sharing Transactions - an amendment of FASB Statements No. 66 and 67", SFAS No. 153, "Exchanges of Nonmonetary Assets - an amendment of APB Opinion No. 29", and SFAS No. 123 (revised 2004), "Share-Based Payment", were recently issued. SFAS No. 151, 152, 153 and 123 (revised 2004) have no current applicability to the Company or their effect on the financial statements would not have been significant. Reclassification - The financial statements for periods prior to March 31, 2005 have been reclassified to conform to the headings and classifications used in the March 31, 2005 financial statements. Restatement - The financial statements have been restated for all periods presented to reflect the recapitalization of Subsidiary [See Note 2] and to reflect a 1-for-100 reverse stock split that Parent effected on October 4, 2001 and a 4-for-1 forward stock split that Parent effected on December 31, 2001 [See Note 7]. NOTE 2 - DOWNSTREAM MERGER On January 14, 2004, Subsidiary acquired the minority interests in Parent and Subsidiary was reorganized as a subsidiary of Parent in a transaction in which Parent issued 9,818,750 shares of its common stock in exchange for all 9,818,750 outstanding shares of Subsidiary's common stock. Accordingly, the equity transactions have been restated to reflect the recapitalization of Subsidiary. The Company recorded goodwill of $21,311 as a result of the downstream merger. The financial statements reflect the operations of Subsidiary from its inception. As part of the downstream merger, Parent issued 1,915,000 Class A warrants and 1,915,000 Class B warrants to replace similar warrants of Subsidiary. Parent also cancelled 5,000,000 shares of its common stock which had previously been owned by Subsidiary. NOTE 3 - ACQUISITION OF 95.9% OF LIPIDVIRO TECH, INC. On June 24, 2003, Subsidiary acquired 95.9% of the outstanding stock of Parent pursuant to a Share Purchase Agreement. The agreement called for Subsidiary to pay $65,718 to the former shareholders of Parent for 5,000,000 shares of Parent's common stock wherein Parent became a 95.9% owned subsidiary of Subsidiary. The agreement also called for Subsidiary to advance an additional $203,282 to pay costs associated with the acquisition and to reduce the liabilities of Parent. The acquisition closed June 24, 2003 and has been accounted for as a purchase of Parent. The Company recorded goodwill of $269,006 as a result of the acquisition. The financial statements reflect the operations of Parent from June 24, 2003. F-7 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following at: March 31, December 31, 2005 2004 ___________ ___________ Office equipment $ 433 $ 433 Website 2,830 2,828 ___________ ___________ 3,263 3,261 Less: accumulated depreciation (953) (790) ___________ ___________ Net property and equipment $ 2,310 $ 2,471 ___________ ___________ Depreciation expense for the three months ended March 31, 2005 was $161. NOTE 5 - DEFINITE-LIFE INTANGIBLE ASSETS Definite-life intangible assets consist of the following at: March 31, December 31, 2005 2004 ___________ ___________ Pending Patents $ 29,233 $ 29,233 Patent applications in process 5,898 770 ___________ ___________ 35,131 30,003 Less: Accumulated amortization (905) (514) ___________ ___________ Net Definite-life Intangible Assets $ 34,226 $ 29,489 ___________ ___________ The Company's definite-life intangible assets are amortized, upon being placed in service, over the estimated useful lives of the assets of 20 years with no residual value. Amortization expense for the three months ended March 31, 2005 and for the period from inception on May 6, 2003 through March 31, 2005 was $391 and $905, respectively. The Company estimates that their amortization expense for each of the next five years will be approximately $1,500 per year. F-8 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 6 GOODWILL The Company has no indefinite-life intangible assets. The following is a summary of the transactions affecting the Company's goodwill. March 31, December 31, 2005 2004 ___________ ___________ Goodwill at beginning of period $ 290,317 $ 269,006 Goodwill from the acquisition of 95.9% of Parent - - Goodwill from the acquisition of the minority interests in Parent - 21,311 ___________ ___________ Goodwill at end of period $ 290,317 $ 290,317 ___________ ___________ NOTE 7 - CAPITAL STOCK Common Stock - The Company has authorized 150,000,000 shares of common stock with a par value of $.001. In January 2004, the Company issued 213,112 shares of their previously authorized but unissued common stock to the former shareholders of Subsidiary as part of a downstream merger [See Note 2]. In June 2003, the Company issued 3,750 shares of their previously authorized but unissued common stock to an officer of the Company for services rendered valued at $113, or $.03 per share. In June 2003, the Company issued 7,875,000 shares of their previously authorized but unissued common stock for cash of $236,250, or .03 per share. In May 2003, the Company issued 1,915,000 units. Each unit consisted of one share of the Company's previously authorized but unissued common stock, one Class A warrant and one Class B warrant. The units were issued for cash of $95,960, or approximately $.05 per unit. In May 2003, in connection with their organization, the Company issued 25,000 shares of their previously authorized but unissued common stock to an officer of the Company as repayment of organization costs of $750, or $.03 per share. F-9 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 7 - CAPITAL STOCK [Continued] Stock Splits - On December 31, 2001, Parent effected a 4-for-1 forward stock split. On October 4, 2001, Parent effected a 1-for-100 reverse stock split. The financial statements for all periods presented have been restated to reflect these stock splits. Class A Warrants - In May 2003, the Company issued 1,915,000 Class A Warrants for cash of $19,255, or approximately $.01 per warrant, as part of a private placement offering. The warrants vested immediately and are exercisable at $5.00 per share. The warrants were originally exercisable for two years. In August 2003, the Company changed the exercise period so the warrants are only exercisable during June 2006. At March 31, 2005, none of these warrants had been exercised, forfeited or cancelled. Class B Warrants - In May 2003, the Company issued 1,915,000 Class B Warrants for cash of $19,255, or approximately $.01 per warrant, as part of a private placement offering. The warrants vested immediately and are exercisable at $10.00 per share. The warrants were originally exercisable for two years. In August 2003, the Company changed the exercise period so the warrants are only exercisable during June 2006. At March 31, 2005, none of these warrants had been exercised, forfeited or cancelled. Stock Option Plan - In March 2003, the Board of Directors of Parent approved and adopted the "2003 Stock Option/Stock Issuance Plan" ("the Plan") with a maximum of 1,500,000 shares of common stock reserved for issuance under the Plan. The Plan provides for both the direct award of shares and for the grant of options to purchase shares. The Board of Directors has authorized options to purchase 500,000 common shares to be granted at a purchase price of $0.01 per share, but to date the Company has not granted any options to their employees, officers or directors. Under the Plan, the Board of Directors shall determine which eligible persons are to receive Incentive Options, Non-Statutory grants or stock issuances. The Board of Directors also sets the exercise price for options granted. The option terms are not to exceed ten years from the option grant date. At March 31, 2005, total awards available to be granted from the Plan amounted to 1,500,000. NOTE 8 - INCOME TAXES The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". SFAS No. 109 requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards. The Company has available at March 31, 2005 unused operating loss carryforwards of approximately $506,000 which may be applied against future taxable income and which expire in various years through 2025. Due to substantial changes in the Company's ownership, there will be an annual limitation on the amount of net operating loss carryforwards which can be utilized. F-10 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 8 - INCOME TAXES [Continued] The amount of and ultimate realization of the benefits from the operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company, and other future events, the effects of which cannot be determined. Because of the uncertainty surrounding the realization of the deferred tax assets, the Company has established a valuation allowance equal to the tax effect of the loss carryforwards, therefore, no deferred tax asset has been recognized. The net deferred tax assets, which consist of difference in book and tax basis of fixed assets and net operating losses, are approximately $92,100 and $88,350 as of March 31, 2005 and December 31, 2004, respectively, with an offsetting valuation allowance of the same amount, resulting in a change in the valuation allowance of approximately $3,750 during the three months ended March 31, 2005. NOTE 9 - RELATED PARTY TRANSACTIONS Management Compensation - The Company has not paid any cash compensation to any officer or director of the Company. However, in June 2003, the Company issued 3,750 shares of common stock to an officer of the Company for services rendered valued at $113 [See Note 7]. Office Space - The Company has not had a need to rent office space. A shareholder (former officer) of the Company is allowing the Company to use her mailing address, as needed, at no expense to the Company. Stock Issuance - In May 2003, in connection with their organization, the Company issued 25,000 shares of their previously authorized but unissued common stock to an officer of the Company as repayment of organization costs of $750, or $.03 per share. Shareholder Advances - During the three months ended March 31, 2005, a shareholder of the Company advanced $46,500 to the Company. At March 31, 2005, the Company owes a total of $249,000 to the shareholder. The advances bear no interest. NOTE 10 - GOING CONCERN The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company was only recently formed and has not yet been successful in establishing profitable operations. Further, the Company has current liabilities in excess of current assets. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of their common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. F-11 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 11 - LOSS PER SHARE The following data shows the amounts used in computing loss per share: For the Three From Inception on Months Ended May 6, 2003 Through March 31, March 31, __________________ ____________________ 2005 2004 2005 ________ ________ __________ Loss from continuing operations available to common shareholders (numerator) $(20,001) $(36,890) $ (414,693) ________ ________ __________ Weighted average number of common shares outstanding used in loss per share for the period (denominator) 10,031,862 9,999,076 9,513,110 ________ ________ __________ At March 31, 2005, the Company had 1,915,000 Class A warrants and 1,915,000 Class B warrants outstanding which were not used in the computation of dilutive loss per share because their effect would be anti-dilutive. Dilutive loss per share was not presented, as the Company had no common stock equivalent shares for all periods presented that would effect the computation of diluted loss per share. NOTE 12 - COMMITMENTS AND CONTINGENCIES Agreements - In August 2004, the Company signed a one-year agreement for the use of a research facility and staff to conduct research on behalf of the Company and to have a researcher coordinate the activities. The Company agreed to pay up to $600,000 for supplies, facilities, a laboratory technician and coordination efforts. During the year ended December 31, 2004 the Company paid $5,000 under this agreement. During the three months ended March 31, 2005 the Company paid an additional $24,000 under this agreement. In July 2004, the Company signed a six-month agreement for a researcher to conduct research on behalf of the Company. The Company agreed to pay $15,000 for the services of the researcher. During the year ended December 31, 2004 the Company paid $10,000 under this agreement and during the three months ended March 31, 2005 paid an additional $5,000 under this agreement. In October 2003, the Company signed one-year agreements for the use of a research facility and staff to conduct research on behalf of the Company and to have a researcher coordinate the activities. The Company agreed to pay up to $76,325 for supplies, facilities, a laboratory technician and coordination efforts. The costs incurred under this agreement totaled $75,000. During the year ended December 31, 2004 and the period from inception on May 6, 2003 through December 31, 2003, respectively, the Company paid $52,000 and $23,000 under these agreements. F-12 LIPIDVIRO TECH, INC. AND SUBSIDIARY (Formerly Anticline Uranium, Inc.) [A Development Stage Company] NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 - COMMITMENTS AND CONTINGENCIES [Continued] Possible Claims Related to Previously Leased Mining Property - In August 2001, Parent obtained 96.5% of the rights to certain mining claims in the Tintic Mining District of Juab County, Utah under the terms of a 5-year Mining Lease. Under the terms of the lease, Parent was obligated to spend $15,000 over the term of the lease for exploration, mining, development or similar costs for the benefit of the property subject to the lease. Parent was also obligated to pay a 3.5% net smelter royalty on all mineral-bearing ores sold. The lease also gave a credit to Parent for the first $30,000 of net smelter royalties. The lessor also agreed to indemnify and hold Parent harmless from any Environmental Protection Agency claim or claims by a similar state agency based solely on past mining contaminations or other environmental violations or damage. In June 2003, Parent paid $3,459 to cancel the Mining Lease. The Company's management believes that the Company would not be responsible for any future claims against the property which Parent previously leased, but the possibility exists that claims may arise against the property and the Company may be named in such claims based on the previous leasing arrangements. The Company's management believes that the Company would be successful in defending against any such claims that may arise. No accrual for possible losses or settlements has been recorded in the accompanying financial statements. NOTE 12 SUBSEQUENT EVENTS On April 18, 2005, the Company executed a Securities Purchase Option Agreement with Lombard, Inc., whereby the Company purchased for $1.00 an option to acquire 7,875,000 shares of the Company's common stock for a purchase price of $600,000. The option has an exercize period of 48 months from the date of the agreement. F-13 ITEM 2 Management Discussion and Analysis or Plan of Operation Plan of Operation. ------------------ Overview. --------- LipidViro Tech, Inc. is a development-stage biotechnology company engaged in developing drug products, fluid purification processes, and drug production and delivery systems (DPD System). Utilizing the Company's proprietary DPD System, LipidViro is currently developing two products for commercialization; therapeutic treatments for Cardiovascular diseases, and processes to inactivate virus, bacteria and prions producing pathogen-free biological products. Technology. ----------- LipidViro's technology is based on three components: * Our proprietary Drug Production and Delivery System (LipidViro DPD System) which produces and delivers a precise, measured dose of ozone; * Our proprietary Gas-Fluid Exchange Device (GFE Device) which efficiently mixes ozone with a fluid; and, * Our proprietary methods that utilize precise, measured dosages of ozone (LVT3), to treat disease and purify bio-fluids. The Company has applied for patent protection on all aspects of this technology. While medicinal ozone therapies have been used for decades in European countries, the FDA rejected applications to develop ozone as a drug in the United States. The common reason underlying these repeated failures was poor measuring and mixing techniques and the inability to produce and deliver ozone in precise, measured dosages. LipidViro's proprietary ozone Drug Production and Delivery System (DPD System) solve both of these problems. The LipidViro DPD System produces a precise, measured dose of ozone, accurate within 2% of the total dose. The technology behind the DPD system allows for a precise, standardized treatment to be delivered by any clinician throughout the world. The LipidViro GFE Device efficiently mixes ozone with a fluid by achieving superior surface area contact between the gas and the fluid; and produces efficient, controlled, consistent, and reproducible mixing, allowing for reliable, repeatable ozone delivery, maximizing treatment results. We believe Lipidviro's technology provides the first and only process able to deliver precise, measured doses of ozone that are consistent and reproducible. We believe this proprietary technology establishes LipidViro as the exclusive market leader, with the only process capable of achieving regulatory approval for use of ozone as a drug. 2005 Milestones and Operational Plan. ------------------------------------- Corporate Development. Our corporate operations objectives for 2005 include financing operations, establishing corporate governance sufficient to apply for NASDAQ SM cap or AMEX listing and, developing and implementing a public relations strategy to enhance shareholder liquidity and value. Scientific Agenda. Our scientific agenda for 2005 includes, site selection and contracting for initial cardiovascular clinical trials; design and initiate cardiovascular clinical trials to produce pilot data; and, selection of a strategic partner for sera purification. Technology Development. Our technology agenda for 2005 includes: selecting a strategic partner to produce our Drug Production and Delivery System; and, selecting a strategic partner to manufacture our Contact Device. Financing. We require immediate financing to fund operations for the next 12 months, including our described technology and corporate development and our scientific agenda. During fiscal year 2005 we will attempt to raise $3-7 million dollars from equity, debt and grants, which we believe will sufficiently sustain our projected operations through the end of fiscal '06. We will attempt to raise additional money from the exercise of the Company's Class A and B warrants during June of '06. If fully exercised, these warrants could raise an additional $28 million. We do not have sufficient cash on hand to finance our current plan of operation. Since inception, debt and equity financing have funded all operations including research expenses. We expend and will likely continue to expend substantial funds to complete our research, development and operational objectives. To fund these operations we will consider all options available. Consequently, now and on an ongoing basis we will consider raising capital through collaborative arrangements, strategic alliances, research grants or equity and debt financings or from other sources. 2005 Pre-Clinical Laboratory Research, Product Development. ----------------------------------------------------------- Our pre-clinical, product development research is designed to evaluate our proprietary technology and process. We utilize the results of our pre- clinical research studies to identify potential products. Each potential product is ranked for development priority based on our assessment of the product's prospects for commercial success. Our evaluation includes studying the efficacy and toxicity of LVT3 in-vitro, the time, expense and anticipated regulatory hurdles likely required to reach commercialization, and, competition in that product category. Early research suggests our proprietary technology and process possess a capacity to inactivate viruses and treat cardiovascular diseases. While our research is preliminary and incomplete, and will require additional research to verify, it does suggest the potential for multiple products that we believe are worthy of further investigation. Product categories we are evaluating include: (i) processing biologicals for pathogen removal and purification; (ii) developing therapeutics to treat serious infectious diseases; (iii) developing therapeutics for treating lipid associated diseases; and, (iv) developing treatments for cardiovascular diseases. Biological Fluid Purification. During the first fiscal quarter 2005, we initiated discussion for development of a commercial bio-fluid purification process with several commercial bio-fluid manufacturers. These Discussions are ongoing at this time. Prion Research. On March 3, 2005 the Company announced pre-clinical research results which demonstrated the ability to substantially inactivate infectious prion proteins in bovine serum. LipidViro's proprietary technology reduced prion infectivity in bovine serum below the limits of detection in both cell and Western blot assays; two gold standards for prion detection. These data were submitted for presentation at the Meeting of the International Union of Microbiological Societies, San Francisco, July 2005. Cardiovascular Platform. During the first fiscal quarter of 2005, we continued development and design of pre-clinical studies associated with our Cardiovascular Platform. Our objective is to initiate Cardiovascular Disease clinical studies during 2005. Intellectual Property. We have filed for patent protection covering our LVT3 drug production and delivery technology and, and our GEN-1, GEN-2 GEN-3 and GEN-4H drug delivery devices, and for proprietary applications utilized by our process. ITEM 3 CONTROLS AND PROCEDURES As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our President, of the effectiveness of our disclosure controls and procedures. Based on this evaluation, our President concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic Securities and Exchange Commission reports. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. In addition, we reviewed our internal controls over financial reporting, and there have been no changes in our internal controls or in other factors in the last fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting. PART II - OTHER INFORMATION Item 1. Legal Proceedings. ------------------ None; not applicable. Item 2. Changes in Securities and Small Business Issuer Purchases of Equity Securities. ----------- On April 18, 2005, we executed a Securities Purchase Option Agreement (the "Agreement") with Lombard, Inc. ("Lombard"), whereby we purchased for $1.00, an option to acquire 7,875,000 shares of our common stock, for a period of 48 months from the date of the Agreement, for a purchase price of $600,000. See our 8-K Current Report dated April 18, 2005, and filed with the Securities and Exchange Commission on May 4, 2005. Item 3. Defaults Upon Senior Securities. -------------------------------- None; not applicable. Item 4. Submission of Matters to a Vote of Security Holders. ---------------------------------------------------- None; not applicable. Item 5. Other Information. ------------------ None; not applicable Item 6. Exhibits. --------- Exhibits. 31 302 Certification of Kenneth P. Hamik 32 906 Certification 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. LIPIDVIRO TECH, INC. Date: 5/18/2005 By/s/Kenneth P. Hamik -------------- ------------------- Kenneth P. Hamik President, CFO and Director