AlumiFuel Power Corp - Quarter Report: 2009 April (Form 10-Q)

ihbt10q43009.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended April 30, 2009

¨	TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______to_______

Commission File No. 333-57946

INHIBITON THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

Nevada	88-0448626
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

7315 East Peakview Avenue

Englewood, Colorado 80111

(Address of principal executive offices) (Zip code)

(303) 796-8940

(Registrant's telephone number including area code)

(Former name, address and fiscal year)

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, and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by a check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting companyx

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Number of shares of common stock outstanding at June 1, 2009: 239,937,246

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Index to Financial Statements

(Unaudited)

		Page

Balance Sheets at April 30, 2009 (unaudited) and January 31, 2009		F-2

Statement of Operations for the three months ended
	April 30, 2009, three months ended April 30, 2008, and from
	May 11, 2004 (Inception) through April 30, 2009 (unaudited)	F-3

Statement of Changes in Shareholders' Deficit for the period from
	May 11, 2004 (Inception) through April 30, 2009 (unaudited)	F-4

Statement of Cash Flows for three months ended April 30, 2009,
	three months ended April 30, 2008, and from May 11, 2004 (Inception)
	through April 30, 2009 (unaudited)	F-5

Notes to Financial Statements		F-6

Item 2. Management’s Discussion and Analysis of Financial Condition
	and Results of Operations	19

Item 3. Quantitative and Qualitative Disclosures About Market Risk		20

Item 4T. Controls and Procedures		20

Part II – Other Information		22

Signatures		23

F-1

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Balance Sheets

	April 30,			January 31,
	2009			2009
	(Unaudited)			(Audited)
Assets
Cash		$35			$655

Total assets		$35			$655

Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts and notes payable:
Accounts payable, related party (Note 2)		$94,250			$83,850
Accounts payable, other		301,293			300,811
Derivative liability, convertible notes payable (Note 3)		41,067			26,583
Notes payable, related party (Note 2)		215,351			216,766
Notes payable, other (Note 3)		35,200			35,200
Convertible notes payable, net of discount of 878 (Note 3)		254,122			246,798
Accrued interest payable:
Interest payable, convertible notes (Note 3)		13,499			6,306
Interest payable, related party notes (Note 2)		38,989			39,163
Interest payable, notes payable other (Note 3)		10,448			9,761

Total current liabilities		1,004,220			965,238

Commitments and contingencies		—

Shareholders’ deficit:
Preferred stock, $.001 par value; 10,000,000 shares authorized,
-0- shares issued and outstanding		—			—
Common stock, $.001 par value; 200,000,000 shares authorized,
22,825,993 (April 30) and 22,075,993 (January 31) shares
issued and outstanding		22,826			22,076
Additional paid-in capital		2,716,204			2,550,522
Deficit accumulated during the development stage		(3,743,215	)		(3,537,181	)

Total shareholders' deficit		(1,004,185	)		(964,583	)

Total liabilities and shareholders' deficit		$35			$655

See accompanying notes to financial statements.

F-2

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Statements of Operations

(Unaudited)

							May 11, 2004
	Three months			Three months			(Inception)
	ended			ended			Through
	April 30,			April 30,			April 30,
	2009			2008			2009

Operating costs and expenses:
Research and development		$-			$-			$900,000
Selling, general and administrative expenses
Related party (Note 2)		33,600			33,000			949,025
Other (Note 4)		138,534			63,211			1,047,998

Total operating costs and expenses		(172,134	)		(96,211	)		(2,897,023	)

Other income (expense)
Interest (expense) income, amortization
of convertible note discount (Note 3)		(7,324	)		-			41,061
Interest expense (Notes 2 & 3)		(12,092	)		(7,785	)		(886,186	)
Fair value adjustment of derivative liabilities (Note 3)		(14,484	)		-			(1,067	)

Loss before income taxes		(206,034	)		(103,996	)		(3,743,215	)

Income tax provision (Note 5)		-			-			-

Net loss		$(206,034	)		$(103,996	)		$(3,743,215	)

Basic and diluted loss per common share		$(0.01	)		$(0.01	)

Weighted average common shares outstanding		22,759,326			17,137,219

See accompanying notes to financial statements.

F-3

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Statement of Changes in Shareholders’ Deficit

(Unaudited)

								Common stock			Deficit
					Additional			issued for			accumulated
	Common Stock				paid-in			prepaid			during the
	Shares		Par value		capital			services			development stage			Total
Balance at May 11, 2004
Inception date		—		$—		$—			$—			$—			$—

October 2004 and January 2005, sale of common stock		9,555,100		9,555		269,945			—			—			279,500
October 2004, issuance of common stock
for debt issue costs		963,000		963		(63	)		—			—			900
December 2004, issuance of common stock for services		107,000		107		893			—			—			1,000
January 2005, notes payable converted to common stock		74,900		75		625			—			—			700
Net loss		—		—		—			—			(534,619	)		(534,619	)
Balance at January 31, 2005		10,700,000		10,700		271,400			—			(534,619	)		(252,519	)

February 2005 and March 2005,
sale of common stock		428,000		428		99,572			—			—			100,000
May 2005 Reverse acquisition of Organic Soils.com, Inc.		2,323,000		2,323		(47,179	)		—			—			(44,856	)
Net loss		—		—		—			—			(664,190	)		(664,190	)

Balance at January 31, 2006		13,451,000		13,451		323,793			—			(1,198,809	)		(861,565	)

July 2006 and August 2006, sale of common
stock, less $7,500 of offering costs		250,000		250		67,250			—			—			67,500
Net loss									—			(527,029	)		(527,029	)
									—
Balance at January 31, 2007		13,701,000		13,701		391,043			—			(1,725,838	)		(1,321,094	)

March 2007, conversion of convertible
promissory notes to common stock		594,356		594		213,374			—			—			213,968
Issuance of warrants upon conversion
of convertible promissory notes		—		—		172,363			—			—			172,363
March 2007, sale of common stock		500,000		500		124,500			—			—			125,000
April 2007, sale of common stock,
less $3,000 of offering costs		100,000		100		26,900			—			—			27,000
July 2007, conversion of convertible
promissory notes to common stock		489,863		490		183,209			—			—			183,699
Issuance of warrants upon conversion
of convertible promissory notes		—		—		151,368			—			—			151,368
July through November 2007, sale of common stock		860,000		860		244,080			—			—			244,940
December 2007, stock issued for consulting services		500,000		500		174,500			(160,417	)		—			14,583
December 2007, issuance of stock options		—		—		140,250			—			—			140,250
January 2008, sale of common stock		150,000		150		39,850			—			—			40,000
Net loss		—		—		—			—			(1,002,127	)		(1,002,127	)

Balance at January 31, 2008		16,895,219		16,895		1,861,437			(160,417	)		(2,727,965	)		(1,010,050	)

February 2008, sale of common stock		242,000		242		67,758			—			—			68,000
May 2008, issuance of warrants to convertible noteholders		—		—		2,440			—			—			2,440
July 2008, expense stock issued for
prepaid services in Dec 2007		—		—		—			160,417			—			160,417
July 2008, promissory note converted to common stock		247,107		247		14,579			—			—			14,826
August 2008, stock issued for consulting services		500,000		500		24,500			—			—			25,000
August through October 2008, sale of common stock		1,450,000		1,450		85,550			—			—			87,000
August 2008, stock issued for liabilities		1,000,000		1,000		99,000			—			—			100,000
October 2008, stock issued for services		25,000		25		1,475			—			—			1,500
December 2008, stock issued for debt		1,666,667		1,667		98,333			—			—			100,000
January 2008, sale of Common Stock		50,000		50		2,950			—			—			3,000
December 2008 and January 2009, beneficial
conversion feature on convertible notes		—		—		200,000			—			—			200,000
December 2008 and January 2009, issuance of
warrants to convertible noteholders		—		—		92,500			—			—			92,500
Net loss		—		—		—			—			(809,216	)		(809,216	)

Balance at January 31, 2009		22,075,993		$22,076		$2,550,522			$—			$(3,537,181	)		$(964,583	)

February 2009, stock issued for liabilities (Notes 3 & 6)		300,000		300		22,200			—			—			22,500
February through April 2009, sale of common stock (Note 6)		450,000		450		26,482			—			—			26,932
March 2009, issuance of stock options (Note 6)		—		—		93,150			—			—			93,150
April 2009, issuance of warrants (Note 6)		—		—		23,850			—			—			23,850
Net loss		—		—		—			—			(206,034	)		(206,034	)

Balance at April 30, 2009		22,825,993		$22,826		$2,716,204			$-			$(3,743,215	)		$(1,004,185	)

See accompanying notes to financial statements.

F-4

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Statements of Cash Flows

(Unaudited)


							May 11, 2004
	Three months			Three months			(Inception)
	ended			ended			Through
	April 30,			April 30,			April 30,
	2009			2008			2009

Cash flows from operating activities:
Net loss		$(206,034	)		$(103,996	)		$(3,743,215	)
Adjustments to reconcile net loss to net cash
used by operating activities:
Stock based compensation (Note 6)		117,000			—			459,750
Common stock issued for prepaid services		—			43,750			—
Loss on debt extinguishment		—			—			126,612
Expense incurred upon issuance or modification
of stock and warrants		—			—			418,671
Increase in derivative liability (Note 3)		14,484			—			41,067
Amortization of discount on debentures payable (Note 3)		7,324			—			(878	)
Beneficial conversion features on convertible
notes payable		—			—			200,000
Changes in operating assets and liabilities:
Accounts payable		483			(10,990	)		301,294
Related party payables (Note 2)		32,900			7,500			216,750
Accrued expenses		7,706			1,802			110,818
Net cash used in
operating activities		(26,137	)		(61,934	)		(1,869,131	)

Cash flows from investing activities:
Investment in Inhibitex Therapeutics, Inc.		—			—			(44,856	)
Net cash used in
investing activities		—			—			(44,856	)

Cash flows from financing activities:
(Payments on) proceeds from related party notes
payable, net (Note 2)		(1,414	)		(26,817	)		316,951
Proceeds from notes payable, other (Note 3)		—			—			48,200
Proceeds from convertible promissory note (Note 3)		—			—			480,000
Proceeds from issuance of common stock,
net of offering costs (Note 6)		26,932			68,000			1,068,872
Net cash provided by
financing activities		25,518			41,183			1,914,023

Net change in cash and
cash equivalents		(620	)		(20,751	)		35

Cash and cash equivalents:
Beginning of period		655			21,023			—

End of period		$35			$272			$35

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes		$—			$—			$—
Interest		$4,386			$6,183			$58,968

Noncash financing transactions:
Notes and interest payable converted to stock		$—			$—			$286,581
Stock issued in exchange for debt issue costs		$—			$—			$900
Stock issued in exchange for related party debt		$22,500			$—			$222,500

See accompanying notes to financial statements.

F-5

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Note 1: Basis of presentation

The interim unaudited financial statements presented herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in unaudited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The interim unaudited financial statements should be read in conjunction with the Company’s annual financial statements for the year ended January 31, 2009, notes and accounting policies thereto included in the Company’s Annual Report on Form 10-K as filed with the SEC.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of operating results for the interim periods presented have been made. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the year.

Interim financial data presented herein are unaudited.

Reorganization

Effective May 19, 2005, Organic Soils.com, Inc. (“Organic Soils.com”) entered into an Agreement and Plan of Reorganization with Inhibetex Therapeutics, Inc. The Agreement provided for the reorganization of Inhibetex with Organic Soils.com, with the surviving entity adopting the name Inhibiton Therapeutics, Inc. (the “Company”). In connection with the Agreement, Organic Soils.com acquired all of the issued and outstanding common shares of Inhibetex, on a fully-diluted basis, in exchange for 11,128,000 shares of Organic Soils.com common stock. At the closing of the Agreement, the shareholders of Inhibetex held 82.7% of the outstanding common stock of Organic Soils.com, resulting in a change in control.

This acquisition was treated as a recapitalization of Inhibetex, with Organic Soils.com as the legal surviving entity. Since Organic Soils.com had, prior to the recapitalization, minimal assets and no operations, the recapitalization has been accounted for as the sale of 2,323,000 shares of Organic Soils.com common stock for net assets of Inhibetex. Costs of the transaction were charged to the period in which they were incurred.

Derivative Instruments

In connection with the issuances of equity instruments or debt, the Company may issue options or warrants to purchase common stock. In certain circumstances, these options or warrants may be classified as liabilities, rather than as equity. In addition, the equity instrument or debt may contain embedded derivative instruments, such as conversion options or listing requirements, which in certain circumstances may be required to be bifurcated from the associated host instrument and accounted for separately as a derivative liability instrument. The Company accounts for derivative instruments under the provisions of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities".

F-6

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Note 2: Related Party

At April 30, 2009, the Company owed its officers a total of $89,650 for management services. The Board of Directors has estimated the value of management services at the monthly rate of $8,000 and $2,000 for the president and secretary/treasurer, respectively. The estimates were determined by comparing the level of effort to the cost of similar labor in the local market.

In February 2009, our secretary/treasurer, Thomas Olson, converted $22,500 in accrued management fees due him to 300,000 shares of our $0.001 par value common stock. The shares were valued at $0.075 per share, the market price of our common stock on the date of issuance.

The Company rents office space, including the use of office machines, phone systems and long distance fees, from an affiliate at the rate of $1,200 per month, based on the amount of space occupied by the Company and use of certain office equipment and services. Rent expense totaled $3,600 for the nine months ended April 30, 2009. As of April 30, 2009, $4,600 in rent was accrued but unpaid.

Accounts payable to related parties consisted of the following at April 30, 2009:

Management fees payable to officers			$89,650

Rent payable to company affiliated with officers			4,600

Total accounts payable, related party			$94,250

From time to time the Company has issued various promissory notes payable to a trust created by the president of the Company for the benefit of his children, in exchange for cash used for working capital purposes with a total principal balance at January 31, 2009 of $157,210. The notes bear an interest rate of 8% and are due on demand. As of April 30, 2009, $157,310 in principal remained outstanding with $33,383 in accrued interest on all notes payable to the trust.

As of January 31, 2009, the Company owed $26,200 in principal to a company owned by the president for various promissory notes issued during prior periods. The notes bear an interest rate of 8% per annum and are due on demand. During the three months ended April 30, 2009, an additional $8,100 in notes payable were issued while the Company made payments of $15,210 on the promissory notes. At April 30, 2009, $19,090 in principal and $459 in accrued interest remained outstanding on all notes payable to this affiliate.

At January 31, 2009, the Company owed $671 in principal on promissory notes payable to the president. The notes bear an interest rate of 8% per annum and are due on demand. During the three months ended April 30, 2009, an additional $1,600 in notes payable were issued while the Company made payments totaling $904 on these notes. As of April 30, 2009, $1,367 in principal and $2 in accrued interest remained payable on these notes.

In periods prior to the three months ended April 30, 2009, the Company executed promissory notes with companies affiliated with the Company’s officers. These notes carry an interest rate of 8% per annum and are due on demand. As of April 30, 2009, $27,084 in principal remained outstanding with accrued interest payable of $4,340.

F-7

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

As of January 31, 2009, the Company owed $5,500 on a promissory note issued to a partnership affiliated with the Company’s president. This note carries an interest rate of 8% and is due on demand. As of April 30, 2008, the entire balance of this note remains outstanding with accrued interest payable of $786.

During the three month period ended April 30, 2009, the Company issued a promissory note to a partnership affiliated with its president and secretary in the amount of $5,000. This note carries and interest rate of 8% per annum and is due on demand. As of April 30, 2009, $5,000 in principal and $19 in accrued interest remained outstanding on this note.

Notes and interest payable to related parties consisted of the following at April 30, 2009:

Notes payable to officers; interest at 8% and due on demand			$1,367

Notes payable to affiliates of Company officers; interest at 8% and due on demand			213,984

Notes payable, related party			215,351

Interest payable related party			38,989

Total principal and interest payable, related party			$254,340

Note 3: Notes Payable

During the year ended January 31, 2006, the Company received proceeds of $30,000, in exchange for a promissory note from an unaffiliated third party. The entire balance of this note remained outstanding at April 30, 2009. The promissory note was issued at an interest rate of 8% per annum and is due on demand. Accrued interest payable on the note totaled $9,909 at April 30, 2009. .

During the year ended January 31, 2008, the Company received proceeds of $5,200 in exchange for a promissory note from an unaffiliated third party. The entire balance of this note remained outstanding at April 30, 2009. The promissory note was issued at an interest rate of 8% per annum and is due on demand. Accrued interest payable on the note totaled $539 at April 30, 2009.

Convertible Promissory Notes

May 2008 Notes

In May 2008, the Company issued notes payable to two accredited investors for the issuance of $55,000 of 10% unsecured convertible notes in private transactions (the “May Notes”). The May Notes are convertible at 75% of the average closing bid price per share of the Company’s common stock for the twenty days immediately preceding the date of conversion subject to a floor of $0.05 per share. The Company evaluated the Notes’ conversion terms to determine if they gave rise to an embedded derivative that would need to be accounted for separately under SFAS No. 133 and Emerging Issues Task Force (EITF) 00-19 "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock." The Company determined that the conversion feature of the Notes represents an embedded derivative since the Notes are convertible into a variable number of shares if converted. Since the May Notes are convertible into a variable number of shares upon conversion, the conversion feature is not considered to be conventional and therefore must be bifurcated from the debt host and accounted for as a derivative liability. Accordingly, the fair value of these derivative instruments of $30,037 has been recorded as a liability in the consolidated balance sheet with the corresponding amount recorded as a discount to the May Notes. The change in the fair value of the derivative liability will be re-measured at each balance sheet reporting date with any difference recorded as other income (expense) in the consolidated statement of operations.

F-8

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

The fair value of the derivative instruments was calculated at issue date utilizing the following assumptions:

Issuance Date	Fair Value	Term	Conversion Price	Market Price on Grant Date	Volatility Percentage	Interest Rate
May 2, 2008	$16,333	1 year	$0.09	$0.12	101%	2.1%
May 21, 2008	$13,704	1 year	$0.068	$0.09	101%	2.1%

At April 30, 3009, the Company revalued all derivative liabilities. Therefore, for the period from their issuance to April 30, 2009, the Company recorded an expense and increased the previously recorded liabilities by $11,030 resulting in a derivative liability balance of $41,067 at April 30, 2009.

The fair value of the derivative instruments was calculated at April 30, 2009 utilizing the following assumptions:

Issuance Date	Fair Value	Term	Conversion Price	Market Price on April 30, 2009	Volatility Percentage	Interest Rate
May 2, 2008	$14,500	1 Month	$0.075	$0.13	122%	.2%
May 21, 2008	$12,083	1 Month	$0.075	$0.13	122%	.2%

December 2008 and January 2009 Notes

During the year ended ended January 31, 2009, the Company issued notes payable to an accredited investor for the issuance of $200,000 of 12% unsecured convertible notes in three private transactions (the “December Notes”). The December Notes are due and payable on May 10, 2009 and are convertible into the Company’s common stock at $0.05 per share. The Company has determined that the conversion feature does not represent an embedded derivative as the conversion price is known and is not variable making them conventional. The Company determined there was a beneficial conversion feature related to the December Notes based on the difference between the conversion price of $0.05 and the market price of the Company’s common stock at the date of each note issuance and recorded as interest expense $200,000 with an offset to additional paid-in capital. The outstanding principal and interest of $208,597 on these notes were converted on May 8, 2009 to 4,171,940 shares of $0.001 par value common stock, which transaction will be reflected in our financial statements for the second quarter ending July 31, 2009.

F-9

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Note 4: Other Expense

Other expense for the three month periods ended April 30, 2009 and 2008, and for the period from May 11, 2004 (Inception) through April 30, 2009 consisted of the following:

	Three months ended April 30, 2009		Three months ended April 30, 2008		May 11, 2004 (Inception) through April 30, 2009
General and administrative		$2,017		$3,197		$39,439
Technology access fees		-		-		40,000
Legal and accounting		6,267		664		99,558
Loss on debt extinguishment		-		-		126,612
Professional services		13,250		59,350		443,056
Stock based compensation		117,000		-		299,333
		$138,534		$63,211		$1,047,998

Note 5: Income Tax

The Company records its income taxes in accordance with Statement of Financial Accounting Standard No. 109, “Accounting for Income Taxes”. The Company has incurred significant net operating losses since inception resulting in a deferred tax asset, which was fully allowed for; therefore, the net benefit and expense resulted in $-0- income taxes.

Note 6: Capital Stock

In February 2009, we issued 300,000 shares of our common stock to our secretary/treasurer in exchange for $22,500 in management fees due to him. These shares were converted at $0.075 per share, the closing price for our common stock on that date.

During the three month period ended April 30, 2009, we issued 450,000 shares of our common stock to unaffiliated accredited investors pursuant to a private placement. The shares were sold for $26,932 or $0.06 per share.

In April 2000, we executed a consulting agreement through which the consultant received a warrant to purchase up to 265,000 restricted shares of our $0.001 par value common stock for $0.001 per share exercisable for one year. The warrants were valued at $23,850 based upon the Black-Scholes option pricing model (approximately a $0.09 grant date fair value per option). The warrants were fully exercisable at the date of the grant and therefore, the Company recorded $23,850 of stock based compensation expense during the three month period ended April 30, 2009.

The fair value of the warrants was calculated at issue date utilizing the following assumptions:

Issuance Date	Fair Value	Term	Conversion Price	Market Price on Grant Date	Volatility Percentage	Interest Rate
April 2009	$23,850	1 Year	$0.001	$0.10	122%	.5%

F-10

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Warrants

A summary of the activity of the Company’s outstanding warrants at January 31, 2009 and April 30, 2009 is as follows:

	Warrants	Weighted-average exercise price	Weighted-average grant date fair value
Outstanding and exercisable at January 31, 2009	4,213,719	$ 0.39	$ 0.10

Granted	265,000	0.001	0.09
Exercised	-	-	-

Outstanding and exercisable at April 30, 2009	4,478,719	$ 0.37	$ 0.10

The following table sets forth the exercise price range, number of shares, weighted average exercise price and remaining contractual lives of the warrants by groups as of April 30, 2009.

Exercise price range	Number of options outstanding	Weighted-average exercise price	Weighted-average remaining life

$0.50	3,186,219	$ 0.50	1.4 years

$0.25	27,500	0.25	2.0 years

$0.06	1,000,000	0.06	2.7 years

$0.001	265,000	0.001	1.0 years

	4,478,719	$ 0.37	1.6 years

Stock Options

On March 4, 2009, our board of directors authorized the Inhibiton Therapeutics, Inc. 2009 Stock Incentive Plan which was amended on May 6, 2009 and approved by our stockholders effective on May 26, 2009. The plan allows for the issuance of up to 20,000,000 shares of our common stock through one or more incentive grants including stock options, stock appreciation rights, stock awards, restricted stock issuances and performance shares to officers, directors, employees and consultants of the Company. The plan is administered by our board of directors.

F-11

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

During the three months ended April 30, 2009, the Company granted officers, directors and consultants 1,350,000 options to purchase shares of common stock at an exercise price of $0.07 per share (the market value of the common stock on the date of the grant). The options were valued at $93,150 based upon the Black-Scholes option pricing model (approximately a $0.07 grant date fair value per option). The options were fully-vested at the date of the grant and therefore, the Company recorded $93,150 of stock based compensation expense during the three month period ended April 30, 2009.

The fair value of the stock options was calculated at issue date utilizing the following assumptions:

Issuance Date	Fair Value	Term	Exercise Price	Market Price on Grant Date	Volatility Percentage	Interest Rate
March 2009	$93,150	5 years	$0.07	$0.07	213%	1.94%

All options outstanding at April 30, 2009 are fully vested and exercisable. A summary of outstanding stock option balances under the 2005 Stock Incentive Plan and the 2009 Stock Incentive Plan at January 31, 2009 and at April 30, 2009 is as follows:

2005 Stock Incentive Plan

	Options	Weighted-average exercise price	Weighted-average remaining contractual life (years)	Aggregate intrinsic value
Outstanding at January 31, 2009	425,000	$0.35	3.92	$0

Options granted	-	-	-	-

Outstanding at April 30, 2009	425,000	$0.35	3.67	$0

2009 Stock Incentive Plan

	Options	Weighted-average exercise price	Weighted-average remaining contractual life (years)	Aggregate intrinsic value
Outstanding at January 31, 2009	0	$0.00	0	$0

Options granted	1,350,000	$0.07	4.83	81,000

Outstanding at April 30, 2009	1,350,000	$0.07	4.83	$81,000

F-12

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Note 7: Agreements

License Agreement

In August 2008, the Company executed a License Agreement between the Company, the University of South Florida Research Foundation, Inc. and the University of Florida Research Foundation, Inc. (“License Agreement”) through which the Company will acquire the exclusive right and license to make, have made, use, import, sublicense and offer for sale any products or processes derived from the ICA-1 process the Company has been funding since September 2004. Under the agreement, the Company currently owes a $40,000 Technology Access Fee, which has not yet been paid. Among other things, the terms of the agreement call for the Company to raise a total of at least $500,000 in external funding in support of the technology advancement by June 30, 2009, and requires certain cash payments and royalties to the licensors beginning as early as three years from the agreement date upon the initiation of certain applications and studies as well as when and if any products are licensed and produced. In addition, the Company must pay quarterly license fees to the licensors beginning in April 2009 of $2,500, which increases annually to as much as $25,000 should the Company produce an FDA approved product. The licensors are also to receive a 4% ownership interest in the Company subject to certain anti-dilution provisions.

As of April 30, 2009, the Company has failed to pay the technology access or quarterly license fees and has failed to substantially perform under the License Agreement. As a result, the licensors could declare a default under the License Agreement to the Company at any time and if the Company fails to perform its obligations under the agreement during any cure period, the Company may lose its ability to secure the licensing rights for the ICA-1 process.

Note 8: Subsequent Events

Pursuant to an Agreement Concerning the Exchange of Securities by and among the Company, HPI Partners, LLC (“HPI”), a Colorado Limited Liability Company, and the Security Holders of HPI Partners, LLC (the “HPI Members”) dated March 4, 2009, (the “Share Exchange Agreement”), the parties entered into a share exchange whereby all of the issued and outstanding membership interests of HPI were exchanged for 171,123,297 shares of the Company’s $0.001 par value common stock and 418,500 shares of the Company’s $0.001 par value Series A Preferred Stock, through which HPI and its wholly-owned subsidiary AlumiFuel Power, Inc. became a wholly owned subsidiaries of the Company (the “Share Exchange”). The 418,500 shares of the Company’s Series A Preferred Stock automatically convert to 34,397,261 shares of the Company’s $0.001 par value common stock upon approval by the Company’s stockholders of an increase in the number of authorized common shares sufficient to effect the conversion. In addition, the HPI Members received warrants to purchase up to 14,302,500 shares of the Company’s $0.001 par value common stock, in exchange for a like number of HPI warrants that are exercisable until March 4, 2012 at an exercise price of $0.12 per share. The Share Exchange was effective as of May 5, 2009, upon closing of the transaction among the parties.

Under the terms of the Share Exchange Agreement, HPI issued to the Company a promissory note in the amount of $200,000 bearing an interest rate of 5% per annum that is due and payable by HPI to the Company on or before March 4, 2014. In addition, the Company must commence a private placement of up to $300,000 of its common stock to be offered to the HPI Members at a per share price equal to $0.0122, the equivalent price for each share of the Company’s common stock issued to the HPI Members in the Stock Exchange.

F-13

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Further terms of the Share Exchange Agreement require the Company to increase the total number of shares of the Company issued in the Share Exchange by the same percentage increase as the increase in the total number of outstanding shares of the Company resulting from the Company’s issuance, between the May 5, 2009 and 90 days following that date, of all shares it shall issue in exchange for debt due from the Company to third party debt holders during the 90 day period.

In connection with the Share Exchange Agreement, API is a wholly-owned operating subsidiary of the Company as of May 5, 2009. API is a an early production stage alternative energy company that generates hydrogen gas and steam for multiple niche applications requiring on-site, on-demand fuel sources. API’s hydrogen drives fuel cells for back-up, remote, and portable power, fills inflatable devices such as weather balloons, and can replace costly, hard-to-handle and high pressure K-Cylinders. Its steam/hydrogen output is also being designed to drive turbine-based underwater propulsion systems and auxiliary power systems. API has significant differentiators in performance, adaptability, safety and cost-effectiveness in its target market applications, with no external power required and no toxic chemicals or by-products.

API’s technology is based on the exothermic reaction of aluminum powder and water, combined with proprietary additives which act as catalysts, initiators and reactants. Novel packaging of the aluminum powder and additives into cartridges enables them to be inserted into a generator/reactor, where an infusion of water results in the rapid generation of highly pure hydrogen and superheated steam. API has an outstanding IP portfolio, including new patent filings embodying its unique and independent technology, and significant proprietary know-how regarding the practical ability to engineer desired reactions at required scales and rates.

API’s lab and offices are located in the Philadelphia Science Center in downtown Philadelphia, where it has access to world class testing instruments and technical talent. API has a seasoned management team and an experienced and dedicated technical team; and has close working relationships with major industry players as path-to-market partners, including major defense contractors and commercial fabricators of the company’s reactors and cartridge products on an outsourcing basis.

Additionally, the Company issued warrants to purchase 10,276,027 shares of common stock of the Company to third parties who assisted the Company in the transaction. These warrants expire on March 4, 2012 and one third have an exercise price of $0.10 per share, one third have an exercise price of $0.15 per share and one third have an exercise price of $0.18 per share.

The 171,123,297 shares of common stock that were issued represented approximately 88.6% of the outstanding capital stock at the time of the Share Exchange. Upon the event of the Series A Preferred Stock being converted into 34,397,261 shares of Company common stock, the former members of HPI would own approximately 90.3% of our common stock on a post-transaction basis (assuming that the Company does not, prior to the conversion of the Series A Preferred Stock, issue any additional shares of common stock other than pursuant to conversion of the Series A Preferred Stock).

The warrants that were issued were valued at $1,587,328 based upon the Black Scholes option pricing model.

F-14

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Pro forma information

Due to the significance of the acquisition of HPI and the effect on the Company’s financial position and results of operations, the following unaudited pro forma condensed consolidated balance sheet is presented as if the transaction was consummated at the end of the period presented, and the unaudited pro forma condensed statement of operations reflect the acquisition of HPI as if the transaction had been consummated at the beginning of the period presented. The accompanying unaudited pro forma condensed financial statements should be read in conjunction with the notes to the unaudited condensed financial statements. The unaudited pro forma condensed financial statements may not be indicative of the results that actually would have occurred if the transaction had been effective on the dates indicated nor are they the results that may be obtained in the future.

F-15

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Unaudited Pro Forma Condensed Balance Sheet

	Inhibiton Therapeutics., Inc. three months ended April 30, 2009			HPI Partners, LLC three months ended March 31, 2009			Pro forma Entries				Consolidation
Assets
Cash		$35			$9,135			$-				$9,169
Accounts receivable		-			-			-				-
Notes and interest receivable		-			160,048			-				160,048
Prepaid expenses and deposits		-			9,521			-				9,521
Total current assets		655			178,704			-				178,739

Property, plant and equipment		-			1,917			-				1,917

		$655			$180,621			$-				$180,656

Liabilities and Shareholders' Deficit

Current liabilities
Accounts and notes payable:
Payroll taxes payable		$-			$52,576			$-				$52,576
Accounts payable, related parties		94,250			-			-				94,250
Accounts payable, other		301,293			320,635			-				621,928
Derivative liability, convertible notes payable		41,067			-			-				41,067
Notes payable, related party		215,351			706			-				216,058
Notes payable, other		35,200			-			-				35,200
Convertible notes payable, net of discount		254,122			-			-				254,122
Convertible notes payable related net of discount		-			-			-				-

Accrued interest payable:
Interest payable, convertible notes		13,949			-			-				13,949
Interest payable, related party notes		38,989			-			-				38,989
Interest payable, notes payable other		10,448			987			-				11,435

		1,004,220			374,905			-				1,379,124

Commitments and contingencies

Shareholders' deficit:
Preferred stock		-			-			418		B		418
Common stock		22,826			2,237,500			(2,066,377	)	A,B		193,949
Additional paid-in capital		2,716,204			-			1,221,504		A,B,C		3,937,708
Retained deficit		(3,743,215	)		(2,431,783	)		844,455		A,C		(5,330,543	)

		(1,004,185	)		(194,283	)		-				(1,198,468	)

		$35			$180,621			$-				$180,656

See notes to unaudited pro forma condensed financial statements.

F-16

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Unaudited Pro Forma Condensed Statement of Operations

	Inhibiton Therapeutics., Inc. three months ended April 30, 2009	HPI Partners, LLC three months ended March 31, 2009	Pro forma Entries		Consolidation
Revenues	$ -	$ 2,750	$ -		$ 2,750

Net loss	(206,034)	(295,818)	(1,587,328)	C	(2,089,180)

Net loss applicable to common stockholders	$ (206,034)	$ (295,818)	$(1,587,328)	C	$ (2,089,180)

Basic and diluted loss per common share	$ (0.01)	$ (0.13)	$ -		$ (0.01)

Shares used in per share calculation	22,759,326	2,237,500	169,486,497	D	193,882,623

See notes to unaudited pro forma condensed financial statements.

Pro Forma Adjustments:

A.	To close out the equity of HPI Partners following the transaction.

B.	To adjust the stockholders’ deficit to reflect the recapitalization of the Company with 193,949,290 shares outstanding at $.001 par value of common stock and 418,500 shares outstanding at $.001 par value of Series A preferred stock outstanding following the transaction.

C.	To record stock compensation expense for warrants issued in the transaction.

D.	To adjust the weighted average common shares outstanding to reflect the issuance of 171,123,297 shares of common stock as if they were issued at the beginning of the period.

F-17

INHIBITON THERAPEUTICS, INC.

(A Development Stage Company)

Notes to Financial Statements

(Unaudited)

Unaudited Pro Form Condensed Statement of Operations

	Inhibiton Therapeutics., Inc. year ended January 31, 2009	HPI Partners, LLC year ended December 31, 2008 (Unaudited)	Pro forma Entries		Consolidation
Revenues	$ -	$ 24,948	$ -		$ 24,948

Net loss	(809,216)	(2,114,100)	(1,587,328)	A	(4,510,644)

Net loss applicable to common stockholders	$ (809,216)	$ (2,114,100)	$(1,587,328)	A	$ (4,510,644)

Basic and diluted loss per common share	$ (0.04)	$ (1.29)	$ -		$ (0.02)

Shares used in per share calculation	18,979,976	1,636,800	169,486,497	B	190,103,273

See notes to unaudited pro forma condensed financial statements.

Pro Forma Adjustments:

A.	To record stock compensation expense for warrants issued in the transaction.

B.	To adjust the weighted average common shares outstanding to reflect the issuance of 171,123,297 shares of common stock as if they were issued at the beginning of the period.

F-18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General:

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto for the years ended January 31, 2009 and 2008.

The independent auditors’ report on our financial statements for the years ended January 31, 2009 and 2008 includes a “going concern” explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. Management’s plans in regard to the factors prompting the explanatory paragraph are discussed below and also in Note 1 to the audited consolidated financial statements for the year ended January 31, 2009.

While our independent auditor has presented our financial statements on the basis that we are a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time, they have raised a substantial doubt about our ability to continue as a going concern.

LIQUIDITY AND CAPITAL RESOURCES

To address the going concern situation addressed in our financial statements at January 31, 2009 and April 30, 2009, we anticipate we will require approximately $900,000 of additional capital to fund the balance due under the CRADA agreement, obligations under the pending License Agreement, operating expenses related to our recently acquired alternative energy business, as well as for general corporate working capital to fund our day-to-day operations and costs associated with being a publicly-traded company. This amount does not include any amounts that may be necessary to pay off existing debt or accrued expenses. We presently believe the source of funds will primarily consist of debt financing, which may include further loans from our officers or directors as detailed more fully in the accompanying financial statements, or the sale of our equity securities in private placements or other equity offerings or instruments.

During the three months ended April 30, 2009, we received a net of approximately $25,500 from our financing activities, primarily from the sale of shares of our common stock. This compared to cash provided by financing activities of $41,000 in the three months ended April 30, 2009 derived via proceeds from the issuance of our common stock.

In the three month period ended April 30, 2009, net cash used in operation activities was $26,137. This compared to net cash used in operating activities of $61,934 for the three months ended April 30, 2008. The 2009 amount included a $206,034 net loss that included $179,897 in non-cash charges and credits to operating assets and liabilities. This compares to a net loss of $103,996 in the three months ended April 30, 2008 that included $43,750 in non-cash charges. The most significant operating expense in the three month period ended April 30, 2009 was related to non-cash “Stock based compensation expense” of $117,000 while there was $43,750 in “Common stock issued for prepaid services” in 2008.

We can make no assurance that we will be successful in raising the funds necessary for our working capital requirements as suitable financing may not be available and we may not have the ability to sell our equity securities under acceptable terms or in amounts sufficient to fund our needs. Our inability to access various capital markets or acceptable financing could have a material effect on our results of operations, research and deployment of our business strategies and severely threaten our ability to operate as a going concern.

During the remainder of our fiscal year and for the foreseeable future, we will be concentrating on raising the necessary working capital through acceptable debt facilities and equity financing to insure our ability to continue our research and implement other business strategies including funding our newly acquired alternative energy business. To the extent that additional capital is raised through the sale of equity or equity related securities, the issuance of such securities could result in significant dilution of our current shareholders.

(b) Results of Operations

For the three month period ended April 30, 2009, our total operating costs and expenses were $172,134 versus $96,211 for the same period in 2008. Those amounts included $33,600 and $33,000 in 2009 and 2008, respectively comprised of related party expense which included officer management fees and rent paid to related parties. The balance of $138,534 and $63,211 for “other” SG&A expenses was comprised of the following:

	Three months ended April 30, 2009		Three months ended April 30, 2008
General and administrative		$2,017		$3,197
Technology access fees		-		-
Legal and accounting		6,267		664
Loss on debt extinguishment		-		-
Professional services		13,250		59,350
Stock based compensation		117,000		-
		$138,534		$63,211

The “other” SG&A expense during the three months ended April 30, 2009 included $117,000 in stock based compensation expenses for fair value expenses related to stock options issued under the 2009 stock option plan totaling 93,150 and warrant issuance costs of 23,850.

The company recorded $(33,900) in “other income (expense)” during the three months ended April 30, 2009 as compared to $(7,785) in the same period of 2008. This increase in primarily attributed to the amortization and fair value adjustments on convertible notes of $21,808 during the 2009 period. Interest expense on the convertible notes accounted for a majority of the $4,307 increase in interest expense during the three months ended April 30, 2009 versus 2008.

Off-Balance Sheet Arrangements. During the three month period ended April 30, 2009, the Company did not engage in any off-balance sheet arrangements and defined in Item 303(a)(4) of the SEC’s Regulation S-B.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

A review and evaluation was performed by the Company's management, including the Company's Chief Executive Officer (the "CEO") who is also the Chief Financial Officer (the “CFO”), of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on that review and evaluation, the CEO concluded that as of April 30, 2009 disclosure controls and procedures, were effective at ensuring that the material information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported as required in the application of SEC rules and forms.

Management’s Report on Internal Controls over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a set of processes designed by, or under the supervision of, a company’s principal executive and principal financial officers, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:

•	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets;

•	Provide reasonable assurance our transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

•	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statement.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. It should be noted that any system of internal control, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our CEO/CFO has evaluated the effectiveness of our internal control over financial reporting as described in Exchange Act Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this report based upon criteria established in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to the extent possible given the limited personnel resources and technological infrastructure in place to perform the evaluation. Based upon our management’s discussions with our auditors and other advisors, our CEO/CFO believe that, during the period covered by this report, such internal controls and procedures were not effective as described below.

Due to the small size and limited financial resources, our administrative assistant, corporate secretary and chief executive officer are the only individuals involved in the accounting and financial reporting. As a result, there is limited segregation of duties in the accounting function, leaving all aspects of financial reporting and physical control of cash in the hands of two individuals. This limited segregation of duties represents a material weakness. We will continue periodically review our disclosure controls and procedures and internal control over financial reporting and make modifications from time to time considered necessary or desirable.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Unregistered Sales of Equity Securities

We offered and sold the securities in reliance on an exemption from federal registration under Section 4(2) of the Securities Act of 1933 and Rule 506 promulgated thereunder. We relied on this exemption and rule based on the fact that there were a limited number of investors, all of whom were accredited investors and (i) either alone or through a purchaser representative, had knowledge and experience in financial and business matters such that each was capable of evaluating the risks of the investment, and (ii) we had obtained subscription agreements from such investors indicating that they were purchasing for investment purposes only. The securities were not registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The disclosure contained herein does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company, and is made only as permitted by Rule 135c under the Securities Act.

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

Exhibits:
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	INHIBITON THERAPEUTICS, INC.
	(Registrant)

Date: June 15, 2009	By: /s/ Henry Fong
	Henry Fong
	Principal Executive Officer and Principal Financial Officer