U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
Quarterly Report under Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended December 31, 2003
Commission File No. 33351058
Advanced Healthcare Technologies, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 84-1565820
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
10421 South Jordan Gateway Suite 550, South Jordan, Utah 84095
(Address of principal executive offices)
(866) 641-7873
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
sections 13 or 15(d) of the Exchange Act during the past 12 months (or 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 [ ]
Yes [X] No [ ]
As of March 1, 2004, 240,000,000 shares of the issuer's Common Stock, no par
value per share, were outstanding.
ADVANCED HEALTHCARE TECHNOLOGIES, INC. AND SUBSIDIARIES
Throughout this report, Advanced Healthcare Technologies, together with its
subsidiaries, is referred to as "we," "us," "our company," "Advanced
Healthcare," "NutraTek" or "the Company."
This Form 10-QSB for the quarter ended December 31, 2003, contains forward-
looking statements, including statements about the strength of our business
and opportunities for future growth. IN SOME CASES, YOU CAN IDENTIFY FORWARD-
LOOKING STATEMENTS BY TERMINOLOGY SUCH AS MAY, WILL, SHOULD, EXPECT, PLAN,
INTEND, ANTICIPATE, BELIEVE, ESTIMATE, PREDICT, POTENTIAL OR CONTINUE, THE
NEGATIVE OF SUCH TERMS OR OTHER COMPARABLE TERMINOLOGY. We believe that our
expectations are reasonable and are based on reasonable assumptions. However,
such forward-looking statements by their nature involve risks and
uncertainties.
We caution that a variety of factors, including but not limited to the
following, could cause our business and financial results to differ materially
from those expressed or implied in forward-looking statements: our ability to
successfully integrate NUTRATEK, LLC ("NUTRATEK"); deterioration in current
economic conditions; our ability to pursue business strategies; pricing
pressures; changes in the regulatory environment; industry competition;
monetary and fiscal policies; and other factors discussed more fully in PLAN
OF OPERATION and Risk Factors below. We assume no obligation to update any
forward-looking statements.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 3. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ADVANCED HEALTHCARE TECHNOLOGIES, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
ADVANCED HEALTHCARE TECHNOLOGIES, INC.
AND SUBSIDIARY
Consolidated Balance Sheet
ASSETS
December 31,
2003
(Unaudited)
CURRENT ASSETS
Accounts receivable $ 11,686
Inventory 2,782
-----------
Total Current Assets 14,468
-----------
FIXED ASSETS, NET 10,409
-----------
TOTAL ASSETS $ 24,877
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Cash overdraft $ 6,915
Accounts payable 18,523
Credit cards payable 18,692
Notes payable 20,000
Notes payable related party 8,500
Related party payables-Advanced Healthcare 247,546
Accrued expenses 30,385
----------
Total Current Liabilities 350,561
----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock: 500,000,000 shares authorized
of $0.001 par value, 240,000,000 shares
issued and outstanding 240,000
Additional paid-in capital (deficit) (466,400)
Accumulated deficit (99,284)
----------
Total Stockholders' Deficit (325,684)
----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 24,877
==========
ADVANCED HEALTHCARE TECHNOLOGIES, INC.
AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
For the Nine For the Three
Months Ended Months Ended
December 31, December 31,
2003 2003
REVENUES $ 192,670 $ 47,133
Cost of goods sold 105,191 20,015
------------ -----------
Gross profit 87,479 27,118
------------ -----------
OPERATING EXPENSES
Payroll 72,963 57,181
Rent 13,621 7,100
Professional fees 10,629 9,729
General and administrative 89,550 26,378
------------ -----------
Total Operating Expenses 186,763 100,388
------------ -----------
NET LOSS $ (99,284) (73,270)
------------ -----------
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
============ ===========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 75,750,000 101,000,000
============ ===========
Note: The Company has not presented the 2002 comparable amounts as NutraTek,
LLC was incorporated on March 3, 2003.
ADVANCED HEALTHCARE TECHNOLOGIES, INC.
AND SUBSIDIARY
Consolidated Statement of Cash Flows
(Unaudited)
For the
Nine Months Ended
December 31,
2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (99,284)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation expense 500
Changes in assets and liabilities:
(Increase) in accounts receivable (11,686)
(Increase) in inventory (2,782)
Increase in accounts payable and
related party payables 18,523
Increase in accrued expenses 49,077
------------
Net Cash Used by Operating Activities (45,652)
------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (10,908)
------------
Net cash used by investing activities (10,908)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash overdraft 6,915
Proceeds from related party notes payable 28,500
Equity infusion 24,518
Owner draws, Nutratek, LLC (3,373)
------------
Net Cash Provided by Financing Activities 56,560
------------
NET INCREASE (DECREASE) IN CASH -
CASH AT BEGINNING OF PERIOD -
------------
CASH AT END OF PERIOD $ -
============
CASH PAID FOR:
Interest $ -
Income taxes $ -
Note: The Company has not presented the statement of cash flows for the nine
months ended December 31, 2002 as NutraTek, LLC was incorporated on March 3,
2003.
ADVANCED HEALTHCARE TECHNOLOGIES, INC.
AND SUBSIDIARY
Consolidated Notes to the Financial Statements
December 31, 2003
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed consolidated financial statements
of Advanced Healthcare Technologies, Inc. (Advanced) and Subsidiary (the
Company) have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed
or omitted in accordance with such rules and regulations. The
information furnished in the interim condensed consolidated financial
statements include normal recurring adjustments and reflects all
adjustments, that, in the opinion of management, are necessary for a
fair presentation of such consolidated financial statements. Although
management believes the disclosures and information presented are
adequate to make the information not misleading, it is suggested that
these interim condensed consolidated financial statements be read in
conjunction with the Company's most recent audited consolidated
financial statements as well as its 8-K Filings. Operating results for
the nine months ended December 31, 2003 are not necessarily indicative
of the results that may be expected for the year ending March 31, 2004.
NOTE 2 - GOING CONCERN
The Company's consolidated financial statements are prepared using
accounting principles generally accepted in the United States of America
applicable to a going concern that contemplates the realization of
assets and liquidation of liabilities in the normal course of business.
The Company has not yet established an ongoing source of revenues
sufficient to cover its operating costs and allow it to continue as a
going concern. The ability of the Company to continue as a going
concern is dependent on the Company obtaining adequate capital to fund
operating losses until it becomes profitable.
The Company estimates that it will require approximately $1,000,000 in
cash to fund its activities through December 31, 2004, which it will
seek to obtain principally through he sale of securities. The Company
has no commitment from any person to acquire all or any of such
securities or to provide funding through any other mechanism. The
Company expects that additional capital will be required in future
fiscal years if it is unable to generate sufficient revenues from
operations.
The ability of the Company to continue as a going concern is dependent
upon its ability to successfully accomplish the plans described in the
preceding paragraph
and eventually secure other sources of financing and attain profitable
operations. The accompanying consolidated financial statements do not
include any adjustments that might be necessary if the Company is unable
to continue as a going concern.
ADVANCED HEALTHCARE TECHNOLOGIES, INC.
AND SUBSIDIARY
Consolidated Notes to the Financial Statements
December 31, 2003
Note 3 - MATERIAL EVENTS
Reorganization Agreement
On December 4, 2003, pursuant to an agreement and plan of
reorganization, Advanced completed a reverse merger with the members of
NutraTek, LLC. in which it acquired 100% of NutraTek, LLC, a Utah
Limited Liability Company in exchange for one hundred one million common
shares of Advanced. The terms of the acquisition are detailed in an 8-K
filing dated December 5, 2003. Under the terms of the agreement, the
president of NutraTek, LLC became the president of the Company and was
elected to the Board of Directors, the acquisition was accounted for as
a recapitalization of NutraTek, LLC because the members of NutraTek, LLC
controlled Advanced after the acquisition. NutraTek, LLC was treated as
the acquiring entity for accounting purposes and Advanced was the
surviving entity for legal purposes. There was no adjustment to the
carrying values of the assets or liabilities of NutraTek, LLC and no
goodwill was recorded. The operations for the nine months ended December
31, 2003 are those of NutraTek, LLC. NutraTek, LLC has a calendar year
end of December 31st, while Advanced has a fiscal year end of March
31st. Advanced anticipates that it will change its year-end to December
31st, to match its operating subsidiary.
Spin-off of Technology
Pursuant to a contract dated October 29, 2003, Advanced assigned all of
its rights, title and interest in the oxygen therapy business to various
shareholders. The Bill of Sale and Assignment was signed on March 8,
2004.
Stock Issuances
During the quarter ended December 31, 2003, the Company issued the
following shares of common stock:
1. On October 15, 2003, 2,120,000 shares of common stock associated
with the merger with NutraTek, LLC valued at $0.00 per share.
2. On October 15, 2003, 3,000,000 shares of common stock for
consulting services valued at the closing price on the date of
issue of $0.05 per share for total consideration of $150,000
3. On October 15, 2003, 275,774 shares of common stock for legal
services valued at the closing price as the date of issue of $0.05
per share for total consideration of $13,779
4. On October 15, 2003, 1,103,095 shares of common stock for debt
extinguishments valued at the closing price on the date of issue
of $0.05 per share for total consideration of $55,155.
ADVANCED HEALTHCARE TECHNOLOGIES, INC.
AND SUBSIDIARY
Consolidated Notes to the Financial Statements
December 31, 2003
NOTE 3 - MATERIAL EVENTS (Continued)
Stock Issuances (Continued)
5. On November 5, 2003, 39,000,000 shares of common stock as a
preliminary issuance for the merger with NutraTek, LLC. Shares
were valued at $0.00 per share.
6. On November 19, 2003, 101,000,000 shares of common stock to
complete the acquisition of Nutratek, LLC valued at $0.00 per
share.
7. On November 19, 2003, 50,000,000 shares of common stock were
issued to related parties for public relations services. The
Company is attempting to get these shares back and canceled
because it questions whether the services were performed. The
shares have been expensed because they have not been returned and
cancelled. The shares were valued at the closing price on the
date of issue of $0.05 per share.
Note that all amounts recorded as an expense in the quarter ended
December 31, 2003 by Advanced have been eliminated in the reverse merger
consolidation entry. Only the operation of NutraTek, LLC have been
presented for the nine months ended December 31, 2003.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This management's discussion and analysis of financial condition and
results of operations and other portions of this Quarterly Report on Form 10-
QSB contain forward looking information that involves risks and uncertainties.
The Company's actual results could differ materially from those anticipated by
this forward looking information. This management's discussion and analysis
of financial condition and results of operations should be read in conjunction
with our unaudited condensed consolidated financial statements and related
notes included elsewhere in this document.
Overview
Advanced Healthcare Technologies, Inc. ("Advanced Healthcare" or the
"Company") acquired NutraTek, LLC ("NutraTek") as a wholly owned subsidiary on
November 17, 2003 in an acquisition transaction treated for accounting
purposes as a "reverse acquisition." Accordingly, the historical results
presented in the accompanying financial statements are those of NutraTek
through November 17, 2003, after which the historical results are those of the
combined entities. Additionally, the plan of operations set forth below
relate to the business of NutraTek as acquired by the Company.
Plan of Operation
NutraTek was organized in March of 2003, and from its inception has researched
and developed and thereafter contracted with third parties to manufacture its
own line of nutritional dietary supplements, functional food products and
proprietary natural sweeteners. As a result of the acquisition transaction,
NutraTek's business and operations have become the principal business and
operations of the Company.
The Company plans to seek to expand its business operations in the near
future, subject to its ability to obtain the additional debt or equity
financing it requires to continue the implementation of its business plan.
Pursuant to its plan of operation for the next twelve (12) months, the Company
believes that existing cash balances will not be adequate to satisfy cash
requirements and maintain current sales and operations. The Company's existing
cash balances have been provided, in substantial part, through loans to the
Company from Mr. Sanchez. If Mr. Sanchez does not continue to provide such
loans to the Company, additional financing or borrowing will be immediately
necessary for the Company to continue its operations. The Company is
currently pursuing and considering debt and equity financing alternatives.
However, the Company has not entered into any agreement or arrangement for the
provision of such debt or equity financing and no assurances can be given that
such financing will be available to the Company on terms acceptable to it or
at all.
Subject to the Company's ability to obtain adequate financing, the Company
plans to research and develop several new products during the next twelve (12)
months including the following: supplements and functional foods that support
cognitive function; cholesterol support, liver detoxification, and Ayurvedic
formulas; dietary supplements for blood sugar balance and weight loss;
comprehensive cardiovascular support formulas; a natural digestive aid;
nutritional bars; female health formulas; probiotic and intestinal support
formulas; stress and mental support formulas; functional foods to be used as
meal replacements for children and female health; and development of a table
top sweetener.
During its plan of operation for the next twelve (12) months, the Company does
not expect to purchase a plant or any significant equipment and plans to
continue to rely on outsourcing manufacturing. However, within the next
twelve (12) months, the Company plans to pursue the sale of its oxygen therapy
assets and is currently negotiating the sale of such assets with a potential
purchaser. The Company does not expect any significant changes in the number
of employees during its plan of operation.
Off Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company's
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources
that is material to investors.
ITEM 3. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Principal Accounting Officer, after
conducting an evaluation, together with other members of the Company's
management, 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
report, have concluded that the Company's disclosure controls and procedures
were effective to ensure that information required to be disclosed by the
Company in its reports filed or submitted under the Securities Exchange Act of
1934 (the "Exchange Act") is recorded, processed, summarized, and reported
within the time periods specified in the rules and forms of the SEC. There
were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to that
evaluation, and there were no significant deficiencies or material weaknesses
in such controls requiring corrective actions.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material legal proceedings and, to the best
of its knowledge; its properties are not the subject of any such proceedings.
ITEM 2. CHANGES IN SECURITIES
Recent Sales of Unregistered Securities
A. On October 15, 2003, the Company issued the following shares of common
stock in a private transaction under Section 4(2) of the Securities Act of
1933:
1. 1,900,000 shares of common stock to Phillip and Jacqueline Loori
for contribution of assets.
2. 220,000 shares of common stock to Frank Rossi contribution of
assets.
3. 3,000,000 shares of common stock to Randall Sulhoff for consulting
services valued at $150,000.
4. 275,774 shares of common stock to Tom Pierson, P.C. for legal
services valued at $13,779.
5. 1,103,095 shares of common stock to Power Network, Inc. for
extinguishment of Company debt of $55,155.
B. In connection with the Company's reverse merger transaction with NutraTek,
the Company issued the following shares in a private transaction under Section
4(2) of the Securities Act of 1933:
1. On November 5, 2003, the Company issued 39,000,000 shares of common
stock, valued at $0.00 per share, as compensation for finders fees and
consulting services as follows:
a. Kripaitis and Associates 4,000,000 shares of common stock
b. Jacqueline Kripaitis 4,000,000 shares of common stock
c. Worldtronics, Inc. 3,000,000 shares of common stock
d. Socrates Skiades 8,500,000 shares of common stock
e. Maria Skiades 8,500,000 shares of common stock
f. YT2K, Ltd. 2,200,000 shares of common stock
g. JVO Consulting, Inc. 3,400,000 shares of common stock
h. New Age Sports, Inc. 2,400,000 shares of common stock
i. Starr Consulting, Inc. 3,000,000 shares of common stock
2. On November 19, 2003, the Company issued 101,000,000 shares, valued
at $0.00 per share, to Johnny Sanchez in exchange for 100% of the ownership
interest of NutraTek;
3. On November 19, 2003, the Company issued 50,000,000 shares of
common stock, valued at $0.05 per share, for public relations and consulting
services to the following companies:
a. ARB Consulting, Inc. 9,500,000 shares of common stock
b. BAF Consulting, Inc. 9,500,000 shares of common stock
c. Power Network, Inc. 4,000,000 shares of common stock
d. Starr Consulting, Inc. 9,000,000 shares of common stock
e. Project Development, Inc. 8,000,000 shares of common stock
f. Phoenix Group Consultants 10,000,000 shares of common stock
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On October 28, 2003 the shareholders of the Company holding a majority of the
voting power signed a written consent approving and authorizing: (i) the
increase in the Company's authorized shares of common stock to 500,000,000;
and (ii) the acquisition of NutraTek for $140,000,000 shares of common stock.
ITEM 5. OTHER INFORMATION
OVERVIEW OF THE COMPANY AFTER THE
REVERSE MERGER TRANSACTION WITH NUTRATEK
Directors and Executive Officers
The following table sets forth the names, ages, and titles of the executive
officers and directors of the Company.
Name Age Title*_________
Johnny Sanchez 33 Director, CEO, President
Virginia Sanchez 32 Director
Carmen Sanchez 53 Director
Joe Overcash 38 Director
Joel Rockwood 30 Director, Vice President, CSO
________________________________________________________________________
*The term of office of each director is one year and until his or her
successor is elected at the Company's annual shareholders' meeting and
is qualified, subject to removal by the shareholders. The term of
office for each officer is one year and until a successor is elected at
the annual meeting of the board of directors and is qualified, subject
to removal by the board of directors. Each of the Company's officers
and directors has served in the offices indicated above since November
2003 except that Joel Rockwood was appointed as a director on March 12,
2004.
Certain biographical information of the Company's directors and officers is
set forth below.
Johnny Sanchez. Mr. Sanchez is the Chief Executive Officer and President of
the Company and serves on the Company's board of directors. Mr. Sanchez is
the founder of NutraTek and has served as its President from its organization
in March 2003 to the present. Prior to that time, Mr. Sanchez worked
extensively in the nutritional and dietary supplement industry performing
research and developing expertise in nutritional biochemistry and the
underlying causes of disease. From July of 1998 through July of 2002, Mr.
Sanchez was also employed by Metagenics as a territory manager and was
responsible for product sales, product development and customer training. Mr.
Sanchez is an Alumnus of the University of Utah and Utah State University
graduating in Business Management and Communications. His post graduate
studies were at the Institute of Functional Medicine and the University of
Utah in the area of Nutritional Biochemistry and Underlying Causes of Disease.
He has more than 120 hours of continuing education and more than a dozen
certifications in nutritional product formulations and the underlying causes
of disease.
Virginia Sanchez. Virginia Sanchez is the wife of Mr. Johnny Sanchez and
currently serves on the Company's board of directors. During 2003, Mrs.
Sanchez worked with Mr. Sanchez in founding and launching NutraTek through
overseeing product development and employee training, performing research and
serving as the secretary of NutraTek. From May of 1996 through December of
2002, Mrs. Sanchez was employed by the Salt Lake County Health Department as
an Environmental Health Scientist where she trained employees, researched
health issues and enforced health issues for residents of Salt Lake County.
Mrs. Sanchez received her Bachelor of Science from the University of Utah in
Environmental Health Science.
Carmen Sanchez. Carmen Sanchez is the mother of Mr. Johnny Sanchez and
currently serves on the Company's board of directors. During 2003, Ms.
Sanchez was employed by NutraTek as an office manager and secretary. From
September 1999 through March 2003, Ms. Sanchez was employed by Dillards as a
sales associate with responsibilities customary of that position. From 1991
through 1999, Ms. Sanchez was employed by First Security Bank as a Bank Teller
with responsibilities customary of that position.
Joe Overcash. Joe V. Overcash currently serves on the Company's board of
directors and resides and works in Winston-Salem, North Carolina. He holds an
Associates Degree in Accounting and is self-employed as an accountant. He
earned his degree in 1992 and has been operating a private practice since
1994. He performs monthly bookkeeping, payroll services, business consulting,
tax planning and income tax preparation for individuals, partnerships and
corporations.
Joel Rockwood. Joel Rockwood currently serves on the board of directors and
is a vice president and chief scientific officer of the Company. Mr. Rockwood
has also served as Chief Scientific Officer of NutraTek since its
organization. Prior to the organization of NutraTek, from June 2002 through
October 2003, Mr. Rockwood was employed by Young Living Essential Oils as a
New Product Development Scientist where he was responsible for product
development from concept to manufacturing. Prior to that, from May 2000
through July 2002, Mr. Rockwood was the head scientist and laboratory
supervisor for Cardinal Health (RP Scherer West, Inc.) and was responsible for
maintenance of laboratory equipment, analytical testing of all materials and
research and development of new product formulae. Located in Springville Utah,
R.P. Scherer West, Inc. is part of the Cardinal Health Family. Additional
responsibilities included trouble shooting existing problems with the
manufacturing process and conducting studies on existing products in an effort
to improve them. Mr. Rockwood received his Bachelor Degree of Science in
Chemistry at Southern Utah University. He also attended Utah State University
for post graduate work in Analytical Chemistry up until May 2000.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth as of March 1, 2004, the number of shares of
the Company's common stock, par value $0.001, owned of record or beneficially
by each person known to be the beneficial owner of 5% or more of the issued
and outstanding shares of the Company's common stock, and by each of the
Company's executive officers and directors, and by all executive officers and
directors as a group. On March 1, 2004, there were 240,000 shares of the
Company's common stock issued and outstanding.
Title Number of Nature of Percent
of Class Name Shares Owned(1) Ownership of Class
Principal Shareholders
Common Johnny Sanchez 101,000,000 Direct 42.08%
Common Johnny Sanchez 62,105,775(2) Indirect 25.88%
Common CEDE & Co. 28,790,269 Indirect 12.00%
Common Socrates & Maria
Skiades 17,000,000 Direct 07.08%
Common Starr Consulting 12,000,000 Direct 05.00%
Officers and Directors
Common Johnny Sanchez 101,000,000 Direct 42.08%
Common Johnny Sanchez 62,105,775(2) Indirect 25.88%
N/A Virginia Sanchez -0- N/A -0-
N/A Carmen Sanchez -0- N/A -0-
Common Joe Overcash 300,000 N/A Less than 1%
N/A Joel Rockwood -0- N/A -0-
Common All Officers and
Directors 101,300,000 Direct 42.08%
As a Group
(5 Persons) 62,105,775(2) Indirect 25.88%
----------- -----
163,405,775 67.96%
_________________________________
(1) Unless otherwise indicated, all shares are held beneficially and of
record by the person indicated.
(2) Consists of 62,105,775 shares owned by various Company shareholders who
have granted irrevocable proxy rights to Mr. Sanchez. Mr. Sanchez may
be deemed to be the beneficial owner of such shares as a result of the
proxy rights.
INFORMATION ABOUT NUTRATEK
History
NutraTek was organized in Utah in March 2003. Prior to NutraTek's
organization, its co-founder, Johnny Sanchez, worked extensively and developed
expertise in the nutritional and dietary supplement industry through
researching nutritional biochemistry and the underlying causes of disease.
Early in 2003, Mr. Sanchez and Joel Rockwood researched and developed a high
protein dietary shake, NutraSmoothTM formulated to take advantage of
developments in the understanding of blood glucose and cellular health that
have allowed a better understanding of the function of glucose utilization in
individuals and hyperinsulinemia which has been shown to be a contributing
factor in the development of Cardiovascular Disease, High Blood pressure and
other health issues. The development of NutraSmooth was a vital component of
Mr. Sanchez's organization and launch of NutraTek.
Since the date of its organization and continuing through the date of its
acquisition by the Company, NutraTek has researched, developed, manufactured,
and marketed its own line of dietary supplements, weight management food
products and proprietary natural sweetners. NutraTek has also been awarded
distribution rights to a health assessment device (IQS) used as a
communication tool to help doctors develop protocols to a patient's
individuality.
Business Plan
NutraTek has a unique business plan program that it hopes to implement through
a synergy of nutritional products and an effective marketing program directed
to licensed health care professionals to improve patient outcomes and clinic
profitability. This business model consists of educating healthcare
professionals on the underlying causes of disease and making product
recommendations based on peer-reviewed scientific literature. NutraTek works
to make doctors aware of the importance of nutritional supplementation and
lifestyle modification techniques that can result in the patient's long-term
health, weight loss, and over all well-being. NutraTek has scientifically
developed NutraSmooth, a dietary shake designed to improve weight loss,
regulate blood sugar, and create optimum health. An important part of this
product is the development of a proprietary low calorie healthy sweetener.
Due to the growth of the weight loss and nutritional supplement industry, the
market is in an explosive stage. Individuals who are health and weight
conscious are now spending a significant portion of their budget on
nutritional supplements and doctors who specialize in their application. An
estimated $30 billion is spent each year on all types of nutritional products
and wellness programs in this country and the trend is growing at a pace of
21% per year according to the London Advertising News Desk. NutraTek fills
this market niche with three primary marketing strategies all designed to put
NutraTek on the forefront.
NutraTek's mission is to bring to the world the possibility of living life
healthfully and powerfully. This objective can be accomplished by changing
the intake of nutrients to improve bodily function. The doctors who are
exposed to our philosophy and products go on to teach and sell to their
patients the key to health. Through a long-term commitment to this mission,
NutraTek hopes to become known as a business that promises results and
delivers on what it promises. Customers, vendors, sales representatives, and
employees see NutraTek as a company with astute business acumen and as a
company that conducts its business with integrity. The NutraTek philosophy
puts the individual in charge of his or her own body shape, vigor and health
by controlling chemical processes in the body that determine true health.
Totally natural and scientifically researched products that would not require
the use of drugs, diet pills or expensive exercise equipment accomplish this
goal.
NutraTek believes it is building a solid foundation that will enable it to
experience rapid, yet controlled growth growth that may produce sustainable
profitability for the future. There are three primary avenues NutraTek will
pursue to reach these goals; (1) Doctor sales through territory sales
representatives; (2) Product sales from third party distribution to small and
medium sized direct marketing companies; (3) Direct Sales via the internet;
and (4) Direct sales from an outside telecommunications marketing group.
NutraTek also plans to develop an Infomercial under a private label and the
sales of its natural sweetener to third party manufacturers to add to other
products in place of sugar.
NutraTek has already assembled a talented and dedicated team of achievement-
oriented individuals to build the doctor sales and the development of third
party and direct sales. It maintains a workplace environment that is
conducive to continued excellence in the industry. Because of these factors,
management hopes and believes that NutraTek will achieve successful
implementation of its business plan.
Key factors to NutraTek's growth and expansion include debt or equity
financing, the continued development and success of products, the right
marketing program and the right management and personnel to implement the
above. By continuing with the implementation of its business plan, NutraTek
hopes to gain a competitive portion of the marketplace with its product line.
Products
NutraTek develops products in five (5) principal categories: (1) vitamins &
mineral formulas; (2) antioxidants; (3) blood-sugar management and weight loss
formulas; (4) herbal formulas; and (5) specialty products. NutraTek's
products are formulated to provide optimal absorption, assimilation, and
effectiveness. NutraTek also maintains the license and distribution rights to
an Interactive Query System (IQS). IQS is an equipment device utilized to
determine a health assessment and weakness in the body. This device is backed
by 25 years of scientific research by Dr. Roy Curtin and other well-known
researchers including the Atkins Clinic. It measures the galvanic skin
response at meridian points on the body which then interprets readings based
on patient specific dietary requirements and compatibility to nutritional
products. By using this simple query technique, the human body can communicate
what it needs to stay healthy. For the client who utilizes it, the IQS device
has been shown to improve the marketability of NutraTek's product by 300%.
Listed below is a brief description of the nutritional product formulations.
Vitamin & Mineral Formulas
Fem HRT - Fem HRT is designed to provide targeted nourishment and support
for the menopausal woman. This formula is prepared with herbal extract
antioxidants and other nutrients that support balance during menopause. It
is also ideal for cardiovascular and adrenal support.
Glucosamine Sulfate - Glucosamine Sulfate has had significant research in
regards to insuring the support of healthy joints. Research also states
that Glucosamine Sulfate may relieve joint discomfort, promote joint
mobility, strength and stimulating the growth of new cartilage.
MultiCare Vitamin Complex - MultiCare Vitamin Complex is a comprehensive
vitamin and mineral product which has been improved with the addition of
amino acid chelates. Amino acid chelates have been shown to improve
absorption within the body for improved utilization and effectiveness.
Additional antioxidants and enzymes have been added for overall support.
MultiCare Vitamin Complex w/o Iron - This Iron free vitamin and mineral
formula is for men or for women who are no longer menstruating. Amino acid
chelates are used for improved absorption of minerals.
Mega Veggie - Mega Veggie is a foundation support product loaded with a
comprehensive blend of antioxidants, vitamins, minerals and enzymes. This
is a WHOLE FOOD vegetable designed for the person who does not get adequate
nutrition from their diet. Broccoli and Garlic powders may support healthy
liver function and detoxification.
Vitamin B Complex - This blend has been formulated to be non-flushing. B
vitamins are essential to good overall health and play an important role in
homocysteine metabolism and cardiovascular health. Scientific research
states that B vitamin supplementation may also be important in managing
stress.
Antioxidants
Alfalfa Leaf - This WHOLE FOOD supplement is packed with antioxidants and
natural enzymes. Alfalfa also contains a complete array of vitamins and
minerals essential for a busy lifestyle. Research suggests Alfalfa may
support liver detoxification.
Antioxidant Protector - A unique formula designed to provide antioxidant
support for both men and women. It features a specific blend of essential
nutrients such as vitamins A, C, & E for healthy aging and immune system
support.
Phytonutrient Plus - A healthy blend of vitamins, minerals, antioxidants
and enzymes found naturally in WHOLE FOODS. The whole foods in this product
are freeze dried to protect nutrient value and bioavailability. Ideally
suited as a daily foundational support.
Blood-sugar Management and Weight-loss Formula
NutraSmooth (Meal Replacement Shake) - NutraSmooth is a non-dairy, high
protein dietary shake, nutritionally fortified from Pea and Soy Protein.
NutraSmooth is designed to be a Macronutrient and Micronutrient foundation,
to support Blood Sugar Metabolism and Lean Body mass. NutraSmooth is also
formulated to take advantage of developments in the understanding of blood
glucose and cellular health that have allowed a better understanding of the
function of glucose utilization in individuals and hyperinsulinemia which
has been shown to be a contributing factor in the development of
Cardiovascular Disease, High Blood pressure and other health issues.
Herbal Formulas
Black Cohosh - Is a phytoestrogenic herb traditionally used by Native
American women, it is especially popular in Europe today for relief of such
symptoms as menstrual cramping and hot flashes during menopause.
Eyebright - The Eyebright herb has been clinically shown to be helpful
against inflammations of the eye, including eye infections, over-
sensitivity to light, weeping conditions and stinging eyes. Eyebright
contains bitters, essential oils, several B vitamins, and Vitamins A, C, D,
and E.
Kava Kava Root - A natural root that has been used for centuries for to aid
relief of stress and anxiety. This herb induces a relaxed, tranquil sense
of well-being while allowing you to maintain mental alertness. Kava root
extract has been standardized to 30% kavalactones, the active constituent
in kava.
Valerian Root - Has traditional use as a mood lifter. Valerian may be used
to promote relaxation. Valerian can also be useful as a healthy support of
minor muscle spasms and aches.
Specialty Products
Healthy Liver Complex - Is a comprehensive blend of Picrorhiza and
Dandelion Roots, Milk Thistle, and Celadine. Its intended design is to be a
powerful aid in liver detoxification and to aid in healthy liver function.
Male Virility Formula - This is a specifically formulated blend for the
support of men's sexual health. This formulation is recognized for its
prostate supporting properties, Saw Palmetto, B6 and Zinc, which are
essential nutrients for maintaining male reproductive health. The
Androstenedione has been clinical shown to support healthy male
reproduction.
Vessel Plus - This blend of Butchers Broom, Hesperidin and some essential
powerful antioxidants is blended to support healthy blood vessels and
cardiovascular health.
Wild Yam Root - Is a compound known as diosgenin. Research has shown that
the body can easily convert diosgenin into human progesterone, promoting
healthy hormonal balance in women.
Research and Development
NutraTek employs and maintains seven (7) member research and development
team that consists of educated and highly experienced individuals in the
fields of chemistry, biochemistry, manufacturing and medical and
chiropractic care. The mission of our research and development team is to
develop and support superior nutritional and healthcare products that
provide for the optimal health of our customers through proven efficacy,
unqualified safety, superior formulation, and outstanding quality. Our
commitment is to continue product innovation and improvement through sound
scientific research.
To support our research and development efforts, we have invested in
product formulation, processing, and packaging research. Part of our
quality control is to ensure that testing is done for product contamination
on both raw materials and finished products. This verifies that the
products are not only efficacious but safe. Our research and development
team also performs product quality and stability studies, including
consumer marketing research to sample consumer opinions about existing and
future product concepts. To facilitate such studies, NutraTek maintains a
variety of industry relationships to improve existing products and identify
new research and development products offering health and wellness
benefits.
Manufacturing
NutraTek outsources the manufacturing of its products to multiple third-
party manufactures in Salt Lake City and Provo, Utah. Salt Lake City is
also the location of NutraTek's corporate offices. NutraTek demands that
its manufacturing agents meet and adhere to NutraTek's high quality control
requirements. These manufactures are approved by the Food and Drug
Administration and strictly adhere to Current Good Manufacturing Practices
(cGMP). NutraTek scientists supervise manufacturing practices by frequent
onsite supervision to ensure quality as well as post production inspection
prior to release. Raw materials are quarantined in a controlled environment
subject to inspection including but not limited to identity and
microbiological testing. Upon arrival, raw materials must have a
Certificate of Analysis (C of A) and Material Safety Data Sheet (MSDS)
indicating identity, purity, safety and fit for use as a dietary
supplement. The manufactures utilize equipment and technology that insure
the purity and accuracy of each product prior to release. Some of the state
of the art equipment includes technology to insure accurate pill count per
bottle and proper weight per container, adequate packaging to maintain
product stability and freshness. The facilities technology improves
efficiency allowing for the production of up to 200,000.00 units per month
of NutraTek products. Products awaiting distribution are held in a
controlled finished goods warehouse which is separate from the inventory
warehouse. Finished products are placed in distribution inventory where
they are counted and monitored weekly.
Marketing and Distribution
NutraTek's products are distributed through a doctor network, private label
third-party network, and the Internet. Since its organization in March
2003, NutraTek has focused on brand building support for its NutraSmooth
dietary shake and has sought to educate doctors, third-party private
labelers and the general consumer on NutraSmooth and nutritional
supplements in general.
As of February 2004, the Company had approximately 150 health professionals
purchasing products for clinics and individual practices throughout the
United States and Germany. To reach the doctor market, NutraTek uses
commissioned sales representatives to visit and educate doctors on
products, nutritional biochemistry and how nutrition helps bodily function.
A territory representative calls on a designated group of doctors within a
geographical area who have an interest in using dietary supplements in
their practice. The sales representative seeks to maintain a long term
relationship with the account for repeat sales. This market venue is
expected to steadily grow as more practitioners recognize the benefit of
utilizing dietary supplements in improving overall health. Scientific
discoveries on nutrition are made frequently and are published in well know
peer-reviewed journals. This serves as a third party endorsement to the
benefit of using NutraTek products.
Due to the innovation of NutraTek's products and the research and quality
control that NutraTek employs with respect to its product development and
manufacturing, third party marketing companies have expressed interest in
private labeling NutraTek products, specifically NutraSmooth. NutraTek's
sales representatives are aggressively negotiating to initiate product
sales to this distribution network.
With the development and expansion of consumers who utilize the Internet
and with the growing number of educated health-conscience consumers in
general, NutraTek has sought to market its products directly to consumers
via the internet. Currently web page development is taking place to begin
Internet product sales as soon as March 15, 2004. Multiple domain names
have been reserved to support an aggressive marketing strategy which will
be employed by the Merrill-Remington (MR) advertising agency. The MR
agency has successfully created sales for companies such as Mrs. Fields
Cookies. An important part of this marketing approach is to strategically
locate NutraSmooth at the top of search engine results for inquiries such
as the "Atkins diet" and "Weight Loss: to name a few.
Employees
As of March 11, 2004, NutraTek employs approximately eight persons, of whom
approximately seven were in management, sales, purchasing and
administration. We believe that we offer our employees a unique and
exciting work environment and that our relationship with our employees is
good.
Facilities
The principal executive offices of the Company have been relocated to
NutraTek's principal executive offices located at 10421 South Jordan
Gateway Suite 550, South Jordan, Utah 84095, where its telephone number is
(866) 641-7873. Such office space is rented by NutraTek from a third party
pursuant to a lease agreement. The current rent for such facility is
$1,365.00 per month.
Management
The officers and directors of the Company constitute the management of
NutraTek.
Executive Compensation
Since its organization, NutraTek has not appointed a chief executive
officer. Prior to the Company's acquisition of NutraTek through a reverse
merger, NutraTek was managed by its members. Johnny Sanchez oversaw the
operations of NutraTek and was paid a salary of $40,000 for NutraTek's
calendar year 2003. Since the effective date of the reverse merger, Mr.
Sanchez has forgone the payment of his salary.
Intellectual Property
NutraTek currently relies on common law trademark rights to protect its
unregistered NutraSmooth trademark. Common law trademark rights do not
provide us with the same level of protection as afforded by a United States
federal registration of a trademark. In addition, common law trademarks
are limited to the geographic area in which the trademark is actually used.
NutraTek also relies on trade secrets that it seeks to protect, in part,
through confidentiality agreements with employees and other third parties.
Competition
The market for nutritional foods and supplements is highly competitive and
sensitive to the introduction of new products and company/brand name
recognition. NutraTek believes the competition is based principally on
price, knowledge of products, quality of products, customer service and
marketing support.
NutraTek's competition includes numerous nutritional supplement companies
that are highly fragmented in terms of both geographic market coverage and
product categories. Additionally, large pharmaceutical companies and
packaged food and beverage companies compete with NutraTek in the
nutritional supplement market. These companies and other nutritional
supplement companies have longer operating records than NutraTek and
possess greater financial and other resources such as extensive
manufacturing, marketing and distribution capabilities. There is no
assurance that NutraTek will be able to compete effectively in the
nutritional supplement market.
Regulation
NutraTek's products include foods and dietary supplements, which are
subject to the laws and regulations of federal government agencies,
including the Food and Drug Administration (FDA), the Federal Trade
Commission (the FTC), the U.S. Department of Agriculture, the U.S. Postal
Service, the Environmental Protection Agency, and also various agencies of
the states and localities in which NutraTek operates and sells its
products.
In October 1994, the Dietary Supplement Health and Education Act of 1994
was enacted (DSHEA). Among other things, the DSHEA defines dietary
supplements (which includes vitamins, minerals, nutritional supplements and
herbs) and provides regulatory framework intended to ensure the safety and
quality of dietary supplements and the dissemination of accurate product
information. The DSHEA permits statements of "nutritional support" for
dietary supplements that may describe how particular dietary ingredients,
or the mechanism of action by which dietary ingredients, affect the
structure, function or general well-being of the body. These statements of
nutritional support or "structure/function claims" may not make a health
claim or disease claim, meaning that a statement may not expressly or
implicitly claim to treat, prevent, cure or mitigate an illness or disease
unless the claim was authorized by the FDA. A structure/function claim in
advertising or on a product label must have scientific substantiation that
the claim is truthful and not misleading, have a disclaimer that the
statement has not been reviewed by the FDA and have been disclosed by the
company to the FDA that the claim would be used for a product. NutraTek's
policy is to label products in accordance with applicable laws and
regulations, which are amended and repealed from time to time.
NutraTek believes that it is in compliance with all applicable government
regulations concerning its business and is not aware of any instance in
which it has contravened such government regulations. However, there is no
assurance that a regulatory agency will not take adverse action against
NutraTek, or that legislative or regulatory changes will not have an
adverse effect on NutraTek and its operations.
RISK FACTORS
The conduct and growth of the Company's business is subject to several
significant risks, including those set forth below. You should carefully
read and consider such risk factors.
The Company and NutraTek will require substantial additional equity or debt
financing to successfully implement its business plan and its failure to
obtain such financing could delay or curtail its operations. The Company
anticipates that it will require substantial additional capital in the
amount of at least $1 million in order to implement its full business plan.
The Company has not entered into any agreements or arrangements for the
provision of such additional financing, and no assurance can be given that
such financing will be available on terms acceptable to the Company or at
all.
NutraTek has a limited operating history and it is difficult to evaluate
its business. NutraTek was only recently organized in March 2003 and does
not have an established history of operations. NutraTek faces all the risks
inherent in a new business and there can be no assurance it will be
successful and/or profitable. NutraTek's entry into the nutritional
supplement market and its lack of a significant operating history make it
difficult to evaluate the risks and uncertainties it faces.
NutraTek is Dependent on Specific Individual Products. NutraTek's
NutraSmooth product accounts for a significant amount of NutraTek's total
revenues and future marketing prospects. No assurance can be made that
NutraSmooth will be accepted by the nutritional supplement market,
experience sales growth or popularity.
NutraTek is subject to the risk of the Unavailability of Raw Materials.
NutraTek obtains all of its raw materials for the manufacture of its
products from third parties. No assurance can be made that suppliers will
provide the raw materials we need in quantities requested, at a price we
are willing to pay, or that meet our quality standards. Any significant
delay in or disruption of the supply of raw materials could, among other
things, substantially increase the cost of such materials or result in our
inability to meet customer demands for products. The occurrence of any of
the foregoing could have a material adverse effect on our results of
operations and financial condition.
NutraTek is subject to the risk of competition. The market for nutritional
supplement products is highly competitive and sensitive to the introduction
of new products. NutraTek's competition includes numerous nutritional
supplement companies that are highly fragmented in terms of both geographic
market coverage and product categories. These companies have longer
operating records than NutraTek and possess greater financial and other
resources such as extensive manufacturing, marketing and distribution
capabilities. There is no assurance that NutraTek will be able to compete
effectively in the nutritional supplement market.
NutraTek is subject to Government Regulation on its Operations. NutraTek's
products include foods and dietary supplements, which are subject to the
laws and regulations of federal government agencies, including the Food and
Drug Administration (FDA), the Federal Trade Commission (the FTC), the U.S.
Department of Agriculture, the U.S. Postal Service, the Environmental
Protection Agency, and also various agencies of the states and localities
in which NutraTek operates and sells its products. Although NutraTek
believes that it is in compliance with the foregoing regulatory agencies,
there is no assurance that a regulatory agency will not take adverse action
against NutraTek, or that legislative or regulatory changes will not have
an adverse effect on NutraTek and its operations.
NutraTek is subject to the risk of product liability claims and the loss of
any such claim in excess of its insurance coverage could have a material
adverse effect on NutraTek. As a manufacturer, NutraTek is subject to the
inherent risk of product liability claims. NutraTek maintains product
liability insurance in amounts it believes adequate but no assurance can
given that its coverage will continue to be available at acceptable prices
or that such coverage will be adequate in scope and coverage to protect
NutraTek from product liability claims.
NutraTek is substantially dependent on Johnny Sanchez and the loss of his
services would have an adverse effect on its business. NutraTek is
dependent on Johnny Sanchez to operate NutraTek and the loss of his
services could have an adverse impact on its operations until such time as
he could be replaced, if he could be replaced. NutraTek does not carry key
man life insurance on the live of Johnny Sanchez, although NutraTek has
entered into an employment agreement with him.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following exhibits are filed herewith:
31.1 Certification of the Company's Chief Executive Officer.
31.2 Certification of the Company's Chief Financial Officer.
32.1 Certification of the Company's Chief Executive Officer.
32.2 Certification of the Company's Chief Financial Officer.
(b) Reports on Form 8-K
1. On January 12, 2004, the Company filed a Current Report on Form 8-K
concerning the Company's acquisition of NutraTek, LLC in a reverse merger
transaction.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Advanced Healthcare Technologies, Inc.
[Date] 3-22-04 /s/ Johnny Sanchez
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Johnny Sanchez
Chief Executive Officer
[Date] 3-22-04 /s /Michael MacArthur
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Michael MacArthur
Principal Accounting Officer