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EX-31.1 - EXHIBIT 31.1 - BRIDGETECH HOLDINGS INTERNATIONAL INCex311.htm
EX-31.2 - EXHIBIT 31.2 - BRIDGETECH HOLDINGS INTERNATIONAL INCex312.htm
EX-32.2 - EXHIBIT 32.2 - BRIDGETECH HOLDINGS INTERNATIONAL INCex322.htm
EX-32.1 - EXHIBIT 32.1 - BRIDGETECH HOLDINGS INTERNATIONAL INCex321.htm



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-K
(Mark One)
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended: December 31, 2011
 
OR
 
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
 
Commission file number:  000-51697
 
  
Bridgetech Holdings International, Inc.
 
 
(Exact name of registrant as specified in its charter)
 


 
Delaware
 
21-1992090
 
 
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer Identification No.)
 


 
777 S Hwy 101 Suite 215 Solana Beach, California
 
 
92075
 
 
(Address of principal executive offices)
 
(Postal Code)
 
 
Registrant’s telephone number, including area code:  (858) 847-9090

 
Securities registered under Section 12(b) of the Act:  None  
 
Securities registered under Section 12(g) of the Act:  Common Stock, Par Value of $0.001 Per Share  
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes    No x
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes   o  No  x
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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  o
 
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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  o    No  x
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company.  See the definitions of the “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.   (Check one):
 
Large Accelerated Filer o                                                    Accelerated Filer o
Non-Accelerated Filer o                                                      Smaller reporting company x
                       (Do not check if a smaller reporting company)
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes x  No o
 
On June 30, 2011, the last business day of the registrant’s most recently completed second fiscal quarter, 96,937,044 shares of its Common Stock, $0.001 par value per share (its only class of voting or non-voting common equity) were held by non-affiliates of the registrant.  The market value of those shares was $360,589 based on the last sale price of $0.1 per share of the Common Stock on that date.  For this purpose, shares of Common Stock beneficially owned by each executive officer and director of the registrant and each beneficial owner of 10% or more of the Common Stock outstanding have been excluded because such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
 
As of April 2, 2010, there were 96,937,044 shares of the registrant's common stock, par value $0.001, issued and outstanding and 100,000 shares of Series A preferred stock, par value $0.02, issued and outstanding.

 

 
 

 

 
 
Bridgetech Holdings International, Inc.
FORM 10-K ANNUAL REPORT
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011
TABLE OF CONTENTS

PART I
  
 
ITEM 1.
  
BUSINESS
  
1
ITEM 1A.
  
RISK FACTORS
  
8
ITEM 1B.
  
UNRESOLVED STAFF COMMENTS
  
12
ITEM 2.
  
PROPERTIES
  
12
ITEM 3.
  
LEGAL PROCEEDINGS
  
13
ITEM 4.
  
MINE SAFETY DISCLOSURES
  
13
PART II
  
 
ITEM 5.
  
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
  
13
ITEM 6.
  
SELECTED FINANCIAL DATA
  
16
ITEM 7.
  
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
17
ITEM 7A.
  
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
21
ITEM 8.
  
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
22
ITEM 9.
  
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
37
ITEM 9A.
  
CONTROLS AND PROCEDURES
  
37
ITEM 9B.
  
OTHER INFORMATION
  
39
PART III
  
 
ITEM 10.
  
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
  
39
ITEM 11.
  
EXECUTIVE COMPENSATION
  
41
ITEM 12.
  
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  
44
ITEM 13.
  
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
46
ITEM 14.
  
PRINCIPAL ACCOUNTING FEES AND SERVICES
  
46
PART IV
  
 
ITEM 15.
  
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
  
47
 
  
SIGNATURES
  
48
         
CERTIFICATIONS    
   Exhibit 31 – Management certification    
   Exhibit 32 – Sarbanes-Oxley Act    
 
 

         

 
 

 


 
Forward Looking Statements — Cautionary Language
 
 
Certain statements made in these documents and in other written or oral statements made by Bridgetech Holdings International, Inc. or on Bridgetech Holdings International, Inc.’s behalf are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). A forward-looking statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like: "believe", "anticipate", "expect", "estimate", "project", "will", "shall" and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, trends in our businesses, prospective products, future performance or financial results. Bridgetech Holdings International, Inc. claims the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.  Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the results contained in the forward-looking statements. Risks and uncertainties that may cause actual results to vary materially, some of which are described in this filing.  The risks included herein are not exhaustive. This annual report on Form 10-K, as quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC include additional factors which could impact Bridgetech Holdings International, Inc.'s business and financial performance. Moreover, Bridgetech Holdings International, Inc. operates in a rapidly changing and competitive environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors. Further, it is not possible to assess the impact of all risk factors on Bridgetech Holdings International, Inc.'s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. In addition, Bridgetech Holdings International, Inc. disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of the report.
 

PART I

ITEM 1.  BUSINESS.

Except for historical information contained herein, the following discussion contains forward-looking statements that involve risks and uncertainties.  Such forward-looking statements include, but are not limited to, statements regarding future events and the Company’s plans and expectations.  Actual results could differ materially from those discussed herein.  Factors that could cause or contribute to such differences include, but are not limited to, those discussed elsewhere in this Form 10-K or incorporated herein by reference, including those set forth in Management's Discussion and Analysis of Financial Condition and Results of Operations.

As used in this annual report, “we”, “us”, “our”, “Bridgetech”, “Bridgetech Holdings” “Company” or “our company” refers to Bridgetech Holdings International, Inc. and all of its subsidiaries.

Overview

Our company, Bridgetech Holdings International, Inc. was a company focused primarily on the business of facilitating the transfer of medical drugs, devices and diagnostics from the United States to China and other international locations. We are no longer in this business.

Other than as set out in this annual report, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.
 
 
 
1

 

 
Corporate History
 
The entity that is the original predecessor of the Company was originally incorporated in Delaware on June 4, 1991. From 1991 through 2002, this predecessor, which was originally named “Huggie Heart, Inc.,” engaged in several different businesses, a merger and several similar corporate transactions, and changed its name several times. In November 2002, this entity acquired Parentech, Inc., a Delaware corporation, and changed its name to “Parentech, Inc.”
 
From its acquisition of Parentech, Inc. until the end of 2004, the Company’s primary business was designing, developing and marketing products intended to enhance the well-being of infants.  This business, however, generated only minimal revenues and could not support the Company’s ongoing operations. By the end of 2004, the Company had begun to wind down its operations.
 
On January 10, 2005, Herbert Wong and Scott Landow formed Bridgetech Holdings International, Inc. under the laws of the State of Florida (“Old Bridgetech”). Old Bridgetech, which was privately-held, was formed to facilitate the transfer of medical drugs, devices and diagnostics from the United States to China and other international locations.
 
In February 2005, the Company entered into a transaction with Old Bridgetech whereby the Company issued 1,673,438 shares of common stock to the shareholders of Old Bridgetech in exchange for all of the outstanding stock of Old Bridgetech. In connection with this transaction, the Company changed its name to “Bridgetech Holdings International, Inc.”
 
We are not actively developing this business and have ceased operations of all other businesses conducted by Parentech, Inc. prior to the transaction with Old Bridgetech.
 
As of January 1, 2009, the Company ceased operations of its medical imaging business and has discontinued operations of all of the companies activity including of Retail Pilot, International MedLink, Inc. and Clarity Imaging International, Inc

We are now a company with no operations. As of the date hereof, we have not been successful in any of our prior business operations.
 
Historically, we were able to raise a limited amount of capital through private placements of our equity stock, but we are uncertain about our continued ability to raise funds privately.
 
During the year ended December 31, 2011, our management has been analyzing the various alternatives available to our company to ensure our survival and to preserve our shareholder's investment in our common shares. This analysis has included sourcing additional forms of financing to continue our business as is, or mergers and/or acquisitions. At this stage in our operations, we believe either course is acceptable, as our operations have not been profitable and our future prospects for our business are not good without further financing.
 
We are focusing our preliminary merger/acquisition activities on potential business opportunities with established business entities for the merger of a target business with our company. In certain instances, a target business may wish to become a subsidiary of our company or may wish to contribute assets to our company rather than merge. We anticipate that any new acquisition or business opportunities by our company will require additional financing. There can be no assurance, however, that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail.
 
 
 
2

 
 
 
In implementing a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is likely that our present management will no longer be in control of our company and our existing business will close down. In addition, it is likely that our officers and directors will, as part of the terms of the acquisition transaction, resign and be replaced by one or more new officers and directors.
 
We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes that there are numerous firms in various industries seeking the perceived benefits of being a publicly registered corporation. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
 
We may seek a business opportunity with entities whom have recently commenced operations, or entities who wish to utilize the public marketplace in order to raise additional capital in order to expand business development activities, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.
 
At this stage, we can provide no assurance that we will be able to locate compatible business opportunities, what additional financing we will require to complete a combination or merger with another business opportunity or whether the opportunity's operations will be profitable.
 
If we are unable to secure adequate capital to continue our business or alternatively, complete a merger or acquisition, our shareholders will lose some or all of their investment and our business will likely fail.
 
Other than as set out herein, we have not entered into any formal written agreements for a business combination or opportunity. If any such agreement is reached, we intend to disclose such an agreement by filing a current report on Form 8-K with the Securities and Exchange Commission.
 
On July 6, 2011, our Company and all of our U.S. subsidiaries (the “Debtors”) filed voluntary petitions for relief (the “Bankruptcy Filing”) under Chapter 11 of Title 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of California (the “Bankruptcy Court”), which are being jointly administered under Case # 11-11264-PB11.   Management's decision to initiate the Bankruptcy Filing was in response to, among other things, our company’s deteriorating liquidity and management's conclusion that the challenges of successfully implementing additional financing initiatives and of obtaining necessary cost concessions from our company’s debtors, was negatively impacting our Company’s ability to implement any turnaround strategy. 

The Bankruptcy Filing provides our Company with the breathing room and the tools available under the Bankruptcy Code to implement our comprehensive financial and operational restructuring. We remain committed to implementing our turnaround strategy while maintain our company during the chapter 11 restructuring process. However, there can be no assurance regarding these matters. There can be no assurance that our operational and financial turnaround strategy will be successful or that the DIP Lenders or the Bankruptcy Court will approve the plan ultimately proposed by our company and under such circumstances we could be forced to consider other alternatives to maximize potential recovery for our various creditor constituencies. The uncertainty regarding these matters raises substantial doubt about our company’s ability to continue as a going concern. 

 
 
3

 
 
 
THERE CAN BE NO ASSURANCES THAT NEGOTIATIONS WITH ANY PROSPECTIVE BUSINESS, INCLUDING BUT NOT LIMITED TO THE ENTITIES DISCUSSED ABOVE, WILL RESULT IN A MERGER WITH OUR COMPANY OR THAT SUCH MERGER WILL RESULT IN PROFITABILITY.

Patents and Trademarks

We do not own any patents or trademarks,.

Employees

We currently have no employees other than our sole officer and director. We expect to use consultants, attorneys and accountants as necessary, and do not anticipate a need to engage any full-time employees.

Research and Development

We have incurred $Nil in research and development expenditures over the last two fiscal years.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the twelve months.
WHERE YOU CAN FIND MORE INFORMATION

You are advised to read this Form 10-K in conjunction with other reports and documents that we file from time to time with the SEC. In particular, please read our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we file from time to time. You may obtain copies of these reports directly from us or from the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E. Washington, D.C. 20549, and you may obtain information about obtaining access to the Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains information for electronic filers at its website http://www.sec.gov.

ITEM 1A – RISK FACTORS

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 2.  PROPERTIES.
 
We are currently operating from 777 S Hwy 101 Suite 215 Solana Beach, CA 92075.  Our office services and office space are provided without charge by the sole officer and director of our company. We do not anticipate that we will require any additional premises in the foreseeable future.

 
 
4

 
 
 
ITEM 3.  LEGAL PROCEEDINGS

We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. Other than described below, 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 company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

The Company filed a Chapter 11 Bankruptcy on July 6, 2011 and proceeding is pending in the Southern District of California Case # 11-11264-11.
 
ITEM 4.  MINE SAFETY DISCLOSURES

None



 
5

 

PART II

ITEM 5.  MARKET FOR REGISTANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUERS PURCHASES OF EQUITY SECURITIES.

Bridgetech common stock is traded in the over-the-counter market, and quoted in the National Association of Securities Dealers Inter-dealer Quotation System (“Electronic Bulletin Board) and can be accessed on the Internet at www.otcbb.com under the symbol “BGTH.OB.”

At December 31, 2011, there were 96,937,044 shares of common stock of Bridgetech outstanding and there were approximately 261 shareholders of record of the Company’s common stock.

The following table sets forth for the periods indicated the high and low bid quotations for Bridgetech’s common stock.  These quotations represent inter-dealer quotations, without adjustment for retail markup, markdown or commission and may not represent actual transactions.

Periods
 
High
   
Low
 
Fiscal Year 2010
           
First Quarter (January – March 2010)
  $ 0.0190     $ 0.0021  
Second Quarter (April – June 2010)
  $ 0.0026     $ 0.0021  
Third Quarter (July – September 2010)
  $ 0.0050     $ 0.0026  
Fourth Quarter (October – December 2010)
  $ 0.0181     $ 0.0021  

Fiscal Year 2011
           
First Quarter (January – March 2011)
  $ 0.04     $ 0.01  
Second Quarter (April – June 2011)
  $ 0.03     $ 0.01  
Third Quarter (July – September 2011)
  $ 0.01     $ 0.01  
Fourth Quarter (October – December 2011)
  $ 0.01     $ 0.01  

On April 2, 2011, the closing bid price of our common stock was $0.01.

Dividends

We may never pay any dividends to our shareholders. We did not declare any dividends for the year ended December 31, 2011. Our Board of Directors does not intend to distribute dividends in the near future. The declaration, payment and amount of any future dividends will be made at the discretion of the Board of Directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the Board of Directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend.

Transfer Agent

Bridgetech’s Transfer Agent and Registrar for the common stock is Colonial Stock Transfer located in Salt Lake City, Utah.
 
 
 
6

 

 
Securities Authorized for Issuance Under Equity Compensation Plans

The Company has two stock option plans: the 2001 Stock Option Plan (the “2001 Plan”) and the 2005 Stock Option Plan (the “2005 Plan”). There are currently no options outstanding under the 2001 Plan, and only 10,000 options remain available for future issuance under the 2001 Plan. The Company does not intend to grant any more options under the 2001 Plan. The Company’s 2005 Plan, which was implemented after the reverse split, provides for the grant of options to purchase up to 5,000,000 shares of the Company’s common stock at consideration to be determined from time-to-time by the Company’s Board of Directors. Both plans have been approved by the Company’s Board of Directors and shareholders.

A total of 5,000,000 shares were reserved for issuance from time to time under the 2005 Plan. This number would be adjusted in the event of any change in the outstanding common stock of the Company by reason of any stock dividend, stock split or similar corporate change. If an option granted under the 2005 Plan expires or otherwise terminates without having been exercised, the shares of common stock subject to such option shall be available for grant again under the 2005 Plan. In July 2007, the Company granted 4,660,000 options under the 2005 Plan.

The 2005 Plan is administered by the Company’s Board of Directors. The Board of Directors may grant options to any employee, consultant or director of the Company or any of its subsidiaries. On the date of grant, the board of directors will determine the vesting schedule, expiration date and option exercise price for each option. The per-share exercise price of any incentive stock option, or ISO, may not be less than the fair market value of a share of the Company’s stock on the date of grant, as determined in accordance with the terms of the 2005 Plan. The per-share exercise price of any non-qualified stock option, or NSO, may not be less than 85% of the fair market value of a share of the Company’s common stock on the date of grant.  Any increase in the maximum number of shares for which options may be granted under the 2005 Plan must be approved by the Company’s shareholders.

Plan Category
 
Number of Securities to be issued upon exercise of outstanding options, warrants and rights
   
Weighted-average exercise price of outstanding options, warrants and rights
   
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
 
   
(a)
   
(b)
   
(c)
 
Equity compensation plans approved by security holders
      - 0 -         - 0 -         5,010,000  
Equity compensation plans not approved by security holders
      - 0 -         - 0 -         - 0 -  
Total
    - 0 -       - 0 -       5,010,000  

 
 
7

 

 
Recent sales of unregistered securities

Other than as set forth below, we did not sell any equity securities which were not registered under the Securities Act during the year ended December 31, 2011 that were not otherwise disclosed in this annual report on Form 10-K, in our quarterly reports on Form 10-Q or in our current reports on Form 8-K filed during the year ended December 31, 2011.

On January 9, 2011, the Company granted 18,378,141 common shares valued at $615,667 using quoted market prices on the date of grant to the Company’s President in satisfaction of accrued but unpaid employment compensation, and 355,617 common shares valued at $11,913 using quoted market prices on the date of grant to Small World Traders, LLC,  (of which the President is a member but disclaims direct or indirect beneficial ownership or control) for expenses paid by  Small World Traders, LLC, on behalf of the Company.

On January 9, 2011, the Company granted 3,675,628 common shares for consulting services rendered.

On January 9, 2011, the Company granted 3,675,628 common shares for legal services rendered.

Purchase of Equity Securities by the Issuer and Affiliated Purchasers
 
We did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended December 31, 2011.
 
ITEM 6.  SELECTED FINANCIAL DATA.

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OR PLAN OF OPERATION.

The following is management’s discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying consolidated financial statements, as well as information relating to the plans of our current management. This report includes forward-looking statements. Generally, the words “believes,” “anticipates,” “may,” “will,” “should,” “expect,” “intend,” “estimate,” “continue,” and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the Securities and Exchange Commission from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information contained elsewhere in this Form 10-K

Critical Accounting Policies

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net sales and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates.
 
 
 
8

 

 
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.

Income Taxes

Deferred income taxes are provided based on 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 follows the 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 December 31, 2011, the Company did not record any liabilities for uncertain tax positions.

Share-Based Compensation

The Company measures the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award.  Compensation cost is recognized when the event occurs.  The Black-Scholes option-pricing model is used to estimate the fair value of options granted.

Reverse Split

On October 26, 2011, the Board of Directors approved a one for two hundred reverse split of the Company’s common stock.  As of the date of this filing, the reverse split had not been effectuated as the Company is awaiting approval from FINRA.

RESULTS OF OPERATIONS

Fiscal Year Ended December 31, 2011, Compared to Fiscal Year Ended December 31, 2010

We currently have no operating activities.  As of January 1, 2009, we ceased operations of its medical imaging business and has discontinued the prior operations of Retail Pilot, Inc., MedLink International, Inc. and Clarity Imaging International, Inc.
 
 
 
9

 

 
We presently have no operations but our plan of operation is to identify and merge with a potential merger candidate/candidates to create new shareholder value and reestablish the Company going forward.

General and administrative expenses (“SG&A”) totaled $572,546 in 2011, compared to $120,000 in 2010. SG&A costs in 2011 and 2010 include the accrued salary of our sole officer and director.

Interest expense increased to $213,238 in 2011 compared to $426,476 in 2010. Interest expense in 2011 and 2010 includes accrued and unpaid interest paid on our debt with principal balances totaling $6.6 million.

Liquidity and Capital Resources
 
We have incurred a total accumulated deficit of $60,217,170 as of December 31, 2011, current assets were $0 and current liabilities were $10,174,667 as of December 31, 2011. We are currently in default on all of our debt 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.

We do not presently generate any revenue to fund the planned development of our business. In order to develop our business plan, we will require funds for working capital.  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 all of our outstanding debt to unrelated third parties and have been unable to raise the capital to pay such notes. Should the debt holders call their notes, we would be unable to pay them.

The accompanying consolidated 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 a working capital deficit and has not generated revenues for the years ended December 31, 2011 and 2010. During the year ended December 31, 2011, the Company incurred a net loss of $785,784 and at December 31, 2011 has an accumulated deficit of $60,217,170.  Further, on July 6, 2011, the Company filed voluntary petitions for bankruptcy relief under Chapter 11 of Title 11 of the United States Bankruptcy Code.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.

We are dependent upon funds from private investors and the support of certain stockholders. Management is proposing to raise any necessary additional funds through loans and additional sales of its common stock. There is no assurance that we will be successful in raising additional capital. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

We filed a Chapter 11 Bankruptcy on July 6, 2011 and the proceeding is pending in the Southern District of California Case # 11-11264-11. We are currently operating as debtors-in-possession pursuant to Bankruptcy Filing and continuation of our Company as a going-concern is contingent upon, among other things, the Debtors’ ability (i) to comply with the terms and conditions of any DIP Credit Agreement; (ii) to develop a plan of reorganization and obtain confirmation of that plan under the Bankruptcy Code; (iii) to reduce debt and other liabilities through the bankruptcy process; (iv) to return to profitability; (v) to generate sufficient cash flow from future operations through a merger candidate; and (vi) to obtain financing sources to meet our future obligations.  The uncertainty regarding these matters raises substantial doubt about our ability to continue as a going concern.

 
 
10

 
 
 
Contractual Obligations
 
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
 
Off-Balance Sheet Arrangements
 
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company”, we are not required to provide the information required by this Item.
 

 
11

 


ITEM 8.  FINANCIAL STATEMENTS

BRIDGETECH HOLDINGS INTERNATIONAL, INC.

TABLE OF CONTENTS                                                                                                                                      


  Page
   
  REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
F-1
   
  CONSOLIDATED FINANCIAL STATEMENTS:
 
     Consolidated Balance Sheets at December 31, 2011 and 2010
F-2
   
     Consolidated Statements of Operations for the years ended December 31, 2011
 
and 2010 and the period from January 1, 2009 to December 31, 2011
F-3
   
     Consolidated Statement of Stockholders’ Equity (Deficit) for the period from
 
January 1, 2009 to December 31, 2011
F-4
   
     Consolidated Statements of Cash Flows for the years ended December 31, 2011
 
and 2010 and the period from January 1, 2009 to December 31, 2011
F-5
   
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-6
 
 

 
12

 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Bridgetech Holdings International, Inc.,
(A Development Stage Company)
(Debtor-in-Possession)
Solana Beach, California

We have audited the accompanying consolidated balance sheets of Bridgetech Holdings International, Inc., (A Development Stage Company) (the “Company”), as of December 31, 2011 and 2010, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended and for the period from January 1, 2009 (date re-entered the development stage) to December 31, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Bridgetech Holdings International, Inc. as of December 31, 2011 and 2010 and the consolidated results of their operations and their consolidated cash flows for the years then ended and for the period from January 1, 2009 (date re-entered the development stage) to December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a working capital deficit, has not generated revenues for the years ended December 31, 2011 and 2010 and filed voluntary petitions for bankruptcy relief. Those conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ GBH CPAs, PC

GBH CPAs, PC
www.gbhcpas.com
Houston, Texas
April 16, 2012
 
 
 
 
 
F-1

 
 
 
 

BRIDGETECH HOLDINGS INTERNATIONAL, INC.
(Development Stage Company)
(Debtor-in-Possession)
 
CONSOLIDATED BALANCE SHEETS
             
   
December 31,
 
   
2011
   
2010
 
             
TOTAL ASSETS
  $ -     $ -  
                 
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
                 
CURRENT LIABILITIES:
               
   Accounts payable and accrued liabilities
  $ -     $ 1,957,185  
   Accounts payable - related party
    -       1,265,392  
   Accrued interest
    -       1,098,379  
   Note payable - related parties
    -       561,511  
   Notes payable
    -       5,380,265  
   Liabilities subject to compromise
    10,174,667       -  
      Total liabilities
    10,174,667       10,262,732  
                 
  COMMITMENTS AND CONTINGENCIES
    -       -  
                 
STOCKHOLDERS' DEFICIT:
               
   Series A 8% cumulative convertible preferred stock, $0.0002 par value
               
     10,000,000 shares authorized, 100,000 issued and outstanding
    200       200  
   Common stock, $0.0001 par value, 100,000,000 shares authorized;
               
     96,937,044 and 70,852,030 issued and outstanding
    96,937       70,852  
    Additional paid-in capital
    49,945,366       49,097,602  
    Accumulated deficit - re-entered development stage on January 1, 2009
    (1,887,465 )     (1,101,681 )
    Accumulated deficit
    (58,329,705 )     (58,329,705 )
      Total stockholders' deficit
    (10,174,667 )     (10,262,732 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $ -     $ -  
                 
                 
The accompanying notes are an integral part of these consolidated financial statements.

 
F-2

 


BRIDGETECH HOLDINGS INTERNATIONAL, INC.
(Development Stage Company)
(Debtor-in-Possession)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 AND FOR THE PERIOD
FROM JANUARY 1, 2009 (RE-ENTERED THE DEVELOPMENT STAGE) THROUGH DECEMBER 31, 2011
                   
               
For the Period
 
               
from
 
               
January 1, 2009
 
   
December 31,
   
through
 
   
2011
   
2010
   
December 31, 2011
 
                   
OPERATING EXPENSES:
                 
   General and administrative expenses
  $ 572,546     $ 120,000     $ 872,546  
         Total operating expenses
    572,546       120,000       872,546  
                         
OPERATING LOSS
    (572,546 )     (120,000 )     (872,546 )
                         
OTHER INCOME (EXPENSE):
                       
     Interest expense
    (213,238 )     (426,476 )     (1,014,919 )
                         
NET INCOME (LOSS)
  $ (785,784 )   $ (546,476 )   $ (1,887,465 )
                         
NET INCOME (LOSS) PER SHARE:
                       
                         
 Basic and diluted:
  $ (0.01 )   $ 0.04          
                         
Weighted average of number of shares outstanding
    96,293,852       70,852,030          
                         
                         
The accompanying notes are an integral part of these consolidated financial statements.

 
F-3

 

BRIDGETECH HOLDINGS INTERNATIONAL, INC.
 
(Development Stage Company)
 
(Debtor-in-Possession)
 
CONSOLIDATED STATEMENT OF STOCKHOLDER' EQUITY (DEFICIT)
 
FOR THE PERIOD FROM JANUARY 1, 2009 (RE-ENTERED THE DEVELOPMENT STAGE) THROUGH DECEMBER 31, 2011
 
                                       
Accumulated
 
                           
Additional
   
Deficit During
 
   
Series A Preferred Stock
 
Common Stock
   
Paid-in
   
Accumulated
   
Development
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Deficit
   
Stage
   
Total
 
 
                                               
   DECEMBER 31, 2008
    100,000     $ 200       30,852,030     $ 30,852     $ 49,097,602     $ (58,329,705 )   $ -     $ (9,201,051 )
                                                                 
   Stock issued for services
    -       -       40,000,000       40,000       -       -       -       40,000  
 
                                                               
   Net loss
    -       -       -       -       -               (555,205 )     (555,205 )
                                                                 
   DECEMBER 31, 2009
    100,000     $ 200       70,852,030     $ 70,852     $ 49,097,602     $ (58,329,705 )   $ (555,205 )   $ (9,716,256 )
                                                                 
   Stock issued for services
    -       -       -       -       -       -       -       -  
 
                                                               
   Net loss
    -       -       -       -       -       -       (546,476 )     (546,476 )
                                                                 
   DECEMBER 31, 2010
    100,000     $ 200       70,852,030     $ 70,852     $ 49,097,602     $ (58,329,705 )   $ (1,101,681 )   $ (10,262,732 )
                                                                 
   Stock issued for services
    -       -       7,706,873       7,707       250,475       -       -       258,182  
                                                                 
Stock issued for settlement of accrued liabilities
    18,378,141       18,378       597,289       -       -       615,667  
 
                                                               
   Net loss
    -       -       -       -       -       -       (785,784 )     (785,784 )
                                                                 
   DECEMBER 31, 2011
    100,000     $ 200       96,937,044     $ 96,937     $ 49,945,366     $ (58,329,705 )   $ (1,887,465 )   $ (10,174,667 )
                                                                 
                                                                 
The accompanying notes are an integral part of these consolidated financial statements.
         

 
F-4

 


BRIDGETECH HOLDINGS INTERNATIONAL, INC.
(Development Stage Company)
(Debtor-in-Possession)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 AND FOR THE PERIOD
 
FROM JANUARY 1, 2009 (RE-ENTERED THE DEVELOPMENT STAGE) THROUGH DECEMBER 31, 2011
 
               
For the Period
 
               
from
 
               
January 1, 2009
 
   
Year Ended December 31,
   
through
 
   
2011
   
2010
   
December 31, 2011
 
CASH FLOWS FROM OPERATING ACTIVITIES:
             
  Net loss
  $ (785,784 )   $ (546,476 )   $ (1,887,465 )
  Adjustments to reconcile net loss to net cash
                       
     from operating activities:
                       
    Common stock issued for services
    258,182       -       298,182  
    Changes in assets and liabilities:
                       
      Accounts payables and accrued liabilities
    253,050       120,000       373,050  
      Accrued payable - related party
    -       140,000       140,000  
      Accrued interest
    213,237       286,476       1,014,918  
          Net cash used in operating activities
    (61,315 )     -       (61,315 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
  Advances from related party
    61,315       -       61,315  
          Net cash provided by financing activities
    61,315       -       61,315  
                         
NET CHANGE IN CASH
    -       -       -  
CASH, BEGINNING OF PERIOD
    -       -       -  
CASH, END OF PERIOD
  $ -     $ -     $ -  
                         
SUPPLEMENTAL CASH FLOW INFORMATION:
                       
   Income Taxes
  $ -     $ -     $ -  
   Interest Paid
  $ -     $ -     $ -  
                         
NON-CASH INVESTING AND FINANCING ACTIVITIES:
                 
   Reclass of payables to liabilities subject to compromise
  $ 9,988,042     $ -     $ 9,988,042  
   Common stock issued for settlement of accrued liabilities
  $ 615,667     $ -     $ 615,667  
                         
                         
The accompanying notes are an integral part of these consolidated financial statements.
 


 
F-5

 

BRIDGETECH HOLDINGS INTERNATIONAL, INC.
(A Development Stage Company)
(Debtor-in-Possession)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2011 AND 2010

NOTE 1 – BUSINESS AND NATURE OF OPERATIONS

Bridgetech Holdings International, Inc. (the “Company”) was a company focused primarily on the business of facilitating the transfer of medical drugs, devices and diagnostics from the United States to China and other international locations. We are no longer in this business. The entity that is the original predecessor of the Company was originally incorporated in Delaware on June 4, 1991. As of January 1, 2009, the Company ceased operations of its medical imaging business and has discontinued operations of all of the its business activity including those of its wholly-owned subsidiaries, Parentech, Inc., Retail Pilot, Inc.,  International MedLink, Inc., and Clarity Imaging International, Inc. As a result of discontinuing all of its previous operations, the Company re-entered the development stage effective January 1, 2009. The Company currently has no operations. As of the date hereof, we have not been successful in any of our prior business operations.

The consolidated financial statements of Bridgetech Holdings International, Inc. include the accounts of its wholly-owned subsidiaries, Parentech, Inc., Retail Pilot, Inc. D/B/A Healthcare Pilot (“Retail”), and International MedLink, Inc. (“MedLink”), Clarity Imaging and a 67% owned subsidiary, Amcare. None of the Company’s subsidiaries have current operations.

The accompanying consolidated 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 a working capital deficit, has no cash on hand, is in default of its outstanding debt agreements and has not generated revenues since it re-entered the development stage on January 1, 2009. During the year ended December 31, 2011, the Company incurred a net loss of $785,784 and at December 31, 2011 has an accumulated deficit of $60,217,170.  

Bankruptcy Filing

On July 6, 2011, the Company and all of our U.S. subsidiaries (the “Debtors”) filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of California, which are being jointly administered under Case # 11-11264-PB11.  Management's decision to initiate the bankruptcy filing was in response to, among other things, the Company’s deteriorating liquidity and management's conclusion that the challenges of successfully implementing additional financing initiatives and of obtaining necessary cost concessions from the Company’s debtors, was negatively impacting our Company’s ability to implement any turnaround strategy. 
 
We are currently operating as debtors-in-possession pursuant to the bankruptcy filing and continuation of the Company as a going-concern is contingent upon, among other things, the Debtors’ ability (i) to develop a plan of reorganization and obtain confirmation of that plan under the bankruptcy code; (ii) to reduce debt and other liabilities through the bankruptcy process; (iii) to return to profitability; (iv) to generate sufficient cash flow from operations; and (v) to obtain financing sources to meet our future obligations.  The uncertainty regarding these matters raises substantial doubt about our ability to continue as a going concern.
 
The Company was required to apply the FASB’s provisions of reorganizations effective on July 6, 2011, which is applicable to companies in Chapter 11 and generally does not change the manner in which financial statements are prepared. However, it does require that the financial statements for periods subsequent to the filing of the bankruptcy filing petition distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Revenues, expenses, realized gains and losses, and provisions for losses that can be directly associated with the reorganization and restructuring of the business must be reported separately as reorganization items in the consolidated statements of operations beginning in the year ended December 31, 2011. The balance sheet must distinguish pre-bankruptcy filing liabilities subject to compromise from both those pre-bankruptcy filing liabilities that are not subject to compromise and from post-bankruptcy filing liabilities.  Currently the notes in default totaling $5,380,265 have priority over the unsecured creditors of our Company. Based upon the uncertainty surrounding the ultimate treatment of the notes in our reorganization plan, including the potential that these notes may be impaired, these notes are classified as “Liabilities subject to compromise” in our balance sheets.  The Company continues to evaluate creditors' claims for other claims that may also have priority over unsecured creditors.  Liabilities that may be affected by a plan of reorganization must be reported at the amounts expected to be approved by the bankruptcy court, even if they may be settled for lesser amounts as a result of the plan of reorganization. In addition, cash used in reorganization items must be disclosed separately in our consolidated statements of cash flows.
 
 
 
F-6

 

 
NOTE 2 – 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:

Principles of Consolidation

The consolidated financial statements include the accounts of Bridgetech Holdings International, Inc., Parentech, Inc., Retail Pilot, Inc. D/B/A Healthcare Pilot, International MedLink, Inc., Amcare and Clarity International, Inc. All significant intercompany transactions have been eliminated.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net sales and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates.

Management evaluates these estimates and assumptions on a regular basis.  Actual results could differ from those estimates.

Income Taxes

Deferred income taxes are provided 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 follows the 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 December 31, 2011, the Company did not record any liabilities for uncertain tax positions.
 
 
 
F-7

 

 
Earnings Per Share
 
Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. Diluted loss per share is the same as basic loss per share for all periods presented because the effects of the additional securities, a result of the net loss, would be anti-dilutive.  

Reclassifications

Certain prior period amounts have been reclassified to conform to current period presentations.

Recent Accounting Pronouncements

The Company’s management does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.
 
NOTE 3 – NOTES PAYABLE

Notes payable consist of the following as of December 31, 2010:

   
December 31, 2010
 
       
Unsecured convertible notes payable (23 promissory notes from 23 unrelated third parties) bearing interest at 8%; all are in default
  $ 5,380,265  
Unsecured notes payable to four related parties bearing no interest and due on demand
    561,511  
Total notes payable
    5,941,776  
Less current portion
    (5,941,776 )
Long-term portion
  $  

At any time prior to the payment in full of the entire balance of the convertible notes payable, the holders have the option of converting all or any portion of the unpaid balance of the convertible notes payable and any related accrued interest into shares of the Company’s common stock at conversion prices ranging from $0.25 to $1.50 per share, subject to adjustment upon certain events. The conversion price was based on the market price at the time of issuance of the convertible notes. If the holders of the convertible notes payable converted the entire principal and accrued interest balance of the convertible notes payable, they would receive approximately 8,880,000 shares of the Company’s common stock. The Company evaluated the terms of the convertible notes payable and concluded that none of the convertible notes payable had an embedded derivative; however, the Company concluded that certain convertible notes payable contained beneficial conversion features, since the convertible notes payable were convertible into shares of common stock at a discount to the market value of the common stock at the time of issuance. The discounts related to the beneficial conversion features were valued at approximately $2.0 million for 2006, $2.2 million for 2007, and $0 for 2008, 2009 and 2010 based on the intrinsic values of the discounts. The discounts were fully amortized at December 31, 2008 due to the short-term nature of the convertible notes payable (all notes had maturity dates prior to December 31, 2008). All convertible notes payable are in default and the Company has no ability to pay the outstanding balances of the convertible notes payable.
 
 
 
F-8

 

 
NOTE 4 – LIABILITIES SUBJECT TO COMPROMISE

As a result of the bankruptcy filing, the payment of pre-petition indebtedness is subject to compromise or other treatment under a plan of reorganization. Generally, actions to enforce or otherwise effect payment of pre-bankruptcy filing liabilities are stayed. Although payment of pre-petition claims generally is not permitted, the bankruptcy court granted the Debtors authority to pay certain pre-petition claims in designated categories and subject to certain terms and conditions. This relief generally was designed to preserve the value of the Company’s businesses and assets. Among other things, the bankruptcy court authorized us to pay certain pre-petition claims relating to wages and benefits and professional fees.

We have been paying and intend to continue to pay undisputed post-petition claims in the ordinary course of business. In addition, we may reject pre-petition executory contracts and unexpired leases with respect to our operations, with the approval of the bankruptcy court. Any damages resulting from rejection of executory contracts and unexpired leases are treated as general unsecured claims and will be classified as “Liabilities subject to compromise” in our consolidated balance sheets. We previously notified all known claimants subject to the bar date of their need to file a proof of claim with the bankruptcy court. A bar date is the date by which claims against the Company must be filed if the claimants disagree with the amounts included in our schedule of assets and liabilities filed with the bankruptcy court and wish to receive any distribution in the bankruptcy filing.  Thus far, claimants filed 5 claims against our Company, asserting approximately $546,297 worth of liabilities.  The Company and our retained professionals are continuing to review and analyze the proofs of claim submitted by claimants and will investigate any material differences between these claims and liability amounts estimated by the Company. If necessary, in the event of a claims dispute, the bankruptcy court will make a final determination whether such claims should be allowed and, if so, the appropriate amount of such allowed claims. The ultimate amount of such liabilities is not determinable at this time.

Pre-petition liabilities that are subject to compromise are required to be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts.  The amounts currently classified as “Liabilities subject to compromise” may be subject to future adjustments depending on bankruptcy court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, or other events.  We expect that certain amounts currently classified as “Liabilities subject to compromise” may in fact be paid in the ordinary course as they come due.  Any resulting changes in classification will be reflected in subsequent financial statements.


 
F-9

 

Liabilities subject to compromise consist of the following:

   
At
December 31, 2011
 
Accounts payable
 
$
1,200,314
 
Accounts payable – related party
   
831,039
 
Accrued salaries, wages, and benefits
   
120,000
 
Accrued interest
   
1,311,617
 
Other accruals
   
769,921
 
8% notes, in default
   
5,330,265
 
Related party promissory note
   
561,511
 
0% note, in default
   
50,000
 
Total liabilities subject to compromise
 
$
10,174,667
 

With the bankruptcy filing on July 6, 2011, the Company ceased accruing interest on its outstanding debt based upon its belief it will not be an allowed priority, secured or unsecured claim.

NOTE 5 – EQUITY

Share-Based Compensation

On January 9, 2011, the Company granted 18,378,141 common shares to the Company’s President in satisfaction of accrued but unpaid employment compensation, and 355,617 common shares to Small World Traders, LLC, (of which the President is a member but disclaims direct or indirect beneficial ownership or control) for expenses paid by Small World Traders, LLC, on behalf of the Company. The number of shares issued was computed at $0.0163/share by the Company based on the greater of the average weighted price for December 2010, $0.0163/share; the average price for December 2010, $0.006/share; and the average price over the period of compensation (January 2009 to December 2010), $0.0041/share. Using quoted market prices, on the date of grant, $0.0334/share, they are valued at $615,667 and $11,913 respectively. The shares last traded at $0.003 on July 28, 2011.
 
On January 9, 2011, the Company granted 3,675,628 common shares to an outside consultant for accounting and financial services rendered. The number of shares issued was computed at $0.0163/share by the Company based on the greater of the average weighted price for December 2010, $0.0163/share; the average price for December 2010, $0.006/share; and the average price over the period of compensation (January 2009 to December 2010), $0.0041/share. Using quoted market prices, on the date of grant, $0.0334/share, they are valued at $123,134. The shares last traded at $0.003 on July 28, 2011.
 
On January 9, 2011, the Company granted 3,675,628 common shares to a consultant for legal services rendered. The number of shares issued was computed at $0.0163/share by the Company based on the greater of the average weighted price for December 2010, $0.0163/share; the average price for December 2010, $0.006/share; and the average price over the period of compensation (January 2009 to December 2010), $0.0041/share. Using quoted market prices, on the date of grant, $0.0334/share, they are valued at $123,134. The shares last traded at $0.003 on July 28, 2011.
 
 
 
F-10

 

 
On January 9, 2011, the Company granted 355,617 common shares to a consultant for legal services rendered. The number of shares issued was computed at $0.0163/share by the Company based on the greater of the average weighted price for December 2010, $0.0163/share; the average price for December 2010, $0.006/share; and the average price over the period of compensation (January 2009 to December 2010), $0.0041/share. Using quoted market prices, on the date of grant, $0.0334/share, they are valued at $11,911. The shares last traded at $0.003 on July 28, 2011.

Warrants

The Company has the following warrants outstanding and exercisable as of December 31, 2011.
 
Date issued
 
Warrants
   
Exercise
   
   
Issued
   
Price
 
Expire
December 23, 2006
    240,000       1.50  
None

Warrants for 200,000 common shares issued April 27, 2007 with an exercise price of $1.00 expired, unexercised, on April 27, 2011. The outstanding warrants at December 31, 2011 have no intrinsic value and no expiration date.

Stock Option Plans

The Company has two stock option plans: the 2001 Stock Option Plan (the “2001 Plan”) and the 2005 Stock Option Plan (the “2005 Plan”). There are currently no options outstanding under the 2001 Plan or the 2005 Plan, and 10,000 and 5,000,000 options remain available for future issuance under the 2001 Plan and 2005 Plan, respectively. The Company does not intend to grant any more options under the 2001 Plan. The Company’s 2005 Plan provides for the grant of options to purchase up to 5,000,000 shares of the Company’s common stock at consideration to be determined from time-to-time by the Company’s Board of Directors.

NOTE 6 – INCOME TAXES

The difference between income tax expense computed by applying the federal statutory corporate tax rate and actual income tax expense is as follows:

   
December 31,
 
   
2011
   
2010
 
             
Statutory federal income tax rate
    (34.0 %)     (34.0 %)
State income taxes and other
    (8.9 %)     (8.9 %)
Valuation allowance
    42.9 %     42.9 %
Effective tax rate
    0.0 %     0.0 %


 
F-11

 

Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following:

   
December 31,
 
   
2011
   
2010
 
             
Net operating loss carryforward
    20,432,000       20,206,000  
Valuation allowance
    (20,432,000 )     (20,206,000 )
                 
Net deferred income tax asset
  $     $  

The Company has a net operating loss carryforward of approximately $58,000,000 available to offset future taxable income through 2030.  However, Section 382 of the Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset taxable income when a corporation has undergone significant changes in its stock ownership. There can be no assurance that the Company will be able to utilize any net operating loss carryforwards in the future.

Significant management judgment is required in determining any valuation allowance recorded against deferred tax assets. In evaluating the ability to recover deferred tax assets, the Company considered available positive and negative evidence, giving greater weight to its recent cumulative losses and its ability to carry-back losses against prior taxable income and lesser weight to its projected financial results due to the challenges of forecasting future periods. The Company also considered, commensurate with its objective verifiability, the forecast of future taxable income including the reversal of temporary differences. At that time the Company continued to have sufficient positive evidence, including recent cumulative profits, a reduction in operating expenses, the ability to carry-back losses against prior taxable income and an expectation of improving operating results, showing a valuation allowance was not required. At the end of the year ended December 31, 2011, changes in previously anticipated expectations and continued operating losses necessitated a valuation allowance against the tax benefits recognized since they are not “more-likely-than-not”, realizable. Under current tax laws, this valuation allowance will not limit the Company’s ability to utilize U.S. federal and state deferred tax assets provided it can generate sufficient future taxable income in the U.S.
 
The Company anticipates it will continue to record a valuation allowance against the losses of certain jurisdictions, primarily federal and state, until such time as we are able to determine it is “more-likely-than-not” the deferred tax asset will be realized. Such position is dependent on whether there will be sufficient future taxable income to realize such deferred tax assets The Company’s effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to federal, state or foreign tax laws, future expansion into areas with varying country, state, and local income tax rates, deductibility of certain costs and expenses by jurisdiction.

NOTE 7 – SUBSEQUENT EVENTS

The Company evaluated subsequent events through the date these financial statements were issued. There were no other material subsequent events that required recognition or additional disclosure in these financial statements.

In ______, 2012, the Company has agreed to issue common stock to Colonial Stock Transfer as payment for services rendered in the past.  The number of shares has not been agreed upon.

 
F-12

 

ITEM 9.                      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
 
 
(a) Previous independent registered public accounting firm.

Effective March 10, 2011, the Registrant dismissed Jewett Schwartz Wolfe & Associates, which firm audited Registrant’s financial statements from inception May 3, 2006 to our fiscal year ended December 31, 2009. The change in the Registrant’s auditors was recommended and approved by the Board of Directors of the Registrant.

Jewett Schwartz Wolfe & Associates issued its auditors’ report on the financial statements for the years ended December 31, 2009 and 2008 and for the period from May 3, 2006 (date of inception) to December 31, 2009, which included an explanatory paragraph as to the Registrant’s ability to continue as a going concern.

Other than the going concern disclosure described above, the auditors’ report of Jewett Schwartz Wolfe & Associates on the financial statements of the Registrant for the years ended December 31, 2009 and 2008 and for the period from May 3, 2006 (date of inception) to December 31, 2009, contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle.

During the years ended December 31, 2009 and 2008 and for the period from May 3, 2006 (date of inception) to December 31, 2009, and through the date of the termination of Jewett Schwartz Wolfe & Associates  there have been no disagreements with Jewett Schwartz Wolfe & Associates(as defined in Item 304(a)(1)(iv) of Regulation S-K) on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Jewett Schwartz Wolfe & Associates, would have caused them to make reference thereto in their report on financial statements for such years.

During the years ended December 31, 2009 and 2008 and for the period from May 3, 2006 (date of inception) to December 31, 2009, and through the date of the dismissal of Jewett Schwartz Wolfe & Associates, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

The Registrant provided Jewett Schwartz Wolfe & Associates with a copy of this Current Report on Form 8-K, and requested that Jewett Schwartz Wolfe & Associates furnish the Registrant with a letter addressed to the U.S. Securities and Exchange Commission stating whether Jewett Schwartz Wolfe & Associates agrees with the disclosure contained in this report, or, if not, stating the respects in which it does not agree.  The Registrant has received the requested letter from Jewett Schwartz Wolfe & Associates, and a copy of Jewett Schwartz Wolfe & Associates ’s letter is filed as Exhibit 16.1 to the Current Report on Form 8-K.

(b) New independent registered public accounting firm.

On March 10, 2011, and effective the same date, on the recommendation of the Registrant’s Board of Directors, the Registrant engaged GBH CPAs, PC as its independent registered public accounting firm to audit the Registrant’s financial statements for the fiscal year ending December 31, 2010 and to perform procedures related to the financial statements included in the Registrant’s annual and quarterly reports on Forms 10-K and 10-Q, beginning with the year ended December 31, 2010.


 
13

 
 
 
During the two fiscal years ended December 31, 2009 and 2008, and through the date of the engagement of GBH CPAs, PC, neither the Registrant nor anyone on its behalf has consulted with GBH CPAs, PC, regarding either:

(a)
The application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Registrant’s financial statements, and neither was a written report provided to the Registrant nor was oral advice provided that GBH CPAs, PC, concluded was an important factor considered by the Registrant in reaching a decision as to an accounting, auditing, or financial reporting issue; or
 
(b)
Any matter that was either the subject of a disagreement or a reportable event, as each term is defined in Items 304(a)(1)(iv) or (v) of Regulation S-K, respectively.

ITEM 9A. CONTROLS AND PROCEDURES

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 not 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, that 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 are 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.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our board of directors, management and other personnel, 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. Internal control over financial reporting includes those policies and procedures that:
 
 
 
14

 

 
 
·
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets;

 
·
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the board of directors; and

 
·
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the financial statements.

Because of their inherent limitations, any system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, including the chief executive officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2011, based on the framework defined in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Management's assessment of the control environment included all significant locations and subsidiaries.

Material Weaknesses

Based on our evaluation under COSO, management concluded that our internal control over financial reporting was not effective as of December 31, 2011, due to control deficiencies in three areas that we believe should be considered material weaknesses. A material weakness is defined within the Public Company Accounting Oversight Board's Auditing Standard No. 5 as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.
 
 
1)
We did not sufficiently segregate duties over incompatible functions at our corporate headquarters.

Our inability to sufficiently segregate duties is due to a small number of personnel at the corporate headquarters, which management expects to remedy when the acquisition of an operating company is completed.

 
2)
In conjunction with the lack of segregation of duties, we did not institute specific anti-fraud controls.

While management found no evidence of fraudulent activity, certain individuals have access to both accounting records and corporate assets, principally the operating bank account. Management believes this exposure to fraudulent activity is not material either to the operations of the company or to the financial reporting; however, management has instituted Key Controls specifically designed to prevent and detect-on a timely basis-any potential loss due to fraudulent activity.

Limitations on Effectiveness of Controls and Procedures

Our management, including our chief executive officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
 
 
 
15

 

 
This Annual Report on Form 10-K does not include an attestation report of the Company's independent registered public accounting firm regarding Internal Control over Financial Reporting.  The Company's Internal Control over Financial Reporting was not subject to attestation by the Company's independent registered public accounting firm pursuant to the provisions of the Dodd-Frank Act that permit the Company to provide only management's report on Internal Control over Financial Reporting in this annual report.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect its internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.


 
16

 

PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Director and Executive Officer

Set forth below is information regarding the Company’s current directors and executive officers. There are no family relationships between any of our directors or executive officers. The directors are elected annually by stockholders. Set forth below are the directors and officers of the Company as of March 2011.

         
Scott Landow
    57  
President and Chief Executive Officer, Director, Principle Accounting Officer

The chief executive officer and sole director and officer of the Company will hold office until additional members or officers are duly elected and qualified.  The background and principal occupations of the sole officer and director of the Company is as follows:

Scott D. Landow is our sole director, CEO and CFO since May, 2008.  In 2004, Mr. Landow co-founded the Company leveraging significant relationships in China & the U.S. to capitalize on proprietary opportunities in high growth segments of the healthcare industry.  He served as CEO and President until the  completion of Q2 2005.  In July 2005 Mr. Landow founded Bond Laboratories, Inc.,  a publicly traded company that manufacturers innovative nutritional supplements and beverages where he served as CEO until August of 2009 and remains Chairman of the board of directors .  From August 2000 through February 2005, Mr. Landow was President of Parentech Inc., an emerging medical device company for newborns and infants that he merged to become publicly traded.

Compensation of Directors

Our bylaws provide that, unless otherwise restricted by our certificate of incorporation, our Board of Directors has the authority to fix the compensation of directors. The directors may be paid their expenses, if any, related to attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as our director. Our bylaws further provide that no such payment will preclude any director from serving our company in any other capacity and receiving compensation therefore. Further, members of special or standing committees may be given compensation for attending committee meetings.

Conflicts of Interest

Members of our management are associated with other firms involved in a range of business activities.  Consequently, there are potential inherent conflicts of interest in their acting as officers and directors of our company.  Although the officers and directors are engaged in other business activities, we anticipate they will devote an important amount of time to our affairs.

Our officers and directors are now and may in the future become shareholders, officers or directors of other companies, which may be formed for the purpose of engaging in business activities similar to ours.  Accordingly, additional direct conflicts of interest may arise in the future with respect to such individuals acting on behalf of us or other entities.  Moreover, additional conflicts of interest may arise with respect to opportunities which come to the attention of such individuals in the performance of their duties or otherwise.  Currently, we do not have a right of first refusal pertaining to opportunities that come to their attention and may relate to our business operations.
 
 
 
17

 

 
Our officers and directors are, so long as they are our officers or directors, subject to the restriction that all opportunities contemplated by our plan of operation which come to their attention, either in the performance of their duties or in any other manner, will be considered opportunities of, and be made available to us and the companies that they are affiliated with on an equal basis.  A breach of this requirement will be a breach of the fiduciary duties of the officer or director.  If we or the companies with which the officers and directors are affiliated both desire to take advantage of an opportunity, then said officers and directors would abstain from negotiating and voting upon the opportunity.  However, all directors may still individually take advantage of opportunities if we should decline to do so.  Except as set forth above, we have not adopted any other conflict of interest policy with respect to such transactions.

Audit Committee Financial Expert

The Company does not have an audit committee or a compensation committee of its board of directors. In addition, the Company’s board of directors has determined that the Company does not have an audit committee financial expert serving on the board. When the Company develops its operations, it will create an audit and a compensation committee and will seek an audit committee financial expert for its board and audit committee.

Compliance with Section 16(A) Of The Exchange Act 9.A. Directors And Executive Officers, Promoters, And Control Persons:

The Company is aware that all filings of Form 4 and 5 required of Section 16(a) of the Exchange Act of Directors, Officers or holders of 10% of the Company's shares have not been timely and the Company has instituted procedures to ensure compliance in the future.
 
Code of Ethics
 
We have adopted a code of ethics that applies to all of our executive officers, directors and employees. Code of ethics codifies the business and ethical principles that govern all aspects of our business. This document will be made available in print, free of charge, to any shareholder requesting a copy in writing from the Company and it attached to our annual report for the fiscal year ended December 31, 2008.

Indemnification of Officers and Directors

As permitted by Delaware law and our Certificate of Incorporation provide that we will indemnify its directors and officers against expenses and liabilities they incur to defend, settle, or satisfy any civil or criminal action brought against them on account of their being or having been Company directors or officers unless, in any such action, they are adjudged to have acted with gross negligence or willful misconduct.

Pursuant to the foregoing provisions, we have been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in that Act and is, therefore, unenforceable.
 
 
 
18

 

 
ITEM 11.  EXECUTIVE COMPENSATION

Summary Compensation Table
 
The following table sets forth for the year ended December 31, 2011 and 2010 compensation awarded to, paid to, or earned by, Mr. Scott Landow, our sole Director and Chief Executive Officer, and our other most highly compensated executive officers whose total compensation during the last fiscal year exceeded $100,000, if any.   Scott Landow defers his entire salary and expense reimbursement

2011 and 2010 SUMMARY COMPENSATION TABLE
                                                   
Name and Principal Position
 
Year
   
Salary ($)
 
Bonus ($)
 
Stock
Awards
($)
   
Option
 Awards
($)
   
Non-Equity
Incentive Plan
Compensation-
ion
($)
 
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
   
All Other
Compensation-
ion
($)
   
Total
($)
 
Scott Landow Chairman
    2010 2011       120,000 120,000         0 0       0  0       0  0       0  0       0       120,000 120,000  


2011 and 2010 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

 
Option Awards
 
 
 
Stock Awards
 
 
   
 
Number of
Securities
Underlying
Unexercised
Options
(#)
 
 
 
Number of
Securities
Underlying
Unexercised
Options
(#)
 
 
 
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
 
 
 
Option
Exercise
Price
($)
 
 
 
Option
Expiration
Date
 
 
 
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
 
 
 
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
 
 
Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
 
 
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)
 
 
Name
 
Exercisable
 
 
 
Unexercisable
 
 
Scott Landow
 
0 0 0 0 0 0 0 0  
 

 
2009 and 2008 OPTION EXERCISES AND STOCK VESTED TABLE

     
Option Awards
   
Stock Awards
 
Name
Year
 
Number of Shares Acquired on Exercise (#)
   
Value Realized on Exercise ($)
   
Number of Shares Acquired on Vesting (#)
   
Value Realized on Vesting ($)
 
Scott Landow
2010
    0       0       0       0  
 
2011
    0       0       0       0  

 
 
 
19

 
 
 
2011 and 2010 PENSION BENEFITS TABLE
 
Name
Plan
Name
 
Number of
Years
Credited Service
(#)
   
Present
Value of Accumulated
Benefit
($)
   
Payments During Last
Fiscal Year
($)
 
Scott Landow
      0       0       0  
 

2011 and 2010 NONQUALIFIED DEFERRED COMPENSATION TABLE
 
 
 
 
   
 
   
 
   
 
   
 
 
Name
 
Executive Contributions
in Last Fiscal Year
($)
   
Registrant
Contributions in Last
Fiscal Year
($)
   
Aggregate Earnings
in Last Fiscal Year
($)
   
Aggregate
Withdrawals /
Distributions
($)
   
Aggregate Balance at
Last Fiscal Year-End
($)
 
Scott Landow
 
    0       0       0       0       0  


2011 and 2010 DIRECTOR COMPENSATION TABLE
 
Name
 
Fees Earned or Paid in Cash
($)
   
Stock Awards
($)
   
Option Awards
($)
   
Non-Equity
 Incentive Plan
 Compensation
($)
   
Change
in Pension
 Value and
 Nonqualified
 Deferred
 Compensation
 Earnings
($)
   
All Other
 Compensation
($)
   
Total
($)
 
Scott Landow
    0       0       0       0       0       0       0          
                                                         
 
 
2011 and 2010 ALL OTHER COMPENSATION TABLE
 
                                   
Name
  
Year
  
Perquisites
 and Other
 Personal
 Benefits
 ($)
  
Tax
 Reimbursements
 ($)
  
Insurance
 Premiums
 ($)
  
Company
 Contributions
 to Retirement and
 401(k) Plans
($)
  
Severance
 Payments /
 Accruals
 ($)
  
Change
 in Control
 Payments /
 Accruals
 ($)
  
Total ($)
 
Scott Landow
  
2010
2011
 
0
0
 
0
0
 
0
0
 
0
0
 
0
0
 
0
0
 
0
0
 
                 


 
20

 

2011 and 2010 PERQUISITES TABLE

 
Name
 
Year
 
Personal Use of
 Company
Car/Parking
 
Financial Planning/
Legal Fees
 
Club Dues
 
Executive Relocation
 
Total Perquisites
and
Other Personal
Benefits
Scott Landow
 
 
2010
2011
 
0
0
 
0
  0
 
0
0
 
0
0
 
0
0
 


2011 and 2010 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE
 
                   
Name
Benefit
Before 
Change in
 Control
Termination
 w/o Cause or for
 Good Reason
After Change in
 Control
Termination w/o Cause or
for Good 
Reason
Voluntary
 Termination
Death
Disability
 
Change in
 Control
 
Scott Landow
 
Basic salary
              -  
 
Compensation of Directors

We currently have one director. Our current compensation policy for directors is to compensate him through options to purchase common stock or issuance of common stock as consideration for his joining our board and/or providing continued services as a director. We do not currently provide our directors with cash compensation, although we do reimburse their expenses, with exception for a chairman of the board. No additional amounts are payable to the Company’s directors for committee participation or special assignments. There are no other arrangements pursuant to which any directors was compensated during the Company’s last completed fiscal year for any service provided.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table lists stock ownership of our Common Stock as of December 31, 2011, based on 96,937,044 shares of common stock issued and outstanding.  The information includes beneficial ownership by (i) holders of more than 5% of our Common Stock, (ii) each of two directors and executive officers and (iii) all of our directors and executive officers as a group. Except as noted below, to our knowledge, each person named in the table has sole voting and investment power with respect to all shares of our Common Stock beneficially owned by them.

Name and Address of Owner
 
Title of Class
 
Number
of Shares
Owned (1)
 
Percentage
of Class
 
               
WWFD, LLC
1350 E Flamingo Rd. #711
Las Vegas, NV 89119
 
Common Stock
 
21,250,000 (1)
 
22%
 
Small World Traders, LLC
1350 E Flamingo Rd. #711
Las Vegas, NV 89119
Scott D Landow
777 S Hwy 101 Suite 215
Solana Beach, CA 92075
All Officers and Directors
As a Group (1 persons)
 
Common Stock
Common Stock
 
21,250,000 (1)
18,378,141(2)
18,378,141 (2)
 
22%
19%
19%
 
               
(1)
(2)
Mr. Landow controls.
Includes 200,000 shares of  SERIES A 8% CUMULATIVE CONVERTIBLE PREFERRED STOCK   held by Landow Revocable Trust which Mr. Landow controls.  Each share is convertible into one share of Common Stock.

 
 
21

 
 
 
Changes in Control

We are not aware of any arrangements that may result in a change in control of the Company.

DESCRIPTION OF SECURITIES

General

Our authorized capital stock consists of 100,000,000 shares of common stock, par value $ .001, and 10,000,000 shares of preferred A stock, par value $ .002.

Common Stock

The shares of our common stock presently outstanding, and any shares of our common stock issues upon exercise of stock options and/or warrants, will be fully paid and non-assessable. Each holder of common stock is entitled to one vote for each share owned on all matters voted upon by shareholders, and a majority vote is required for all actions to be taken by shareholders. In the event we liquidate, dissolve or wind-up our operations, the holders of the common stock are entitled to share equally and ratably in our assets, if any, remaining after the payment of all our debts and liabilities and the liquidation preference of any shares of preferred stock that may then be outstanding. The common stock has no preemptive rights, no cumulative voting rights, and no redemption, sinking fund, or conversion provisions. Since the holders of common stock do not have cumulative voting rights, holders of more than 50% of the outstanding shares can elect all of our Directors, and the holders of the remaining shares by themselves cannot elect any Directors. Holders of common stock are entitled to receive dividends, if and when declared by the Board of Directors, out of funds legally available for such purpose, subject to the dividend and liquidation rights of any preferred stock that may then be outstanding.

Voting Rights 

Each holder of Common Stock is entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders.

SERIES A 8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, $0.002
PAR VALUE
 
 
 Landow Revocable Trust
 
100,000 (1)
 
100%

 
(1)
Each share is convertible into one share of Common Stock and for voting purposes represents 500 shares of Common Stock.

Dividends 

Subject to preferences that may be applicable to any then-outstanding shares of Preferred Stock, if any, and any other restrictions, holders of Common Stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the Company’s board of directors out of legally available funds. The Company and its predecessors have not declared any dividends in the past. Further, the Company does not presently contemplate that there will be any future payment of any dividends on Common Stock.

 
 
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Amendment of our Bylaws

Our bylaws may be adopted, amended or repealed by the affirmative vote of a majority of our outstanding shares. Subject to applicable law, our bylaws also may be adopted, amended or repealed by our Board of Directors.

Transfer Agent

On August 31, 2006, the Company engaged Colonial Transfer Agent to serve in the capacity of transfer agent. Their mailing address and telephone number Colonial Stock Transfer, 66 Exchange Place, Salt Lake City, UT 84111 - Phone is (801) 355-5740.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDPENDENCE.

The Company is managed by its key shareholder

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES
 
Audit Fees.  The aggregate fees billed by GBH CPAs, PC for professional services rendered for the audit of the Company’s annual financial statements and reviews of the financial statements included in the Company’s Forms 10-Q for fiscal years ended December 31, 2011 and 2010 approximated $10,800 and $9,300, respectively.  The aggregate fees billed by Jewett, Schwartz, Wolfe & Associates for the reviews of the financial statements included in the Company’s Forms 10-Q for fiscal year 2010 approximated $6,000 annually.

Audit-Related Fees.  No audit-related fees were billed to the Company by GBH CPAs, PC and  Jewett Schwartz Wolfe & Associates for the years ended December 31, 2011 and 2010.

Tax Fees.  No tax fees were billed to the Company by GBH CPAs, PC and  Jewett Schwartz Wolfe & Associates for the years ended December 31, 2011 and 2010.

All Other Fees.  No other fees were billed to the Company by GBH CPAs, PC and  Jewett Schwartz Wolfe & Associates for the years ended December 31, 2011 and 2010.

The Board has received and reviewed the written disclosures and the independence letter from its the independent registered public accounting firm as required by standards and regulations, and has discussed with its auditors its independence from the Company. The Board has considered whether the provision of services other than audit services is compatible with maintaining auditor independence. Based on the review and discussions referred to above, the Board approved all services provided by its independent registered public accounting firm.
 
PART IV

ITEM 15.  EXHIBITS AND REPORTS.
Exhibits
     
3.1
 
Articles of Incorporation (1)
3.2
 
Amendments to Articles of Incorporation (1)
3.1
 
Bylaws of the Corporation (1)
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31.1
 
Subsidiaries (2)
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. (2)
31.2
 
Certification of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. (2)
32.1
 
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.  (2)
32.2
 
Certification of Chief Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.  (2)
__________________________________________________

(1) Incorporated by reference to exhibit 3(i) to the Company's Form 10-SB/12g filed on February 13, 2008.
(2) Filed herein


 
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SIGNATURES

In accordance with 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, there unto duly authorized.

Registrant
Date: April 16, 2012
 
 
Bridgetech Holdings International, Inc.
 By: /s/ Scott Landow
   
Scott Landow
   
Chief Executive Officer (Principle Executive Officer), President, Sole Board Member (Principle Accounting Officer)

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.


Date: April 16, 2012
 
 
By: /s/ Scott Landow
   
Scott Landow
   
Chairman


 
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