Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-Q
(Mark one)
x Quarterly Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934
For the quarterly period ended June 30, 2012
o Transition Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934
For the transition period from ______________ to _____________
Commission file number 000-26703
MEDICAL MAKEOVER CORPORATION OF AMERICA
(Exact name of registrant as specified in its charter)
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Delaware
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000-11596
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65-0907798
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(State or other jurisdiction of incorporation)
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(Commission file number)
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(IRS Employe rIdentification No.)
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2101 Vista Parkway, Suite 292
West Palm Beach FL33411
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (561) 228-6148
N/A
(Former name or former address, if changes since last report)
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 is an accelerated filer, a non-accelerated filer, or a smaller reporting company.
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). x Yes o No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
As of August 23, 2012, there were approximately 38,235 shares of the Issuer's common stock, par value $0.0001 per share outstanding.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this quarterly report on Form 10-Q contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors including the risk factors set forth in our Form 10-K. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this quarterly report in its entirety, including but not limited to our financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
INDEX
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PART I. - FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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F-1 |
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Item 2
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Management's Discussion and Analysis or Plan of Operations
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2 |
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Item 3
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Quantitative and Qualitative Disclosures About Market Risk
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4 |
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Item 4T.
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Controls and Procedures
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4 |
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PART II. - OTHER INFORMATION
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Item 1
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Legal Proceedings
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5 |
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Item 1A.
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Risk Factors
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5 |
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Item 2
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Unregistered Sales of Equity Securities and Use of Proceeds
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5 |
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Item 3
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Defaults Upon Senior Securities
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5 |
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Item 4
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Mine Safety Disclosures
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5 |
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Item 5
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Other Information
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5 |
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Item 6
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Exhibits
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5 |
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SIGNATURES
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6 | |
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EXHIBITS
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INDEX TO FINANCIAL STATEMENTS
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Balance Sheet
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F-2
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Statements of Operations
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F-3
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Statements of Stockholders’ Equity
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F-4
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Statements of Cash Flows
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F-5
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Notes to Financial Statement
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F-6
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F-1
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MEDICAL MAKEOVER CORPORATION OF AMERICA
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(A DEVELOPMENT STAGE ENTERPRISE)
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BALANCE SHEETS
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June 30
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December 31,
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2012
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2011
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(Unaudited)
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ASSETS
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Current Assets:
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Cash and Cash Equivalents
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$ | 4,747 | $ | 15,547 | ||||
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Prepaid expenses
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1,250 | 1,250 | ||||||
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Total Current Assets
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5,997 | 16,797 | ||||||
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PROPERTY AND EQUIPMENT, net
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- | - | ||||||
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OTHER ASSETS
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TOTAL ASSETS
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$ | 5,997 | $ | 16,797 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Accounts Payable and Accrued Liabilities
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$ | 210,646 | $ | 210,646 | ||||
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Line of credit and accrued interest
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151,887 | 90,430 | ||||||
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Stockholders loans and accrued interest
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- | - | ||||||
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Note payable and accrued interest
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35,658 | $ | 34,290 | |||||
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Total Current Liabilities
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398,191 | 335,366 | ||||||
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LONG-TERM LIABILITIES
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TOTAL LIABILITIES
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398,191 | 335,366 | ||||||
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STOCKHOLDERS' EQUITY
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Preferred stock, $.0001 par value; 10,000,000 shares authorized -0-
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and -0- shares issued and outstanding at June 30, 2012 and
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December 31, 2011 (respectively)
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- | - | ||||||
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Common stock, $.0001 par value; 10,000,000,000 shares authorized 382,354,500
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shares issued and outstanding at June 30, 2012 and December 31, 2011
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38,235 | 38,235 | ||||||
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Additional Paid in Capital
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1,309,660 | 1,309,660 | ||||||
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Deficit Accumulated During Development Stage
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(1,740,089 | ) | (1,666,464 | ) | ||||
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TOTAL STOCKHOLDERS' EQUITY
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(392,194 | ) | (318,569 | ) | ||||
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TOTAL LIABILITIES & STOCKHOLDERS EQUITY
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$ | 5,997 | $ | 16,797 | ||||
| See accompanying notes to the unaudited Condensed Financial Statements | ||||||||
F-2
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MEDICAL MAKEOVER CORPORATION OF AMERICA
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(A DEVELOPMENT STAGE ENTERPRISE)
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STATEMENTS OF OPERATIONS
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Three Months Ended
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Three Months Ended
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Six Months Ended
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Six Months Ended
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March 29, 1999
(Inception) to |
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June 30,
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June 30,
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June 30,
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June 30,
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June 30,
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2012
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2011
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2012
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2011
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2012
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Revenue
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- | - | - | - | $ | 44,414 | ||||||||||||||
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Cost of Sales
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- | - | - | - | $ | 4,163 | ||||||||||||||
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Gross Profit
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- | - | - | - | 40,251 | |||||||||||||||
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Operating expenses:
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Professional Fees
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27,670 | 14,587 | 60,895 | 33,633 | 420,832 | |||||||||||||||
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General and Administrative expenses
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3,998 | 1,257 | 5,906 | 53,673 | 1,297,904 | |||||||||||||||
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Total operating expenses
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31,668 | 15,844 | 66,801 | 87,306 | 1,718,736 | |||||||||||||||
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Income (loss) from operations
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(31,668 | ) | (15,844 | ) | (66,801 | ) | (87,306 | ) | (1,678,485 | ) | ||||||||||
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Other Income
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20,458 | |||||||||||||||||||
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Interest Expense
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(3,875 | ) | (3,056 | ) | (6,824 | ) | (5,574 | ) | (82,062 | ) | ||||||||||
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Income (loss) before income taxes
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(35,543 | ) | (18,900 | ) | (73,625 | ) | (92,880 | ) | (1,740,089 | ) | ||||||||||
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Provision for income taxes
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Net income (loss)
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(35,543 | ) | (18,900 | ) | (73,625 | ) | (92,880 | ) | (1,740,089 | ) | ||||||||||
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Basic and diluted income (loss) per share
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
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Weighted average number of shares outstanding
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| 382,354,500 | 282,354,500 | 382,354,500 | 277,514,721 | |||||||||||||||||
| See accompanying notes to the unaudited Condensed Financial Statements | ||||||||||||||||||||
F-3
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MEDICAL MAKEOVER CORPORATION OF AMERICA
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| (A DEVELOPMENT STAGE ENTERPRISE) | ||||||||||||||||||||
| STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||||||||||||||
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Deficit
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Accumulated
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Additional
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During The
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Total
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Number of
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Common
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Paid-In
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Development
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Stockholders'
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Shares
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Stock
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Capital
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Stage
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Equity
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BEGINNING BALANCE, January 1, 2005
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46,907,500 | $ | 4,691 | $ | 463,177 | $ | (562,336 | ) | $ | (94,468 | ) | |||||||||
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Shares issued for services
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6,168,252 | 616 | 257,046 | - | 257,662 | |||||||||||||||
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Net loss
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(693,568 | ) | (693,568 | ) | ||||||||||||||||
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BALANCE, December 31, 2005
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53,075,752 | 5,307 | 720,223 | (1,255,904 | ) | (530,374 | ) | |||||||||||||
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Shares issued for services
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300,000 | 30 | 16,470 | - | 16,500 | |||||||||||||||
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Shares issued to settle debt and interest expense
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13,055,800 | 1,306 | 231,299 | - | 232,605 | |||||||||||||||
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Net loss
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(69,104 | ) | (69,104 | ) | ||||||||||||||||
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BALANCE, December 31, 2006
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66,431,552 | 6,643 | 967,992 | (1,325,008 | ) | (350,373 | ) | |||||||||||||
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Shares issued to settle debt and interest expense
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12,294,411 | 1,229 | 31,581 | - | 32,810 | |||||||||||||||
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Net loss
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(74,019 | ) | (74,019 | ) | ||||||||||||||||
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BALANCE, December 31, 2007
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78,725,963 | 7,872 | 999,573 | (1,399,027 | ) | (391,582 | ) | |||||||||||||
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Shares issued to settle debt and interest expense
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34,869,226 | 3,487 | 53,664 | - | 57,151 | |||||||||||||||
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Net loss
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(66,563 | ) | (66,563 | ) | ||||||||||||||||
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BALANCE, December 31, 2008
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113,595,189 | 11,359 | 1,053,237 | (1,465,590 | ) | (400,994 | ) | |||||||||||||
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Shares issued to settle debt and interest expense
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16,423,542 | 1,642 | 19,184 | - | 20,826 | |||||||||||||||
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Net loss
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(34,865 | ) | (34,865 | ) | ||||||||||||||||
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BALANCE, December 31, 2009
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130,018,731 | 13,001 | 1,072,421 | (1,500,455 | ) | (415,034 | ) | |||||||||||||
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Net loss
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(43,651 | ) | (43,651 | ) | ||||||||||||||||
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BALANCE, December 31, 2010
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130,018,731 | 13,001 | 1,072,421 | (1,544,106 | ) | (458,685 | ) | |||||||||||||
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Shares issued to settle debt and interest expense
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216,335,769 | 21,635 | 204,839 | - | 226,474 | |||||||||||||||
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Shares issued for services
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36,000,000 | 3,600 | 32,400 | 36,000 | ||||||||||||||||
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Net loss
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- | - | - | (122,358 | ) | (122,358 | ) | |||||||||||||
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BALANCE, December 31, 2011
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382,354,500 | 38,235 | 1,309,660 | (1,666,464 | ) | (318,569 | ) | |||||||||||||
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Net loss
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- | - | - | (73,625 | ) | (73,625 | ) | |||||||||||||
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ENDING BALANCE, June 30, 2012
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382,354,500 | $ | 38,235 | $ | 1,309,660 | $ | (1,740,089 | ) | $ | (392,194 | ) | |||||||||
| See accompanying notes to the unaudited Condensed Financial Statements | ||||||||||||||||||||
F-4
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MEDICAL MAKEOVER CORPORATION OF AMERICA
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(A DEVELOPMENT STAGE ENTERPRISE)
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STATEMENTS OF CASH FLOWS
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SIX MONTHS ENDED
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(UNAUDITED)
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June 30, 2012
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June 30, 2011
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From March 29, 1999(Inception) to
to June 30, 2012
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss
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$ | (73,625 | ) | $ | (92,880 | ) | $ | (1,740,089 | ) | |||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Stock issued for services
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- | 36,000 | 476,422 | |||||||||
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Depreciation
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- | - | 3,436 | |||||||||
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Stock Issued for Compensation
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- | |||||||||||
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Decrease (Increase) in assets:
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Prepaid expenses
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- | 12,750 | (1,250 | ) | ||||||||
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Increase (Decrease) in liabilities:
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Accrued interest expense
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6,824 | 5,574 | 74,606 | |||||||||
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Accounts payable and accrued expenses
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- | - | 210,656 | |||||||||
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Net Cash Used In Operating Activities
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(66,801 | ) | (38,556 | ) | (976,219 | ) | ||||||
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Cash Flows from Investing Activities
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Notes Receivable
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- | |||||||||||
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Purchase of Fixed Assets
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- | - | (20,671 | ) | ||||||||
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Net Cash( Used In) Provided by Investing Activities
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- | - | (20,671 | ) | ||||||||
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Cash Flows from Financing Activities
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Proceeds from issuance of common stock
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- | - | 541,472 | |||||||||
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Proceeds from bank overdraft
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- | - | ||||||||||
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Payments on stockholders' loan
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(5,000 | ) | (40,500 | ) | ||||||||
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Proceeds from stockholders' loan
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61,001 | 139,190 | ||||||||||
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Proceeds from third party notes payable
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47,000 | 489,732 | ||||||||||
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Decrease in amounts due related party
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- | - | (20,459 | ) | ||||||||
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Decrease in notes payable
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- | - | (107,798 | ) | ||||||||
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Net Cash Provided by(Used In) Financing Activities
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56,001 | 47,000 | 1,001,637 | |||||||||
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
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(10,800 | ) | 8,444 | 4,747 | ||||||||
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CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
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15,547 | 2,781 | - | |||||||||
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CASH AND CASH EQUIVALENTS, END OF PERIOD
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$ | 4,747 | $ | 11,225 | 4,747 | |||||||
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INFORMATION:
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SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
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Common stock issued for reduction in LOC payable, accrued interest, and accounts payable
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- | 110,000,000 | 110,000,000 | |||||||||
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Income taxes paid during the period
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$ | - | $ | - | - | |||||||
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See accompanying notes to the unaudited Condensed Financial Statements
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F-5
Medical Makeover Corporation of America
(a development stage enterprise)
NOTES TO FINANCIAL STATEMENTS
(Information with regard to the six months ended June 30, 2012 and 2011 is unaudited)
Note 1: Nature of Business
Medical Makeover Corporation of America (f/k/a Cactus New Media I, Inc.) (“the Company”) was incorporated on March 29, 1999, under the laws of the State of Delaware. The Company’s business activities to date have primarily consisted of the formation of a business plan for internet link exchanges in connection with internet banner advertising and implementation thereof. The Company originally intended to become active in internet entertainment services through the registration of internet domains with InterNIC, and engage in the development of proprietary software and services designed to support and facilitate its internet services. In February 2004, subsequent to a change of control, management decided to enter the medical makeover/anti-aging industry. In March 2004, the Company changed its name to Medical Makeover Corporation of America.
NOTE 2 – Summary of Significant Accounting Policies
Basis of Presentation
The Company prepares its condensed financial statements in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of financial position and results of operations have been included. Significant accounting policies are as follows:
Use of Estimates
The preparation of condensed 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 condensed 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 condensed 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.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of year end or less to be cash equivalents. Cash equivalents include cash on hand and cash in the bank.
Property and Equipment
Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using principally the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized.
The range of estimated useful lives used to calculate depreciation for principal items of property and equipment are as follows:
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Asset Category
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Depreciation/ Amortization Period
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Furniture and Fixtures
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3 years
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Office equipment
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3 years
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F-6
Medical Makeover Corporation of America
(A Development Stage Enterprise)
Notes to Financial Statements
Property Evaluations
Management of the Company will periodically review the net carrying value of its properties on a property-by-property basis. These reviews will consider the net realizable value of each property to determine whether a permanent impairment in value has occurred and the need for any asset write-down. An impairment loss will be recognized when the estimated future cash flows (undiscounted and without interest) expected to result from the use of an asset are less than the carrying amount of the asset. Measurement of an impairment loss will be based on the estimated fair value of the asset if the asset is expected to be held and used.
Although management will make its best estimate of the factors that affect net realizable value based on current conditions, it is reasonably possible that changes could occur in the near term which could adversely affect management's estimate of net cash flows expected to be generated from its assets, and necessitate asset impairment write-downs.
Asset retirement obligations
The Company plans to recognize liabilities for statutory, contractual or legal obligations, including those associated with the reclamation of properties and any plant and equipment, when those obligations result from the acquisition, construction, development or normal operation of the assets. Initially, a liability for an asset retirement obligation will be recognized at its fair value in the period in which it is incurred. Upon initial recognition of the liability, the corresponding asset retirement cost will be added to the carrying amount of the related asset and the cost will be amortized as an expense over the economic life of the asset using either the unit-of-production method or the straight-line method, as appropriate. Following the initial recognition of the asset retirement obligation, the carrying amount of the liability will be increased for the passage of time and adjusted for changes to the amount or timing of the underlying cash flows needed to settle the obligation.
Impairment of Long-Lived Assets
In accordance with ASC Topic 360, long-lived assets, such as property, plant, and equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and other intangible assets are tested for impairment. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.
Goodwill and Other Intangible Assets
The Company adopted Statement of Financial Accounting Standard (“FASB”) Accounting Standards Codification (“ASC”) Topic 350 Goodwill and Other Intangible Assets, effective July 1, 2002. In accordance with (“ASC Topic 350”) "Goodwill and Other Intangible Assets," goodwill, which represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method, acquired in business combinations is assigned to reporting units that are expected to benefit from the synergies of the combination as of the acquisition date. Under this standard, goodwill and intangibles with indefinite useful lives are no longer amortized. The Company assesses goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter, or more frequently if events and circumstances indicate impairment may have occurred in accordance with ASC Topic 350. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference. ASC Topic 350 also requires that the fair value of indefinite-lived purchased intangible assets be estimated and compared to the carrying value. The Company recognizes an impairment loss when the estimated fair value of the indefinite-lived purchased intangible assets is less than the carrying value.
F-7
Medical Makeover Corporation of America
(A Development Stage Enterprise)
Notes to Financial Statements
Income Taxes
Deferred income taxes are provided based on the provisions of ASC Topic 740, "Accounting for Income Taxes", to reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company adopted the provisions of ASC Topic 740; "Accounting For Uncertainty In Income Taxes-An Interpretation Of ASC Topic 740 ("Topic 740"). Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At December 31, 2011, the Company did not record any liabilities for uncertain tax positions.
We have adopted “Accounting for Uncertainty in Income Taxes”. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption of ASC 740-10-25 had no effect on our condensed financial statements.
Concentration of Credit Risk
The Company maintains its operating cash balances in banks in West Palm Beach, Florida. The Federal Depository Insurance Corporation (FDIC) insures accounts at each institution up to $250,000.
Share-Based Compensation
The Company applies Topic 718 “Share-Based Payments” (“Topic 718”) to share-based compensation, which requires the measurement of 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.
Basic and Diluted Net Loss Per Share
Net loss per share was computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Diluted net loss per share for the Company is the same as basic net loss per share, as the inclusion of common stock equivalents would be antidilutive.
F-8
Medical Makeover Corporation of America
(A Development Stage Enterprise)
Notes to Financial Statements
Fair Value of Financial Instruments
The Company financial instruments consist primarily of cash, affiliate receivable, settlement receivable, accounts payable and accrued expenses and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or from future earnings or cash flows.
The Company adopted ASC Topic 820, Fair Value Measurements (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosure about fair value measurements. The standard provides a consistent definition of fair value, which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based measurements.
The three-level hierarchy for fair value measurements is defined as follows:
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Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;
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Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable of the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active;
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Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.
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Reclassifications
Certain prior year amounts have been reclassified to conform to the current period presentation for comparative purposes.
Recent Accounting Pronouncements
ASU 2011-05 – Presentation of comprehensive income
ASU 2011-05 was the result of a joint project with the IASB and amends the guidance in ASC 220, Comprehensive Income, by eliminating the option to present components of other comprehensive income (OCI) in the statement of stockholders’ equity. Instead, the new guidance now requires entities to present all nonowner changes in stockholders’ equity either as a single continuous statement of comprehensive income or as two separate but consecutive statements.
All entities that report OCI items will be impacted by the changes in this ASU. The components of OCI have not changed, nor has the guidance on when OCI items are reclassified to net income; however, the amendments require entities to present all reclassification adjustments from OCI to net income on the face of the statement of comprehensive income.
F-9
Medical Makeover Corporation of America
(A Development Stage Enterprise)
Notes to Financial Statements
The amendments to ASC 220, Comprehensive Income, included in ASU 2011-05, Presentation of Comprehensive Income, are effective for fiscal years and for interim periods within those fiscal years, beginning after December 15, 2011 (that is, the fiscal year beginning January 1, 2012 for calendar-year entities) for public entities and for interim and annual periods thereafter. The amended guidance must be applied retrospectively and early adoption is permitted.
ASU 2011-04 – Amendments to achieve common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs
The amendments in ASU 2011-04 do not modify the requirements for when fair value measurements apply; rather, they generally represent clarifications on how to measure and disclose fair value under ASC 820, Fair Value Measurement, including the following revisions:
• The concepts of highest and best use and valuation premise are relevant only for measuring the fair value of nonfinancial assets and do not apply to financial assets and liabilities.
• An entity should measure the fair value of an equity-classified financial instrument from the perspective of the market participant that holds the instrument as an asset.
• An entity that holds a group of financial assets and financial liabilities whose market risk (that is, interest rate risk, currency risk, or other price risk) and credit risk are managed on the basis of the entity’s net risk exposure may apply an exception to the fair value requirements in ASC 820 if certain criteria are met. The exception allows such financial instruments to be measured on the basis of the reporting entity’s net, rather than gross, exposure to those risks.
• Premiums or discounts related to the unit of account are appropriate when measuring fair value of an asset or liability if market participants would incorporate them into the measurement (for example, a control premium). However, premiums or discounts related to size as a characteristic of the reporting entity’s holding (that is, a “blockage factor”) should not be considered in a fair value measurement.
The amendments to ASC 820, Fair Value Measurement, included in ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, are effective prospectively for public entities for interim and annual periods beginning after December 15, 2011 (that is, the quarter ending June 30, 2012 for calendar-year entities). Early adoption is not permitted for public entities.
ASU 2011-03 – Reconsideration of effective control for repurchase agreements
The amendments to ASC 860-10 included in ASU 2011-03, simplified the accounting for financial assets transferred under repurchase agreements (repos) and similar arrangements, by eliminating the transferor’s ability criteria from the assessment of effective control over those assets as well as the related implementation guidance.
Currently under ASC 860-10-40-24 a transferor must meet four criteria to maintain effective control of securities transferred in a repo and to therefore account for the transfer as a secured borrowing rather than a sale. One of these criteria states that the transferor must be able to either repurchase or redeem the transferred securities on substantially the agreed terms, even if the transferee is in default. This criterion is satisfied only if the transferor has cash or collateral sufficient to fund substantially the entire cost of purchasing replacement securities.
The amendments in ASU 2011-03 remove this criterion and related implementation guidance from the Codification, thereby reducing the criteria that transferors must satisfy to qualify for secured borrowing accounting and, as a result, likely reducing the number of transfers accounted for as sales.
F-10
Medical Makeover Corporation of America
(A Development Stage Enterprise)
Notes to Financial Statements
The amendments to ASC 860-10, Transfers and Servicing, included in ASU 2011-03, Reconsideration of Effective Control for Repurchase Agreements, are effective for both public and nonpublic entities prospectively for new transfers and existing transactions modified as of the first interim or annual period beginning on or after December 15, 2011 (that is, the fiscal year beginning January 1, 2012 for calendar-year entities). Early adoption is not permitted.
ASU 2011-02 - FASB amends creditor troubled debt restructuring guidance
This bulletin discusses ASU 2011-02, which was issued by the FASB to provide creditors with additional guidance in evaluating whether a restructuring of debt is a troubled debt restructuring. The new guidance does not amend the guidance for debtors. It is generally effective for public entities in the quarter ended September 30, 2011.
ASU 2011-01 - Troubled debt restructuring disclosures for public-entity creditors deferred
The FASB issued Accounting Standards Update (ASU) 2011-01, Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20, which temporarily defers the date when public-entity creditors are required to provide the new disclosures for troubled debt restructurings in ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The deferred effective date will coincide with the effective date for the clarified guidance about what constitutes a troubled debt restructuring, which the Board is currently deliberating. The clarified guidance is expected to apply for interim and annual periods ending after June 15, 2011.
When providing the new disclosures under ASU 2010-20, public entities would be required to retrospectively apply the clarified guidance on what constitutes a troubled debt restructuring to restructurings occurring on or after the beginning of the year in which the proposed clarified guidance is adopted.
The Company has implemented all new accounting pronouncements that are in effect and that may impact its condensed financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 3- Stockholders' Equity (Deficit)
The Company has the authority to issue 500,000,000 million shares of common stock, par value $0.001 and 10,000,000 shares of preferred stock, par value $0.0001 per share, which may be divided into series and with the preferences, limitations and relative rights determined by the Board of Directors. At December 31, 2011, no preferred stock shares were issued and outstanding. In October 2003, the Company amended its certificate of organization to increase the authorized shares of common stock to 10,000,000,000 with a par value of $0.0001, and effectuated a 100 for 1 reverse stock split of the Company’s common stock. On October 13, 2011 we approved a 10,000 for 1 reverse split which FINRA appoved in July 2012. In conjunction with that reverse split, the Company amended its certificate of organization to its present capitalization.
In 2011 the Company issued 6,335,769 shares of restricted common stock to retire convertible debt and accrued interest totaling $16,473, or $0.003 per share.
On January 6, 2011, the Company authorized the issuance of 110,000,000 shares of our restricted common stock to S.C. Capital Investment Corp. in exchange for S.C. Capital Investment Corp, agreeing to cancel $110,000 in debt owed to it by the Company. As a result, the debt due S.C. Capital Investment Corp. was reduced from $236,000 to $210,646.
In addition the Company also authorized 100,000,000 shares of common stock to retire $100,000 of debt owed for note payable also issued were 36,000,000 shares of common stock for services received valued at $36,000.
F-11
Medical Makeover Corporation of America
(A Development Stage Enterprise)
Notes to Financial Statements
Note 4- Income Taxes
Deferred income taxes (benefits) are provided for certain income and expenses which are recognized in different periods for tax and financial reporting purposes. The Company had net operating loss carry- forwards for income tax purposes of approximately 1,740,000 expiring in various years from 2019 through 2030. Due to the change in ownership in February 2004, the prior years net operating loss carry-forwards are subject to substantial restrictions and may only be utilized to offset approximately $7,000 of annual taxable income as well as any unrealized appreciation on assets existing at the time of the ownership change. Deferred tax assets are reduced by a valuation allowance if, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management's valuation procedures consider projected utilization of deferred tax assets over the next several years, and continually evaluate new circumstances surrounding the future realization of such assets. The difference between income taxes and the amount computed by applying the federal statutory tax rate to the loss before income taxes is due to an increase in the deferred tax asset valuation allowance. The valuation allowance at June 30, 2012 is 100%.
Note 5- Related Parties
a) Office lease: The Company formerly leased its office facility from a company related by virtue of common ownership. Total rent expense to related parties amounted to $0 for the three months ended June 30, 2011 and 2012.
b) Related party notes payable: In the second quarter 2004, the Company was loaned $50,000, ($25,000 each), by the Company’s two officers. These notes carried an interest rate of 15%. One matured on December 1, 2004, which terms were modified on January 21, 2005, to a) $10,000 payment at signing, b) the execution of a promissory note in the amount $47,750, with an interest rate of 15%, payable monthly for 12 months, c) 6,100,000 shares of the Company are contributed back to the Company and d) the Company issues 89,413 additional shares of restricted common stock earned under the original employment agreement, and the other has been converted to monthly payments over 12 months beginning in November 2004. Payments amounting to $35,500 were made on these notes in the first half-year of 2005. In 2008 the Company issued 15,000,000 shares of restricted common stock to settle $26,222 of these notes payable. In the civil action titled Glen v. Medical Makeover Corporation of America, et al, Case Number # 200594178H in the Circuit Court of the Fifteen Judicial Circuit in and for Palm Beach County, Florida, a settlement was reached on February 9, 2011, whereby the former officers and the Company released each other from any and all claims, including the amount previously owed under the stockholder loan.
Note 6- Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company's financial position and operating results raise substantial doubt about the Company's ability to continue as a going concern, as reflected by the net loss of approximately $1,740,000 accumulated from March 29, 1999 (Inception) through June 30, 2012.
The ability of the Company to continue as a going concern is dependent upon commencing operations, developing sales and obtaining additional capital and debt financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company is currently seeking additional capital to allow it to restart its planned operations.
Note 7 - Short-term convertible debt
Effective in January 2009, the Company entered into a convertible line of credit with a third-party lender. This line of credit matures on December 31, 2014, with a principal maximum draw of $250,000 and carries a 10% interest rate and is convertible into common stock of the Company at a rate to be negotiated between the Company and the lender, but is expected to be pari passu with the long term debt remaining on the Company’s books. In 2012 the Company drew $61,000 on this line and accrued $5,457 in interest payable.
Note 8 - Note payable
In December 2004, the Company received $20,000 and $115,000 in the first quarter 2005 in cash as a short-term loan. This loan matures in six months and carries a 10% interest rate.
In June 2005, the Company received a $250,000 convertible loan from a third party. This loan is in default and carries an 8% interest rate. In 2006 the Company issued 13,205,800 shares of restricted common stock to retire convertible debt and accrued interest totaling $232,605, or $0.02 per share. In 2007 the Company issued 12,294,411 shares of restricted common stock to retire convertible debt and accrued interest totaling $32,810, or $0.001 per share. In 2008 the Company issued 19,869,229 shares of restricted common stock to retire convertible debt and accrued interest totaling $32,919, or $0.001 per share. In 2009 the Company issued 16,424,542 shares of restricted common stock to retire convertible debt and accrued interest totaling $20,826, or $0.0013 per share. In 2011 the Company issued 106,335,769 shares of restricted common stock to retire convertible debt and accrued interest totaling $116,473, or $.003 per share. At December 31, 2011 and June 30, 2012, the remaining balance on this note is $34,290 with $-0- in accrued interest as of December 31, 2011 and $1,368 as of June 30, 2012.
F-12
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our Financial Statements and Notes thereto appearing elsewhere in this Report on Form 10-Q as well as our other SEC filings.
Overview
The Company is a development stage company and has not yet generated or realized any revenues from business operations. The Company's business strategy changed in the third quarter 2007 to seeking potential merger candidates. The Company's auditors have issued a going concern opinion in our audited financial statements for the fiscal year ended December 31, 2011. This means that our auditors believe there is doubt that the Company can continue as an on-going business for the next twelve months unless it obtains additional capital to pay its bills. This is because the Company has not generated any revenues and no revenues are currently anticipated. Accordingly, we must raise cash from sources such as investments by others in the Company and through possible transactions with strategic or joint venture partners. We do not plan to use any capital raised for the purchase or sale of any plant or significant equipment. The following discussion and analysis should be read in conjunction with the financial statements of the Company and the accompanying notes appearing subsequently under the caption "Financial Statements."
Comparison of Operating Results for the Quarter Ended June 30, 2012 to the Quarter Ended June 30, 2011
Revenues
The Company did not generate any revenues from operations for the three months ended June 30, 2012 or 2011. Accordingly, comparisons with prior periods are not meaningful. The Company is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and cost increases in services.
Operating Expenses
Operating expenses increased $15,824 for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, from $15,844 to $31,668. This increase is a result of the increase in professional fees incurred during the three months ended June 30, 2012.
Operating expenses decreased $20,505 for the six months ended June 30, 2012 compared to the six months ended June 30, 2011, from $87,306 to $66,801. This decrease is a result of the issuance of common shares for $36,000 of G&A expenses provided the Company, lawsuit settlement cost and increase in professional fees incurred during the three months ended June 30, 2011.
Net Income/Loss
Net loss increased by $16,643 from a net loss of $18,900 for the three months ended June 30, 2011 to a net loss of $35,543 for the three months ended June 30, 2012. The decrease in net operating loss is due to an increase in professional fees incurred.
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Net loss decreased by $19,255 from a net loss of $92,880 for the six months ended June 30, 2011 to a net loss of $73,625 for the three months ended June 30, 2012. The increase in net operating loss is due to the issuance of common shares for $36,000 of G&A expenses provided the Company, lawsuit settlement cost and increase in professional fees incurred.
At June 30, 2012, our accumulated deficit was $1,740,089.
Assets and Liabilities
Our total assets were $5,997 at June 30, 2012.
Total Current Liabilities are $398,191 at June 30, 2012. Our note payable and line of credit total $187,545.
Financial Condition, Liquidity and Capital Resources
At June 30, 2012, we had cash and cash equivalents of $4,747. Our working capital is presently minimal and there can be no assurance that our financial condition will improve. To date, we have not generated cash flow from operations.
As of June 30, 2012, we had a working capital deficit of $392,194. The Company will seek funds from possible strategic and joint venture partners and financing to cover any short term operating deficits and provide for long term working capital. No assurances can be given that the Company will successfully engage strategic or joint venture partners or otherwise obtain sufficient financing through the sale of equity.
No trends have been identified which would materially increase or decrease our results of operations or liquidity.
Plan of Operation
The Company's plan of operation through December 31, 2012 is to focus on finding a suitable merger candidate or a viable business plan. The Company is seeking to raise capital to implement the Company's business strategy. In the event additional capital is not raised, the Company may seek a merger, acquisition or outright sale.
Critical Accounting Policies
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.
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Loss per share: Basic loss per share excludes dilution and is computed by dividing the loss attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the Company. Diluted loss per share is computed by dividing the loss available to common shareholders by the weighted average number of common shares outstanding for the period and dilutive potential common shares outstanding unless consideration of such dilutive potential common shares would result in anti-dilution. Common stock equivalents were not considered in the calculation of diluted loss per share as their effect would have been anti-dilutive for the periods ended June 30, 2012 and 2011.
Going Concern
The Company has suffered recurring losses from operations and is in serious need of additional financing. These factors among others indicate that the Company may be unable to continue as a going concern, particularly in the event that it cannot obtain additional financing or, in the alternative, affect a merger or acquisition. The Company's continuation as a going concern depends upon its ability to generate sufficient cash flow to conduct its operations and its ability to obtain additional sources of capital and financing. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
The Company is not subject to any specific market risk other than that encountered by any other public company related to being publicly traded.
Item 4T - Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, within the 90 days prior to the filing date of this report, the Company carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company's management, including the Company's President, Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Company's President, Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective. There have been no significant changes in the Company's internal controls or in other factors, which could significantly affect internal controls subsequent to the date the Company carried out its evaluation.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.
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PART II
OTHER INFORMATION
Item 1 Legal Proceedings
The Company is a named defendant in a civil action brought against it by Joel R. Weiner in the Court of Chancery of the State of Delaware, Case Number 7099-VCP. The suit does not seek monetary damages but seeks to enforce a shareholder right to inspect Company books and records and related matters. The Company has furnished certain books and records to date and is of the opinion it has satisfied the issues raised in the litigation to date.
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 Defaults Upon Senior Securities
None
Item 4 Mine Safety Disclosures
None
On October 13, 2011 we approved a 10,000 for 1 reverse split which FINRA appoved in July 2012. In conjunction with that reverse split, the Company amended its certificate of organization to its present capitalization.
Item 6 Exhibits
(a) The following sets forth those exhibits filed pursuant to Item 601 of Regulation S-K:
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Exhibit number
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Descriptions
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31.1
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* Certification of the Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
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31.2
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* Certification of the Acting Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
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32.1
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* Certification Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
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32.1
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* Certification Acting Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
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* Filed herewith.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Medical Makeover Corporation of America
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By:
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/s/ Ramon Pagan | ||
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Chief Executive Officer,
President and Chairman of the Board*
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Date: August 28, 2012
* Ramon Pagan has signed both on behalf of the registrant as a duly authorized officer and as the Registrant's principal accounting officer.
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