10QSB 1 appiq.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. FORM 10-QSB [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, For the Quarter Ended September 30, 2003 [ ] Transitional Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File No. 000-28459 ADVANCED PLANT PHARMACEUTICALS, INC. (Exact name of Registrant as specified in its charter) Delaware 59-2762023 ------------------- ------------------- (State of other jurisdiction (I.R.S. Employer Identification Number) of incorporation or organization) 43 West 33rd Street, New York, New York 10001 --------------------------------------------- Address of principal executive offices Registrant's telephone number, including area code: 212-695-3334 Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -- ----- As of November 13, 2003, there were issued and outstanding 517,666,060 shares of Common Stock, $.0007 par value per share. Transitional Small Business Disclosure Format Yes No X -- ----- ADVANCED PLANT PHARMACEUTICALS, INC. INDEX -----

PAGE NUMBER ---------- PART I. FINANCIAL INFORMATION --------------------- Item 1. Condensed financial statements (unaudited) Condensed Balance sheet as of September 30, 2003 3 Condensed Statements of operations for the nine months ending September 30, 2003 and 2002 4 Condensed Statements of operations for the three months ending September 30, 2003 and 2002 5 Condensed Statements of cash flows 6 Notes to financial statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3. Controls and Procedures 13 PART II. OTHER INFORMATION 14 ---------------- SIGNATURES 15

PART I ITEM 1. CONDENSED FINANCIAL STATEMENTS ADVANCED PLANT PHARMACEUTICALS, INC. CONDENSED BALANCE SHEET SEPTEMBER 30, 2003 (UNAUDITED)

Assets ------ Current assets Cash and cash equivalents $ 247,008 Accounts receivable 28,385 Inventory 77,481 --------------- Total current assets 352,874 --------------- Other assets Intangible assets - net 719,920 Other assets 11,031 --------------- Total other assets 730,951 --------------- Total assets $ 1,083,825 =============== Liabilities and Stockholders' Deficiency ---------------------------------------- Current liabilities Accounts payable and accrued liabilities $ 302,236 Due to stockholder - asset acquisition 1,440,000 Due to stockholders 1,149,081 Loan payable - other 350,000 Due to distributor 103,500 --------------- Total liabilities 3,344,817 --------------- Stockholders' deficiency Preferred - $.0007 par value, 10,000,000 shares authorized, 2,500,000 shares issued and outstanding 1,750 Common - $.0007 par value, 600,000,000 shares authorized; 517,666,060 shares issued and outstanding 362,366 Paid-in-capital 9,645,583 Deficit (12,270,691) --------------- Total stockholders' deficiency (2,260,992) --------------- Total liabilities and stockholders' deficiency $ 1,083,825 ===============

The accompanying notes are an integral part of the condensed financial statements. 3 ADVANCED PLANT PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended Nine Months Ended September 30, September 30, ------------ ------------ 2003 2002 2003 2002 ---- ---- ---- ---- Net sales $ 4,151 $ 5,302 $ 70,660 $ 13,051 Cost of goods sold 1,163 2,625 30,629 6,539 ------------ ------------ -------------- --------------- Gross profit 2,988 2,677 40,031 6,512 Operating expenses: General and administrative 742,969 371,390 1,559,616 1,208,716 ------------ ------------ -------------- --------------- Operating loss (739,981) (368,713) (1,519,585) (1,202,204) Provision for income taxes - - (687) - ------------ ----------- -------------- --------------- Net loss $ (739,981) $ (368,713) $ (1,520,272) $ (1,202,204) ============ ============ ============== =============== Loss per common share $ 0.00 $ 0.00 $ 0.00 $ 0.00 ============ ============ ============== =============== Weighted average shares outstanding 496,055,460 244,847,277 374,837,987 244,847,277 ============ ============ ============== ===============

The accompanying notes are an integral part of the condensed financial statements. 4 ADVANCED PLANT PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30, 2003 2002 ---- ---- Cash flows from operating activities Net cash provided by operations $ 295 $ 125,639 --------------- --------------- Cash flows from financing activities Loans payable - stockholders - net 246,494 - Payments on short-term loans payable - net - (131,978) --------------- --------------- Net cash provided by (used in) financing Activities 246,494 (131,978) --------------- --------------- Net increase (decrease) in cash and cash equivalents 246,789 (6,339) Cash and cash equivalents - beginning of period 219 7,316 --------------- --------------- Cash and cash equivalents - end of period $ 247,008 $ 977 =============== =============== Supplemental cash flow information: Cash paid during the period for: Interest $ - $ - =============== =============== Income taxes $ 687 $ - =============== =============== Non-cash transaction: Preferred stock issued for services $ 1,750 $ - =============== =============== Common stock issued for services $ 1,432,507 $ 398,221 =============== ===============

The accompanying notes are an integral part of the condensed financial statements. 5 ADVANCED PLANT PHARMACEUTICALS, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB and Item 310 of Regulation SB. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to the financial statements and footnotes thereto included in the Form 10-KSB for the year ended December 31, 2002. 1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Advanced Plant Pharmaceuticals, Inc. ("The Company" or "APPI") focuses on the sale of plant based dietary health supplements. The Company owns the rights to a thirteen step manufacturing process, which utilizes whole plants to manufacture all natural dietary supplements. The Company intends to use this process to manufacture products that it hopes to distribute worldwide through various sales distribution contracts. APPI was incorporated in November 1994 and had devoted most of its efforts since inception to 1999 conducting research and development and acquiring agreements to the rights of this process and one major sinus product. The Company's manufacturing operations are located in Long Island, New York and its corporate offices are located in New York City. GOING CONCERN These financial statements have been prepared assuming that the Company will continue as a going concern. The Company presently has operating risks and liquidity concerns and has incurred an accumulated deficit of $12,270,691 and stockholder's deficiency of $2,260,992 as of September 30, 2003 and current liabilities exceeded current assets by $2,991,943. There can be no assurance that the Company will be able to successfully acquire the necessary capital to mitigate their operating risks and continue their on-going development efforts and bring their products to the commercial market. These factors, among others, create a substantial uncertainty about the Company's ability to continue as a going concern. CONTROL BY PRINCIPAL STOCKHOLDERS The director, executive officers and other related parties own beneficially and in the aggregate, the majority of the voting power of the outstanding shares of the preferred stock and common stock of the Company. Accordingly, the director, executive officers and related parties, if they voted their shares uniformly, would have the ability to control the approval of most corporate actions, including increasing the authorized capital stock of APPI and the dissolution, merger or sale of all of the Company's assets. 6 ADVANCED PLANT PHARMACEUTICALS, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) REVENUE RECOGNITION Product revenue is recognized upon shipment to customers. The Company has adopted Securities and Exchange Commission's Staff Accounting Bulletin (SAB) No. 101, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. STOCK ISSUED FOR SERVICES The value of stock issued for services are based on management's estimate of the fair value of the Company's stock at the date of issuance or the fair value of the services received, whichever is more reliably measurable. RESEARCH AND DEVELOPMENT COSTS Research and development costs are expensed as incurred. For the nine months ended September 30, 2003, the Company incurred research and development costs related to clinical trials and testing in the amount of $59,599. LOSS PER SHARE The Company computed basic and diluted loss per share amounts for September 30, 2003 and 2002 pursuant to the Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings Per Share." No dilution resulted from the 9,000,000 and 5,500,000 employee stock options outstanding at September 30, 2003 and 2002, respectively, because of the net loss. 7 ADVANCED PLANT PHARMACEUTICALS, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted 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 financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. SIGNIFICANT ESTIMATES Several areas require significant management estimates relating to uncertainties for which it is reasonably possible that there will be a material change in the near term. The more significant areas requiring the use of management estimates relate to the valuation of inventory, intangible assets, contingent liabilities and the valuation of the stock options. RECLASSIFICATION Certain prior year's amounts have been reclassified to conform to the 2003 presentation. 8 ADVANCED PLANT PHARMACEUTICALS, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 2. RELATED PARTY TRANSACTIONS In March 2003, the Company issued 1,250,000 shares of Series A Preferred Stock to the sole director and stockholder and 1,250,000 shares of Series A Preferred Stock to a shareholder of the Company for services rendered. The stock was issued at par value, $.0007 per share. These two stockholders own 100% of the outstanding Series A Preferred Stock. During the three months ended September 30, 2003, the Company had issued 29,500,000 shares of its common stock in lieu of payments in cash for services rendered by consultants and stockholders. These shares were valued at the fair value of the services performed. Accordingly, consulting expense of $530,500 was recognized for the three months ended September 30, 2003, for these stock issuances. 3. CAPITAL STOCK In 2003, The Board of Directors of the Company elected and the stockholders voted to amend the Certificate of Incorporation of the Company to change authorized number of shares from 250,000,000 shares of common stock and 5,000,000 shares of preferred stock to 600,000,000 shares of common stock and 10,000,000 shares of preferred stock by means of an amendment to the Company's Certificate of Incorporation. The preferred shares voting rights are equivalent to 150 shares of common stock for each share of preferred stock. The Board of Directors determined that it was in the best interests of the Company to make this change at this time, due to the fact that the Company has issued almost the entire authorized amount permitted under the Certificate of Incorporation. This would limit the ability of the Company to issue shares to raise capital, pay for various services and other related activities. 4. COMMITMENTS AND CONTINGENCIES The Company has employment agreements with two employees and consulting contracts with individuals who are also stockholders of the Company. At September 30, 2003, the Company has a total liability for accrued salaries to stockholders of $618,148. There are certain accrued unpaid payroll tax liabilities owed to the IRS on some of the salaries to stockholders that were paid in prior years, pursuant to these agreements. On April 15, 2003, the Company entered into a consulting agreement with Consulting Solutions Group. The agreement is for a one year term. Compensation under the agreement is for the Company to issue 10,000,000 shares of its common stock. This stock was issued to Consulting Solutions Group on May 12, 2003. 9 ADVANCED PLANT PHARMACEUTICALS, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 4. COMMITMENTS AND CONTINGENCIES (Continued) On February 25, 2003, the Company and Tele-V, LLC, ("Tele") a marketing company with experience in print and broadcast media and in purchasing, manufacturing and marketing consumer products, entered into an agreement whereby the Company issued 30,000,000 shares of common stock in consideration for Tele finding a reputable marketing and distribution company capable of successfully promoting, marketing and distributing Lo-Chol. In addition, upon airing of an infomercial for Lo-Chol, the Company was required to issue but fif not issue to Tele 2,500,000 shares of Series A Preferred Stock, which represents 50% of the outstanding shares of Series A Preferred Stock, and 100,000,000 shares of common stock, which represents 26% of the Company's outstanding common stock. Finally, upon the Company achieving sales in excess of $2,000,000 the Company is required to issue 20% of the then outstanding common stock to Tele. Further, pursuant to the agreement, no further issuance of common stock shall in any way dilute or diminish Tele's ownership below 26% of the outstanding common stock or 50% of the outstanding Series A. It is the Company's position that Tele breached this agreement due to its inability to provide a reputable marketing and distribution company capable of successfully promoting, marketing and distributing Lo-Chol. As a result, the Company does not believe it is required to issue the aforementioned securities to Tele. On May 28, 2003, the Company entered into an additional agreement (the "Agreement") with Tele. According to the terms of the Agreement, Tele had the exclusive right to purchase a minimum of 100,000 bottles, through May 2004 of the Company's patented cholesterol reducing dietary supplement, Lo-Chol, for resale. In exchange for awarding Tele the exclusive right for the marketing and distribution of Lo-Chol, Tele has agreed to bear all costs associated with the marketing, designs and distribution of Lo-Chol, including a significant commitment of media buys. Tele-V, LLC was also required to produce and air a Lo-Chol radio commercial within 90 days of this agreement, followed by the production and airing of an infomercial on Lo-Chol within 120 days. Pursuant to the Agreement, Tele was required to purchase a minimum of $2,000,000 worth of purchase orders per year after the date of the first purchase order. On July 9, 2003, Tele pursuant to an Assignment and Assumption Agreement, assigned all of its rights, title and interest to purchase, market and resell Lo-Chol to Nutralife Pharmaceuticals, Corp.(Nutralife), which was consented to by the Company. On October 1, 2003, the Company and Nutralife entered into an amendment of the Agreement whereby, in addition to amending the purchase price structure of units of Lo-Chol, they amended the following: o the agreement is no longer exclusive; o Nutralife is required to purchase a minimum of $200,000 worth of purchase orders per year; o in the event that Nutralife purchases in excess of $2,000,000 units of Lo-Chol, then Nutralife will have the exclusive right to purchase and resell Lo-Chol; o the requirement to purchase 100,000 units of Lo-Chol was terminated; o and the down payment originally required for the Company to commence production was increased from 30% to 50%. 10 ADVANCED PLANT PHARMACEUTICALS, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) On May 12, 2003, the Company entered into an agreement with Dr. Gerard Armand to serve as the Company's Director of Clinical Research and Manufacturing. The agreement is for a one year term, and requires the Company to issue to Dr. Armand 500,000 shares of common stock and a monthly stipend of $150 for services rendered. LITIGATION The Company is a defendant in several lawsuits arising in the normal course of business and involves claims for damages. The Company is contesting the actions but is unable to predict the ultimate outcome. 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS Background Advanced Plant Pharmaceuticals, Inc. (the "Company") was incorporated in the State of Delaware in 1986, under the name Ventra Management, Inc. On July 20, 1994, we amended our Certificate of Incorporation to change our name to Advanced Plant Pharmaceuticals, Inc. Description of Business The Company continues to focus on the research and development of plant based dietary supplements. In July 1999, the Company acquired exclusive rights and interests to a thirteen-step process, which utilizes virtually all of the nutrients found in plants to manufacture natural herbal dietary supplements. The purchase price for the thirteen step process was 12,000,000 shares of common stock of the Company. The shares were issued on February 13, 2001. Further, the Company is required to issue an additional 6,000,000 shares of common stock when marketing of the product commences. The Company intends to use this process to manufacture products that it hopes to distribute worldwide through various sales distribution contracts. On February 28, 2000, the Company entered into an Asset Purchase Agreement with Dr. Bielory to purchase his various allergy and nasal formulations. This agreement was approved by the Board of Directors on September 6, 2000. Dr. Bielory was granted a five year option to purchase an aggregate of 18,000,000 shares of the Company's common stock at an exercise price of $180.00. Dr. Bielroy exercised an option for 12,000,000 shares in the first quarter of 2001. Sinusol, being one of the formulations purchased from Dr. Bielory, is a generalized base solution for the development of an extensive line of specialty products related to allergy and sinus conditions. The ingredients include a mixture of gently pH-balanced essential mineral oils that combat the various symptoms related to allergies and sinus disorders, including congestions, irritated nasal mucosa and bacterial and fungal infections. Specialized advanced formulations are being reviewed for patent submission. On February 25, 2003, the Company and Tele-V, LLC ("Tele"), a marketing company with experience in print and broadcast media and in purchasing, manufacturing and marketing consumer products, entered into an agreement whereby the Company agreed to issue 30,000,000 shares of common stock in consideration for Tele finding a reputable marketing and distribution company capable of successfully promoting, marketing and distributing Lo-Chol. In addition, upon airing of an infomercial for Lo-Chol, the Company was required to issue to Tele 2,500,000 shares of Series A Preferred Stock, which represents 50% of the outstanding Series A Preferred Stock, and 100,000,000 shares of common stock, which represents 26% of the Company's outstanding common stock.. Finally, upon the Company achieving sales in excess of $2,000,000 the Company is required to issue 20% of the then outstanding common stock to Tele. Further, pursuant to the agreement, no further issuance of common stock shall in any way dilute or diminish Tele's ownership below 26% of the outstanding common stock or 50% of the outstanding Series A. It is the Company's position that Tele breached this agreement due to its inability to provide a reputable marketing and distribution company capable of successfully promoting, marketing and distributing Lo-Chol. As a result, the Company does not believe it is required to issue the aforementioned securities to Tele. On May 28, 2003, the Company entered into an agreement (the "Agreement") with Tele-V, LLC, a marketing company with experience in print and broadcast media and in purchasing, manufacturing and marketing consumer products. According to the terms of the agreement, Tele-V, LLC had the exclusive right to purchase a minimum of 100,000 bottles, through May 2004 of the Company's patented cholesterol reducing dietary supplement, Lo-Chol, for resale. In exchange for awarding Tele-V, LLC the exclusive right for the marketing and distribution of Lo-Chol, Tele-V, LLC has agreed to bear all costs associated with the marketing, designs and distribution of Lo-Chol, including a significant commitment of media buys. Tele-V, LLC was also required to produce and air a Lo-Chol radio commercial within 90 days of this agreement, followed by the production and airing of an infomercial on Lo-Chol within 120 days. Pursuant to the Agreement, Tele-V was required to purchase a minimum of $2,000,000 worth of purchase orders per year after the date of the first purchase order. On July 9, 2003, Tele-V, pursuant to the Assignment and Assumption Agreement, assigned all of its rights, title and interest to purchase, market and resell Lo-Chol to Nutralife Pharmaceuticals, Corp., which was consented to by the Company. On October 1, 2003, the Company and Nutralife entered into an amendment of the Agreement whereby, in addition to amending the price structure of units of Lo-Chol, they amended the following: o the agreement is no longer exclusive; o Nutralife is required to purchase a minimum of $200,000 worth of purchase orders per year; o in the event that Nutralife purchases in excess of $2,000,000 units of Lo-Chol, then Nutralife will have the exclusive right to purchase and resell Lo-Chol; o the requirement to purchase 100,000 units of Lo-Chol was terminated; and o the down payment required for the Company to commence production was increased from 30% to 50%. 12 Results of Operations Results of Operations - Nine Months Ended September 30, 2003 Compared to the Nine Months Ended September 30, 2002. Revenues Revenues generated during the nine months ended September 30, 2003, aggregated $70,660, as compared to $13,051 for the nine months ended September 30, 2002. The increase of $57,609 in revenues from the prior year is primarily due to an increase in sales during the first six months of the year as compared to the prior year, which was partially offset by a decrease in sales for the third quarter ended September 30, 2003. Costs of Goods Sold Cost of Goods Sold for the nine months ended September 30, 2003, aggregated $30,629 as compared to $6,539 for the nine months ended September 30, 2002. The increase for the nine months ended September 30, 2003 of $24,090, was primarily due to increased sales. Operating Expenses Operating Expenses incurred for the nine months ended September 30, 2003, aggregated $1,559,616 as compared to $1,208,716 for nine months ended September 30, 2002. Operating expense primarily consist of consulting and professional fees. Operating expenses increased by $350,900 as a result of payment for consulting services, legal fees, accounting fees, business development and public relations expenses, and research and development expenses. Net Loss and Loss Per Common Share The net loss and the loss per common share was $1,520,272 and $.00 for the nine months ended September 30, 2003, as compared to net loss of $1,202,204 and $.00 for the nine months ended September 30, 2002. The reason for the increased net loss is a result of the reasons described above. Results of Operations - Three Months Ended September 30, 2003 Compared to the Three Months Ended September 30, 2002. Revenues Revenues generated during the three months ended September 30, 2003, aggregated $4,151, as compared to $5,302 for the three months ended September 30, 2002. The decrease of $1,151 in revenues from the prior year is primarily due to a decrease in sales for the third quarter ended September 30, 2003. Costs of Goods Sold Cost of Goods Sold for the three months ended September 30, 2003, aggregated $1,163 as compared to $2,625 for the three months ended September 30, 2002. The decrease for the nine months ended September 30, 2003 of $24,090, was primarily due to decreased sales. Operating Expenses Operating Expenses incurred for the three months ended September 30, 2003, aggregated $742,969 as compared to $371,390 for thee months ended September 30, 2002. Operating expense primarily consist of consulting and professional fees, research and development, and travel and entertainment costs. Operating expenses increased by $371,579 as a result of payment for consulting services, legal fees, accounting fees, business development and public relations expenses, and research and development expenses. 13 Net Loss and Loss Per Common Share The net loss and the loss per common share was $739,981 and $.00 for the three months ended September 30, 2003, as compared to net loss of $368,713 and $.00 for the thee months ended September 30, 2002. The reason for the increased net loss is a result of the reasons described above. Liquidity and Capital Resources At September 30, 2003, we had working capital deficit of $2,991,943 as compared with $3,300,433 at December 31, 2002. The decrease in the working capital deficit is primarily the result of the purchase of inventory and repayment of stockholders loans. We have historically sustained our operations and funded our capital requirements with the funds received from the sale of our products, loans received from related parties and the sale of our securities. We will still need additional investments in order to continue operations. Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and the downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations again. Critical Accounting Policies The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management of the Company to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. The Company considers its critical accounting policies to be those that require the more significant judgments and estimates in the preparation of the Company's financial statements, including the following: valuation of inventories and intangible assets, valuation of stock options and warrants, and valuation of all accrued liabilities including payroll taxes and other contingent liabilities. Management relies on historical experience and on other assumptions believed to be reasonable under the circumstances in making its judgment and estimates. Actual results could differ materially from those estimates. ITEM 3 - CONTROLS AND PROCEDURES As of September 30, 2003, an evaluation was performed under the supervision and with the participation of the Company's management, including the Principal Executive Officer and the Principal Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the Principal Executive Officer and the Principal Financial Officer, concluded that the Company's disclosure controls and procedures were effective as of September 30, 2003. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to September 30, 2003. 14 PART II ITEM 1 - LEGAL PROCEEDINGS The Company is a party to an action in the Civil Court of the City of New York, County of New York, entitled, Bowne of New York City, LLC v. Advanced Plant Pharmaceuticals. This is an action for unpaid fees for filing the reports of the Company on EDGAR. The suit seeks $15,805.42 in unpaid fees for filings on the EDGAR system. The Company disputes the total amount due. If the Company is unable to work out a resolution of this action, it could have a material affect upon the Company. Counsel for the Company has been in contact with the attorney's for Bowne, and, although no assurances can be provided, it is likely that a resolution will be able to be reached. The Company was sued by Airgate International Corp. ("Airgate") for provided services to the Company. These services involved importing certain items and supplies for the Company. The suit seeks the sum of $7,350.00 in unpaid invoices. If the Company is unable to work out a resolution of this action, it could have a material affect upon the Company. Counsel for the Company has been in contact with the attorney's for Airgate, and intends to file and answer to the complaint. The parties have reached an agreement for the payment of the outstanding amount. The agreement has not been reduced to writing, although the Company has commenced making payments. ITEM 2 - CHANGES IN SECURITIES None ITEM 3 - DEFAULTS UPON SENIOR SECURITIES None ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5 - OTHER INFORMATION None Item 6. - Exhibits and Reports on Form 8-K (a) Exhibits 31.1 Certification of the Chief Executive Officer and Principal Financial Officer of Advanced Plant Pharmaceuticals, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of the Chief Executive Officer and Principal Financial Officer of Advanced Plant Pharmaceuticals, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports None. 15 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Advanced Plant Pharmaceuticals, Inc. By: /s/ David Lieberman David Lieberman, Chief Executive Officer and -------------------------------------------- Principal Financial Officer Dated: November 18, 2003 16