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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2004
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[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File No.: 333-51058
ADVANCED HEALTHCARE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
NEVADA 84-1565820
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2820 LA MIRADA, SUITE H
VISTA, CA 92081
(Address of principal executive offices)
Issuer's telephone number: (760) 599-0775
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Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS
As of August 15, 2004, 240,000,200 shares of Advanced Healthcare's common stock
were outstanding.
Transitional Small Business Disclosure Format: Yes No X
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PART 1: FINANCIAL INFORMATION
ITEM 1 - CONDENSED FINANCIAL STATEMENTS
ADVANCED HEALTHCARE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
ASSETS
June 30,
2004
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ASSETS $ --
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES $ --
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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 6,609,060
Deficit accumulated during the development stage (6,849,060)
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Total Stockholders' Deficit --
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ --
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The accompanying notes are an integral part of these financial statements.
2
ADVANCED HEALTHCARE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
Statements of Operations
(Unaudited)
From inception
For the three on March 28,
months ended 2000 through
June 30, 2004 June 30, 2004
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REVENUES $ -- $ --
OPERATING EXPENSES -- --
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LOSS BEFORE
DISCONTINUED OPERATIONS -- --
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LOSS FROM DISCONTINUED
OPERATIONS (NOTE 3) (116,946) (6,849,060)
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NET LOSS $ (116,946) $ (6,849,060)
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BASIC LOSS PER SHARE $ (0.00)
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WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 240,000,000
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Note: The Company has not presented the 2003 comparable amounts as NutraTek, LLC
was incorporated on March 3, 2003 and the operations for the one-month ended
March 31, 2003 are immaterial (see Note 2).
The accompanying notes are an integral part of these financial statements.
3
ADVANCED HEALTHCARE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flows
(Unaudited)
From
Inception on
March 28, 2000
For the three through
months ended June 30,
June 30, 2004 2004
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CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (116,946) $(6,849,060)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 509 821
Equity issuances for stock -- 6,786,535
Changes in discontinued assets and liabilities: 106,679 (265,440)
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Net Cash Used by Operating Activities (9,758) (327,144)
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets -- (11,858)
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Net Cash Used by Investing Activities -- (11,858)
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CASH FLOWS FROM FINANCING ACTIVITIES
Common stock sold or subscribed for cash -- 268,150
Repayment of related party loans -- (70,325)
Advances to affiliated company -- (55,380)
Repayment of advances to affiliated company -- 50,000
Loans from related party -- 67,225
Cash used for partner draw (12,006) (25,422)
Cash contributed by former officer 20,000 --
Proceeds from issuance of note payable 15,500 91,018
Change from cash overdraft (13,736) 13,736
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Net Cash Provided by Financing Activities 9,758 339,002
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NET INCREASE (DECREASE) IN CASH -- --
CASH AT BEGINNING OF PERIOD -- --
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CASH AT END OF PERIOD $ -- $ --
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The accompanying notes are an integral part of these financial statements.
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ADVANCED HEALTHCARE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
Consolidated Statement of Cash Flows (Continued)
(Unaudited)
From
Inception on
March 28, 2000
For the three through
months ended June 30,
JUNE 30, 2004 2004
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CASH PAID FOR
Interest $ -- $ 659
Income taxes $ -- $ --
SCHEDULE OF NON CASH FINANCING ACTIVITIES
Contributed capital by shareholders $247,546 $247,546
Note: The Company has not presented the 2003 comparable amounts as NutraTek, LLC
was incorporated on March 3, 2003 and the operations for the one month
ended March 31, 2003 are immaterial (see Note 2).
The accompanying notes are an integral part of these financial statements.
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ADVANCED HEALTHCARE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
Notes to the Financial Statements
June 30, 2004 and March 31, 2004
NOTE 1 - FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at June 30, 2004
and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted. It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto included in
the Company's March 31, 2004 audited consolidated financial statements.
The results of operations for the period ended June 30, 2004 are not
necessarily indicative of the operating results for the full year.
NOTE 2 - CHANGE OF CONTROL
On June 30, 2004, the Company's president and CEO entered into an
agreement to sell his controlling interest in the Company and retain the
operations and activities of NutraTek, LLC. In connection with this change
in control the Company's president and CEO, vice president and chief
scientific officer, as well as the Company's secretary, resigned.
Additionally, five individuals resigned as directors of the Company. The
individual gaining controlling interest was appointed to fill these
vacancies.
Concurrent with the above-mentioned events, the Company settled $247,546
of accounts payable debt by reallocating a total of 25,000,200 shares of
common stock, which had previously been issued to a number of different
related entities, in exchange for their forgiveness of the debt as well as
payment of $10,000.
At March 31, 2004, the financial statements had been presented in a
reverse merger format with NutraTek, LLC being reported as the accounting
entity and Advanced as the legal entity. Accordingly the inception date
had been presented as March 2003, which was the inception date of
NutraTek. With NutraTek being returned to its former owner at June 30,
2004, Advanced is the only remaining entity. The inception date of
Advanced was on March 28, 2000. Advanced is now the remaining accounting
and legal entity.
NOTE 3 - DISCONTINUED OPERATIONS
On June 30, 2004, the Company's CEO entered into an agreement to sell
126,000,000 of the Company's common stock and his controlling interest to
an unrelated individual. This resulted in the Company's wholly-owned
subsidiary, NutraTek, LLC, being spun off and left Advanced Healthcare
Technologies Inc. as the remaining shell company.
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ADVANCED HEALTHCARE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
Notes to the Financial Statements
June 30, 2004 and March 31, 2004
NOTE 3 - DISCONTINUED OPERATIONS (Continued)
All assets were associated with the discontinued operations as well as all
of the liabilities, except for $247,546 which was associated with
Advanced. See Note 2 for a discussion on the settlement of this debt
associated with Advanced.
The operations of Nutratek are for the three months ended March 31, 2004
because NutraTek had a December 31 year-end.
For the three
months ended
March 31, 2004
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REVENUES $ 15,349
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Cost of goods sold 4,108
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Gross profit 11,241
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OPERATING EXPENSES
Payroll 53,930
Rent 2,271
Professional fees 49,104
Depreciation 509
General and administrative 21,362
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Total Operating Expenses 127,175
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LOSS FROM OPERATIONS (115,935)
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OTHER EXPENSE
Interest Expense (1,011)
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Total Other Expense (1,011)
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NET LOSS $ (116,946)
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BASIC LOSS PER SHARE $ (0.00)
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WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 240,000,000
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ADVANCED HEALTHCARE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
Notes to the Financial Statements
June 30, 2004 and March 31, 2004
NOTE4 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in
the normal course of business. However, the Company has had a change in
control and has changed its business plan and it has not generated any
revenues. The future of the Company is dependent upon its ability to
obtain financing and upon future profitable operations from the
development of its new business opportunities. Management plans to
research possible acquisitions of various entities and an officer of the
Company has agreed to loan the Company funds as needed to sustain business
for a period of twelve months. However, the Company is dependent upon its
ability to secure equity and/or debt financing, and there are no
assurances that the Company will be successful, without sufficient
financing it would be unlikely for the Company to continue as a going
concern.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
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ITEM 2 - PLAN OF OPERATION
The following discussion and analysis should be read in conjunction with
our unaudited consolidated condensed financial statements and related notes
included in this report. This report contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. The
statements contained in this report that are not historic in nature,
particularly those that utilize terminology such as "may," "will," "should,"
"expects," "anticipates," "estimates," "believes," or "plans" or comparable
terminology are forward-looking statements based on current expectations and
assumptions.
Various risks and uncertainties could cause actual results to differ
materially from those expressed in forward-looking statements. All
forward-looking statements in this document are based on information currently
available to us as of the date of this report, and we assume no obligation to
update any forward-looking statements. Forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements.
The following discussion and analysis should be read in conjunction with
our unaudited condensed financial statements and related notes included in this
report. This report contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. The statements contained
in this report that are not historic in nature, particularly those that utilize
terminology such as "may," "will," "should," "expects," "anticipates,"
"estimates," "believes," or "plans" or comparable terminology are
forward-looking statements based on current expectations and assumptions.
Various risks and uncertainties could cause actual results to differ
materially from those expressed in forward-looking statements. All
forward-looking statements in this document are based on information currently
available to us as of the date of this report, and we assume no obligation to
update any forward-looking statements. Forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements.
GENERAL
On June 30, 2004, Richard Mangiarelli purchased 126,000,000 shares of
Advanced Healthcare common stock from its former President, Chief Executive
Officer, Director, and majority stockholder, Johnny Sanchez. As a result, Mr.
Mangiarelli now holds approximately 52.5% of the issued and outstanding common
stock of Advanced Healthcare.
In connection with this change in control, Mr. Sanchez resigned as
Advanced Healthcare's President and Chief Executive Officer, Joel Rockwood
resigned as its Vice President and Chief Scientific Officer, and Michael
MacArthur resigned as its Secretary. The board of directors appointed Mr.
Mangiarelli as the new President, Chief Financial Officer, and Secretary. In
addition, Mr. Sanchez, Mr. Rockwood, Virginia Sanchez, Carmen Sanchez, and Joe
V. Overcash resigned as directors of Advanced Healthcare. The outgoing directors
appointed Richard Mangiarelli to fill the vacancies on the board.
On June 30, 2004, Advanced Healthcare entered into a Release and Indemnity
Agreement with Johnny Sanchez, its former President, Chief Executive Officer,
Director, and majority stockholder, pursuant to which Advanced Healthcare sold
the all of its membership interest in NutraTek to Mr. Sanchez in exchange for
Mr. Sanchez's agreement to do the following: (a) release Advanced Healthcare
from any and all claims that Mr. Sanchez may have had against Advanced
Healthcare; (b) indemnify Advanced Healthcare for any and all claims against or
liabilities of Advanced Healthcare that existed before June 30, 2004, and (c) to
cooperate with and assist Advanced Healthcare in connection with its reporting
obligations or filing requirements under the Securities Act of 1933, as amended,
and Securities Exchange Act of 1934, as amended, and to deliver such other
instruments and take such other actions as may be reasonably requested by
Advanced Healthcare in order to carry out the intent of the agreement.
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As a result of the spin-off of Nutratak, Advanced Healthcare currently has
no operations. Advanced Healthcare intends to either commence operations or
acquire another business with operations in which Mr. Mangiarelli may have an
equity interest. It is possible that, as a result of any acquisition of a
business in which Mr. Mangiarelli has an equity interest, Advanced Healthcare
may issue additional shares of capital stock to Mr. Mangiarelli.
Advanced Healthcare moved its principal executive offices to the following
address:
Advanced Healthcare Technologies, Inc.
2820 La Mirada, Suite H
Vista, CA 92081
(760) 599-0775
Before the change of control described above, Advanced Healthcare's
principal business and operations were those of NutraTek. NutraTek researched,
developed, and thereafter contracted with third parties to manufacture its own
line of nutritional dietary supplements, functional food products and natural
sweeteners. As a result of the spin-off of Nutratak, Advanced Healthcare's new
management has decided to terminate the nutritional products business and focus
on other opportunities. Management is currently evaluating various business
opportunities, including operating opportunities, joint ventures, acquisitions
or other business combinations. Some of the opportunities being evaluated are
ones in which management has a current interest, and it is possible that, if
Advanced Healthcare pursues one of these opportunities, management may receive
additional capital stock of Advanced Healthcare in connection therewith.
Advanced Healthcare currently has limited working capital with which to
satisfy its cash requirements, and it will require additional capital in order
to conduct operations. Advanced Healthcare anticipates that we will at least
$250,000 in additional working capital in order to sustain operations for the
next 12 months. This requirement may increase substantially, depending on the
nature and capital requirements of the business opportunities it elects to
pursue. In order to obtain the necessary working capital, Advanced Healthcare
intends to seek private equity financing in 2004. Such financing may not be
available to Advanced Healthcare, when and if needed, on acceptable terms or at
all. In the event that Advanced Healthcare is unable to obtain such financing,
management may provide additional financing for Advanced Healthcare.
In the next twelve months, Advanced Healthcare intends to hire from six to
up to fifty employees, depending on the nature of the business opportunities it
elects to pursue. Advanced Healthcare may establish a new equity compensation
plan in order to attract and retain employees and to provide employees who make
significant and extraordinary contributions to Advanced Healthcare's long-term
growth and performance with equity-based compensation incentives. Advanced
Healthcare may lease these employees from an employment leasing agency rather
than hire the employees directly, and the employment leasing agency may be
affiliated with our new management.
Advanced Healthcare intends to retain any future earnings to finance the
expansion of its business and any necessary capital expenditures, and for
general corporate purposes.
OFF BALANCE SHEET ARRANGEMENTS
Advanced Healthcare does not have any off-balance sheet financing
arrangements.
ITEM 3 - CONTROLS AND PROCEDURES
Our disclosure controls and procedures are designed to ensure that
information required to be disclosed in reports that we file or submit under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and
Exchange Commission. Our Chief Executive Officer and Chief Financial Officer has
reviewed the effectiveness of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c))
within the last ninety days and has concluded that the disclosure controls and
procedures are effective to ensure that material information relating to
Advanced Healthcare Technologies, Inc. is recorded, processed, summarized, and
reported in a timely manner. There were no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the last day they were evaluated by our Chief Executive Officer
and Chief Financial Officer.
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It should be noted that any system of controls, however well designed and
operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system are met. In addition, the design of any control system
is based in part upon certain assumptions about the likelihood of future events.
Because of these and other inherent limitations of control systems, there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. As a small organization, the effectiveness of
our controls heavily depends on the direct involvement of our Chief Executive
Officer and Chief Financial Officer.
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PART II: OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - CHANGES IN SECURITIES
(a) None.
(b) None.
(c) In June 2004, Advanced Healthcare issued 200 shares of common stock in
connection with the settlement of outstanding liabilities. The issuance was
exempt under Section 4(2) of the Securities Act.
(d) None.
(e) None.
ITEM 3 - DEFAULT UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
Item NO. DESCRIPTION METHOD OF FILING
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31.1 Certification of Richard Mangiarelli pursuant to Rule Filed electronically herewith.
13a-14(a)
32.1 Chief Executive Officer and Chief Financial Officer Filed electronically herewith.
Certification pursuant to 18 U.S.C.ss.1350 adopted pursuant
to Section 906 of the Sarbanes Oxley Act of 2002
(b) REPORTS ON FORM 8-K
On June 11, 2004, Advanced Healthcare filed Amendment No. 1 to a
current report on Form 8-K filing the financial statements of
Nutratek, LLC.
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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.
August 20, 2004 /S/ RICHARD MANGIARELLI
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Richard Mangiarelli
President and Chief Executive Officer
(Principal Executive Officer,
Principal Financial Officer,
and Principal Accounting Officer)
13