Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - Nano Mobile Healthcare, Inc.Financial_Report.xls
EX-10.1 - EX10_1 - Nano Mobile Healthcare, Inc.ex10_1.htm
EX-31.2 - EX31_2 - Nano Mobile Healthcare, Inc.ex31_2.htm
EX-32.1 - EX32_1 - Nano Mobile Healthcare, Inc.ex32_1.htm
EX-31.1 - EX31_1 - Nano Mobile Healthcare, Inc.ex31_1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended December 31, 2013
[  ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to__________
Commission File Number: 333-168930

 

Vantage Health

(Exact name of registrant as specified in its charter)

 

Nevada 93-0659770
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)

 

401 Warren St. Suite 200

Redwood City, CA 94063

(Address of principal executive offices)

 

(650) 503-3570
(Registrant’s telephone number)

 

___________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days

[ ] Yes [X] No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ ] Yes [X] No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

[ ] Large accelerated filer [ ] Accelerated filer
[ ] Non-accelerated filer [X] Smaller reporting company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[ ] Yes [X] No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 149,800,000 as of January 31, 2014.

 

 

TABLE OF CONTENTS

 

  Page

PART I – FINANCIAL INFORMATION 

Item 1: Financial Statements 3
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations 4
Item 3: Quantitative and Qualitative Disclosures About Market Risk 6
Item 4: Controls and Procedures 6
PART II – OTHER INFORMATION
Item 1: Legal Proceedings 7
Item 1A: Risk Factors 7
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 7
Item 3: Defaults Upon Senior Securities 7
Item 4: Mine Safety Disclosures 7
Item 5: Other Information 7
Item 6: Exhibits 7
2

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:

 

F-1 Balance Sheets as of December 31, 2013 and June 30, 2013 (unaudited);
F-2 Statements of Operations for the three and six months ended December 31, 2013 and 2012 and period from April 21, 2010 (Inception) to December 31, 2013 (unaudited);
F-3 Statements of Other Comprehensive Income (Loss) for the three and six months ended December 31, 2013 and 2012 and the period from April 21, 2010 (Inception) to December 31, 2013;
F-4 Statements of Cash Flows for the six months ended December 31, 2013 and 2012 and period from April 21, 2010 (Inception) to December 31, 2013;
F-5 Notes to Financial Statements.

 

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended December 31, 2013 are not necessarily indicative of the results that can be expected for the full year.

3

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS (Unaudited)

AS OF DECEMBER 31, 2013 AND JUNE 30, 2013  

 

  December 31, 2013  June 30, 2013
ASSETS         
Current Assets         
Cash and cash equivalents $300,000   $—    
Prepaid expenses  100,000    —   
          
Total Current Assets  400,000    —   
          
Property and equipment, net  —      —   
Assets of discontinued operations  —      95,248 
          
TOTAL ASSETS $400,000   $95,248 
          
          
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)         
          
Current Liabilities         
Accounts payable and accrued expenses $2,500   $29,606 
Shareholder loans  —      237,754 
Liabilities of discontinued operations  —      323,586 
          
Total Liabilities  2,500    590,946 
          
Stockholders’ Equity (Deficit)         
Common stock, $.001 par value, 250,000,000 shares authorized, 135,025,000 and 80,125,000 shares issued and outstanding, respectively  135,025    80,125 
Additional paid-in capital  4,787,485    261,585 
Deferred stock-based compensation  (3,494,453)   —   
Non-controlling interest  —      (305,775)
Accumulated other comprehensive income (loss)  —      164,320 
Deficit accumulated during the development stage  (1,030,557)   (695,953)
Total Stockholders’ Equity (Deficit)  397,500    (495,698)
          
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $400,000   $95,248 

  

See accompanying notes to financial statements.

F-1

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS (Unaudited)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2013 AND 2012

FOR THE PERIOD FROM APRIL 21, 2010 (INCEPTION) TO DECEMBER 31, 2013

 

  Three months ended
December 31, 2013
  Three months ended
December 31,  2012
  Six months ended
December 31,  2013
  Six months ended December 31,  2012  Period from
April 21, 2010
(Inception) to
December 31, 2013
REVENUES $—     $—     $—     $—     $—   
                         
OPERATING EXPENSES                        
Professional fees  2,500    5,237    6,219    5,506    111,421 
Office expenses/salaries and wages  1,296    3,437    1,927    4,056    25,048 
Officer/director compensation  —      —      —      —      11,500 
Stock-based compensation  43,546    —      43,546    —      75,546 
Consulting  —      —      5,000    —      26,052 
Deposit impairment  —      —      —      —      50,000 
Depreciation  —      —      —      —      —   
Travel and entertainment  —      —      —      —      26,650 
Bank fees  —      —      —      —      2,287 
TOTAL OPERATING EXPENSES  47,342    8,674    56,692    9,562    328,504 
                         
LOSS FROM CONTINUING OPERATIONS  (47,342)   (8,674)   (56,692)   (9,562)   (328,504)
                         
OTHER INCOME (EXPENSE)                        
Interest income  —      —      —      —      19,163 
Bad debt – interest  —      —      —      —      (19,094)
TOTAL OTHER EXPENSE  —      —      —      —      69 
                         
NET LOSS FROM CONTINUING OPERATIONS  (47,342)   (8,674)   (56,692)   (9,562)   (328,435)
                         
LOSS FROM DISCONTINUED OPERATIONS  (269,011)   (24,122)   (277,912)   (57,568)   (616,922)
                         
LOSS BEFORE PROVISION FOR INCOME TAXES  (316,353)   (32,796)   (334,604)   (67,130)   (945,357)
                         
PROVISION FOR INCOME TAXES  —      —      —      —      —   
                         
NET  LOSS $(316,353)  $(32,796)  $(334,604)  $(67,130)  $(945,357)
NET LOSS PER SHARE: BASIC AND DILUTED $(0.00)  $(0.00)  $(0.00)  $(0.00)     
WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC AND DILUTED  117,122,826    80,125,000    98,623,913    80,125,000      

 

See accompanying notes to financial statements.

F-2


VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS) (Unaudited)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2013 AND 2012

FOR THE PERIOD FROM APRIL 21, 2010 (INCEPTION) TO DECEMBER 31, 2013  

 

  Three months ended
December 31,  2013
  Three months ended
December 31,  2013
  Six months ended
December 31,  2013
  Six months ended
December 31,  2012
  Period from
April 21, 2010
(Inception) to
December 31, 2013
Net Loss $(316,353)  $(32,796)  $(334,604)  $(67,130)  $(945,357)
                         
Foreign Currency Translation:                        
Change in cumulative translation adjustment  (5,491)   9,366    6,809    11,808    169,811 
Change in cumulative translation adjustment from discontinued operations  5,491    (9,366)   (6,809)   (11,808)   (169,811)
Income tax benefit (expense)  —      —      —      —      —   
Total $—     $—     $—     $—     $—   

 

See accompanying notes to financial statements.

F-3

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS (Unaudited)

FOR THE SIX MONTHS ENDED DECEMBER 31, 2013 AND 2012

FOR THE PERIOD FROM APRIL 21, 2010 (INCEPTION) TO JUNE 30, 2013

 

  Six months ended
December 31,  2013
  Six months ended
December 31,  2012
  Period from
April 21, 2010
(Inception) to
December 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES OF CONTINUING OPERATIONS:        
Net loss for the period $(56,692)  $(9,562)  $(328,435)
Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities of Continuing Operations:              
Stock-based compensation  43,546    —      75,546 
Deposit impairment  —      —      50,000 
Bad debt expense  —      —      19,094 
Changes in assets and liabilities:              
Increase (decrease) in accounts payable and accrued expenses  2,500    (24,397)   2,500 
Net Cash Used by Operating Activities of Continuing Operations  (10,646)   (33,959)   (181,295)
               
CASH FLOWS FROM FINANCING ACTIVITIES OF CONTINUING OPERATIONS:              
Proceeds from sales of common stock  —      0    89,710 
Proceeds from additional investor paid in capital  301,296         301,296 
Proceeds from exercise of stock warrants  —      0    170,000 
Proceeds from notes payable – related parties  —      0    —   
Payments on notes payable – related parties  —      (97,951)   —   
Net Cash Provided by (Used by) Financing Activities of Continuing Operations  301,296    (97,951)   561,006 
               
CASH FLOWS FROM DISCONTINUED OPERATIONS:              
     Cash flows from operating activities of discontinued operations  (8,902)   (97,223)   (347,911)
     Cash flows from investing activities of discontinued operations  —      225    (10,318)
     Cash flows from financing activities of discontinued operations  18,252    33,950    278,518 
Net Cash (Used by) Provided by Discontinued Operations  9,350    (63,048)   (79,711)
               
NET INCREASE (DECREASE) IN CASH  300,000    (194,958)   300,000 
Cash, beginning of period  —      300,687    0 
Cash, end of period $300,000   $105,729   $300,000 
               
SUPPLEMENTAL CASH FLOW INFORMATION:              
Cash paid for interest $0   $0   $0 
Cash paid for income taxes $0   $0   $0 
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING INFORMATION:              
Deemed dividend related to acquisition/disposition of subsidiary $317,693   $0   $85,200 
Exercise of stock warrants for stock subscription receivable $0   $0   $118,750 
Stock issued for equity issuance costs $0   $0   $5,000 
Stock issued for discontinued operations $269,010   $0   $269,010 
Write-off of stock subscription receivable $0   $0   $(118,750)
Common stock warrants issued for deferred stock-based compensation $3,494,453   $0   $3,494,453 

 

See accompanying notes to financial statements.

F-4

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2013

 

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES

 

Nature of Business

Vantage Health (“Vantage Health” and the “Company”) is a development stage company and was incorporated in Nevada on April 21, 2010.

 

On October 9, 2013, Vantage Health executed an Agreement of Conveyance, Transfer and Assignment of Subsidiary and Assumption of Obligations for the sale of the Company’s 51% interest in Moxisign (PTY) Ltd (“Moxisign”) with Lisa Ramakrishnan, an officer, director and shareholder of the Company. Pursuant to the terms of the Agreement, Ms. Ramakrishnan agreed to assume all of the debts and liabilities of Moxisign, totaling approximately $575,971. The assets and beneficial equity relief of Moxisign are valued at approximately $154,316. As a result of this transaction, we are no longer in the business of becoming a pharmaceutical distributor with the specific intention of bidding on South African government health care contracts and tenders.  This line of business was sold under the Agreement. We are currently evaluating alternative business opportunities. 

 

Development Stage Company

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development-stage companies. A development-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.

 

Basis of Presentation

The accompanying interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K filed with the SEC as of and for the year ended June 30, 2013. In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results expected for the full year. The Company has adopted a June 30 year end.

 

Cash and Cash Equivalents

Vantage Health considers all highly liquid investments with maturities of three months or less to be cash equivalents. At December 31, 2013 and June 30, 2013, the Company had $300,000 and $0 of cash from continuing operations, respectively.

 

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts payable and accrued expenses and shareholder loans. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Revenue Recognition

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

 

F-5

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2013

 

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

 

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of December 31, 2013.

 

Other Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and other gains and losses affecting stockholder’s equity that, under GAAP, are excluded from net income (loss), including foreign currency translation adjustments, gains and losses related to certain derivative contracts, and gains or losses, prior service costs or credits, and transition assets or obligations associated with pension or other postretirement benefits that have not been recognized as components of net periodic benefit cost.

 

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

 

NOTE 2 – PREPAID EXPENSES

 

In relation to a sub-licensing agreement with NASA, a shareholder has paid royalty fees applicable to 2014 on behalf of the Company. The $100,000 payment was an additional investment in the Company and is not required to be repaid.

  

F-6

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2013

 

NOTE 3 - SHAREHOLDER LOANS

 

During the period ended June 30, 2010, the Company received loans from two shareholders for $100,699, $30,000. The loans were non-interest bearing, unsecured and were due on July 13, 2013.

 

An additional $247,623 was loaned from a shareholder during the year ended June 30, 2011.

 

During the year ended June 30, 2011, a shareholder forgave loans totaling $50,000 which have been recorded as contributed capital.

 

An additional $311,951 was loaned from a shareholder during the year ended June 30, 2012.

 

During the year ended June 30, 2013, the Company received loans totaling $16,725 from a shareholder and repaid $100,000 of the outstanding shareholder loans.

 

On October 9, 2013 the Company entered into an agreement whereby the originator of the shareholder loans agreed to forgive the existing loan balance in exchange for all the assets and liabilities of the Company as of October 9, 2013. Therefore, the balance of the loan was reduced to $0 as of that date.

 

The total amount due to the shareholders was $0 and $237,754 as of December 31, 2013 and June 30, 2013, respectively.

 

NOTE 4 – COMMON STOCK

 

The Company has 250,000,000 shares of $0.001 par value common stock.

 

During the period ended June 30, 2010, the Company issued 74,150,000 shares of common stock ranging from $0.001 to $0.003 per share. Vantage received total proceeds of $89,710. Also, during the year ended June 30, 2011, a shareholder forgave loans totaling $50,000 which have been recorded as contributed capital. Finally, on June 30, 2011, a director of the company was issued 100,000 shares of restricted common stock valued at $32,000 for services rendered.

 

During the year ended June 30, 2012, warrants were exercised for 5,775,000 common shares of stock, for $20,000 in cash and notes receivable totaling $268,750, subscriptions receivable were collected in the amount of $170,000. Also during the year ended June 30, 2012, 100,000 shares of common stock were issued for issuance costs.

 

At June 30, 2013, it was determined that the outstanding stock subscription receivable was uncollectable and the amount was written off. The Company plans to pursue the balance through all possible means however chances of collectability are unknown.

 

During the period ended December 31, 2013, 54,900,000 shares of common stock were issued for services rendered in connection with discontinued operations. This stock issuance was initiated by the former management of the Company. The stock was valued at the market value on the grant date for a total of $269,010.

 

There were 135,025,000 and 80,125,000 shares issued and outstanding as of December 31, 2013 and June 30, 2013 respectively.

 

F-7

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2013

 

NOTE 5 – STOCK WARRANTS

 

The Company issued 7,859,375 stock warrants in connection with the issuance of common stock. The Company has accounted for these warrants as equity instruments in accordance with ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, and as such, will be classified in stockholders’ equity as they meet the definition of “…indexed to the issuer’s stock” in ASC 815-40. The Company has estimated the fair value of the warrants issued in connection with the private placement at $13 as of the grant dates using the Black-Scholes option pricing model. Each common stock purchase warrant has an exercise price of $3.00 and will expire 36 months from the effective date of the S-1.  The Company has the right to call the common stock purchase warrants within ten days written notice if the Company’s common stock is trading at or above $3.00 per share and has average daily trading volume of 200,000 shares of twenty consecutive days. No adjustment was made to the financial statements due to materiality.

 

On August 4, 2011 the exercise price for all the outstanding warrants was revised from $3.00 to $0.05 per share. The warrants were revalued on that date at $1,611,135. The stock and warrants were originally sold for total value of $13,541. As the value of the warrants cannot exceed the total value of the equity sale, no further adjustments are necessary.

 

During the quarter ended September 30, 2011 warrants were exercised for 5,775,000 common shares of stock, for $20,000 in cash and notes receivable totaling $268,750. There are 2,084,375 stock warrants remaining as of June 30, 2013. The remaining warrants will expire on January 28, 2014.

 

Key assumptions used by the Company are summarized as follows at the original grant date and the date of revision:

 

  Modification  Original
Stock price $0.25   $0.00275 
Exercise price $0.05   $3.00 
Expected volatility  86%   105%
Expected dividend yield  0.00%   0.00%
Risk-free rate over the estimated expected life of the warrants  0.27%   0.84%
Expected term (in years)  1.92    3 

 

On December 16, 2013, the Board of Directors of the Company approved the election of William S. Rees, Jr. to serve as a member of the Board effective December 16, 2014. Mr. Rees has not yet been appointed to serve on any committee of the Board. There are no arrangements or understandings between Mr. Rees and any other person pursuant to which Mr. Rees was appointed as a director. The Company entered into an agreement with Mr. Rees pursuant to which it agreed to issue to him, in consideration of his services, a warrant to purchase up to 2,000,000 shares of the Company’s common stock for a period of five years at an exercise price of $0.05 per share. As of December 31, 2013 the stock-based compensation expense related to this issuance was $2,915 and the deferred stock-based compensation was $96,848.

 

F-8

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2013

 

NOTE 5 – STOCK WARRANTS (CONTINUED)

 

On December 31, 2013, we issued to Accent Healthcare Advisors, LLC, a California limited liability company, as compensation for their past and future advisory services for the next several years in the bio-pharmaceutical and healthcare industries, a warrant to purchase up to 25,000,000 shares of the Company’s common stock, par value $.01 per share, for a period of seven years at an exercise price of $0.049 per share. The exercise price was calculated based on the prior ten days average closing price per share. The holder may not exercise the Warrant such that the number of shares of common stock beneficially owned by the holder and its affiliates exceeds 4.9% of the total outstanding shares of common stock of the Company. The exercise price and number of Warrant Shares are subject to adjustment upon the subdivision or combination of the Company’s common stock. Further, upon the consolidation, merger or sale of the Company, the holder is entitled to receive, at the Company’s discretion, either (a) if the Warrant is exercised, the consideration payable with respect to or in exchange for those Warrant Shares that would have been received if no consolidation, merger or sale had taken place or (b) cash equal to the value of the Warrant as determined in accordance with the Black-Scholes option pricing formula. As of December 31, 2013 the stock-based compensation expense related to this issuance was $16,408 and the deferred stock-based compensation was $2,977,999.

 

On November 27, 2013, the Company issued 3,875,000 warrants for the Company’s common stock as stock based compensation for a three year period, par value $.01 per share, at an exercise price per share equal to $0.05. The warrants are exercisable any time after November 27, 2013 for a period of five years from date of issuance. As of December 31, 2013 the stock-based compensation expense related to this issuance was $6,549 and the deferred stock-based compensation was $198,355.

 

On December 10, 2013, the Company issued 5,000,000 warrants for the Company’s common stock as stock based compensation for a three year period, par value $.01 per share, at an exercise price per share equal to the closing price on December 10, 2013 of $0.0478. The warrants are exercisable any time after December 10, 2013 for a period of seven years from date of issuance. As of December 31, 2013 the stock-based compensation expense related to this issuance was $17,674 and the deferred stock-based compensation was $221,251. 

 

NOTE 6 – DISCONTINUED OPERATIONS

 

On October 9, 2013, Vantage Health executed an Agreement of Conveyance, Transfer and Assignment of Subsidiary and Assumption of Obligations for the sale of the Company’s 51% interest in Moxisign (PTY) Ltd (“Moxisign”) with Lisa Ramakrishnan, an officer, director and shareholder of the Company. Pursuant to the terms of the Agreement, Ms. Ramakrishnan agreed to assume all of the debts and liabilities of Moxisign, totaling approximately $575,971. The assets and beneficial equity relief of Moxisign are valued at approximately $154,316. As a result of this transaction, we are no longer in the business of becoming a pharmaceutical distributor with the specific intention of bidding on South African government health care contracts and tenders.  This line of business was sold under the Agreement. We are currently evaluating alternative business opportunities. 

 

The gain on the disposal of the subsidiary is included as additional paid in capital for the period.

  

F-9

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2013

 

NOTE 7 – COMMITMENTS

 

On January 1, 2014, the Company entered into a Sub-License Agreement affiliated with the National Aeronautics and Space Administration (“NASA”) pursuant to which the Company was granted a royalty-bearing, non-transferable license to certain inventions and patent rights owned by NASA relating to chemical sensing nanotechnology, for use within the United States and its territories. The License is effective as of December 31, 2013 and subject to an initial five year term, during which the License will be exclusive to the Company. Following the initial five-year term, the License shall automatically convert to a non-exclusive license. The License may be terminated by NASA following a 30 day cure period, among other reasons, upon a breach of the License Agreement or upon its determination that the Company has failed to adequately develop or commercialize the licensed patents. Specific milestones and commercialization requirements are set forth in the License Agreement. NASA provides no warranties under the License Agreement and assumes no responsibility for our use, sale or other disposition of the licensed technology. We agree to indemnify NASA against all liabilities arising from such use, sale or other disposition. We must pay certain royalties in connection with the License as set forth in the License Agreement. Royalties owed for 2014 have been paid in advance by Nanobeak and will not be charged to Vantage Health, with the next Vantage Health payment due in 2015.

 

NOTE 8 – LIQUIDITY AND GOING CONCERN

 

The Company has incurred losses since inception, and has not yet received material revenues from sales of products or services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

 

The ability of Vantage Health to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.

 

NOTE 9 – INCOME TAXES

 

For the six months ended December 31, 2013, Vantage Health has incurred a net loss from continuing operations of approximately $56,692 and thus has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward from continuing operations is approximately $328,435 at December 31, 2013, and will expire beginning in the year 2030.

 

F-10

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2013

 

NOTE 9 – INCOME TAXES (CONTINUED)

 

The provision for Federal income tax consists of the following for the six months ended December 31, 2013 and 2012:

 

  2013  2012
Federal income tax benefit attributable to:         
Continuing operations $19,275   $3,251 
Less: valuation allowance  (19,275)   (3,251)
Net provision for Federal income taxes $0   $0 

 

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of December 31, 2013 and June 30, 2013:

 

  December 31, 2013  June 30, 2013
Deferred tax asset attributable to:         
  Net operating loss carryover $111,668   $92,393 
  Valuation allowance  (111,668)   (92,393)
 Net deferred tax asset $0   $0 

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards from continuing operations of approximately $328,435 for Federal income tax reporting purposes are subject to annual limitations. Use of the net operating loss carry forwards is limited due to a change in control.

 

NOTE 10 – SUBSEQUENT EVENTS

 

Effective January 1, 2014, Dr. Ramakrishnan resigned as a director of the Company.

 

On January 1, 2014, the Company entered into a Sub-License Agreement affiliated with the National Aeronautics and Space Administration (“NASA”) pursuant to which the Company was granted a royalty-bearing, non-transferable license to certain inventions and patent rights owned by NASA relating to chemical sensing nanotechnology, for use within the United States and its territories. The License is effective as of December 31, 2013 and subject to an initial five year term, during which the License will be exclusive to the Company. Following the initial five-year term, the License shall automatically convert to a non-exclusive license. The License may be terminated by NASA following a 30 day cure period, among other reasons, upon a breach of the License Agreement or upon its determination that the Company has failed to adequately develop or commercialize the licensed patents. Specific milestones and commercialization requirements are set forth in the License Agreement. NASA provides no warranties under the License Agreement and assumes no responsibility for our use, sale or other disposition of the licensed technology. We agree to indemnify NASA against all liabilities arising from such use, sale or other disposition. We must pay certain royalties in connection with the License as set forth in the License Agreement. Royalties owed for 2014 of $100,000 have been paid in advance by Nanobeak and will not be charged to Vantage Health, with the next Vantage Health payment due in 2015.

 

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2013 through the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than the events described above.

 

F-11

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

 

Overview

 

We were incorporated in the State of Nevada on April 21, 2010. We were a development stage company with a business plan of becoming a pharmaceutical manufacturer with the specific intention of bidding on South African government health care contracts and tenders. On October 9, 2013, however, we sold our subsidiary and accompanying assets associated with the pharmaceutical business and, since then, we have been evaluating alternative business opportunities.

 

On November 7, 2013, Nanobeak, Inc., a California corporation (“Nanobeak”) acquired a majority interest in our company through the stock purchase of a controlling interest in our company from Bayview Terrace Limited.

 

On January 1, 2014, our new majority shareholder, Nanobeak, entered into a License Agreement (the “License Agreement”) with the National Aeronautics and Space Administration (“NASA”) pursuant to which Nanobeak was granted a royalty-bearing, non-transferable license (the “License”) to certain inventions and patent rights owned by NASA relating to chemical sensing nanotechnology, for use within the United States and its territories.

 

The License is effective as of December 31, 2013 and subject to an initial five year term, during which the License will be exclusive to Nanobeak. Following the initial five-year term, the License shall automatically convert to a non-exclusive license. Under the License, Nanobeak is required to develop and commercialize the licensed patents..

 

On January 1, 2014, Nanobeak sublicensed the License to us, which was approved by NASA. NASA provides no warranties under the License Agreement and assumes no responsibility for our use, sale or other disposition of the licensed technology. We have agreed to indemnify NASA against all liabilities arising from such use, sale or other disposition.

 

We must pay certain royalties in connection with the License as set forth in the License Agreement. Royalties owed for 2014 have been paid in advance by Nanobeak, with the next payment due in 2015.

 

As a result of the License Agreement, we are now a mobile health technology company that is developing personalized and point-of-care screening using applications based upon chemical sensing residing within a small device attached to a smartphone. With our foundations in advanced nanotechnology, our first product, the Vantage Health Sensor, is the convergence of nano-electronics, bio-informatics, and wireless technology to create the next generation mobile health application. Still under development, the first mobile application is expected to be for lung cancer screening with additional mobile healthcare applications in the planning stages. The company has offices in Redwood City, CA and New York.

4

 

Results of operations for the three and six months ended December 31, 2013 and 2012 and for the period from April 21, 2010 (date of inception) through December 31, 2013

 

We have earned only nominal revenues from our inception to December 31, 2013. We do not expect to generate revenues until we are able to locate and implement a viable business opportunity.

 

Our operating expenses from continuing operations for the three months ended December 31, 2013 were $47,342, compared with operating expenses from continuing operations of $8,674 for the three months ended December 31, 2012. Our operating expenses from continuing operations for the three months ended December 31, 2013 consisted of professional fees of $2,500, stock-based compensation of $43,546, and office expenses, salaries and wages of $1,296. Our operating expenses from continuing operations for the three months ended December 31, 2012 consisted of professional fees of $5,237 and office expenses, salaries and wages of $3,437.

 

Our operating expenses from continuing operations for the six months ended December 31, 2013 were $56,692, compared with operating expenses from continuing operations of $9,562 for the six months ended December 31, 2012. Our operating expenses from continuing operations for the six months ended December 31, 2013 consisted of professional fees of $6,219, stock-based compensation of $43,546, office expenses, salaries and wages of $1,927, and consulting expenses of $5,000. Our operating expenses from continuing operations for the six months ended December 31, 2012 mainly consisted of professional fees of $5,506 and office expenses, salaries and wages of $4,056.

 

Our operating expenses from continuing operations from inception to December 31, 2013 amounted to $328,504.

 

We incurred a net loss of $316,353 for the three months ended December 31, 2013, which included a net loss from continuing operations of $47,342 and loss from discontinued operations of $269,011, compared with a net loss of $32,796 for the three months ended December 31, 2012, which included a net loss from continuing operations of $8,674 and loss from discontinued operations of $24,122. We incurred a net loss of $334,604, which included a net loss from continuing operations of $56,692 and loss from discontinued operations of $277,912, for the six months ended December 31, 2013, compared with a net loss of $67,130 for the six months ended December 31, 2012, which included a net loss from continuing operations of $9,562 and loss from discontinued operations of $57,568. We had a cumulative net loss of $945,357 for the period from April 21, 2010 (inception) to December 31, 2013.

 

We have not attained profitable operations and are dependent upon locating, financing and implementing a viable business opportunity to stay in business. For these reasons, there is substantial doubt that we will be able to continue as a going concern.

 

Liquidity and Capital Resources

 

As of December 31, 2013, we had total current assets of $400,000, consisting of cash of $300,000 and prepaid expenses of $100,000. We had current liabilities of $2,500 as of December 31, 2013. Accordingly, we had working capital of $397,500 as of December 31, 2013.

 

Operating activities from continuing operations used $10,646 in cash for the six months ended December 31, 2013. Our negative operating cash flow was a result of our net loss, offset by stock based compensation of $43,546 and an increase in accounts payable and accrued expenses of $2,500.

 

Financing activities from continuing operations for the six months ended December 31, 2013 provided $301,296 in cash from an investor who made a capital contribution.

 

Our success beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

 

Off Balance Sheet Arrangements

 

As of December 31, 2013, there were no off balance sheet arrangements.

 

5

Going Concern

 

We have incurred losses from inception and have not yet received material revenues from sales of products or services. These factors create substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.

 

Our ability to continue as a going concern is dependent on generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling our equity securities and obtaining debt financing to fund our capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and principal financial officer evaluated our company's disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and to ensure that such information is accumulated and communicated to our company's management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both United States generally accepted accounting principles and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.

 

We plan to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending June 30, 2014, subject to obtaining additional financing: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out above are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

 

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2013 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

 

6

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 

Item 1A: Risk Factors

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Aside from that provided below, there have been no issuances of securities without registration under the Securities Act of 1933 during the reporting period which were not previously included in a Quarterly Report on Form 10-Q or Current Report on Form 8-K.

 

On December 16, 2013, we entered into an agreement with our director, William S. Rees, pursuant to which we agreed to issue to him, in consideration of his services, a warrant to purchase up to 2,000,000 shares of our common stock for a period of five years at an exercise price of $0.05 per share.

 

On December 31, 2013, we issued to Accent Healthcare Advisors, LLC, a California limited liability company, as compensation for its past and future advisory services for the next several years in the bio-pharmaceutical and healthcare industries, a warrant to purchase up to 25,000,000 shares of our common stock for a period of seven years at an exercise price of $0.049 per share.

 

On November 27, 2013, we issued warrants to purchase 3,875,000 shares of our common stock as stock based compensation for a three year period, at an exercise price of $0.05per share. The warrants are exercisable any time after November 27, 2013 for a period of five years from date of issuance.

 

On December 10, 2013, we issued warrants to purchase 5,000,000 shares of our common stock as stock based compensation for a three year period, at an exercise price per share equal to the closing price on December 10, 2013 of $0.0478. The warrants are exercisable any time after December 10, 2013 for a period of seven years from date of issuance.

 

The above securities were issued in reliance upon the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder.

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None

 

Item 6. Exhibits

 

Exhibit Number Description of Exhibit
10.1 License Agreement*
31.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101** The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2013 formatted in Extensible Business Reporting Language (XBRL).

* Portions of this exhibit have been omitted pursuant to a request for confidential treatment with the Securities and Exchange Commission.

**Provided herewith

 

7

SIGNATURES

 

Pursuant to the requirements 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.

 

Vantage Health
Date: February 19, 2014
   

 

By:

 

/s/ J. Jeremy Barbera

J. Jeremy Barbera
Title: Chief Executive Officer

 

8