10QSB 1 v051034_10qsb.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 June 30, 2006 [_] 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 August 18, 2006, there were issued and outstanding 798,157,996, shares of Common Stock, $.0007 par value per share. Transitional Small Business Disclosure Format Yes [X] No [_] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [_] No [X] ADVANCED PLANT PHARMACEUTICALS, INC. INDEX ----- PAGE NUMBER ------ PART I. FINANCIAL INFORMATION ------------------------------ Item 1. Condensed financial statements (unaudited) Condensed Balance sheets as of June 30, 2006 (Unaudited) and December 31, 2005 3 Condensed Statements of operations (Unaudited) for the three months and six months ended ended June 30, 2006 and 2005 4 Condensed Statements of cash flows (Unaudited) for the six months ended June 30, 2006 and 2005 5 Notes to the condensed financial statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3. Controls and Procedures 15 PART II. OTHER INFORMATION 16 --------------------------- SIGNATURES 17 PART I ITEM 1. CONDENSED FINANCIAL STATEMENTS Item 1. Financial Statements ADVANCED PLANT PHARMACEUTICALS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

June 30, December 31, 2006 2005 ------------ ------------ Unaudited (Restated) ASSETS CURRENT ASSETS Cash $ 3,384 $ 11,688 Accounts receivable 1,188 Miscellaneous receivable 5,000 Prepaid expenses - officers 9,882 31,550 ------------ ------------ Total Current Assets 18,266 44,426 OFFICE EQUIPMENT, net of accumulated depreciation of $3,500 and $2,942, respectively 853 1,411 OTHER ASSETS Goodwill 10,406 10,406 Due from related company 13,500 9,000 Other assets 5,444 7,144 ------------ ------------ 29,350 26,550 ------------ ------------ Total Assets $ 48,469 $ 72,387 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIENCY CURRENT LIABILITIES Bank overdraft $ 5,682 $ 7,977 Accounts payable 156,582 192,371 Accrued expenses 358,567 229,794 Accrued expenses - officers 1,279,467 1,220,481 Due to distributor Due to stockholder - asset acquisition 1,315,000 1,315,000 Deposits to acquire common stock 67,500 Loans payable - stockholders 374,643 369,290 ------------ ------------ Total Current Liabilities 3,557,441 3,334,913 DEFERRED CREDIT 4,755,105 4,286,105 STOCKHOLDERS' DEFICIENCY Preferred stock, authorized 10,000,000 shares; $0.0007 par value; 5,000,000 shares issued and outstanding at June 30, 2006 and December 31, 2005 3,500 3,500 Common stock, authorized 880,000,000 shares; $0.0007 par value; 798,157,996 shares issued and outstanding at June 30, 2006 and December 31, 2005 558,711 558,711 Additional paid-in capital 14,681,548 14,681,548 Accumulated deficit (23,507,836) (22,792,390) ------------ ------------ Total Stockholders' Deficiency (8,264,077) (7,548,631) ------------ ------------ Total Liabilities and Stockholders' Deficiency $ 48,469 $ 72,387 ============ ============

See accompanying notes to financial statements. ADVANCED PLANT PHARMACEUTICALS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

For the Three Months Ended For the Six Months Ended June 30, June 30, --------------------------- --------------------------- 2006 2005 2006 2005 ------------ ------------ ------------ ------------ REVENUE - SALES $ 2,575 $ 3,799 $ 4,551 $ 5,929 COSTS AND EXPENSES Cost of goods sold 704 1,826 Salaries and consulting fees - officers 158,700 185,613 425,400 265,413 Selling, general and administrative expenses 228,443 182,729 598,171 406,181 Depreciation 279 280 558 559 ------------ ------------ ------------ ------------ Total Costs and Expenses 387,422 369,326 1,024,129 673,979 ------------ ------------ ------------ ------------ NET OPERATING LOSS (384,847) (365,527) (1,019,578) (668,050) OTHER INCOME (EXPENSE) Gain on sale of investment 308,300 308,300 Interest expense (125) (30) (4,168) (30) ------------ ------------ ------------ ------------ Net Other Income (Expense) 308,175 (30) 304,132 (30) ------------ ------------ ------------ ------------ NET LOSS $ (76,672) $ (365,557) $ (715,446) $ (668,080) ============ ============ ============ ============ NET LOSS PER SHARE OF COMMON STOCK $ (.00) $ (.00) $ (.00) $ (.00) ============ ============ ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 798,157,996 794,685,469 798,157,996 787,351,366 ============ ============ ============ ============

See accompanying notes to financial statements. ADVANCED PLANT PHARMACEUTICALS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Six Months Ended June 30, --------------------------- 2006 2005 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (715,446) $ (668,080) Adjustments to reconcile net loss to cash flows used in operating activities Stock issued for services 324,000 125,863 Gain on sale of investment (308,300) Stock held for investment issued for services 72,000 Depreciation expense 558 559 Changes in assets and liabilities: Decrease in accounts receivable 1,188 306 Increase in inventory (1,137) Decrease (increase) in prepaid expenses - officers 21,668 (13,200) Decrease in due from related company (4,500) (4,500) Decrease in accounts payable (35,789) (4,334) Increase in accrued expenses 128,773 132,463 Increase in accrued expenses - officers 226,986 97,966 ------------ ------------ Net cash used in operating activities (288,862) (334,094) CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for intangible assets (5,579) Due from related parties 65,000 ------------ ------------ Net cash provided by (used in) investing activities 65,000 (5,579) CASH FLOWS FROM FINANCING ACTIVITIES Bank overdraft (2,295) 6,946 Cash acquired in acquisition of subsidiary Loans payable - stockholders' - net 5,353 20,650 Increase in deposits 67,500 345,000 Proceeds from issuance of Mazal common stock 145,000 Proceeds from issuance of common stock 56,500 ------------ ------------ Net cash provided by financing activities 215,558 429,096 ------------ ------------ Net (decrease) increase in cash (8,304) 89,423 CASH AT BEGINNING OF PERIOD 11,688 1,045 ------------ ------------ CASH AT END OF PERIOD $ 3,384 $ 90,468 ============ ============

See accompanying notes to financial statements. ADVANCED PLANT PHARMACEUTICALS, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

For the Six Months Ended June 30, ------------ ------------ 2006 2005 ------------ ------------ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION CASH PAID Interest $ 475 $ 30 NON-CASH INVESTING AND FINANCING ACTIVITIES Issuance of common stock for services $ 125,863 Issuance of preferred stock in payment of loans payable to stockholders 10,000 Issuance of preferred stock in payment of accrued expenses to stockholders 10,000 Purchase of intangible assets for loan payable to stockholder 19,000 Issuance of Mazal common stock for services classified as A deferred credit $ 324,000 Miscellaneous receivable from sale of stock held for investment 5,000 Issuance of stock held for investment in payment of accrued Expenses - officers 168,000

See accompanying notes to financial statements. ADVANCED PLANT PHARMACEUTICALS, INC AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 NOTE A - CONDENSED FINANCIAL STATEMENTS In the opinion of the Company, the accompanying unaudited condensed financial statements include all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosure, normally included in the financial statements prepared in accordance with generally accepted accounting principles, have been condensed and omitted. The results of operations for the three and six month periods ended June 30, 2006 are not indicative of the results of operations for the year ended December 31, 2006. The condensed financial statements should be read in conjunction with the Company's financial statements included in its annual Form 10 KSB for the year ended December 31, 2005. NOTE B - STOCK WARRANTS At June 30, 2006, the Company had outstanding warrants to purchase 7,000,000 shares of the Company's common stock at a price of $.03 per share. The warrants are exercisable and expire at various dates through 2007. NOTE C - COMMITMENTS AND CONTINGENCIES The Company has employment agreements with nine employees and a consulting contract with a key consultant, who are also stockholders of the Company and Mazal Plant Pharmaceuticals, Inc. ("Mazal"). At June 30, 2006, the Company has a total liability for accrued salaries and consulting expense to stockholders of $1,139,201. There could be certain payroll tax liabilities owed to the IRS on some of the payments for services to certain consultants that were paid in prior years, pursuant to these employment agreements. NOTE D - DEPOSITS TO ACQUIRE COMMON STOCK The deposits to acquire common stock at June 30, 2006 in the amount of $67,500 represents deposits to acquire shares of Mazal common stock for which there are no written agreements at the present time. The deposits are non-interest bearing. NOTE E - RELATED PARTIES STOCK AND ASSET TRANSACTIONS On January 24, 2006, Mazal issued 200,000 shares of its common stock to a consultant at $1.08 per share. The aggregate remuneration of $216,000 has been treated as stock based compensation and expensed in the current period. On January 25, 2006, Mazal issued 100,000 shares of its common stock to its President at $1.08 per share. The aggregate remuneration of $108,000 has been treated as stock based compensation and expensed in the current period. On February 7, 2006, Mazal approved the issuance of 200,000 shares of its common stock at $0.25 per share pursuant to a private placement. Mazal incurred $5,000 in expenses related to the private placement and realized $45,000. On April 11, 2006, Mazal approved the issuance of 400,000 shares of its common stock at $0.25 per share pursuant to a private placement realizing $100,000. ADVANCED PLANT PHARMACEUTICALS, INC AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 NOTE F - GAIN ON SALE OF INVESTMENT The gain on sale of investment resulted from the sale of 500,000 shares of common stock of Amazon Biotech, Inc., an affiliated company, for $70,000. The Company received $65,000 and $5,000 is included in miscellaneous receivables. The stock had a basis of $500. The gain on sale of investment also includes the transfer of 1,200,000 shares of common stock of Amazon Biotech, Inc., to three officers of the Company in payment of accrued salaries - officers in the amount of $168,000 and compensation in the amount of $72,000. The stock had a basis of $1,200. NOTE G - GOING CONCERN As reflected in the accompanying financial statements, the Company has current liabilities in excess of current assets of $3,539,175, resulting in negative working capital and an accumulated deficit of $23,507,836. Management is presently seeking to raise permanent equity capital in the capital markets to eliminate negative working capital and provide working capital. Failure to raise equity capital or secure some other form of long-term debt arrangement will cause the Company to further increase its negative working capital deficit and could result in the Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company's ability to continue as a going concern. However, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. NOTE H - SUBSEQUENT EVENTS On July 25, 2006, the Company entered into an agreement of settlement and release with its President and transferred 200,000 shares of common stock of Amazon Biotech, Inc., held as an investment, as payment of $22,000 of accrued salary. On July 1, 2006, Mazal authorized the issuance of 244,000 shares of its common stock for cash at $0.25 per share realizing $61,000. On July 11, 2006, Mazal amended its 2005 Stock Compensation Plan to allow for the issuance of 3,500,000 shares, an increase of 2,500,000 shares. On July 17, 2006, Mazal entered into a consulting agreement whereby the consultant is to introduce medical clinics and assist in the development of clinical trials for Mazal for a term of one year. Either party may terminate the contract with or without cause upon thirty days written notice. The agreement calls for the issuance of 500,000 shares of Mazal common stock upon signing and 1,500,000 shares of Mazal common stock upon Mazal receiving a letter of intent from a medical center that has previously performed clinical trials for a major pharmaceutical company, to perform clinical trials at competitive rates, in which at least one third (33%) of the payment shall be in shares of Mazal common stock. ADVANCED PLANT PHARMACEUTICALS, INC AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 NOTE H - SUBSEQUENT EVENTS (CONTINUED) On July 31, 2006, Mazal entered into an Interim Letter of Agreement for a Phase I/II, double-blind, placebo and active-controlled, randomized, parallel-group study to evaluate the safety and efficacy of MAHDL01 alone and as an adjunct to statin therapy, versus placebo or statin therapy alone, in increasing HDL in subjects with hypoalphalipoproteinemia who are maintaining a restricted diet. The agreement calls for a minimum number of subjects of ten and a maximum of four hundred. Mazal is responsible for all external direct trial expenses. The consultant will receive $2,500 per subject who completes the study, where fifty percent (50%) will be paid in cash and the remaining fifty percent (50%) will be paid in shares of Mazal common stock. 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 the formulation 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. In addition to Sinusol, the Company is also currently marketing its Lo-Chol product. Lo-Chol's formula is derived from the "whole plant" parts of six selected plants that work in concert to help tip your lipid balance (good and bad cholesterol) towards a more normal level. These six plants are synergistically combined using a proprietary "whole plant technology" (a special pharmaceutical-grade process) that delivers virtually all the natural phyto-chemicals and active ingredients in the plants. Unlike almost all other herbal supplements on the market, Lo-Chol does not contain any extracts. Instead, it utilizes the entire part of a specific plant that is processed and standardized to deliver optimum potency and nutritional benefits. Recent Developments In January 2004, the Company acquired a 44% interest in Amazing Nutritionals, Inc., a development stage company, whereby APPI sold Amazing all of the rights, title, patents, trademarks, processes and related items of LHM123 which is a natural composition for the treatment of senile dementias in consideration for 3,300,000 shares of Amazing's common stock. In December 2004, the Company acquired a 99% interest in Mazal Plant Pharmaceuticals, Inc. ("Mazal"), a development stage company, whereby APPI sold Mazal all of its rights relating to or connected with developing, manufacturing and distributing of three of its products, plant based compositions designed to treat elevated cholesterol, leukemia and Alzheimer's disease in consideration for 7,000,000 shares of Mazal's common stock and a receivable of $50,000. On June 6, 2005, the Company consummated the transactions contemplated by the Share Exchange Agreement dated as of May 2005 (the "Share Exchange Agreement") by and among the Company, Akid Corporation ("Akid") and James B. Wiegand. Pursuant to the Share Exchange Agreement, the Company sold its entire ownership interest in 7,000,000 shares of the common stock of Mazal to Akid. In exchange, Akid agreed to issue to the Company 20,000,000 shares (the "Exchange Shares") of Akid's common stock. Following the consummation of such share exchange, the Company holds a majority of the issued and outstanding common shares of Akid, and Akid holds a majority of the issued and outstanding common shares of Mazal. Akid issued to the Company 17,500,000 of the Exchange Shares at the closing, and agreed to issue the remaining 2,500,000 of the Exchange Shares upon increasing its authorized common stock from 20,000,000 shares to 40,000,000 shares. In October 2005, Akid amended its Articles of Incorporation to change its name to Mazal Plant Pharmaceuticals, Inc. Results of Operations Results of Operations - Three Months Ended June 30, 2006 Compared to the Three Months Ended June 30, 2005. Revenues Revenues generated during the three months ended June 30, 2006, aggregated $2,575, as compared to $3,799 for the three months ended June 30, 2005. The decrease of $1,224 in revenues from the comparable period in the prior year is primarily due to a decrease in marketing due to a lack of funding. Costs of Goods Sold Cost of Goods Sold for the three months ended June 30, 2006 aggregated $-0- as compared to $704 for the three months ended June 30, 2005. The decrease for the three months ended June 30, 2006 is the result of a decrease in sales of our products. Operating Expenses Operating Expenses incurred for the three months ended June 30, 2006, aggregated $387,422 as compared to $368,622 for three months ended June 30, 2005, which is a decrease of $18,800. This decrease was primarily due to a decrease in the issuance of stock for services and the payment of fees for officers and consultants. Net Loss and Loss Per Common Share The net loss and the loss per common share was $76,672 and $.00 for the three months ended June 30, 2006, as compared to net loss of $365,557 and $.00 for the three months ended June 30, 2005. This decrease was due primarily to the decrease in the issuance of stock for services and the payment of fees to officers and consultants. Liquidity and Capital Resources At June 30, 2006, we had working capital deficit of $3,539,175 as compared with $3,290,487 at December 31, 2005. The increase in the working capital deficit is primarily the result of an increase in accrued expenses. 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 the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and principal financial officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and principal financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. There was no change in our internal controls or in other factors that could affect these controls during our last fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. PART II ITEM 1 - LEGAL PROCEEDINGS From time to time, the Company is a party to litigation or other legal proceedings that it considers to be a part of the ordinary course of its business. The Company is not involved currently in legal proceedings that could reasonably be expected to have a material adverse effect on its business, prospects, financial condition or results of operations except as set forth below. We may become involved in material legal proceedings in the future. ITEM 2 - CHANGES IN SECURITIES On January 24, 2006, Mazal Plant Pharmaceuticals, Inc. ("Mazal") issued 200,000 shares of its common stock to a consultant at $1.08 per share. The aggregate remuneration of $216,000 has been treated as stock based compensation and expensed in the current period. On January 25, 2006, Mazal issued 100,000 shares of its common stock to its President at $1.08 per share. The aggregate remuneration of $108,000 has been treated as stock based compensation and expensed in the current period. On February 7, 2006, Mazal approved the issuance of 200,000 shares of its common stock at $0.25 per share pursuant to a private placement. Mazal incurred $5,000 in expenses related to the private placement and realized $45,000. On April 11, 2006, Mazal approved the issuance of 400,000 shares of its common stock at $0.25 per share pursuant to a private placement realizing $100,000. The gain on sale of investment resulted from the sale of 500,000 shares of common stock of Amazon Biotech, Inc., an affiliated company, for $70,000. The Company received $65,000 and $5,000 is included in miscellaneous receivables. The stock had a basis of $500. The gain on sale of investment also includes the transfer of 1,200,000 shares of common stock of Amazon Biotech, Inc., to three officers of the Company in payment of accrued salaries - officers in the amount of $168,000 and compensation in the amount of $72,000. The stock had a basis of $1,200. On July 25, 2006, the Company entered into an agreement of settlement and release with its President and transferred 200,000 shares of common stock of Amazon Biotech, Inc., held as an investment, as payment of $22,000 of accrued salary. On July 1, 2006, Mazal authorized the issuance of 244,000 shares of its common stock for cash at $0.25 per share realizing $61,000. On July 11, 2006, Mazal amended its 2005 Stock Compensation Plan to allow for the issuance of 3,500,000 shares, an increase of 2,500,000 shares. On July 17, 2006, Mazal entered into a consulting agreement whereby the consultant is to introduce medical clinics and assist in the development of clinical trials for Mazal for a term of one year. Either party may terminate the contract with or without cause upon thirty days written notice. The agreement calls for the issuance of 500,000 shares of Mazal common stock upon signing and 1,500,000 shares of Mazal common stock upon Mazal receiving a letter of intent from a medical center that has previously performed clinical trials for a major pharmaceutical company, to perform clinical trials at competitive rates, in which at least one third (33%) of the payment shall be in shares of Mazal common stock. ITEM 3 - DEFAULTS UPON SENIOR SECURITIES None ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5 - OTHER INFORMATION On July 31, 2006, Mazal entered into an Interim Letter of Agreement for a Phase I/II, double-blind, placebo and active-controlled, randomized, parallel-group study to evaluate the safety and efficacy of MAHDL01 alone and as an adjunct to statin therapy, versus placebo or statin therapy alone, in increasing HDL in subjects with hypoalphalipoproteinemia who are maintaining a restricted diet. The agreement calls for a minimum number of subjects of ten and a maximum of four hundred. Mazal is responsible for all external direct trial expenses. The consultant will receive $2,500 per subject who completes the study, where fifty percent (50%) will be paid in cash and the remaining fifty percent (50%) will be paid in shares of Mazal common stock. ITEM 6. - EXHIBITS (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. 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: August 21, 2006