SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FORM 10QSB
FOR THE QUARTER ENDED SEPTEMBER 30, 2003
COMMISSION FILE NUMBER 333-51058
Advanced Healthcare Technologies, Inc.
Formally Email Mortgage, Inc.
(Exact name of Registrant as specified in its charter)
Colorado 84-1565820
(State or other jurisdiction of (I.R.S. Employer I.D.)
incorporation or organization)
124 Colts Neck Road,
Farmingdale NJ 07727
Registrant's Telephone Number, including area code
732-938-9672
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 twelve months, and (2) has been
subject to such filing requirements for the past 90 days.
Yes__x___ No______
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report: 43,501,131 shares.
2
Advanced Healthcare Technologies, Inc.
Index
Part I Financial Information Page Number
Item 1.
Balance Sheet 3
Statements of Loss and Accumulated Deficit 4
Statements of Cash Flows 5
Footnotes 6
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations 7
Part II None
Signatures 10
3
Advanced Healthcare Technologies, Inc.
(A Development Stage Company)
Balance Sheet
September 30, 2003
(Unaudited)
ASSETS
-------
Current assets: 2003
Cash $ 78
Advances to affiliated company 5,380
----------
Total current assets 5,458
----------
$ 5,458
==========
STOCKHOLDERS' EQUITY
--------------------
Current liabilities:
Accounts payable $ 600
Accrued expenses 37,523
----------
Total current liabilities 38,123
Loans from shareholders 224,830
Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000 shares
authorized, no shares issued and outstanding -
Common stock, $.001 par value, 100,000,000 shares
authorized, 43,501,131 shares issued and outstanding 43,502
Additional paid in capital 3,670,921
Common stock subscribed 15,000
(Deficit) accumulated during development stage (3,986,918)
----------
(257,495)
----------
$ 5,458
==========
See accompanying notes to financial statements.
4
Advanced Healthcace Technologies, Inc.
(A Development Stage Company)
Statements of Operations
Three Months and Six Months Ended September 30, 2003 and 2002
For the Period From Inception (March 28, 2000) to September 30, 2003
(Unaudited)
Period From
Three Months Ended Six Months Ended Inception To
September 30, September 30, September 30,
2003 2002 2003 2002 2003
---------- ---------- ---------- ---------- ----------
Revenue:
Loan processing fees $ - $ - $ - $ 1,100 $ 4,350
Interest income - 588 - 1,653 3,302
---------- ---------- ---------- ---------- ---------
- 588 - 2,753 7,652
Operating expenses:
Loan processing costs - - - 500 7,050
Professional fees 18,064 13,389 21,064 14,664 108,590
Consulting services 1,651,457 2,400 1,898,066 2,400 2,607,947
Web site expenses - 125 92 125 23,592
Investor relations costs - - 6,829 - 659,589
Rent and office services 1,600 475 3,200 950 14,875
Purchased research and
development costs - - - - 525,000
Other expenses 2,951 1,328 25,749 2,158 47,927
---------- ---------- ---------- ---------- ----------
1,674,072 17,717 1,955,000 20,797 3,994,570
---------- ---------- ---------- ---------- ----------
(Loss from operations)
and net (loss) $(1,674,072) $ (17,129) $(1,955,000) $ (18,044) $(3,986,918)
========== ========== ========== ========== ==========
Per share information:
Basic and diluted (loss)
per common share $ (0.04) $ - $ (0.07) $ -
========== ========== ========== ==========
Weighted average shares
outstanding 41,467,798 11,257,000 30,056,878 11,257,000
========== ========== ========== ==========
See accompanying notes to financial statements.
5
Advanced Healthcare Technologies, Inc.
(A Development Stage Company)
Statements of Cash Flows
Six Months Ended September 30, 2003 and 2002
For the Period From Inception (March 28, 2000) to September 30, 2003
(Unaudited)
Period From
Six Months Ended Inception To
September 30, September 30,
2003 2002 2003
---------- ---------- ----------
Net income (loss) $(1,955,000) $ (18,044) $(3,986,918)
Adjustments to reconcile net income to
net cash provided by operating activities:
Services provided for common stock 1,717,890 900 2,273,790
Technology acquired for common stock - - 525,000
Expenses contributed to capital by shareholder - - 8,500
Services provided for shareholder advances 191,652 - 844,413
Changes in assets and liabilities:
Increase (decrease) in accounts payable (8,071) 350 600
Increase (decrease) in accrued expenses (32,477) - 37,523
---------- ---------- ----------
Total adjustments 1,868,994 1,250 3,689,826
---------- ---------- ----------
Net cash provided by (used in)
operating activities (86,006) (16,794) (297,092)
Cash flows from financing activities:
Common stock sold or subscribed for cash 15,000 - 268,150
Proceeds from note payable 25,000 - 37,500
Repayment of related party loans - - (70,325)
Advances to affiliated company - (20,000) (55,380)
Repayment of advances to affiliated company 28,000 - 50,000
Loans from related party 5,400 475 67,225
---------- ---------- ----------
Net cash provided by (used in) financing
activities 73,400 (19,525) 297,170
---------- ---------- ----------
Increase (decrease) in cash (12,606) (36,319) 78
Cash and cash equivalents, beginning of period 12,684 143,114 -
---------- ---------- ----------
Cash and cash equivalents, end of period $ 78 $ 106,795 $ 78
========== ========== ==========
See accompanying notes to financial statements.
6
Advanced Healthcare Technologies, Inc.
Notes to Unaudited Financial Statements
Basis of presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions incorporated in
Regulation SB of the Securities and Exchange Commission. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments and accruals) considered necessary for
a fair presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The
accompanying financial statements should be read in conjunction with
the Company's financial statements for the year ended March 31, 2003.
Basic loss per share was computed using the weighted average number of
common shares outstanding.
The Company received $5,400 of cash advances from shareholders during
the six months ended September 30, 2003 and had an outstanding advance
balance due to shareholders of $224,830 at September 30, 2003. During
the six months ended September 30, 2003, $624,983 of shareholder debt
was converted to stockholders' equity by the issuance of 13,886,506
restricted common shares to the shareholders. The debt exchange was
completed at $.045 per share at a time when the fair value of the stock
was $.09 per share. The Company has recorded compensation expense of
$624,983 in connection with the exchange. Additionally during the
period, the shareholders provided consulting and other services to the
Company amounting to $191,652 which amount has been added to the
shareholder advance account.
During the six months ended September 30, 2003 the Company issued
11,605,625 shares of its common stock for services provided. The
shares were valued at an aggregate of $1,029,906, which represents the
aggregate fair value of the stock and is based on quoted market prices
for the stock on the date the issuances were approved. Two million of
the shares issued were to two individuals who are no longer affiliated
with the Company and who did not, in the opinion of the Company,
provide the services agreed to with the Company. The Company is
attempting to recover the shares.
Additionally during the period, an aggregate of 1,800,000 shares of
common stock were issued to two individuals for conversion of notes
payable amounting to $37,500. The exchanges were completed at a
discounted price from the fair value of the stock and the Company has
recorded $63,000 of compensation expense in connection with the
exchanges.
7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Trends and Uncertainties. Demand for Advanced Healthcare products and
services will be dependent on, among other things, market acceptance of
the Advanced Healthcare's concept, the quality of its services, and
general economic conditions, which are cyclical in nature. Inasmuch as
a major portion of Advanced Healthcare's activities will be the receipt
of revenues from our services, Advanced Healthcare's business
operations may be adversely affected by Advanced Healthcare's
competitors and prolonged recessionary periods.
Capital and Source of Liquidity. All of the initial working capital
has been obtained from the sale of common shares to the current
officers, directors and principal shareholder ($250,000) and loans from
a related party of ($62,745). We do not have the liquidity to fund
our operations and will require additional capital. We currently have
little working capital and will rely on further loans to continue
operations until completion of the current public offering. Advanced
Healthcare's requires these additional loans to expand our current and
strategic business plans. We do not have any funding arrangements
with any third party or any affiliates.
For the six months ended September 30, 2003, we received $15,000 for
common stock sold or subscribed and received proceeds from note payable
of $25,000. Additionally, we repaid $28,0000 of advances to affiliated
company and received $5,400 in loans from a related party. As a
result, we had net cash provided by financing activities of $73,400 for
the six months ended September 30, 2003.
For the six months ended September 30, 2002, we made advances to a
related party of $20,000 and received loans from a related party of
$450 resulting in net cash used in financing activities.
For the six months ended September 30, 2003 and 2002, we did not pursue
any investing activities.
On a long-term basis, liquidity is dependent on continuation and
expansion of operation and receipt of revenues, additional infusions of
capital, and debt financing. Advanced Healthcare believes that
additional capital and debt financing in the short term will allow
Advanced Healthcare to increase its marketing and sales efforts and
thereafter result in increased revenue and greater liquidity in the
long term. However, there can be no assurance that Advanced Healthcare
will be able to obtain additional equity or debt financing in the
future, if at all.
Results of Operations. Since inception, Advanced Healthcare has not
received any significant revenues from operations.
For the six months ended September 30, 2003 we did not receive any
revenue. We had operating expenses of $1,674,072 that consisted of
professional fees of $18,064, consulting services of $1,651,457, rent
and office services of $1,600 and other expenses of $2,951.
8
Advanced Healthcare received $5,400 of cash advances from shareholders
during the six months ended September 30, 2003 and had an outstanding
advance balance due to shareholders of $224,830 at September 30, 2003.
During the six months ended September 30, 2003, $624,983 of shareholder
debt was converted to stockholders' equity by the issuance of
13,886,506 restricted common shares to the shareholders. The debt
exchange was completed at $.045 per share at a time when the fair value
of the stock was $.09 per share. Advanced Healthcare has recorded
compensation expense of $624,983 in connection with the exchange.
Additionally during the period, the shareholders provided consulting
and other services to Advanced Healthcare amounting to $191,652 which
amount has been added to the shareholder advance account.
During the six months ended September 30, 2003 Advanced Healthcare
issued 11,605,625 shares of its common stock for services provided.
The shares were valued at an aggregate of $1,029,906, which represents
the aggregate fair value of the stock and is based on quoted market
prices for the stock on the date the issuances were approved. Two
million of the shares issued were to two individuals who are no longer
affiliated with Advanced Healthcare and who did not, in the opinion of
Advanced Healthcare, provide the services agreed to with Advanced
Healthcare. Advanced Healthcare is attempting to recover the shares.
Plan of Operation. Advanced Healthcare is in the development stage
and has not conducted any significant operations to date or received
significant operating revenues. We will not need to conduct any
research and development regarding our business plan.
We do not expect to purchase any plant or significant equipment.
Advanced Healthcare may experience problems; delays, expenses, and
difficulties sometimes encountered by an enterprise in Advanced
Healthcare's stage of development, many of which are beyond Advanced
Healthcare's control. These include, but are not limited to,
unanticipated problems relating to the development of the system,
manufacturing costs, production and marketing problems, additional
costs and expenses that may exceed current estimates, and competition.
Controls and Procedures. The Chief Executive Officer and the Chief
Financial Officer of the Company have made an evaluation of the
disclosure controls and procedures relating to the quarterly report on
Form 10QSB for the period ended September 30, 2003 as filed with the
Securities and Exchange Commission and have judged such controls and
procedures to be effective as of September 30, 2003 (the evaluation
date).
There have not been any significant changes in the internal controls of
the Company or other factors that could significantly affect internal
controls relating to the Company since the evaluation date.
9
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 hereunto duly authorized.
Date: November 24, 2003
By: /s/ Phillip E. Loori
------------------------
Phillip E. Loori
President
18
CERTIFICATIONS
I, Daniel Motsinger, certify that:
1. I have reviewed this quarterly report on Form 10QSB of Advanced
Healthcare Technologies, Inc.
2. Based on my knowledge, the quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present, in all material respects, the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods
presented in this quarterly report;
4. The small business issuer's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)
and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and
have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the small
business issuer, including its consolidated subsidiaries, is made known
to me by others within those entities, particularly during the period
in which this quarterly report is being prepared;
(b) designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this quarterly
report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) disclosed in this quarterly report any change in the small
business issuer's internal control over financial reporting that
occurred during the small business issuer's most recent fiscal quarter
that has materially affected, or is reasonably likely to materially
affect, the small business issuer's internal control over financial
reporting; and
19
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of the registrant's board of directors (or persons
performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability
to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
(6) The registrant's other certifying officer and I have indicated
in this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: November 24, 2003
/s/Daniel Motsinger
Daniel Motsinger
Chief Executive Officer
20
CERTIFICATION
I, Daniel Starczewski, certify that:
1. I have reviewed this quarterly report on Form 10QSB of Advanced
Healthcare Technologies, Inc.
2. Based on my knowledge, the quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present, in all material respects, the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods
presented in this quarterly report;
4. The small business issuer's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)
and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and
have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the small
business issuer, including its consolidated subsidiaries, is made known
to me by others within those entities, particularly during the period
in which this quarterly report is being prepared;
(b) designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this quarterly
report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) disclosed in this quarterly report any change in the small
business issuer's internal control over financial reporting that
occurred during the small business issuer's most recent fiscal quarter
that has materially affected, or is reasonably likely to materially
affect, the small business issuer's internal control over financial
reporting; and
21
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of the registrant's board of directors (or persons
performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability
to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
Date: November 24, 2003
/s/Daniel Starczewski
--------------------------------
Daniel Starczewski, Chief Financial Officer