Attached files
| file | filename |
|---|---|
| EX-31.1 - EXHIBIT 31.1 - Global 2.0 | exhibit31-1.htm |
| EX-32.1 - EXHIBIT 32.1 - Global 2.0 | exhibit32-1.htm |
| EX-32.2 - EXHIBIT 32.2 - Global 2.0 | exhibit32-2.htm |
| EX-31.2 - EXHIBIT 31.2 - Global 2.0 | exhibit31-2.htm |
U.S. Securities and Exchange Commission
Washington, D.C. 20549
____________________
FORM 10-Q
____________________
(Mark One)
x Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2009
o Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act
For the transition period from N/A to N/A
____________________
Commission File No. 0-51697
____________________
Bridgetech Holdings International, Inc.
(Name of small business issuer as specified in its charter)
|
Delaware
State of Incorporation |
21-1992090
IRS Employer Identification No. |
P.O.
Box 1072
Cardiff, CA 92007
(Address of principal executive offices)
(858) 847-9090
(Issuer’s telephone number)
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value per share
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required by Section 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 ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).
Yes x No o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non–accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b–2 of the Exchange Act. (Check one):
|
Large accelerated filer ¨
Non-Accelerated filer ¨ |
Accelerated filer
Small Business Issuer |
o
x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).
Yes x No ¨
Transitional Small Business Disclosure Format (check one):
Yes o No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
|
Class |
Outstanding at November 16, 2009 | |
|
Common stock, $0.001 par value |
70,852,030 |
BRIDGETECH HOLDINGS INTERNATIONAL, INC.
INDEX TO FORM 10-Q FILING
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009
TABLE OF CONTENTS
PART I
FINANCIAL INFORMATION PAGE
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CERTIFICATIONS
Exhibit 31 – Management certification
Exhibit 32 – Sarbanes-Oxley Act
PART I – FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
BRIDGETECH HOLDINGS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
| September | December | |||||||
|
ASSETS: |
30, |
31, |
||||||
|
2009 |
2008 |
|||||||
|
(audited) |
||||||||
|
CURRENT ASSETS |
||||||||
|
Cash |
$ | - | $ | - | ||||
|
Prepaid expense |
- | - | ||||||
|
Total current assets |
- | - | ||||||
|
TOTAL ASSETS |
$ | - | $ | - | ||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY: |
||||||||
|
CURRENT LIABILITIES: |
||||||||
|
Accounts payable |
$ | 2,192,657 | $ | 2,192,657 | ||||
|
Accrued liabilities |
769,920 | 769,920 | ||||||
|
Note payable affiliate |
701,511 | 561,511 | ||||||
|
Notes payable short term |
5,676,963 | 5,676,963 | ||||||
|
Total current liabilities |
9,341,051 | 9,201,051 | ||||||
|
Total liabilities |
9,341,051 | 9,201,051 | ||||||
|
COMMITMENTS AND CONTINGENCIES |
- | - | ||||||
|
STOCKHOLDERS' DEFICIT: |
||||||||
|
Series A 8% cumulative convertible preferred stock, $.002 par value 10,000,000 shares authorized, 100,000 issued and outstanding on September 30, 2009 and December 31, 2008, respectively |
200 | 200 | ||||||
|
Common stock, $.001 par value, 100,000,000 shares authorized; 70,852,030 and 30,852,030 issued and outstanding September 30, 2009 as of December 31, 2008, respectively |
70,852 | 30,852 | ||||||
|
Additional paid-in capital |
49,097,602 | 49,097,602 | ||||||
|
Accumulated deficit |
(58,509,705 | ) | (58,329,705 | ) | ||||
|
Total stockholders' equity |
(9,341,051 | ) | (9,201,051 | ) | ||||
|
LIABILITIES AND STOCKHOLDERS' DEFICIT: |
$ | - | $ | - | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
BRIDGETECH HOLDINGS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
|
Three Months |
Nine Months |
|||||||||||||||
|
2009 |
2008 |
2009 |
2008 |
|||||||||||||
|
OPERATING EXPENSES: |
||||||||||||||||
|
General and administrative expenses |
180,000 | 180,000 | ||||||||||||||
|
Total operating expenses |
180,000 | - | 180,000 | - | ||||||||||||
|
OPERATING LOSS |
180,000 | - | 180,000 | - | ||||||||||||
|
LOSS BEFORE DISCONTINUED OPERATIONS |
$ | 180,000 | $ | - | $ | 180,000 | $ | - | ||||||||
|
LOSS FROM DISCONTINUED OPERATIONS |
$ | - | $ | 105,000 | $ | - | $ | 1,202,898 | ||||||||
|
NET LOSS |
$ | (180,000 | ) | $ | (105,000 | ) | $ | (180,000 | ) | $ | (1,202,898 | ) | ||||
|
NET LOSS PER SHARE: |
||||||||||||||||
|
Basic and diluted: |
$ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | ||||
|
WEIGHTED AVERAGE OF SHARES OUTSTANDING: |
||||||||||||||||
|
Basic and diluted: |
70,852,030 | 30,852,030 | 44,185,363 | 30,852,030 | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
BRIDGETECH HOLDINGS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
|
2009 |
2008 |
|||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
|
Net Loss |
$ | (180,000 | ) | $ | (1,202,898 | ) | ||
|
Adjustments to reconcile net loss to net cash |
||||||||
|
(used in) operating activities: |
||||||||
|
Discontinued operations |
- | 1,202,898 | ||||||
|
Common stock issued for debt conversion |
180,000 | - | ||||||
|
Changes in assets and liabilities: |
||||||||
|
Inventory |
21,421 | |||||||
|
Accounts receivables |
- | 73,716 | ||||||
|
Prepaid expenses |
- | 116,635 | ||||||
|
Accrued payables and accrued liabilities |
- | 42,891 | ||||||
|
Net cash (used in) provided by operating activities |
(180,000 | ) | 254,663 | |||||
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
|
Repayment from affiliates loan |
- | (411,198 | ) | |||||
|
Net cash provided by financing activities |
- | (411,198 | ) | |||||
|
DECREASE IN CASH |
- | (156,535 | ) | |||||
|
CASH, BEGINNING OF YEAR |
- | 156,535 | ||||||
|
CASH, END OF YEAR |
$ | - | $ | - | ||||
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
||||||||
|
Income Taxes |
$ | - | $ | - | ||||
|
Interest Paid |
$ | - | $ | 207,908 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
BRIDGETECH HOLDINGS INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 and 2008
NOTE 1 - DESCRIPTION OF BUSINESS
The consolidated financial statements of Bridgetech Holdings International, Inc. do not include the accounts of its wholly owned subsidiaries, Retail Pilot, Inc. D/B/A Healthcare Pilot (“Retail”), International MedLink, Inc. (“MedLink”), and Clarity Imaging International, Inc. (“Clarity”) that no longer
operate and are failed ventures and are a part of discontinued operations.
In April 2005, Bridgetech formed Amcare and owns 67% of Amcare. Amcare is not an operating entity presently and upon approval will operate a CRO and lab in China. The Amcare transaction was never implemented and the corporate entity was abandoned.
In 2006, Bridgetech formed Bridgetech Medical Technologies Research & Development Ltd. (“BMT”), in conjunction with the University of Hong Kong (“CUHK”). Bridgetech Medical Technologies Research & Development Ltd. is an entity that is operating to provide clinical trial services. Bridgetech
acquired a 51 percent ownership in BMT with an initial funding of $50,000 in the form of a loan. CUHK did not contribute any material assets to BMT for its 49 percent ownership. Bridgetech is obligated under the BMT Agreement to provide 100 percent of the funding requirements of BMT, including additional financing over a three-year period. The financial statements of BMT have been fully consolidated into the Company’s financial statements. The corporate entity was sold in
March, 2008.
As of September 30, 2008 the Company has no further business activity as the Company is no longer operating.
NOTE 2 - BASIS OF PRESENTATION
Interim Financial Statements
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended September 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. For further information, refer to the financial statements and footnotes thereto included in our Form 10-K Report for the fiscal year
ended December 31, 2008.
NOTE 3 - GOING CONCERN
The accompanying consolidated condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern. However, the Company has year end losses from operations and had minimal revenues from operations
as of September 30, 2009. During nine months ended September 30, 2009 the Company incurred an accumulated deficit of $58,509,705 from inception. Further, the Company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from private investors and the support of certain stockholders.
These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. In this regard, Management is proposing to raise any necessary additional funds through loans and
additional sales of its common stock. There is no assurance that the Company will be successful in raising additional capital.
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are as follows:
Principle of Consolidation
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Our management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These
estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates.
Revenue Recognition
Revenue includes product sales. The Company recognizes revenue from product sales in accordance with Staff Accounting Bulletin (SAB) No. 104, “Revenue Recognition in Financial Statement” which is at the time customers are invoiced at shipping point, provided title and risk of loss has passed to the customer, evidence of an
arrangement exists, fees are contractually fixed or determinable, collection is reasonably assured through historical collection results and regular credit evaluations, and there are no uncertainties regarding customer acceptance.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At September 30, 2009, and December 31, 2008, respectively, cash and cash equivalents include cash on hand and cash in the bank.
Property and Equipment
Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using principally the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized. Ordinary maintenance and repairs are
charged to expense as incurred, and replacements and betterments are capitalized.
The range of estimated useful lives used to calculated depreciation for principal items of property and equipment are as follow:
|
Asset Category |
Depreciation/
Amortization Period |
|
Furniture and Fixture |
3 Years |
|
Office equipment |
3 Years |
|
Leasehold improvements |
5 Years |
Impairment of Long-Lived Assets
In accordance with ASC Topic 360, long-lived assets, such as property, plant, and equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and other
intangible assets are tested for impairment. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no events or changes in circumstances that necessitated
an impairment of long lived assets.
Income Taxes
Deferred income taxes are provided based on the provisions of ASC Topic 740, "Accounting for Income Taxes", to reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws
and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company adopted the provisions of ASC Topic 740; "Accounting For Uncertainty In Income Taxes-An Interpretation Of ASC Topic 740 ("ASC Topic 740"). ASC Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining
if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At September 30,
2009, the Company did not record any liabilities for uncertain tax positions.
Concentration of Credit Risk
The Company does not maintain an operating cash balances. The Federal Depository Insurance Corporation (FDIC) insures accounts at each institution up to $250,000.
Basic and Diluted Net Loss Per Share
Net loss per share was computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Diluted net loss per
share for the Company is the same as basic net loss per share, as the inclusion of common stock equivalents would be antidilutive.
Fair Value of Financial Instruments
The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation.
The carrying amounts of the Company’s financial instruments, including cash, accounts payable and accrued liabilities, income tax payable and related party payable approximate fair value due to their most maturities.
Reclassification
Certain prior period amounts have been reclassified to conform to current year presentations.
Recent Accounting Pronouncements
Recent accounting pronouncements that the Company has adopted or that will be required to adopt in the future are summarized below.
On September 30, 2009, the Company adopted updates issued by the Financial Accounting Standards Board (FASB) to the authoritative hierarchy of GAAP. These changes establish the FASB Accounting Standards CodificationTM (ASC) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative
in their own right as they will only serve to update the Codification. These changes and the Codification itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Condensed Consolidated Financial Statements.
In June 2009, the FASB issued guidance now codified as ASC Topic 105, “Generally Accepted Accounting Principles” (“ASC 105”), which establishes the FASB Accounting Standards Codification as the source of GAAP to be applied to nongovernmental agencies.
ASC 105 explicitly recognizes rules and interpretive releases of the SEC under authority of federal securities laws as authoritative GAAP for SEC registrants. ASC 105 became effective for interim or annual periods ending after September 15, 2009. ASC 105 does not have a material impact on the Company’s consolidated financial statements presented hereby.
In May 2009, the FASB issued guidance now codified as ASC Topic 855, “Subsequent Events” (“ASC 855”). The pronouncement modifies the definition of what qualifies as a subsequent event—those events or transactions that occur following the balance sheet
date, but before the financial statements are issued, or are available to be issued—and requires companies to disclose the date through which it has evaluated subsequent events and the basis for determining that date. The Company adopted the provisions of ASC 855 in the second quarter of 2009, in accordance with the effective date.
On April 1, 2009, the Company adopted updates issued by the FASB to the recognition and presentation of other-than-temporary impairments. These changes amend existing other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary
impairments on debt and equity securities. The recognition provision applies only to fixed maturity investments that are subject to the other-than-temporary impairments. If an entity intends to sell, or if it is more likely than not that it will be required to sell an impaired security prior to recovery of its cost basis, the security is other-than-temporarily impaired and the full amount of the impairment is recognized as a loss through earnings. Otherwise, losses on securities which are other-than-temporarily
impaired are separated into: (i) the portion of loss which represents the credit loss; or (ii) the portion which is due to other factors.
In April 2009, the FASB issued guidance now codified as ASC Topic 825, “Financial Instruments” (“ASC 825”). The pronouncement amends previous ASC 825 guidance to require disclosures about the fair value of financial instruments in all interim as well as annual financial statements. This pronouncement was effective
for interim periods ending after June 15, 2009 and the Company adopted its provisions in the second quarter of 2009.
On January 1, 2009, the Company adopted updates issued by the FASB to fair value accounting and reporting as it relates to nonfinancial assets and nonfinancial liabilities that are not recognized or disclosed at fair value in the financial statements on at least an annual basis. These changes define fair value, establish a framework
for measuring fair value in GAAP, and expand disclosures about fair value measurements. This guidance applies to other GAAP that require or permit fair value measurements and is to be applied prospectively with limited exceptions. The adoption of these changes, as it relates to nonfinancial assets and nonfinancial liabilities, had no impact on the Condensed Consolidated Financial Statements. These provisions will be applied at such time a fair value measurement of a nonfinancial asset or nonfinancial liability
is required, which may result in a fair value that is materially different than would have been calculated prior to the adoption of these changes.
On January 1, 2009, the Company adopted updates issued by the FASB to accounting for intangible assets. These changes amend the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset in order to improve the consistency between the useful
life of a recognized intangible asset outside of a business combination and the period of expected cash flows used to measure the fair value of an intangible asset in a business combination. The adoption of these changes had no impact on the Condensed Consolidated Financial Statements.
On January 1, 2009, the Company adopted updates issued by the FASB to the calculation of earnings per share. These changes state that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation
of earnings per share pursuant to the two-class method for all periods presented. The adoption of these changes had no impact on the Condensed Consolidated Financial Statements.
In April 2008, the FASB issued guidance now codified as ASC Topic 350, “Intangibles—Goodwill and Other” (“ASC 350”). This pronouncement amends the factors that should be considered in developing renewal or extension assumptions used to determine
the useful life of a recognized intangible asset under previous ASC 350 guidance, thereby improving the consistency between the useful life of a recognized intangible asset under ASC 350 and the period of expected cash flows used to measure the fair value of the asset under ASC Topic 805, “Business Combinations” (“ASC 805”). This pronouncement was effective for financial statements issued for fiscal years beginning after December 15, 2008 and must be applied prospectively to intangible
assets acquired after the effective date. The Company has not acquired any intangible assets since adopting this pronouncement. As such, there has been no impact to the Company’s financial statements since the January 1, 2009 adoption date.
In March 2008, the FASB issued guidance now codified as ASC Topic 815 “Derivatives and Hedging” (“ASC 815”), which expands the disclosure requirements in previous ASC 815 guidance about an entity’s derivative instruments and hedging activities. This
pronouncement’s disclosure provisions apply to all entities with derivative instruments subject to the previous ASC 815 guidance. The provisions also apply to related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to this pronouncement must provide more robust qualitative disclosures and expanded quantitative disclosures. Such disclosures, as well as existing required disclosures, generally will
need to be presented for every annual and interim reporting period. This pronouncement was effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. For the nine months ended September 30, 2009, the Company has included the expanded disclosures about derivative instruments and hedging activities within the Company’s financial statements.
In December 2007, the FASB issued guidance now codified as ASC Topic 805, “Business Combinations” (“ASC 805”), which replaces previous ASC 805 guidance. This pronouncement establishes principles and requirements for how an acquirer recognizes and measures
in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired in connection with a business combination. This pronouncement also establishes disclosure requirements that will enable users to evaluate the nature and financial effect of the business combination. This pronouncement applies prospectively to business combinations for which the acquisition date is on or after the beginning of an entity’s first fiscal
year that begins after December 15, 2008. The Company applied the provisions of ASC 805 in connection with the acquisition that closed during the first quarter of 2009. The adoption of this pronouncement did not have a material impact on the Company’s consolidated financial statements.
Updates issued but not yet adopted
In October 2009, the FASB issued updates to revenue recognition guidance. These changes provide application guidance on whether multiple deliverables exist, how the deliverables should be separated, and how the consideration should be allocated to one or more units of accounting. This update establishes a selling price hierarchy for
determining the selling price of a deliverable. The selling price used for each deliverable will be based on vendor-specific objective evidence, if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific or third-party evidence is available. The Company will be required to apply this guidance prospectively for revenue arrangements entered into or materially modified after January 1, 2011; however, earlier application is permitted.
The Company has not determined the impact that this update may have on its Consolidated Financial Statements.
In August 2009, the FASB issued updates to fair value accounting for liabilities. These changes clarify existing guidance that in circumstances in which a quoted price in an active market for the identical liability is not available, an entity is required to measure fair value using either a valuation technique that uses a quoted price
of either a similar liability or a quoted price of an identical or similar liability when traded as an asset, or another valuation technique that is consistent with the principles of fair value measurements, such as an income approach (e.g., present value technique). This guidance also states that both a quoted price in an active market for the identical liability and a quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are
required are Level 1 fair value measurements. These changes will become effective for the Company’s Consolidated Financial Statements for the year ended December 31, 2009. The Company has not determined the impact that this update may have on its Consolidated Financial Statements.
NOTE 5 - NOTE PAYABLES
Notes payable consist of the following as of September 30, 2009 and year ended December 31, 2008:
|
September 30, 2009 |
December 31, 2008 |
|||||||
|
Unsecured Notes Payables from 23 promissory notes from 23 outside investors at a 8% interest rate and are in default. |
$ | 5,676,963 | $ | 5,676,963 | ||||
|
Loans and advances from four affiliates and these notes are in default |
701,151 | 561,511 | ||||||
|
Total of Notes Payable |
6,378,474 | 6,238,474 | ||||||
|
Less Current Portion |
(6,378,474 | ) | (6,238,474 | ) | ||||
|
Long-Term Portion |
$ | - | $ | - | ||||
All notes are in default and there is no plan for repayment of these obligations.
NOTE 7 – EQUITY
On July 26, 2005, the Company authorized 50,000,000 shares of common stock, at $.01 par value and as of September 30, 2009, 70,852,030 common shares were issued and outstanding. In August 2007, the Company authorized 10,000,000 of preferred series A shares at a par value of .02 and 100,000 shares were issued and outstanding
as of December 31, 2008.
There are 440,000 warrants issued and outstanding all other warrants have expired as of September 30, 2009.
NOTE 8 – RELATED PARTY TRANSACTIONS
The Company is managed by its key shareholders.
NOTE 10 - NET LOSS PER SHARE
Restricted shares and warrants are included in the computation of the weighted average number of shares outstanding during the periods. The net loss per common share is calculated by dividing the consolidated loss by the weighted average number of shares outstanding during the periods.
NOTE 11 - DISCONTINUED OPERATIONS
The Company has discontinued operations of Retail Pilot, MedLink International, Inc. and Clarity Imaging International, Inc .as of September 30, 2008 in the amount of $1,202,898.
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis contains various “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this
Form 10-QSB, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to “anticipates”, “believes”, “plans”, “expects”, “future” and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company’s business, The Company adopted at management’s discretion, the most
conservative recognition of revenue based on the most astringent guidelines of the SEC in terms of recognition of software licenses and recurring revenue. Management will elect additional changes to revenue recognition to comply with the most conservative SEC recognition on a forward going accrual basis as the model is replicated with other similar markets (i.e. SBDC). The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors,
including those set forth therein.
Forward-looking statements involve risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors and risks that could affect our results and achievements and cause them to materially differ
from those contained in the forward-looking statements include those identified in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as well as other factors that we are currently unable to identify or quantify, but that may exist in the future.
In addition, the foregoing factors may affect generally our business, results of operations and financial position. Forward-looking statements speak only as of the date the statement was made. We do not undertake and specifically decline any obligation to update any forward-looking statements.
Overview
The Company has no revenue model as the Company has no operating entity. The Company is winding down its operations in Asia due to the sale of its subsidiary. The Company has abandoned its assets and discontinued operations. The Company presently has no operations.
The Company has incurred an accumulated deficit of approximately $58,509,705 as of September 30, 2009, and current liabilities exceeded current assets by approximately $9,341,051 as of September 30, 2009. We cannot assure you that we will be successful in these fundraising activities. We are currently in default on our convertible notes outstanding and have
been unable to raise the capital to pay such notes. Should the note holders call their notes, we would be unable to pay them.
RESULTS OF OPERATIONS
The Company has discontinued all operations and is no longer operating.
LIQUIDITY AND CAPITAL RESOURCES
We do not presently generate any revenue to fund our operations and the planned development of our business. In order to sustain our current operations and develop our business plan, we will require funds for working capital. We are attempting to raise additional working capital through the sale of equity, debt
or a combination of equity and debt. We do not presently have any firm commitments for additional working capital and there are no assurances that such capital will be available to us when needed or upon terms and conditions which are acceptable to us. If we are able to secure additional working capital through the sale of equity securities, the ownership interests of our current stockholders will be diluted. If we raise additional working capital through the issuance of debt our future interest expense will
increase. We are currently in default on our convertible notes outstanding and have been unable to raise the capital to pay such notes. Should the note holders call their notes, we would be unable to pay them.
Additional Information
We file reports and other materials with the Securities and Exchange Commission. These documents may be inspected and copied at the Securities and Exchange Commission, Judiciary Plaza, 100 F Street, N.E., Room 1580, and Washington, D.C. 20549. You can obtain information on the operation of the Public Reference
Room by calling the Commission at 1-800-SEC-0330. You can also get copies of documents that the Company files with the Commission through the Commission’s Internet site at www.sec.gov.
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ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
We do not hold any derivative instruments and do not engage in any hedging activities. We have no business activity as of the period ended September 30, 2009
ITEM 4. CONTROLS AND PROCEDURES
a) Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system
cannot provide absolute assurance, however, the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
Our Chief Executive Officer and Chief Financial Officer is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting
companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Often, one or two individuals control every aspect of the Company's operation and are in a position to override any system of internal control. Additionally, smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.
Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Company's internal control over financial reporting as of September 30, 2009. In making this assessment, our Chief Executive Officer and Chief Financial Officer used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control -- Integrated Framework. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2009, our internal control over financial reporting was effective.
b) Changes in Internal Control over Financial Reporting.
During the Quarter ended September 30, 2009, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
LACK OF AUDIT COMMITTEE
Management is aware that an audit committee composed of the requisite number of independent members along with a qualified financial expert has not yet been established. Considering the costs associated with procuring and providing the infrastructure to support an independent audit committee and the limited number of transactions, Management has concluded that the risks associated
with the lack of an independent audit committee are not justified. Management will periodically reevaluate this situation.
LACK OF SEGREGATION OF DUTIES
Management is aware that there is a lack of segregation of duties at the Company due to the small number of employees dealing with general administrative and financial matters. However, at this time management has decided that considering the abilities of the employees now involved and the control procedures in place, the risks associated with such lack of segregation are low and the potential
benefits of adding employees to clearly segregate duties do not justify the substantial expenses associated with such increases. Management will periodically reevaluate this situation
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries
or of our companies or our subsidiaries' officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect except as follows:
The Company has been sued in Superior Court of the State of California, County of San Diego Case No. 37-2008-00083687-CU-BC-CTL in Michael Arnstedt v. Bridgetech Holdings, Inc. and an order has been entered against the Company of $105,475.51 and this judgment accrues interest at the federal interest rate of 10%.
ITEM 1A - Risk Factors
We have updated or confirmed some of the risk factors previously disclosed in our registration statement on Form 10SB, filed November 27, 2007(the “Form 10SB”) and in our Annual Report on Form 10–K for the year ended December 31, 2008, which was filed with the Securities and Exchange Commission on
April 15, 2009 (the “Fiscal 20080–K”). We believe there are no changes that constitute material changes from the risk factors previously disclosed in the Fiscal 2008 10–KSB but updated or confirmed some of the risk factors previously disclosed below.
Our Common Stock Is Subject To Penny Stock Regulation
Our shares are subject to the provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock" rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock
as that used in Rule 3a51-1 of the Exchange Act. The Commission generally defines penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is considered to be penny stock unless that security is: registered and traded on a national securities exchange meeting specified criteria set by the Commission; authorized for quotation
on the NASDAQ Stock Market; issued by a registered investment company; excluded from the definition on the basis of price (at least $5.00 per share) or the registrant's net tangible assets; or exempted from the definition by the Commission. Since our shares are deemed to be "penny stock", trading in the shares will be subject to additional sales practice requirements on broker/dealers who sell penny stock to persons other than established customers and accredited investors.
The Liquidity Of Our Common Stock Is Seriously Limited And There Is A Limited Market For Our Common Stock
Our stock is currently being traded on the NASDAQ Over-The-Counter Bulletin Board, and the liquidity of our common stock is limited. The Bulletin Board is a limited market and subject to substantial restrictions and limitations in comparison to the NASDAQ system. Any broker/dealer that makes a market in our stock or other person that
buys or sells our stock could have a significant influence over its price at any given time.
II. Risks Associated with Our Current Stage of Business
We Depend Upon Key Management Personnel and the Loss of Any of Them Would Seriously Disrupt Our Operations:
The success of our company is largely dependent on the personal efforts of Scott Landow and other key executives. The loss of the services of Scott Landow or other key executives would have a material adverse effect on our business and prospects.
We Are A "Shell" Company And Our Shares Will Subject To Restrictions On Resale.
As we currently have nominal operations and our assets consist of cash, and/or cash equivalents, we will be deemed a "shell company" as defined in Rule 12b-2 of the Securities Exchange Act of 1934. Accordingly, until we are no longer a "shell company," we will file a Form 10 level disclosure, and continue to
be a reporting company pursuant to the Securities Exchange Act of 1934, as amended, and for twelve months, shareholders holding restricted, non-registered shares will not be able to use the exemptions provided under Rule 144 for the resale of their shares of common stock. Preclusion from any prospective investor using the exemptions provided by Rule 144 may be more difficult for us to sell equity securities or equity-related securities in the future to investors
that require a shorter period before liquidity or may require us to expend limited funds to register their shares for resale in a future prospectus.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS SECURITIES
There were no changes in securities and small business issuer purchase of equity securities during the period ended September 30, 2009.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There were no defaults upon senior securities during the period ended September 30, 2009.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to the vote of securities holders during the period ended September 30, 2009.
ITEM 5. OTHER INFORMATION
There is no information with respect to which information is not otherwise called for by this form.
ITEM 6. EXHIBITS
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31.1 |
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act |
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31.2 |
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. |
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32.1 |
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act. |
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32.2 |
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act. |
Pursuant to the requirements of Section 13 or 15(d) 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.
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Registrant
Date: November 16, 2009
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Bridgetech Holdings International, Inc.
By: /s/ Scott Landow | |
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Scott Landow | ||
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Chairman, Chief Executive Officer
(Principle Executive Officer, Principle Financial Officer) |