Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.Financial_Report.xls
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R1.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R4.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R6.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R9.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R5.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R8.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R3.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R2.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R7.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R22.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R27.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R32.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R38.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R19.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R44.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R16.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R41.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R39.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R40.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R37.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R28.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R11.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R18.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R13.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R26.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R25.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R10.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R17.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R43.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R12.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R29.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R24.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R42.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R15.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R21.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R30.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R14.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R36.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R23.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R33.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R31.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R20.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R34.htm
EX-32 - ANTIVIRAL TECHNOLOGIES, INC.exhibit322.htm
EX-32 - ANTIVIRAL TECHNOLOGIES, INC.exhibit321.htm
EX-31 - ANTIVIRAL TECHNOLOGIES, INC.exhibit312.htm
EX-31 - ANTIVIRAL TECHNOLOGIES, INC.exhibit311.htm
XML - IDEA: XBRL DOCUMENT - ANTIVIRAL TECHNOLOGIES, INC.R35.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2012

or


[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from ___________ to ______________


Commission File Number: 000-53449


ANTIVIRAL TECHNOLOGIES, INC.

 (Exact name of registrant as specified in its charter)


Nevada

 

26-1188469

(State or other jurisdiction of incorporation)

 

(IRS Employer Identification Number)

 

Suite 1211, Tower II, Silvercord, 30 Canton Road,

Tsimshatsui, Kowloon, Hong Kong

(Address of principal executive offices)

(852) 2317 1291

(Registrant’s telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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.  [ X ] Yes   [ ] No


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). Not Applicable.


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer [  ]

Accelerated filer [  ]

Non-accelerated filer [  ]  (Do not check if a smaller reporting company)

Smaller reporting company [ X ]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     

[   ] Yes   [ X ] No


As of September 30, 2012 the Issuer had 150,000,000 shares of common stock issued and outstanding.



i




INDEX

 

Page

PART I. FINANCIAL INFORMATION

 

 

 

 

Item 1.

Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011 (unaudited)

1

 

Consolidated Statements of Operations and Comprehensive Loss for the Three Months and Nine Months ended September 30, 2012 and 2011 and from September 13, 2007 (Inception) to September 30, 2012 (unaudited)

2

 

Consolidated Statements of Stockholders' Deficit and Accumulated Other Comprehensive Deficit for the period September 13, 2007 (Inception) to September 30, 2012 (unaudited)

3

 

Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2012 and 2011 and from September 13, 2007 (Inception) to September 30, 2012 (unaudited)

4

 

Notes to Consolidated Financial Statements

5

 

 

 

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

13

 

 

 

Item 3.

Quantitative and Qualitative Disclosure About Market Risk

15

 

 

 

Item 4.

Controls and Procedures

15

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1

Legal Proceedings

16

 

 

 

Item 1A

Risk Factors

16

 

 

 

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

16

 

 

 

Item 3

Defaults Upon Senior Securities

16

 

 

 

Item 4

Mine Safety Disclosures

16

 

 

 

Item 5

Other Information

16

 

 

 

Item 6.

Exhibits

16

 

 

 

SIGNATURES

17

 

 

 


ii




PART I   FINANCIAL INFORMATION


ITEM 1.   FINANCIAL STATEMENTS.


ANTIVIRAL TECHNOLOGIES, INC.

(A Development Stage Company, Formerly Table Mesa Acquisitions, Inc.)

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2012 AND DECEMBER 31, 2011

Currency stated in United States Dollars

 

 

 

 

 

 

 

 

 

 

 

September 30, 2012

 

December 31, 2011

 

Notes

 

(Unaudited)

 

(Audited)

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

382

 

$

3,935

Prepayments, deposit and other receivables

 

 

 

2

 

 

946

Total current assets

 

 

 

384

 

 

4,881

 

 

 

 

 

 

 

 

Non-Current Assets

 

 

 

 

 

 

 

Property, plant and equipment, net

6

 

 

1,925

 

 

2,890

Patents, net

7

 

 

483,476

 

 

397,785

Total non-current assets

 

 

 

485,401

 

 

400,675

 

 

 

 

 

 

 

 

Total Assets

 

 

$

485,785

 

$

405,556

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accruals and other payables

 

 

$

163,763

 

$

167,712

Amounts due to directors and officers

8

 

 

967,340

 

 

789,993

Amount due to the shareholder

9

 

 

1,539,992

 

 

1,381,646

Total Liabilities

 

 

$

2,671,095

 

$

2,339,351

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

Preferred stock, par value $0.001, 20,000,000 shares authorized, no share issued as of September 30, 2012 and December 31, 2011

 

 

 

-

 

 

-

Common stock, $0.001 par value; 150,000,000 shares authorized; 150,000,000 shares issued and outstanding as of September 30, 2012 and December 31, 2011.

 

 

$

150,000

 

$

150,000

Additional paid-in-capital

 

 

 

(144,858)

 

 

(144,858)

Accumulated other comprehensive income

 

 

 

(6,982)

 

 

(2,881)

Deficit accumulated during the development stage

 

 

 

(2,183,470)

 

 

(1,936,056)

 

 

 

 

 

 

 

 

Total stockholders' equity/(deficit)

 

 

 

(2,185,310)

 

 

(1,933,795)

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders' equity

 

 

$

485,785

 

$

405,556



 The accompanying notes are an integral part of these consolidated financial statements



1





ANTIVIRAL TECHNOLOGIES, INC.

(A Development Stage Company, Formerly Table Mesa Acquisitions, Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

AND FROM SEPTEMBER 13, 2007 (INCEPTION) TO SEPTEMBER 30, 2012

Unaudited, currency stated in United States Dollars

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the period

 

 

Three Months ended

 

Nine Months ended

 

 

September 13, 2007

 

 

September 30,

 

September 30,

 

 

(Inception to)

 

 

2012

 

2011

 

2012

 

2011

 

 

September 30, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and distribution costs

 

 

259

 

 

2

 

 

6,845

 

 

1,686

 

 

53,123

General and administrative expenses

 

 

76,792

 

 

90,354

 

 

240,572

 

 

272,133

 

 

2,012,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations before other expense

 

 

(77,051)

 

 

(90,356)

 

 

(247,417)

 

 

(273,819)

 

 

(2,065,648)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expenses

 

 

-

 

 

-

 

 

-

 

 

2

 

 

(95,224)

Write off of bad debt

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(3,585)

Preliminary expenses

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,393)

Interest income

 

 

1

 

 

1

 

 

3

 

 

7

 

 

14,342

Interest expense

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(31,962)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(77,050)

 

 

(90,355)

 

 

(247,414)

 

 

(273,810)

 

 

(2,183,470)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation gain / (loss)

 

 

(410)

 

 

712

 

 

(4,101)

 

 

(1,104)

 

 

(6,982)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

$

(77,460)

 

$

(89,643)

 

$

(251,515)

 

$

(274,914)

 

$

(2,190,452)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per common share

 

$

(0.00)

 

$

(0.00)

 

$

(0.00)

 

$

(0.00)

 

$

(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average number of common shares

 

 

150,000,000

 

 

150,000,000

 

 

150,000,000

 

 

150,000,000

 

 

148,760,304





The accompanying notes are an integral part of these consolidated financial statements



2






ANTIVIRAL TECHNOLOGIES, INC.

(A Development Stage Company, Formerly Table Mesa Acquisitions, Inc.)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE DEFICIT

FOR THE PERIOD FROM SEPTEMBER 13, 2007 (INCEPTION) TO SEPTEMBER 30, 2012

Unaudited, currency stated  in United States Dollars, except for number of shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

Accumulated other

 

 

 

 

Total

 

 

Common stock

 

 

paid-in

 

comprehensive

 

 

Accumulated

 

stockholders'

 

 

Shares

 

 

Amount

 

 

capital

 

deficit

 

 

deficit

 

equity (deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 13, 2007 (inception)

 

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

Issuance of founder shares

 

147,000,000

 

 

147,000

 

 

(146,999)

 

 

-

 

 

-

 

 

1

Foreign currency translation adjustment

 

-

 

 

-

 

 

-

 

 

1,042

 

 

-

 

 

1,042

Net loss

 

-

 

 

-

 

 

-

 

 

-

 

 

(319,416)

 

 

(319,416)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2007

 

147,000,000

 

 

147,000

 

 

(146,999)

 

 

1,042

 

 

(319,416)

 

 

(318,373)

Foreign currency translation adjustment

 

-

 

 

-

 

 

-

 

 

10

 

 

-

 

 

10

Net loss

 

-

 

 

-

 

 

-

 

 

-

 

 

(310,453)

 

 

(310,453)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2008

 

147,000,000

 

 

147,000

 

 

(146,999)

 

 

1,052

 

 

(629,869)

 

 

(628,816)

Reverse acquisition

 

3,000,000

 

 

3,000

 

 

2,141

 

 

-

 

 

-

 

 

5,141

Foreign currency translation adjustment

 

-

 

 

-

 

 

-

 

 

492

 

 

-

 

 

492

Net loss

 

-

 

 

-

 

 

-

 

 

-

 

 

(462,012)

 

 

(462,012)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2009

 

150,000,000

 

 

150,000

 

 

(144,858)

 

 

1,544

 

 

(1,091,881)

 

 

(1,085,195)

Foreign currency translation adjustment

 

-

 

 

-

 

 

-

 

 

2,600

 

 

-

 

 

2,600

Net loss

 

-

 

 

-

 

 

-

 

 

-

 

 

(441,291)

 

 

(441,291)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2010

 

150,000,000

 

 

150,000

 

 

(144,858)

 

 

4,144

 

 

(1,533,172)

 

 

(1,523,886)

Foreign currency translation adjustment

 

-

 

 

-

 

 

-

 

 

(7,025)

 

 

-

 

 

(7,025)

Net loss

 

-

 

 

-

 

 

-

 

 

-

 

 

(402,884)

 

 

(402,884)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2011

 

150,000,000

 

 

150,000

 

 

(144,858)

 

 

(2,881)

 

 

(1,936,056)

 

 

(1,933,795)

Foreign currency translation adjustment

 

-

 

 

-

 

 

-

 

 

(4,101)

 

 

-

 

 

(4,101)

Net loss

 

-

 

 

-

 

 

-

 

 

-

 

 

(247,414)

 

 

(247,414)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2012

 

150,000,000

 

$

150,000

 

$

(144,858)

 

$

(6,982)

 

$

(2,183,470)

 

$

(2,185,310)

The accompanying notes are an integral part of these consolidated financial statements.




3





ANTIVIRAL TECHNOLOGIES, INC.

(A Development Stage Company, Formerly Table Mesa Acquisitions, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

AND FROM SEPTEMBER 13, 2007 (INCEPTION) TO SEPTEMBER 30, 2012

Unaudited, currency stated in United States Dollars

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the period

 

 

 

Nine Months ended

 

September 30, 2007

 

 

 

September 30

 

(Inception) to

 

 

2012

 

2011

 

September 30, 2012

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(247,414)

 

$

(273,810)

 

$

(2,183,470)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

Depreciation

 

 

978

 

 

959

 

 

8,806

Amortization

 

 

5,036

 

 

3,524

 

 

26,165

Written off on patents

 

 

-

 

 

-

 

 

23,834

Change in assets and liabilities:

 

 

 

 

 

 

 

 

 

Prepaid expenses, deposits

 

 

944

 

 

6,958

 

 

(2)

Other receivables

 

 

-

 

 

-

 

 

-

Accruals

 

 

(3,949)

 

 

4,954

 

 

163,273

Related party payables

 

 

-

 

 

-

 

 

490

Amounts due to directors and officers

 

 

168,306

 

 

167,119

 

 

816,137

Compensatory option issuances

 

 

-

 

 

-

 

 

560

Net cash generated/(used) in operating activities

 

 

(76,099)

 

 

(90,296)

 

 

(1,144,207)

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchase of plant and equipment

 

 

(36)

 

 

(134)

 

 

(10,871)

Patents filing costs

 

 

(90,769)

 

 

(25,801)

 

 

(533,536)

Net cash used in investing activities

 

 

(90,805)

 

 

(25,935)

 

 

(544,407)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Amount due to the stockholder

 

 

158,346

 

 

75,355

 

 

1,539,992

Director’s advancement

 

 

9,041

 

 

39,935

 

 

151,203

Sales of common stock

 

 

-

 

 

-

 

 

21,000

Net cash (used in) provided by financing activities

 

 

167,387

 

 

115,290

 

 

1,712,195

 

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

 

483

 

 

(941)

 

 

23,581

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(4,036)

 

 

(1,079)

 

 

(23,199)

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents – beginning of period

 

 

3,935

 

 

3,134

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents – end of period

 

$

382

 

$

1,114

 

$

382

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

Interest paid

 

$

-

 

$

-

 

$

31,962

Income taxes paid

 

$

-

 

$

-

 

$

-



The accompanying notes are an integral part of these consolidated financial statements.



4




ANTIVIRAL TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012   (UNAUDITED)

(Stated in US Dollars)


NOTE 1.  BASIS OF PRESENTATION


The accompanying unaudited financial statements of Antiviral Technologies, Inc. at September 30, 2012 and 2011 have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial statements, instructions to Form 10-Q and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2011. In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation to make our financial statements not misleading have been included. The results of operations for the periods ended September 30, 2012 and 2011 presented are not necessarily indicative of the results to be expected for the full year. The December 31, 2011 balance sheet has been derived from the Company’s audited financial statements included in its annual report on Form 10-K for the year ended December 31, 2011.



NOTE 2.  ORGANIZATION AND PRINCIPAL ACTIVITY


Antiviral Technologies, Inc. (“the Company”) was incorporated in the state of Nevada on September 13, 2007, as Table Mesa Acquisitions, Inc., and on October 13, 2009, changed its name to Antiviral Technologies, Inc.  On October 14, 2009, the Company acquired Obio Pharmaceutical (H.K.) Ltd (“Obio HK”), and its wholly-owned subsidiary, Beijing Obio Pharmaceutical Co., Ltd (“Beijing Obio”) in a share exchange transaction (the “Share Exchange”). This transaction was accounted for as a “reverse merger” with Obio HK deemed to be the accounting acquirer and the Company as the legal acquirer.  Consequently, the assets and liabilities and the historical operations that are reflected in the financial statements for periods prior to the Share Exchange are those of Obio HK, recorded at its historical cost basis. After completion of the Share Exchange, the Company’s consolidated financial statements include the assets and liabilities of the Company and Obio HK, the historical operations of Obio HK and the operations of the Company and its subsidiaries from the closing date of the Share Exchange.


Obio HK is a Hong Kong corporation which was formed on June 28, 1999 as Pacific Cosmos Investment Limited. After formation, it had several name changes including a change to J & P Capital (Hong Kong) Limited, on August 27, 1999, a change to Omega-Pharma (Hong Kong) Limited, on May 21, 2003, a change to Omega-BioPharma (HK) Limited, on December 10, 2003, and finally, a change to its current name, Obio Pharmaceutical (H.K.) Limited, on March 2, 2009.


Beijing Obio was incorporated under the laws of the PRC as a limited company on January 2, 2008.


The Company and its subsidiaries (hereinafter, collectively referred to as the “Group”) are engaged in human pharmaceutical research and development.



NOTE 3  CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS


Financial instruments which potentially expose the Company to concentrations of credit risk, consists of cash and other receivables as of September 30, 2012 and 2011. The Company performs ongoing evaluations of its cash position and credit evaluations to ensure collections and minimize losses.


As of September 30, 2012 and 2011, the Company’s bank deposits were all placed with banks in Hong Kong and the PRC where there is currently no rule or regulation in place for obligatory insurance of bank accounts.


The maximum amount of loss due to credit risk that the Company would incur if the counter parties to the financial instruments failed to perform is represented the carrying amount of each financial asset in the balance sheet.



NOTE 4  UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN


The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate significant earnings



5




in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations.


As of September 30, 2012, the Company has not generated any revenue and has incurred an accumulated deficit since inception totaling $2,183,470 at September 30, 2012 and its current liabilities exceed its current assets by $2,670,711. These financial statements do not include any adjustments relating to the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors noted above raise substantial doubts regarding the Company's ability to continue as a going concern.



NOTE 5  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


(a)

Principles of consolidation


The consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiary.  All significant inter-company balances and transactions are eliminated in consolidation.


The Company owned its subsidiary soon after its inception and continued to own the equity’s interests through September 30, 2012.  The following table depicts the identity of the subsidiary:


 

 

 

 

Attributable equity

 

Registered

Name of subsidiary

 

Place of Incorporation

 

interest %

 

capital

 

 

 

 

 

 

 

Obio Pharmaceutical (H.K.) Ltd

 

Hong Kong

 

100

 

$1

 

 

 

 

 

 

 

Beijing Obio Pharmaceutical Co., Ltd

 

PRC

 

100

 

$200,000


(b)

Use of estimates


The preparation of the consolidated 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 and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.  Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.


(c)

Economic and political risks


The Company’s operation is conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

 

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.


(d)

Property, plant and equipment


Plant and equipment are carried at cost less accumulated depreciation.  Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:


Office equipment

5 years

Testing equipment

5 years


The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of operation.


(e)

Patents



6




Patents that are acquired by the Company and/or self-invented are stated as cost less accumulated amortization. Amortization is provided over the respective useful lives, using the straight-line method.  Estimated useful lives of the patents are 20 years from the date the patent is filed.


(f)

Accounting for the impairment of long-lived assets


The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC No. 360. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose.


During the reporting years, there was no impairment loss.


(g)

Cash and cash equivalents


The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains bank accounts in the Hong Kong. The subsidiaries of the Company maintain bank accounts in Hong Kong and the PRC.


(h)

Income taxes


The Company accounts for income taxes in interim periods in accordance with ASC Topic 740, Income Taxes (“ASC 740”).  We have determined an estimated annual effective tax rate.  The rate will be revised, if necessary, as of the end of each successive interim period during our fiscal year to our best current estimate.  As of September 30, 2012, the estimated effective tax rate for the year will be zero.


ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  This pronouncement also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.


(i)

Foreign currency translation


The accompanying consolidated financial statements are presented in United States dollars. The functional currency of the Company is the Hong Kong Dollar (HKD) and Renminbi (RMB). The consolidated financial statements are translated into United States dollars from RMB at period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.


The exchange rates used to translate amounts in HKD and RMB into USD for the purposes of preparing the consolidated financial statements were as follows:


 

 

September 30, 2012

 

December 31, 2011

 

September 30, 2011

Twelve months ended

HKD : USD exchange rate

 

 

 

7.7691

 

 

Nine months ended

HKD : USD exchange rate

 

7.7549

 

 

 

7.7934

Average nine months ended

HKD : USD exchange rate

 

7.75965

 

 

 

7.78673


 

 

September 30, 2012

 

December 31, 2011

 

September 30, 2011

Twelve months ended

RMB : USD exchange rate

 

 

 

6.3647

 

 

Nine months ended

RMB : USD exchange rate

 

6.3340

 

 

 

6.4018

Average nine months ended

RMB : USD exchange rate

 

6.32745

 

 

 

6.50601




7




The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.  No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation. In addition, the current foreign exchange control policies applicable in PRC also restrict the transfer of assets or dividends outside the PRC.


(j)

Per Share Information


Earnings per share are based on the weighted average number of shares outstanding during the period after consideration of the dilutive effect, if any, for common stock equivalents, including stock options, restricted stock, and other stock-based compensation. Earnings per common share are computed in accordance with ASC Topic 260, Earnings Per Share, which requires companies to present basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share are computed by dividing net income by the weighted average number of shares of common stock outstanding and dilutive securities outstanding during the year.  We had a net loss for the nine-month periods ended September 30, 2012 and 2011, and accordingly, any outstanding equivalents would be anti-dilutive.


(k)

Recently Accounting Pronouncements


In April 2011, the FASB issued ASU 2011-03, Consideration of Effective Control on Repurchase Agreements, which deals with the accounting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU 2011-03 changes the rules for determining when these transactions should be accounted for as financings, as opposed to sales. The guidance in ASU 2011-03 is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The adoption of ASU 2011-03 is not expected to have a material impact on the Company’s financial condition or results of operation.


In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”). ASU 2011-04 clarifies some existing concepts, eliminates wording differences between U.S. GAAP and IFRS, and in some limited cases, changes some principles to achieve convergence between U.S. GAAP and IFRS. ASU 2011-04 results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. ASU 2011-04 will be effective for the Company beginning after December 15, 2011. The Company does not expect the adoption of ASU 2011-04 to have a material effect on its operating results or financial position.


In June 2011, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) 2011-05, Presentation of Comprehensive Income, which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. ASU 2011-05 will be effective for the Company beginning after December 15, 2011. The Company does not expect the adoption of ASU 2011-05 to have a material effect on its operating results or financial position. However, it will impact the presentation of comprehensive income.


In September 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 is intended to simplify how entities, both public and nonpublic, test goodwill for impairment. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350, Intangibles-Goodwill and Other. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance.


In December 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. ASU No. 2011-11 is intended to provide enhanced disclosures that will enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position. This includes the effect or potential effect of rights of setoff associated with an entity’s recognized assets and recognized liabilities within the scope of this Update. The amendments require enhanced disclosures by requiring improved information about financial instruments and derivative instruments that are either (1) offset in accordance with either Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either Section 210-20-45 or Section 815-10-45. An entity is required to apply the amendments for annual reporting periods beginning on or after



8




January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented.


In December 2011, the FASB has issued Accounting Standards Update (ASU) No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU No. 2011-11 is intended to supersede certain pending paragraphs in Accounting Standards Update No. 2011-05,Comprehensive Income (Topic 220): Presentation of Comprehensive Income, to effectively defer only those changes in Update 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income. The amendments will be temporary to allow the Board time to redeliberate the presentation requirements for reclassifications out of accumulated other comprehensive income for annual and interim financial statements for public, private, and non-profit entities. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. Nonpublic entities should begin applying these requirements for fiscal years ending after December 15, 2012, and interim and annual periods thereafter.


In July 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-01, Health Care Entities (Topic 954): Continuing Care Retirement Communities -- Refundable Advance Fees. This ASU clarifies that an entity should classify an advance fee as deferred revenue when a continuing care retirement community has a resident contract that provides for payment of the refundable advance fee upon re-occupancy by a subsequent resident, which is limited to the proceeds of re-occupancy. Refundable advance fees that are contingent upon re-occupancy by a subsequent resident but are not limited to the proceeds of re-occupancy should be accounted for and reported as a liability. For public entities (including conduit bond obligors), the amendments in ASU No. 2012-01 are effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments to the codification in the ASU are effective for fiscal periods beginning after December 15, 2013. Early adoption is permitted. The amendments in ASU No. 2012-01 should be applied retrospectively by recording a cumulative-effect adjustment to opening retained earnings (or unrestricted net assets) as of the beginning of the earliest period presented.


In July 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-02, Intangibles--Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with Codification Subtopic 350-30, Intangibles--Goodwill and Other, General Intangibles Other than Goodwill. Under the guidance in this ASU, an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance.


In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-03, Technical Amendments and Corrections to SEC Sections. This ASU amends various SEC paragraphs pursuant to SAB 114, SEC Release No. 33-9250, and ASU 2010-22, which amend or rescind portions of certain SAB Topics.


In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-04, Technical Corrections and Improvements. This ASU make technical corrections, clarifications, and limited-scope improvements to various Topics throughout the Codification. The amendments in this ASU that will not have transition guidance will be effective upon issuance for both public entities and nonpublic entities. For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2013.


In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-05, Statement of Cash Flows (Topic 230). This ASU addresses how cash receipts arising from the sale of certain donated financial assets, such as securities, should be classified in the statement of cash flows of not-for-profit entities (NFPs). Some NFPs classify those cash receipts as investing cash inflows, while other entities classify them as either operating cash inflows or financing cash inflows, consistent with their treatment of inflows arising from cash contributions. The objective of this Update is for an NFP to classify cash receipts from the sale of donated financial assets consistently with cash donations received in the statement of cash flows if those cash receipts were from the sale of donated financial assets that upon receipt were directed without the NFP imposing any limitations for sale and were converted nearly immediately into cash. The amendments in the ASU are effective prospectively for fiscal years, and interim fiscal periods within those



9




years, beginning after June 15, 2013. Retrospective application to all periods presented upon the date of adoption is permitted. Early adoption from the beginning of the fiscal year of adoption is permitted.


In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-06, Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution. This ASU addresses the diversity in practice about how to interpret the terms on the same basis and contractual limitations when subsequently measuring an indemnification asset recognized in a government-assisted (Federal Deposit Insurance Corporation or National Credit Union Administration) acquisition of a financial institution that includes a loss-sharing agreement (indemnification agreement). For public and nonpublic entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. Early adoption is permitted. The amendments should be applied prospectively to any new indemnification assets acquired after the date of adoption and to indemnification assets existing as of the date of adoption arising from a government-assisted acquisition of a financial institution.


In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-07, Entertainment--Films (Topic 926): Accounting for Fair Value Information That Arises after the Measurement Date and Its Inclusion in the Impairment Analysis of Unamortized Film Costs. This ASU eliminates the rebuttable presumption that the conditions leading to the write-off of unamortized film costs after the balance sheet date existed as of the balance sheet date. The amendments also eliminate the requirement that an entity incorporate into fair value measurements used in the impairment tests the effects of any changes in estimates resulting from the consideration of subsequent evidence if the information would not have been considered by market participants at the measurement date. or SEC filers, the amendments are effective for impairment assessments performed on or after December 15, 2012. For all other entities, the amendments are effective for impairment assessments performed on or after December 15, 2013. The amendments resulting from this ASU should be applied prospectively. Earlier application is permitted, including for impairment assessments performed as of a date before October 24, 2012, if, for SEC filers, the entity’s financial statements for the most recent annual or interim period have not yet been issued or, for all other entities, have not yet been made available for issuance.


Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.



NOTE 6  PROPERTY, PLANT AND EQUIPMENT, NET


Property and equipment is summarized as follows:

 

 

As of September 30, 2012

 

As of December 31, 2011

 

 

-------------------------------

 

-------------------------------

Cost

 

 

 

 

 

 

 

 

 

Plant and Machinery

$

3,893

$

3,886

Furniture, fixture and equipment

 

1,765

 

1,756

Office equipment

 

5,213

 

5,194

 

 

-----------------------

 

-----------------------

 

 

10,871

 

10,836

Accumulated depreciation

 

(8,946)

 

(7,946)

 

 

-----------------------

 

-----------------------

 

 

 

 

 

 

$

1,925

$

2,890

 

 

==============

 

==============


Depreciation expenses included in the general and administrative expenses for the nine months ended September 30, 2012 and for the year ended December 31, 2011 were $978 and $1,284.




10





NOTE 7  PATENTS, NET


Patents are summarized as follows:


 

 

As of September 30, 2012

 

As of December 31, 2011

 

 

-------------------------------

 

-------------------------------

Cost

 

 

 

 

 

 

 

 

 

Patents

$

442,648

$

352,000

License

 

67,054

 

66,933

 

 

-----------------------

 

-----------------------

 

 

509,702

 

418,933

Accumulated amortization

 

(26,226)

 

(21,148)

 

 

-----------------------

 

-----------------------

 

 

 

 

 

 

$

483,476

$

397,785

 

 

==============

 

==============


Amortization included in the general and administrative expenses for the nine months ended September 30, 2012 and for the year ended December 31, 2011 were $5,036 and $4,766.


Written off on patents included in the general and administrative expenses for the period September 13, 2007 (Inception) to September 30, 2012 was $23,834.



NOTE 8  AMOUNTS DUE TO DIRECTORS AND OFFICERS


Amounts due to directors and officers were the amount due to Mr. Francis Chi, Director, Dr. Bill Piu Chan, Director and Chief Executive Officer, Mr. Kin Chung Cheng, Director and Chief Financial Officer and Dr. Jess Gilbert Thoene, Director and Chief Technical Officer and was unsecured, interest free and repayable upon completion of any fund raising exercise of Obio HK or ATI. The balances due to directors and officers are $967,340 and $789,993 as of September 30, 2012 and December 31, 2011 respectively.



NOTE 9  AMOUNT DUE TO THE STOCKHOLDER


Amount due to the stockholder was unsecured, interest free and does not have a fixed repayment date.



NOTE 10  COMMON STOCK


As a result of the share exchange transaction on October 14, 2009, which is being accounted for as a “reverse merger,” the Group’s capital structure has changed. Following completion of the share exchange transaction, the Company has a total of 150,000,000 shares of $0.001 par value common stock issued and outstanding.  Common stock recorded was $150,000 with additional paid-in capital of ($144,858).



NOTE 11  RELATED PARTY TRANSACTIONS


In the normal course of its business, the group carried out the following related party transactions during the nine months ended September 30, 2012 and 2011.


 

 

For the nine months ended

 

 

September 30, 2012

 

September 30, 2011

 

 

 

 

 

Company secretarial fee paid to related parties (a)

$

502

$

498

 

 

 

 

 

 

 

 

 

 


(a)

The company secretarial fee was paid to related companies controlled by Chan Kin Man, Eddie, a director of the stockholder.




11






NOTE 12  FAIR VALUE OF FINANCIAL INSTRUMENTS


ASC Topic 820, “Fair Value Measurements and Disclosures” ("ASC 820"), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:


Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.

Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.

Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.


The Company’s financial instruments consist of cash and cash equivalents, payables, and amounts due to officers, directors and stockholder. The carrying values of cash and cash equivalents, payables, and amounts due to officers, directors and stockholder approximate their fair value due to their short maturities.



NOTE 13  SEGMENT INFORMATION


The Company is principally engaged in business of human pharmaceutical research and development.  No significant revenues are derived during the reporting periods. Accordingly, no analysis of the Company’s sales and assets by geographical market is presented.



NOTE 14 SUBSEQUENT EVENTS


In preparing these financial statements, the Company evaluated the events and transactions that occurred from October 1, 2012, through November 7, 2012, the date these financial statements were issued. The Company has made the required additional disclosures in reporting periods in which subsequent events occur.




12




ITEM 2.   MANAGEMENT’S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS


CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS," "INTENDS," "WILL," "HOPES," "SEEKS," "ANTICIPATES," "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS REPORT ON FORM 10-Q AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS.


Overview


History


The Registrant was incorporated in the state of Nevada on September 13, 2007, as Table Mesa Acquisitions, Inc., and on October 13, 2009, changed its name to Antiviral Technologies, Inc..  On October 14, 2009, the Registrant acquired Obio Pharmaceutical (H.K.) Limited, and its wholly-owned subsidiary, Beijing Obio Pharmaceutical Co., Ltd. in a share exchange transaction.  This transaction was accounted for as a “reverse merger” with Obio HK deemed to be the accounting acquirer and the Registrant as the legal acquirer.  Consequently, the assets and liabilities and the historical operations that are reflected in the financial statements for periods prior to the share exchange transaction are those of Obio HK, recorded at its historical cost basis. Following completion of the share exchange transaction, the Registrant’s consolidated financial statements include the assets and liabilities of both the Registrant and Obio HK, the historical operations of Obio HK and the operations of the Registrant and its subsidiaries from October 14, 2009, the closing date of the share exchange transaction.


Corporate Background


We are a development stage biotechnology company utilizing Cysteamine compositions in the development of antiviral drugs for human application.  We have been assigned rights in certain patents and have obtained licenses to use certain technology owned by Walcom Group Limited.  The rights assigned or licensed to us by Walcom include its proprietary micro-encapsulation technology for cysteamine. We intend to use the rights assigned or licensed to us by Walcom Group, which were developed by Walcom Group for use in develop of products for animals, in conjunction with efforts to develop products for human application.  


Because we are in the development stage of operations the relationships between revenue, cost of revenue, and operating expenses reflected in our financial statements are not necessarily indicative of the relationship between and among such items as we expand and as we progress towards operations. Accordingly, there is currently no basis upon which we are able to provide a meaningful comparison of our results of operation for one period as compared to another period.


Liquidity and Capital Resources


As of September 30, 2012, we had current assets of $384 consisting of cash and cash equivalents of $382 as well as deposits and prepayments of $2.  As of September 30, 2012, our total assets were $485,785, consisting primarily of the net value of patents of $483,476.


As of September 30, 2012, our current liabilities were $2,671,095, consisting primarily of amounts due to our holding company in the amount of $1,539,992, which are unsecured, interest free and repayable upon demand.



13





As described more fully below under Plan of Operations, our plan of operations calls for significant expenditures in connection with conducting additional research and development activities and conducting clinical trials TG 21.


Plan of Operations


Our plan of operations for the fiscal year ending December 31, 2012, is to continue to conduct additional research and development activities regarding TG 21 and other potential antiviral solutions for various viruses.  Our initial consideration will be to begin pre-clinical and clinical trials in China in cooperation with the South China Center for Innovative Pharmaceuticals (SCCIP), to undertake efforts in the United Kingdom directed toward international recognition of TG 21, to conduct additional research and development in India and to prepare for filing of additional patent applications in various countries.


We currently estimate that we will require approximately US$7 million to conduct initial clinical trials and the additional research and development activities described above, and approximately US$3 million for working capital purposes.  We do not currently have any arrangements in place to obtain the necessary financing for these activities and may not be able to find such financing on terms which are acceptable to us. We believe the most likely source of additional financing presently available to us is through sale of equity capital after, or in conjunction with, the process of establishing a public trading market for our shares.  There can be no assurance that a trading market will be established, or we will be able to raise additional capital on terms we consider satisfactory, either after, or in conjunction with, the establishment of a trading market for our shares.


We have no current sources of liquidity other than cash on hand. To date, our limited operations have been funded primarily through advances received from our majority shareholder.  However, our shareholder is not obligated to continue to make such advances, and there is no assurance it will continue to do so.  We do not have in place any line of credit or other credit facility, and our lack of revenue and our assets with which to be collateralized of a loan would make borrowings from conventional financial institutions or funds a difficulty.  For this reason, we believe that the most feasible source of funds currently available to us is from the offer and sale of equity securities, or debt securities convertible into equity securities either after, or in conjunction with, the establishment of a public trading market for our shares.


Going Concern Consideration


The Company is a development stage company. The Company incurred a net loss of $247,414 for the nine months ended September 30, 2012 and has an accumulated net loss of $2,183,470 as at September 30, 2012. The Company's ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered in emerging markets and the competitive environment in which the Company operates. The Company is pursuing financing for its operations. Failure to secure such financing and to raise additional equity capital may result in the Company depleting its available funds and not being able to pay its obligations. These financial statements do not include any adjustment to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.




14




ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Not Applicable



ITEM 4.  CONTROLS AND PROCEDURES.


Disclosure Controls and Procedures


The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.


As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported with the time periods specified.  Our chief executive officer and chief financial officer also concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance of the achievement of these objectives.  


Changes in Internal Control over Financial Reporting


There was no change in the Company's internal control over financial reporting during the period ended September 30, 2012, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.




15




PART II   OTHER INFORMATION



ITEM 1.   LEGAL PROCEEDINGS


The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated. No director, officer or affiliate of the Company, and no owner of record or beneficial owner of more than 5.0% of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation.



ITEM 1A. RISK FACTORS


Smaller reporting companies are not required to provide the information required by this item.



ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


None.



ITEM 3.   DEFAULTS UPON SENIOR SECURITIES


None.



ITEM 4.   MINE SAFETY DISCLOSURES.


N/A



ITEM 5.   OTHER INFORMATION.


None.


ITEM 6.   EXHIBITS.


 3.1

Original Articles of Incorporation filed with the State of Nevada on September 13, 2007, incorporated by reference from exhibit to Form 10 filed with the Securities and Exchange Commission on October 8, 2008 (incorporated by reference from exhibit to Form 8-K filed with the Securities and Exchange Commission on October 22, 2009).

 3.2

Bylaws incorporated by reference from exhibit to Form 10 filed with the Securities and Exchange Commission on October 8, 2008 (incorporated by reference from exhibit to Form 8-K filed with the Securities and Exchange Commission on October 22, 2009).

 31.1

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

 31.2

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

 32.1

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

 32.2

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

 101

SCH XBRL Schema Document.*

 101

INS XBRL Instance Document*

 101

CAL XBRL Taxonomy Extension Calculation Linkbase Document.*

 101

LAB XBRL Taxonomy Extension Label Linkbase Document*

 101

PRE XBRL Taxonomy Extension Presentation Linkbase Document*

 101

DEF XBRL Taxonomy Extension Definition Linkbase Document*


* filed herewith


16





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.





ANTIVIRAL TECHNOLOGIES, INC.






By:

/s/ Bill Piu Chan

--------------------------------------------------

Bill Piu CHAN, Chief Executive Officer

Date:  November 13, 2012.






By:

/s/ Kin Chung Cheng

-------------------------------------------------------

Kin Chung CHENG, Chief Financial Officer

Date:  November 13, 2012.





17