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
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(D) OF THE EXCHANGE ACT OF 1934
From the transition period from ___________ to ____________.
Commission File Number 01-28911
NATIONAL HEALTHCARE TECHNOLOGY, INC.
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(Exact name of small business issuer as specified in its charter)
Colorado 91-1869677
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
20700 Ventura Boulevard, #227, Woodland Hills, California 91364
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(Address of principal executive offices)
(818) 227-9494
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(Issuer's telephone number)
N/A
---
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past
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 [_]
As of August 8, 2003 7,855,500 shares of Common Stock of the issuer were
outstanding.
PART I. FINANCIAL INFORMATION
NATIONAL HEALTHCARE TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
JUNE 30, 2004
(UNAUDITED)
Assets $ --
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable:
Trade $ 70,908
Crown Partners', Inc. 93,309
-----------
Total current liabilities 164,217
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STOCKHOLDERS' DEFICIT:
Preferred stock, $.01 par value, 500,000,000 shares
authorized, no shares issued and outstanding --
Common stock, $.001 par value, 25,000,000 shares
authorized, 7,855,500 shares issued and outstanding 7,855
Additional paid in capital 1,237,439
Accumulated deficit (1,409,511)
-----------
Total Stockholders' Deficit (164,217)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ --
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NATIONAL HEALTHCARE TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003 AND
FEBRUARY 29, 1996 (INCEPTION) THROUGH JUNE 30, 2004
(UNAUDITED)
INCEPTION
THROUGH
THREE MONTHS ENDED NINE MONTHS ENDED JUNE
JUNE 30, JUNE 30, 30,
------------------------- -------------------------- -----------
2004 2003 2004 2003 2004
----------- ---------- ----------- ----------- -----------
Revenue $ -- $ -- $ -- $ -- $ 9,578
Expenses:
Development costs -- -- -- -- 1,264,236
General and administrative 14,346 11,426 28,578 27,673 150,053
----------- ----------- ----------- ----------- -----------
14,346 11,426 28,578 27,673 1,414,289
----------- ----------- ----------- ----------- -----------
Net loss before income taxes (14,346) (11,426) (28,578) (27,673) (1,404,711)
Income taxes -- -- -- -- 4,800
----------- ----------- ----------- ----------- -----------
Net loss $ (14,346) $ (11,426) $ (28,578) $ (27,673) $(1,409,511)
=========== =========== =========== =========== ===========
Basic net loss per common share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
=========== =========== =========== ===========
Weighted average shares
outstanding 7,855,500 7,855,500 7,855,500 7,855,500
=========== =========== =========== ===========
NATIONAL HEALTHCARE TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003 AND
FEBRUARY 29, 1996 (INCEPTION) THROUGH JUNE 30, 2004
(UNAUDITED)
NINE MONTHS ENDED INCEPTION
JUNE 30, THROUGH
------------------------ JUNE 30,
2004 2003 2004
---------- ---------- ----------
Cash flows from operating activities:
Net loss $ (28,578) (27,673) $ (1,409,511)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization -- -- 22,977
Common stock issued for settlement of interest
Expense -- -- 12,900
Common stock issued for services -- -- 217,900
Loss on abandoned assets -- -- 120,387
Gain on sale of assets -- -- (500)
Income from sale of abandoned assets -- -- (9,578)
Changes in operating assets and liabilities
Accounts payable 28,578 27,673 165,020
---------- ---------- ----------
Net cash used in operating activities -- -- (880,405)
---------- ---------- ----------
Cash flows from investing activities:
Purchase of property and equipment -- -- (87,314)
Proceeds from the sale of equipment -- -- 15,078
---------- ---------- ----------
Net cash used in investing activities -- -- (72,236)
---------- ---------- ----------
Cash flows from financing activities:
Proceeds from notes payable -- -- 217,200
Payments on notes payable -- -- (20,000)
Proceeds from the sale of common stock, net -- -- 755,441
---------- ---------- ----------
Net cash provided by financing activities -- -- 952,641
---------- ---------- ----------
Net increase (decrease) in cash and cash equivalents -- -- --
Cash at beginning of period -- -- --
---------- ---------- ----------
Cash at end of period $ -- $ -- $ --
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NATIONAL HEALTHCARE TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 - BASIS OF PRESENTATION
The balance sheet of the Company as of June 30, 2004, the related statements of
operations for the three months and nine months ended June 30, 2004 and 2003 and
the statements of cash flows for the nine months ended June 30, 2004 and 2003
included in the financial statements have been prepared by the Company without
audit. In the opinion of management, the accompanying financial statements
include all adjustments (consisting of normal, recurring adjustments) necessary
to summarize fairly the Company's financial position and results of operations.
The results of operations for the three months ended June 30, 2004 are not
necessarily indicative of the results of operations for the full year or any
other interim period. The information included in this Form 10-QSB should be
read in conjunction with Management's Discussion and Analysis and Financial
Statements and notes thereto included in the Company's September 30, 2003 Form
10-KSB.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
THIS REPORT CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
27A OF THE SECURITIES ACT OF 1933, AS AMENDED AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE SET FORTH ON THE FORWARD LOOKING STATEMENTS AS A RESULT OF
THE RISKS SET FORTH IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION, GENERAL ECONOMIC CONDITIONS, AND CHANGES IN THE ASSUMPTIONS USED IN
MAKING SUCH FORWARD LOOKING STATEMENTS.
GENERAL
National Healthcare Technology, Inc. (the "Company") was organized February 29,
1996 as "Patriot Holding Corporation" and subsequently changed its name to
"National Healthcare Technology, Inc." on August 26, 1996. Between 1996 and
1999, the Company was unsuccessful in raising sufficient capital to begin and
complete a proposed double-blind study of an intravenous drug called Magkelate.
The Company did raise $1,000,000 which was used to pay its operating expenses
and general and administrative expenses as well as expenses related to starting
the double-blind study. Following its inability to raise capital and needing to
conserve its financial resources, the Company dismissed all of its employees in
early 1999. The developer of Magkelate passed away in the fall of 1999 and the
Magkelate patent has expired. Since 1999, the Company has been substantially
inactive. The Company is in the development stage as defined in Statement of
Financial Accounting Standards No. 7.
When used in this Form 10-QSB, the words "anticipate", "estimate", "expect",
"project" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks, uncertainties and
assumptions including the possibility that the Company's proposed plan of
operation will fail to generate projected revenues. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, estimated
or projected.
LIQUIDITY AND CAPITAL RESOURCES
The Company is in the development stage and since inception has experienced no
significant change in liquidity or capital resources or stockholders equity
other than the receipt of $1,000,000 from an offering conducted under Rule 504
of Regulation D in 1997. The Company's balance sheet as of June 30, 2004
reflects no assets and limited liabilities. Further, there exists no agreements
or understandings with regard to loan agreements by or with the Officers,
Directors, principals, affiliates or shareholders of the Company.
The Company is continuing to search for suitable merger candidates or other
businesses to become involved in so that it can commence operations and generate
revenues to continue paying its bills.
The Company will attempt to carry out its plan of business and hopes to enter
into a business combination with another entity. The Company cannot predict to
what extent its lack of liquidity and capital resources will hinder its business
plan prior to the consummation of a business combination.
RESULTS OF OPERATIONS
During the period from November 5, 1989 (inception) through September 30, 2003,
the Company engaged in limited operations and attempted to initiate its double
blind study of its drug, Magkelate. The Company received no revenues during this
period. The capital raised was expended for general office and administrative
expenses and the proposed double-blind study of Magkelate, which double-blind
study the Company was unable to start due to lack of capital.
For the nine months ended June 30, 2004, the Company had no revenue and its
expenses were $28,578 resulting in a net loss for the nine months of $28,578
compared to no revenue and expenses of $27,673 for the nine months ended June
30, 2003 and a net loss of $27,673 for the nine months then ended.
For the three months ended June 30, 2004, the Company had no revenue and its
expenses were $14,346 resulting in a net loss for the quarter of $14,346
compared to no revenue and expenses of $11,426 for the three months ended June
30, 2003 and a net loss of $11,426.
The Company anticipates that until a business combination is completed with an
acquisition candidate, it will not generate revenue and may operate at a loss
after completing a business combination, depending upon the performance of the
acquired business. The Company will attempt to carry out its business plan as
discussed above. The Company cannot predict to what extent its lack of liquidity
and capital resources will hinder its business plan prior to the consummation of
a business combination.
NEED FOR ADDITIONAL FINANCING
The Company's has no working capital to meet the Company's cash needs, including
the costs of compliance with the continuing reporting requirements of the
Securities Exchange Act of 1934, as amended. Once a business combination is
completed, the Company's need for additional financing is likely to increase
substantially.
No commitments to provide additional funds have been made by management or
other stockholders. Accordingly, there can be no assurance that any funds will
be available to the Company to allow it to cover its expenses.
The Company might seek to compensate providers of services by issuances of stock
in lieu of cash.
DESCRIPTION OF PROPERTIES
The Company presently has no office space.
EMPLOYEES
As of June 30, 2004, the Company had no employees.
New Accounting Pronouncements
In April 2002, the FASB approved for issuance Statements of Financial Accounting
Standards No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of
SFAS 13, and Technical Corrections" ("SFAS 145"). SFAS 145 rescinds previous
accounting guidance, which required all gains and losses from extinguishment of
debt be classified as an extraordinary item. Under SFAS 145 classification of
debt extinguishment depends on the facts and circumstances of the transaction.
SFAS 145 is effective for fiscal years beginning after May 15, 2002 and is not
expected to have a material effect on the Company's financial position or
results of its operations.
In July 2002, the FASB issued Statements of Financial Accounting Standards No.
146, "Accounting for Costs Associated with Exit or Disposal Activities" (SFAS
146). SFAS 146 requires companies to recognize costs associated with exit or
disposal activities when they are incurred rather than at the date of a
commitment to an exit or disposal plan. Examples of costs covered by SFAS 146
include lease termination costs and certain employee severance costs that are
associated with a restructuring, discontinued operation, plant closing, or other
exit or disposal activity. SFAS 146 is to be applied prospectively to exit or
disposal activities initiated after December 31, 2002. The adoption of SFAS 146
is not expected to have a material effect on the Company's financial position or
results of its operations.
In December 2002, the FASB issued Statements of Financial Accounting Standards
No. 148 "Accounting for Stock-Based Compensation--Transition and Disclosure--an
amendment of FASB Statement No. 123, This Statement amends FASB Statement No.
123, Accounting for Stock-Based Compensation, to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this Statement amends the
disclosure requirements of Statement 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The adoption of SFAS 148 is not expected to have a material effect on
the Company's financial position or results of its operations.
Inflation
The Company's results of operations have not been affected by inflation and
management does not expect inflation to have a significant effect on its
operations in the future.
ITEM 3. CONTROLS AND PROCEDURES
Based on the evaluation of the Company's disclosure controls and procedures by
Mr. Charles Smith, both the chief executive officer and chief accounting officer
of the company, as of a date within 90 days of the filing date of this quarterly
report, such officer has concluded that the Company's disclosure controls and
procedures are effective in ensuring that information required to be disclosed
by the Company in the reports that it files or submits under the Securities and
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported, within the time period specified by the Securities and Exchange
Commission's rules and forms.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II - OTHER INFORMATION
Items No. 1, 2, 3, 4, 5 - Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits - None.
b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter for which
this report is filed.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NATIONAL HEALTHCARE TECHNOLOGY, INC.
Date: August 19, 2004 By: /s/ Charles Smith
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Charles Smith
CEO, CFO