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U.S. Securities and Exchange Commission
Washington, D.C. 20549
____________________
FORM 10-Q
____________________
 
(Mark One)
  Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2012

  Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act
For the transition period from N/A to N/A
____________________

Commission File No. 000-51697
____________________
Bridgetech Holdings International, Inc.
(Name of small business issuer as specified in its charter)
              
Delaware
State of Incorporation
21-1992090
IRS Employer Identification No.

777 South Highway 101, Suite 215, Solana Beach, CA  92075
(Address of principal executive offices)

 (858) 847-9090
(Issuer’s telephone number)
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value per share
(Title of Class)
 
 


Indicate by check mark whether the Registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days:   Yes  x    No  ¨
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [_] No [X]
 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non–accelerated filer. See definition of “accelerated filer large accelerated filer” and “Smaller reporting company” in Rule 12b–2 of the Exchange Act. (Check one):

Large accelerated filer  ¨                    Accelerated filer  ¨                    Non–Accelerated filer  ¨  Smaller reporting company x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).  Yes  x    No  ¨
 
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
 
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes [_] No [X ]
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

     
Class
 
Outstanding at  August 14, 2012
Common stock, $0.001 par value
 
97,937,044

 
 
 

 

 
BRIDGETECH HOLDINGS INTERNATIONAL, INC.
INDEX TO FORM 10-Q FILING
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012

TABLE OF CONTENTS
 
      PAGE
Numbers
PART I - FINANCIAL INFORMATION
 
 
     
Item 1.
 
Consolidated Financial Statements (unaudited)
 
 
 
 
Consolidated Balance Sheets
 
3
 
 
Consolidated Statements of Operations
 
4
 
 
Consolidated Statements of Cash Flows
 
5
 
 
Notes to Consolidated Financial Statements
 
6
Item 2.
 
Management Discussion and Analysis of Financial Condition and Results of Operations
 
11
Item 3.
 
Quantitative and Qualitative Disclosures About Market Risk
 
15
Item 4.
 
Controls and Procedures
 
15
         
   
PART II - OTHER INFORMATION
 
 
     
Item 1.
 
Legal Proceedings
 
16
Item 1A
 
Risk Factors
 
16
Item 2.
 
Unregistered Sales of Equity Securities and Use of Proceeds
 
17
Item 3.
 
Defaults Upon Senior Securities
 
17
Item 4.
 
Mine Safety Disclosures
 
17
Item 5.
 
Other information
 
17
Item 6.
 
Exhibits
 
17
         
         
CERTIFICATIONS  
   
  Exhibit 31 – Management certification  
  Exhibit 32 – Sarbanes-Oxley Act  
 

 
2

 

PART I – FINANCIAL INFORMATION

Item 1.
Interim Consolidated Financial Statements and Notes to Interim Consolidated Financial Statements

General

The accompanying interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q.  Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles.  Except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2011.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.   Operating results for the three months ended June 30, 2012 are not necessarily indicative of the results that can be expected for the year ending December 31, 2012.

 
BRIDGETECH HOLDINGS INTERNATIONAL, INC.
 
(Development Stage Company)
 
CONSOLIDATED BALANCE SHEETS
 
(Unaudited)
 
             
   
June 30,
   
December 31,
 
   
2012
   
2011
 
             
             
TOTAL ASSETS
  $ -     $ -  
  LIABILITIES AND STOCKHOLDERS' DEFICIT                
CURRENT LIABILITIES:
               
   Accounts payable
  $ 1,254,944     $ -  
   Accounts payable - related party
    849,216       -  
   Accrued liabilities
    949,921       -  
   Accrued interest
    1,740,640       -  
   Notes payable - related parties
    561,511       -  
   Notes payable
    5,380,265       -  
   Liabilities subject to compromise
    -       10,174,667  
      Total liabilities
    10,736,497       10,174,667  
                 
COMMITMENTS AND CONTINGENCIES
    -       -  
                 
STOCKHOLDERS' DEFICIT:
               
Series A 8% cumulative convertible preferred stock, $.002 par value
               
  10,000,000 shares authorized, 100,000 issued and outstanding
    200       200  
Common stock, $.001 par value, 100,000,000 shares authorized;
               
  97,937,044 and 96,937,044 shares issued and outstanding, respectively
    97,937       96,937  
    Additional paid-in capital
    49,950,366       49,945,366  
Accumulated deficit - re-entered development stage on January 1, 2009
    (2,455,294 )     (1,887,465 )
    Accumulated deficit
    (58,329,705 )     (58,329,705 )
      Total stockholders' deficit
    (10,736,497 )     (10,174,667 )
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
  $ -     $ -  
                 
The accompanying notes are an integral part of these consolidated financial statements.

 
3

 


BRIDGETECH HOLDINGS INTERNATIONAL, INC.
 
(Development Stage Company)
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011 AND FOR THE PERIOD
 
FROM JANUARY 1, 2009 (RE-ENTERED THE DEVELOPMENT STAGE) THROUGH JUNE 30, 2012
 
(Unaudited)
 
                           
For the Period
 
   
For the Three Months Ended
   
For the Six Months Ended
   
from January 1, 2009
 
   
June 30,
   
June 30,
   
through June 30,
 
   
2012
   
2011
   
2012
   
2011
   
2012
 
                               
OPERATING EXPENSES:
                             
   General and administrative expenses
  $ 71,377     $ 95,940     $ 136,377     $ 385,922     $ 1,008,923  
         Total operating expenses
    71,377       95,940       136,377       385,922       1,008,923  
                                         
OPERATING LOSS
    (71,377 )     (95,940 )     (136,377 )     (385,922 )     (1,008,923 )
                                         
OTHER INCOME (EXPENSE):
                                       
    Interest expense
    (429,023 )     (106,619 )     (429,023 )     (213,238 )     (1,443,942 )
    Loss on settlement of payables
    (2,429 )     -       (2,429 )     -       (2,429 )
TOTAL OTHER EXPENSES
    (431,452 )     (106,619 )     (431,452 )     (213,238 )     (1,446,371 )
                                         
NET LOSS
  $ (502,829 )   $ (202,559 )   $ (567,829 )   $ (599,160 )   $ (2,455,294 )
                                         
NET LOSS PER COMMON SHARE:
                                       
     Basic and Diluted
  $ (0.01 )   $ (0.00 )   $ (0.01 )   $ (0.01 )        
                                         
WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING:
                                 
     Basic and Diluted
    97,420,560       96,937,044       97,178,802       95,639,999          
                                         
The accompanying notes are an integral part of these consolidated financial statements.

 
4

 


BRIDGETECH HOLDINGS INTERNATIONAL, INC.
 
(Development Stage Company)
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011 FOR THE PERIOD
 
FROM JANUARY 1, 2009 (RE-ENTERED THE DEVELOPMENT STAGE) THROUGH JUNE 30, 2012
 
(Unaudited)
 
               
For the Period
 
   
For the Six Months Ended
   
from January 1, 2009
 
   
June 30,
   
through June 30,
 
   
2012
   
2011
   
2012
 
CASH FLOWS FROM OPERATING ACTIVITIES:
             
  Net loss
  $ (567,829 )   $ (599,160 )   $ (2,455,294 )
  Adjustments to reconcile net loss to net cash
                       
     from operating activities:
                       
  Common stock issued for services
    -       258,182       298,182  
  Loss on settlement of payables
    2,429       -       2,429  
  Changes in operating assets and liabilities:
                       
      Accounts payable and accrued liabilities
    118,200       6,425       491,250  
      Accounts payable - related party
    18,177       121,315       158,177  
      Accrued interest
    429,023       213,238       1,443,941  
          Net cash used in operating activities
    -       -       (61,315 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
  Advances from related party
    -       -       61,315  
          Net cash provided by financing activities
    -       -       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:
                 
   Common stock issued for payment of accrued liabilities
  $ 6,000     $ 615,667     $ 621,667  
                         
                         
The accompanying notes are an integral part of these consolidated financial statements.

 
5

 

BRIDGETECH HOLDINGS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012
(Unaudited)

NOTE 1 – BUSINESS AND NATURE OF OPERATIONS

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. 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 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 six months ended June 30, 2012, the Company incurred a net loss of $567,829 and at June 30, 2012 has an accumulated deficit since re-entering the development stage of $2,455,294.  

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 creditors, was negatively impacting our Company’s ability to implement any turnaround strategy.  On June 5, 2012, the Court dismissed the bankruptcy proceeding.

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.  None of the Company’s subsidiaries have current operations. All significant intercompany transactions have been eliminated.

 
 
6

 
 
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 June 30, 2012 the Company did not record any liabilities for uncertain tax positions.

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.  
 
Subsequent Events

The Company evaluated subsequent events through the date these financial statements were issued for disclosure consideration.
 
 
7

 

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 June 30, 2012:

   
June 30, 2012
Unsecured notes payable (23 promissory notes from 23 unrelated third parties bearing interest at 8%; all are in default.
  $ $5,330,265  
Unsecured notes payable to four related parties bearing no interest and due on demand.
  $ 561,511  
Unsecured notes payable related party at 0% interest rate and in default
  $ 50,000  
Total of Notes Payable
  $ 5,941,776  

All notes are in default and there is currently no plan for repayment of these obligations.

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.

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.  On June 5, 2012, the Court dismissed the Bankruptcy proceeding and the Company accrued all interest expense through June 30, 2012.

NOTE 4 – LIABILITIES SUBJECT TO COMPROMISE

In a 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.

 
 
8

 
 
 
Prior to the dismissal of the bankruptcy proceeding, we were paying undisputed post-petition claims in the ordinary course of business. In addition, in a bankruptcy proceeding, 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 were previously 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.  The ultimate amount of such liabilities is not determinable at this time.

Pre-petition liabilities that were subject to compromise were reported at the amounts expected to be allowed, even if they may be settled for lesser amounts.  The amounts classified at December 31, 2011 as “Liabilities subject to compromise” were subject to adjustments depending on bankruptcy court actions, 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.  As a result of the Court dismissing the bankruptcy proceeding on June 5, 2012, these liabilities are now reported based on the nature of the liability.

Liabilities subject to compromise consisted 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
 

NOTE 5 – EQUITY

Share-Based Compensation

2012

On May 18, 2012, the Company issued 1,000,000 shares of common stock to Colonial Stock Transfer as payment for services rendered in the past.  The stock was trading at $0.006 on May 18, 2012 and the Company valued the stock at $6,000.  A loss of $2,429 on settlement of the payable was recorded by the Company.
 
 
 
9

 

2011
 
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 $.0163/share by the Company based on the greater of the Average Weighted Price for December 2010, $.0163/share; the Average Price for December 2010, $.006/share; and the Average Price over the period of compensation (January 2009 to December 2010), $.0041/share. Using quoted market prices, on the date of grant, $.0334/share, they are valued at $615,667 and $11,913 respectively. The shares last traded at $.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 $.0163/share by the Company based on the greater of the Average Weighted Price for December 2010, $.0163/share; the Average Price for December 2010, $.006/share; and the Average Price over the period of compensation (January 2009 to December 2010), $.0041/share. Using quoted market prices, on the date of grant, $.0334/share, they are valued at $123,134. The shares last traded at $.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 $.0163/share by the Company based on the greater of the Average Weighted Price for December 2010, $.0163/share; the Average Price for December 2010, $.006/share; and the Average Price over the period of compensation (January 2009 to December 2010), $.0041/share. Using quoted market prices, on the date of grant, $.0334/share, they are valued at $123,134. The shares last traded at $.003 on July 28, 2011.

Warrants

The Company has the following warrants outstanding and exercisable as of June 30, 2012:
   
Warrants
   
Exercise
 
Expiration
Date issued
 
Issued
   
Price
 
Date
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 June 30, 2012 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.

*  *  *  *  *  *


 
10

 

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This discussion may contain forward-looking statements about the future performance of our Company, and is based on our assumptions and beliefs in light of information currently available.  We assume no obligation to update this information.  These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements, including, but not limited to: the ability of the Debtors to continue as going concerns; the ability of the Debtors to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 cases; the ability of the Debtors to prosecute, develop and consummate one or more plans of reorganization with respect to the Chapter 11 cases; the effects of the Bankruptcy Filing on the Debtors and the interests of various creditors, equity holders and other constituents; Bankruptcy Court rulings in the Chapter 11 cases and the outcome of the cases in general; the length of time the Debtors will operate under the Chapter 11 cases; risks associated with third-party motions in the chapter 11 cases, which may interfere with the ability of the Debtors to develop and consummate one or more plans of reorganization once such plans are developed; the potential adverse effects of the Chapter 11 proceedings on the Debtors’ liquidity or results of operations; the ability to execute Debtors’ business and restructuring plan and to timely and effectively implement the turnaround strategy; increased legal costs related to the Bankruptcy Filing and other litigation; the costs and other effects of lawsuits and administrative proceedings; changes in the capital markets which may affect our cost of capital or the ability to access capital; regulatory compliance.  Refer to Risk Factors included in this quarterly report. Factors and risks that could affect our results and achievements and cause them to materially differ from those contained in the forward-looking statements include those identified in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, as well as other factors that we are currently unable to identify or quantify, but that may exist in the future.
 
In addition, the foregoing factors may affect generally our business, results of operations and financial position. Forward-looking statements speak only as of the date the statement was made. We do not undertake and specifically decline any obligation to update any forward-looking statements.

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-Q 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.

Corporate History
 
The entity that is the original predecessor of our 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.”
 
 
 
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From its acquisition of Parentech, Inc. until the end of 2004, our 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 our ongoing 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, we entered into a transaction with Old Bridgetech whereby we issued 1,673,438 shares of our common stock to the shareholders of Old Bridgetech in exchange for all of the outstanding stock of Old Bridgetech. In connection with this transaction, we changed our 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, we ceased operations of our medical imaging business and have discontinued operations of all of our business activities including of Parentech, Inc., Retail Pilot, Inc., International MedLink, Inc., Amcare and Clarity Imaging International, Inc

We are now an entity 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.
 
Our management has been analyzing the various alternatives available to us 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.
 
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.
 
 
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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 that have recently commenced operations, or entities that 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 creditors, was negatively impacting our Company’s ability to implement any turnaround strategy.  On June 5, 2012, the Court dismissed the Bankruptcy proceeding at the request of the Debtors.  

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.

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.
 
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.
 
 
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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.

RESULTS OF OPERATIONS

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.

Three Months Ended June 30, 2012, Compared to Three Months Ended June 30, 2011

General and administrative expenses (“G&A”) totaled $71,377 for the three months ended June 30, 2012, compared to $95,940 in the 2011, respectively. G&A costs in 2012 and 2011 include the accrued salary of our sole officer and director totaling $30,000 three months ended.

Interest expense was $429,023 for the three months ended June 30, 2012 and $106,619 for 2011. Interest expense includes accrued and unpaid interest on our debt with principal balances totaling approximately $6.7 million.

Six Months Ended June 30, 2012, Compared to Six Months Ended June 30, 2011

General and administrative expenses (“G&A”) totaled as compared to $136,377 for the six months ended June 30, 2012 compared to $385,922 for the 2011, respectively. G&A costs in 2012 and 2011 include the accrued salary of our sole officer and director totaling $60,000 for six months ended.

Interest expense was $429,023 for the six months ended June 30, 2012 and $213,238 for 2011, respectively. Interest expense includes accrued and unpaid interest on our debt with principal balances totaling approximately $6.7 million.

LIQUIDITY AND CAPITAL RESOURCES

We currently have a total accumulated deficit of $60,784,999 as of June 30, 2012, current assets of $0, and current liabilities of $10,736,497 as of June 30, 2012. 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.

 
 
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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 our company as a going concern.  However, we have a working capital deficit and have not generated revenues since we re-entered the development stage on January 1, 2009. During the six months ended June 30, 2012, we incurred a net loss of $567,829 and at June 30, 2012 have an accumulated deficit of $60,784,999.  These factors raise substantial doubt about the ability of our 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.  The Company filed a Chapter 11 Bankruptcy on July 6, 2011 in the Southern District of California (Case # 11-11264-11).  On June 5, 2012, the Court dismissed the Bankruptcy proceeding.

Additional Information

We file reports and other materials with the Securities and Exchange Commission.  These documents may be inspected and copied at the Securities and Exchange Commission, Judiciary Plaza, 100 F Street, N.E., Room 1580, and Washington, D.C. 20549.  You can obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.  You can also get copies of documents that the Company files with the Commission through the Commission’s Internet site at www.sec.gov.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not hold any derivative instruments and do not engage in any hedging activities. We have no business activity as of the six-month period ended June 30, 2012.

ITEM 4.  CONTROLS AND PROCEDURES
 
a) Evaluation of Disclosure Controls and Procedures.

Under the supervision and with the participation of our Chief Executive Officer and Principal Accounting Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the period covered by this quarterly report. Based on this evaluation, our Chief Executive Officer and Principal Accounting Officer concluded as of June 30, 2012, that our disclosure controls and procedures were not effective such that the information required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Principal Accounting Officer, as appropriate to allow timely decisions regarding required disclosure. Our Chief Executive Officer concluded, based on the evaluation of the effectiveness of the disclosure controls and procedures by our management, that as of June 30, 2012, our disclosure controls and procedures were not effective due to the material weaknesses described in Management's Report on Internal Control over Financial Reporting as reported in our Form 10-K for the year ended December 31, 2011.
 
 
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b) Changes in Internal Control over Financial Reporting.

During the quarter ended June 30, 2012, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries' officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

The Company filed a Chapter 11 Bankruptcy on July 6, 2011 in the Southern District of California (Case # 11-11264-11).  On June 5, 2012, the Court dismissed the Bankruptcy proceeding.

ITEM 1A. - RISK FACTORS

In addition to the other information set forth in this report, the factors discussed in "Part I — Item 1A — Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, could materially affect our business, financial condition, or operating results. The risks described in our Annual Report on Form 10-K and our subsequent SEC reports are not the only risks facing us. There are additional risks and uncertainties not currently known to us or that we currently deem to be immaterial that may also materially adversely affect our business, financial condition, or operating results. While not required for smaller reporting companies, we include the following risk factors in addition to the risk factors previously provided:
 
We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.
 
We are an “emerging growth company,” as defined in the Jumpstart our Business Startups Act of 2012 or JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
 
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An “emerging growth company” can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
 
We will incur increased costs and demands upon management as a result of complying with the laws and regulations that affect public companies, which could materially adversely affect our results of operations, financial condition, business and prospects.
 
 
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As a public company and particularly after we cease to be an “emerging growth company,” we will incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules implemented by the SEC.
 
The increased costs associated with operating as a public company will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business. Additionally, if these requirements divert our management’s attention from other business concerns, they could have a material adverse effect on our results of operations, financial condition, business and prospects.
 
However, for as long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”
 
If the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30, we would cease to be an “emerging growth company” as of the following June 30, or if we issue more than $1 billion in non-convertible debt in a three-year period, we would cease to be an “emerging growth company” immediately.
 
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS SECURITIES

On May 18, 2012, the Company issued 1,000,000 shares of common stock to Colonial Stock Transfer as payment for services rendered in the past.  The stock was trading at $0.006 on May 18, 2012 and the Company valued the shares at $6,000.  A loss of $2,429 on settlement of the payable was recorded by the Company.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
  
There were no defaults upon senior securities during the quarter ended June 30, 2012.
  
ITEM 4.  MINE SAFETY DISCLOSURES
              
None.

ITEM 5.  OTHER INFORMATION

There is no information with respect to which information is not otherwise called for by this form.
 
ITEM 6.  EXHIBITS
 
31.1
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
31.2
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

 
 
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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Registrant
Date: August 20, 2012
 
Bridgetech Holdings International, Inc.
 By: /s/ Scott Landow
   
Scott Landow
   
Chairman, Chief Executive Officer (Principle Executive Officer, Principle Financial Officer)

 
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