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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Medical Care Technologies Inc (PK) | USOTC:MDCE | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.0002 | -9.52% | 0.0019 | 0.0017 | 0.0021 | 0.0021 | 0.0015 | 0.002 | 5,319,499 | 21:02:25 |
x QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2011 | |
OR
|
|
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Index | |
Consolidated Balance Sheets
|
F-1
|
Consolidated Statements of Expenses
|
F-2
|
Consolidated Statements of Cash Flows
|
F-3
|
Consolidated Statement of Stockholders’ Equity (Deficit)
|
F-4 to F-5
|
Notes to the Consolidated Financial Statements
|
F-6 to F-16
|
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Unaudited) | ||||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 24,195 | $ | 391 | ||||
Prepaid expenses
|
317,896 | 6,500 | ||||||
Total Current Assets
|
342,091 | 6,891 | ||||||
Property and equipment, net of accumulated depreciation of $15,000 and $40,000 respectively
|
5,000 | 10,000 | ||||||
Deferred financing costs
|
6,894 | – | ||||||
Total Assets
|
$ | 353,985 | $ | 16,891 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 45,635 | $ | 77,958 | ||||
Accrued liabilities
|
25,868 | 10,112 | ||||||
Convertible note payable, net of unamortized discount of $106,394 and $ respectively'
|
151,595 | 1,573 | ||||||
Derivative liability
|
116,387 | 6,095 | ||||||
Due to related parties
|
65,357 | 59,402 | ||||||
Loans payable
|
81,225 | 91,113 | ||||||
Total Liabilities
|
486,067 | 246,253 | ||||||
Commitments and Contingency (Notes 1, 8 and 9)
|
||||||||
Subsequent Events (Note 10)
|
||||||||
Stockholders’ Deficit
|
||||||||
Preferred Stock: 100,000,000 shares authorized, $0.00001 par value,
No shares issued and outstanding as of June 30, 2011 and December 31, 2010
|
– | – | ||||||
Common Stock: 500,000,000 shares authorized, $0.00001 par value,
213,018,992 and 161,006,087 shares issued and outstanding as of
June 30, 2011 and December 31, 2010, respectively
|
2,130 | 1,610 | ||||||
Additional Paid-in Capital
|
3,097,670 | 2,136,705 | ||||||
Deficit Accumulated During the Development Stage
|
(3,326,031 | ) | (2,367,677 | ) | ||||
Total Stockholders’ Deficit
|
(226,231 | ) | (229,362 | ) | ||||
Non-controlling Interest
|
94,149 | – | ||||||
Stockholder's Total Deficit
|
(132,082 | ) | (229,362 | ) | ||||
Total Liabilities and Stockholders’ Deficit
|
$ | 353,985 | $ | 16,891 | ||||
Period from
|
||||||||||||||||||||
February 27, 2007
|
||||||||||||||||||||
For the Three Months Ended
|
For the Six Months Ended
|
(Inception)
|
||||||||||||||||||
June 30,
|
June 30,
|
to June 30,
|
||||||||||||||||||
2011
|
2010
|
2011
|
2010
|
2011
|
||||||||||||||||
Expenses
|
||||||||||||||||||||
General and administrative
|
$ | 437,136 | $ | 298,077 | $ | 504,153 | $ | 333,689 | $ | 1,378,912 | ||||||||||
Depreciation and amortization expense
|
6,960 | 115,282 | 9,460 | 230,564 | 504,378 | |||||||||||||||
Management fees
|
131,287 | 15,000 | 176,096 | 30,000 | 1,087,804 | |||||||||||||||
Total Operating Expenses
|
(575,383 | ) | (428,359 | ) | (689,709 | ) | (594,253 | ) | (2,971,094 | ) | ||||||||||
Other Income (Expense)
|
||||||||||||||||||||
Interest expense
|
(175,035 | ) | – | (187,404 | ) | – | (187,745 | ) | ||||||||||||
Loss on derivative
|
(69,900 | ) | – | (70,829 | ) | – | (68,080 | ) | ||||||||||||
Loss on settlement of debt
|
(13,750 | ) | – | (13,750 | ) | – | (13,750 | ) | ||||||||||||
Foreign currency exchange gain (loss)
|
39 | 362 | (3 | ) | 125 | (1,393 | ) | |||||||||||||
Total Other Income (Expense)
|
(258,646 | ) | 362 | (271,986 | ) | 125 | (270,968 | ) | ||||||||||||
Loss Before Discontinued Operations
|
(834,029 | ) | (427,997 | ) | (961,695 | ) | (594,128 | ) | (3,242,062 | ) | ||||||||||
Loss from Discontinued Operations
|
– | – | – | – | (87,310 | ) | ||||||||||||||
Net Loss
|
$ | (834,029 | ) | $ | (427,997 | ) | $ | (961,695 | ) | $ | (594,128 | ) | $ | (3,329,372 | ) | |||||
Net Loss attributable to non-controlling interest
|
1,888 | – | 3,341 | – | 3,341 | |||||||||||||||
Net Loss Attributable to Medical Care Technologies Inc.
|
$ | (832,141 | ) | $ | (427,997 | ) | $ | (958,354 | ) | $ | (594,128 | ) | $ | (3,326,031 | ) | |||||
Net Loss Per Common Share – Basic and Diluted available to Medical Care Technologies Inc.:
|
||||||||||||||||||||
Discontinued Operations
|
N/A | N/A | N/A | N/A | ||||||||||||||||
Continued Operations
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||
Net Loss
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.001 | ) | $ | (0.01 | ) | ||||||||
Weighted Average Common Shares Outstanding –Basic and Diluted
|
184,755,000 | 102,620,000 | 174,076,000 | 100,930,000 |
Period from
|
||||||||||||
February 27, 2007
|
||||||||||||
For the Six Months Ended
|
(Date of Inception)
|
|||||||||||
June 30,
|
to June 30,
|
|||||||||||
2011
|
2010
|
2011
|
||||||||||
Cash Flows from Operating Activities
|
||||||||||||
Net loss
|
$ | (961,695 | ) | $ | (594,128 | ) | $ | (3,329,372 | ) | |||
Adjustment to reconcile net loss to net cash used in operating activities: | ||||||||||||
Donated services and expenses
|
– | – | 10,500 | |||||||||
Depreciation and amortization
|
9,460 | 230,564 | 504,378 | |||||||||
Stock-based compensation
|
523,975 | 260,000 | 2,005,872 | |||||||||
Accretion of discount on convertible debt
|
177,756 | – | 178,097 | |||||||||
Loss on derivative
|
70,829 | – | 68,080 | |||||||||
Loss on settlement of debt
|
13,750 | – | 13,750 | |||||||||
Amortization of debt financing costs
|
3,606 | – | 3,606 | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Prepaid expenses
|
(52,466 | ) | (45,500 | ) | (58,966 | ) | ||||||
Accounts payable
|
22,677 | 25,308 | 75,651 | |||||||||
Accrued liabilities
|
16,357 | 4,923 | 26,469 | |||||||||
Net Cash Used in Operating Activities
|
(175,751 | ) | (118,833 | ) | (501,755 | ) | ||||||
Cash Flows from Financing Activities:
|
||||||||||||
Proceeds from sale of common stock for cash
|
– | 100,000 | 141,000 | |||||||||
Proceeds from loans payable
|
– | 9,977 | 91,189 | |||||||||
Proceeds from convertible note payable
|
192,000 | – | 202,000 | |||||||||
Due to related party
|
5,955 | 9,566 | 90,161 | |||||||||
Contributions from non-controlling interest
|
1,600 | – | 1,600 | |||||||||
Net Cash Provided by Financing Activities
|
199,555 | 119,543 | 525,950 | |||||||||
Increase in Cash and Cash Equiva
lent
|
23,804 | 710 | 24,195 | |||||||||
Cash – Beginning of Period
|
391 | 475 | – | |||||||||
Cash – End of Period
|
$ | 24,195 | $ | 1,185 | $ | 24,195 | ||||||
Supplemental Disclosures:
|
||||||||||||
Interest paid
|
– | – | – | |||||||||
Income taxes paid
|
– | – | – | |||||||||
Non-Cash Disclosures:
|
||||||||||||
Debt discount
|
$ | 108,130 | $ | – | $ | 116,974 | ||||||
Cancellation of shares
|
– | – | 573 | |||||||||
Conversion of derivative liability
|
236,167 | – | 236,167 | |||||||||
Reclassification of related party debt to/from accounts payable
|
– | 23,445 | 48,249 | |||||||||
Shares issued for acquisition of assets
|
– | 471,128 | 504,918 | |||||||||
Shares issued upon conversion of convertible debt and accrued
interest
|
$ | 177,593 | $ | – | $ | 177,593 |
Deficit
|
||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||
Common Stock
|
Additional
|
During
|
Non–
|
|||||||||||||||||||||
Paid-in
|
Development
|
Controlling
|
||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Interest
|
Total
|
|||||||||||||||||||
Balance – February 27, 2007 (Inception)
|
– | $ | – | $ | – | $ | – | $ | – | $ | – | |||||||||||||
Issuance of common stock for cash at $0.00001 per
share to the President of the Company
|
57,500,000 | 575 | 4,425 | – | – | 5,000 | ||||||||||||||||||
Issuance of common stock for cash at $0.0001 per share
|
41,400,000 | 414 | 35,586 | – | – | 36,000 | ||||||||||||||||||
Donated services
|
– | – | 5,000 | – | – | 5,000 | ||||||||||||||||||
Net loss for the period
|
– | – | – | (37,543 | ) | – | (37,543 | ) | ||||||||||||||||
Balance – December 31, 2007
|
98,900,000 | 989 | 45,011 | (37,543 | ) | – | 8,457 | |||||||||||||||||
Donated services
|
– | – | 5,500 | – | – | 5,500 | ||||||||||||||||||
Net loss for the year
|
– | – | – | (55,742 | ) | – | (55,742 | ) | ||||||||||||||||
Balance – December 31, 2008
|
98,900,000 | $ | 989 | $ | 50,511 | $ | (93,285 | ) | $ | – | $ | (41,785 | ) | |||||||||||
Cancellation of common stock – President of the
Company
|
(57,500,000 | ) | (575 | ) | (14,425 | ) | – | – | (15,000 | ) | ||||||||||||||
Issuance of common stock for cash – President of the
Company
|
57,500,000 | 575 | 14,425 | – | – | 15,000 | ||||||||||||||||||
Net loss for the year
|
– | – | – | (85,121 | ) | – | (85,121 | ) | ||||||||||||||||
Balance – December 31, 2009
|
98,900,000 | $ | 989 | $ | 50,511 | $ | (178,406 | ) | $ | – | $ | (126,906 | ) | |||||||||||
Cancellation of common stock
|
(57,300,000 | ) | (573 | ) | 573 | – | – | – | ||||||||||||||||
Issuance of common stock for acquisition of assets
|
58,695,000 | 587 | 504,331 | – | – | 504,918 | ||||||||||||||||||
Issuance of common stock for cash at $0.20 per share
|
500,000 | 5 | 99,995 | – | – | 100,000 | ||||||||||||||||||
Issuance of common stock for consulting services
|
16,635,000 | 166 | 514,921 | – | – | 515,087 | ||||||||||||||||||
Issuance of common stock for management services
|
38,000,000 | 380 | 835,620 | – | – | 836,000 | ||||||||||||||||||
Issuance of common stock for director fees
|
500,000 | 5 | 10,995 | – | – | 11,000 | ||||||||||||||||||
Issuance of common stock for business promotion
services
|
3,826,087 | 38 | 87,962 | – | – | 88,000 | ||||||||||||||||||
Issuance of common stock for advisory services
|
1,250,000 | 13 | 28,737 | – | – | 28,750 | ||||||||||||||||||
Stock-based compensation
|
– | – | 3,012 | – | – | 3,012 | ||||||||||||||||||
Issuance of stock options
|
– | – | 48 | – | – | 48 | ||||||||||||||||||
Net loss for the year
|
– | – | – | (2,189,271 | ) | – | (2,189,271 | ) | ||||||||||||||||
Balance – December 31, 2010
|
161,006,087 | $ | 1,610 | $ | 2,136,705 | $ | (2,367,677 | ) | $ | – | $ | (229,362 | ) |
Deficit
|
||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||
Common Stock
|
Additional
|
During
|
Non–
|
|||||||||||||||||||||
Paid-in
|
Development
|
Controlling
|
||||||||||||||||||||||
Shares
|
Amount |
Capital
|
Stage
|
Interest
|
Total
|
|||||||||||||||||||
Balance – December 31, 2010
|
161,006,087 | $ | 1,610 | $ | 2,136,705 | $ | (2,367,677 | ) | $ | – | $ | (229,362 | ) | |||||||||||
Issuance of common stock for consulting services
|
21,300,000 | 213 | 338,032 | – | – | 338,245 | ||||||||||||||||||
Issuance of common stock upon conversion of
convertible debt
|
20,572,157 | 206 | 177,387 | – | – | 177,593 | ||||||||||||||||||
Issuance of common stock for promissory note
|
1,250,000 | 12 | 23,738 | – | – | 23,750 | ||||||||||||||||||
Issuance of common stock for management services
|
3,500,000 | 35 | 52,465 | – | – | 52,500 | ||||||||||||||||||
Issuance of common stock for administrator services
|
4,300,000 | 43 | 61,757 | – | – | 61,800 | ||||||||||||||||||
Issuance of common stock for business promotion
services
|
1,090,748 | 11 | 19,989 | – | – | 20,000 | ||||||||||||||||||
Conversion feature on convertible debt
|
– | – | 236,167 | – | – | 236,167 | ||||||||||||||||||
Stock-based compensation
|
– | – | 51,430 | – | – | 51,430 | ||||||||||||||||||
Net loss for the period
|
– | – | – | (958,354 | ) | (3,341 | ) | (961,695 | ) | |||||||||||||||
Contribution from non-controlling interest
|
– | – | – | – | 97,490 | 97,490 | ||||||||||||||||||
Balance – June 30, 2011 (unaudited)
|
213,018,992 | $ | 2,130 | $ | 3,097,670 | $ | (3,326,031 | ) | $ | 94,149 | $ | (132,082 | ) |
1.
|
Nature of Operations and Continuance of Business
|
2.
|
Related Party Transactions
|
a)
|
During the six months ended June 30, 2011, the Company recognized $30,000 of management fees for the President of the Company. At June 30, 2011, the Company is indebted to the President of the Company for $59,595. This amount is unsecured, bears no interest and is due on demand.
|
b)
|
On February 1, 2011, the Company entered into an employment agreement with its Chief Operating Officer (“COO”). Pursuant to the agreement, the Company granted 2,000,000 shares of common stock for the first year of service at a fair value of $28,000 based on the quoted market price of the stock on the date of grant. This grant is for the first year of service. The term of the agreement is 36 months and the agreement is automatically renewable for successive one year. Refer to Note 4(c).
|
c)
|
On February 1, 2011, the Company issued 100,000 stock options to the COO with an exercise price of $0.25 per share. The 100,000 stock options are exercisable until February 1, 2021. 50,000 vest on August 1, 2011, 25,000 vest on January 1, 2012 and 25,000 stock options vest on August 1, 2012. The fair value for these stock options was estimated at the date of grant using the Black-Scholes options-pricing model assuming a weighted average expected life of 10.1 years, a risk-free rate of 3.48%, an expected volatility of 250%, and a 0% dividend yield. The weighted fair value of stock options was $0.014 per share. During the six months ended June 30, 2011, the Company recorded stock-based compensation of $833 as management fees.
|
3.
|
Convertible Notes Payable
|
a)
|
On November 15, 2010, the Company entered into a Convertible Promissory Note agreement for $10,000. Pursuant to the agreement, the loan is convertible into shares of common stock at a variable conversion price equal to the lower of 80% of the average of the lowest three closing bid prices for the common stock during the 10 trading days prior to the date of the conversion notice. The loan bears interest at 6% per year and the principal amount and any interest thereon are due on November 12, 2011.
|
b)
|
On February 1, 2011, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. (“Asher”) for the sale of a Convertible Promissory Note (the “Note”) in the principal amount of $50,000. On February 7, 2011, Asher executed the purchase agreement and funded the Company pursuant to the terms thereof. The Company received net proceeds from the issuance of the Note in the amount of $47,000 and incurred debt financing costs of $3,000, which will be amortized over the term of the Note. The Note, which is due on November 3, 2011, bears interest at the rate of 8% per annum. All principal and accrued interest on the Note is convertible into shares of the Company’s common stock at the election of Asher at any time after 180 days from February 1st at a conversion price equal to a 39.9% discount to the average of the 3 closing bid prices of the common stock during the 10 trading day period prior to conversion. The derivative treatment would not become applicable until the Note becomes convertible on July 31, 2011.
|
c)
|
On March 11, 2011, the Company entered into a Securities Purchase Agreement with Asher for the sale of a Convertible Promissory Note (the “Note”) in the principal amount of $32,500. The Company received net proceeds from the issuance of the Note in the amount of $30,000 and incurred debt financing costs of $2,500, which will be amortized over the term of the Note. The Note, which is due on December 14, 2011, bears interest at the rate of 8% per annum. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 22% per annum from the due date thereof until the same is paid. All principal and accrued interest on the Note is convertible into shares of the Company’s common stock at the election of Asher at any time after 180 days from March 11, 2011 at a conversion price equal to a 39.9% discount to the average of the 3 closing bid prices of the common stock during the 10 trading day period prior to conversion. The derivative treatment would not become applicable until the Note becomes convertible on September 7, 2011.
|
d)
|
On April 12, 2011, the Company entered into a Securities Purchase Agreement with Asher for the sale of a Convertible Promissory Note (the “Note”) in the principal amount of $32,500. The Company received net proceeds from the issuance of the Note in the amount of $30,000 and incurred debt financing costs of $2,500, which will be amortized over the term of the Note. The Note, which is due on January 18, 2012, bears interest at the rate of 8% per annum. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 22% per annum from the due date thereof until the same is paid. All principal and accrued interest on the Note is convertible into shares of the Company’s common stock at the election of Asher at any time after 180 days from April 12, 2011 at a conversion price equal to a 39.9% discount to the average of the 3 closing bid prices of the common stock during the 10 trading day period prior to conversion. The derivative treatment would not become applicable until the Note becomes convertible on October 9, 2011.
|
e)
|
On April 28, 2011, the Company entered into six Convertible Promissory Note agreements with various investors for a total sum of $167,500. Pursuant to the agreement, the loan is convertible into shares of common stock at a conversion price of 61.5% of the closing bid prices for the common stock on the date of the conversion notice. The loan bears interest at 6% per year and the principal amount and any interest thereon are due on December 4, 2011.
|
f)
|
On June 1, 2011, the Company entered into a Securities Purchase Agreement with Asher for the sale of a Convertible Promissory Note (the “Note”) in the principal amount of $32,500. The Company received net proceeds from the issuance of the Note in the amount of $30,000 and incurred debt financing costs of $2,500, which will be amortized over the term of the Note. The Note, which is due on March 6, 2012, bears interest at the rate of 8% per annum. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 22% per annum from the due date thereof until the same is paid. All principal and accrued interest on the Note is convertible into shares of the Company’s common stock at the election of Asher at any time after 180 days from June 1, 2011 at a conversion price equal to a 39.9% discount to the average of the 3 closing bid prices of the common stock during the 10 trading day period prior to conversion. The derivative treatment would not become applicable until the Note becomes convertible on November 28, 2011.
|
g)
|
On June 1, 2011, the Company entered into a Convertible Promissory Note agreement for $55,000. Pursuant to the agreement, the loan is convertible into shares of common stock at a variable conversion price equal to the lower of 70% of the average of the lowest three closing bid prices for the common stock during the 10 trading days prior to the date of the conversion notice. The loan bears interest at 8% per year and the principal amount and any interest thereon are due on May 31, 2012.
|
h)
|
On June 17, 2011, the Company entered into a Convertible Promissory Note agreement for $10,000. Pursuant to the agreement, the loan is convertible into shares of common stock at a variable conversion price equal to the lower of 70% of the average of the lowest three closing bid prices for the common stock during the 10 trading days prior to the date of the conversion notice. The loan bears interest at 8% per year and the principal amount and any interest thereon are due on June 16, 2012.
|
i)
|
On June 17, 2011, the Company entered into a Convertible Promissory Note agreement for $25,000. Pursuant to the agreement, the loan is convertible into shares of common stock at a variable conversion price equal to the lower of 70% of the average of the lowest three closing bid prices for the common stock during the 10 trading days prior to the date of the conversion notice. The loan bears interest at 8% per year and the principal amount and any interest thereon are due on June 16, 2012.
|
j)
|
On June 17, 2011, the Company entered into a Convertible Promissory Note agreement for $10,000. Pursuant to the agreement, the loan is convertible into shares of common stock at a variable conversion price equal to the lower of 80% of the average of the lowest three closing bid prices for the common stock during the 10 trading days prior to the date of the conversion notice. The loan bears interest at 8% per year and the principal amount and any interest thereon are due on June 16, 2012.
|
k)
|
On June 19, 2011, the Company entered into a Convertible Promissory Note agreement for $10,000. Pursuant to the agreement, the loan is convertible into shares of common stock at a variable conversion price equal to the lower of 80% of the average of the lowest three closing bid prices for the common stock during the 10 trading days prior to the date of the conversion notice. The loan bears interest at 6% per year and the principal amount and any interest thereon are due on June 18, 2012.
|
4.
|
Common and Preferred Stock
|
a)
|
On January 5, 2011, the Company filed an S-8 Registration Statement to reserve 10,000,000 shares of common stock for its 2010 Stock Option Plan as described in Note 6 and to register 7,000,000 shares of common stock to be issued to various consultants pursuant to consulting agreements as described in Note 7.
|
b)
|
On January 11, 2011, the Company issued 1,097,141 restricted shares of common stock upon the conversion of the convertible note as described in Note 3(a).
|
c)
|
On February 1, 2011, the Company issued 2,000,000 shares of common stock to the Chief Operating Officer of the Company at a fair value of $28,000 for management services. Refer to Note 2(b).
|
d)
|
On March 24, 2011, the Company issued 275,000 shares of common stock pursuant to the administrative services agreement as described in Note 7(b).
|
e)
|
On April 4, 2011, the Company issued 100,000 shares of common pursuant to the consulting agreement as described in Note 7(c).
|
f)
|
On April 28, 2011, the Company issued 1,900,000 shares of common stock under the S-8 Registration Statement filed on January 5, 2011 pursuant to the administrative services agreement as described in Note 7(e).
|
g)
|
On May 2, 2011, the Company issued 19,475,016 restricted shares of common stock upon the conversion of the convertible notes as described in Note 6.
|
h)
|
On May 10, 2011, the Company issued 1,800,000 shares of common stock under the S-8 Registration Statement filed on January 5, 2011 pursuant to the administrative services agreement as described in Note 7(i).
|
i)
|
On May 12, 2011, the Company issued 588,235 restricted common shares pursuant to investor relations services agreement as described in Note 7(h).
|
j)
|
On May 15, 2011, the Company issued 275,000 shares of common stock under the S-8 Registration Statement filed on January 5, 2011 pursuant to the administrative services agreement as described in Note 7(b).
|
k)
|
On June 1, 2011, the Company issued 1,250,000 shares of common stock with a fair value of $23,750 for settlement of a promissory note. Since the fair value of the shares issued was more than the promissory note, the Company recognized a loss on the shares issued for the promissory note of $$13,750.
|
l)
|
On June 2, 2011, the Company filed an S-8 Registration Statement to register 21,000,000 shares of common stock. On June 2, 2011, the Company issued 7,500,000 shares of common stock under the S-8 Registration Statement pursuant to a May 16, 2011 consulting agreement as described in Note 7(k).
|
m)
|
On June 8, 2011, the Company issued 502,513 restricted common shares pursuant to investor relations services agreement as described in Note 7(h).
|
n)
|
On June 9, 2011, the Company issued 5,000,000 shares of restricted common stock to a consultant pursuant to a May 16, 2011 consulting agreement that are subject to a one year hold period as described in Note 7(k).
|
o)
|
On June 16, 2011, the Company issued 500,000 shares of restricted common stock to two consultants pursuant to a May 16, 2011 consulting agreement as described in Note 7(l).
|
p)
|
On June 17, 2011, the Company issued 3,500,000 shares of common stock pursuant to an April 1, 2011 management services agreement under the June 2, 2011 S-8 Registration Statement as described in Note 7(f).
|
q)
|
On June 20, 2011, the Company issued 2,500,000 shares of common stock pursuant to an April 1, 2011 administrative services agreement under the June 2, 2011 S-8 Registration Statement as described in Note 7(g).
|
r)
|
On June 29, 2011, the Company issued 3,750,000 shares of common stock pursuant to an May 10, 2011 management advisory agreement under the June 2, 2011 S-8 Registration Statement as described in Note 7(j).
|
5.
|
Stock Options
|
Number of
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life (years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
# | $ | # | $ | |||||||||||||
Outstanding, December 31, 2010
|
1,350,000 | 0.25 | 10.00 | – | ||||||||||||
Granted
|
350,000 | 0.25 | ||||||||||||||
Outstanding, June 30, 2011
|
1,700,000 | 0.25 | 9.51 | – | ||||||||||||
Exercisable, June 30, 2011
|
– | – | – | – |
Non-vested options
|
Number of
Options
|
Weighted Average
Grant Date
Fair Value
|
||||||
# | $ | |||||||
Non-vested at December 31, 2010
|
1,350,000 | 0.011 | ||||||
Granted
|
350,000 | 0.018 | ||||||
Vested
|
– | – | ||||||
Non-vested at June 30, 2011
|
1,700,000 | 0.015 |
6.
|
Joint Venture
|
7.
|
Commitments
|
a)
|
On September 15, 2010, the Company entered into an agreement with Accredited Members, Inc. (“AMI”), pursuant to which the Company will create and post a corporate profile on AMI’s community website which provides AMI’s members a channel to present information regarding their business to other members. Under the terms of the agreement, the Company agreed to pay $1,000 per month and issue $88,000 worth of restricted shares of common stock of the Company within 20 days of the signing of the agreement. If at the end of the 180-day restricted stock period (covered under Rule 144), the shares of common stock of the Company are valued at less than $88,000 (based on the lesser of the closing bid price at the 180 day mark or the trailing 20 day closing bid average), the Company will issue additional shares to equal the original $88,000 stock value at the start of the agreement. On September 15, 2010, the Company issued 3,826,087 shares of common stock at a fair value of $88,000. On March 13, 2011, the 3,826,087 shares of common stock had a value less than $88,000. However, the Company and AMI have agreed that no additional shares will be issued.
|
b)
|
On November 15, 2010, the Company entered into an administrative services agreement. Pursuant to the agreement, the Company agreed to issue 1,100,000 shares of common stock registered under an S-8 registration statement. The term of the agreement is one year. The 1,100,000 shares are payable as follows: 275,000 upon the execution of the agreement; 275,000 shares on February 15, 2011; 275,000 shares on May 15, 2011 and; 275,000 shares on August 15, 2011. On November 15, 2010, the Company issued 275,000 shares of common stock at a fair value of $4,538. On March 24, 2011, the Company issued 275,000 shares of common stock at a fair value of $4,125. On May 15, 2011, the Company issued 275,000 shares of common stock at a fair value of $4,070. Refer to Notes 5(d).
|
c)
|
On December 6, 2010, the Company entered into a consulting agreement for consulting services related to development, modification, packaging and marketing of certain consumer products acquired by the Company. Under the terms of the agreement, the Company agreed to issue 500,000 restricted shares of common stock of the Company, payable as follows: i) 100,000 shares upon execution of the agreement; ii) 100,000 shares on March 1, 2011; iii) 150,000 shares on August 1, 2011 and; iv) 150,000 shares on January 1, 2012. The term of the agreement is 24 months from the effective date of the agreement. On December 6, 2010, the Company issued 100,000 shares at a fair value of $1,400. On April 4, 2011, the Company issued the 100,000 shares due on March 1, 2011 at a fair value of $3,000. The contract was cancelled on May 23, 2011, and the stock-based compensation for the non-vested shares was reversed.
|
d)
|
On February 1, 2011, the Company entered into an Executive Officer Employment Agreement with its Chief Operating Officer (“COO”). Pursuant to the agreement, the Company agreed to pay a base compensation to be determined at such time when the Company secures a major financing in excess of $1,000,000. The Company issued 2,000,000 restricted shares of common stock for the first year of service at a fair value of $28,000. The Company will determine the stock based compensation for subsequent years 30 days prior to the anniversary date of the agreement. The term of the agreement is 36 months and the agreement is automatically renewable for successive one year.
|
e)
|
On April 1, 2011, the Company entered into a Form of Amended and Restated Information Technology Services Agreement to amend and extend the May 18, 2010 consulting and software development agreement pursuant to which the contractor agreed to build a secure software information platform for the Company. In consideration for the incremental software development services agreed upon, on April 28, 2011, the Company issued 1,900,000 shares of common stock at a fair value of $28,500, registered under the S-8 Registration Statement filed on January 5, 2011.
|
f)
|
On April 1, 2011, the Company entered into a management services agreement with a consultant. In consideration for such services, the Company is required to make a payment of $50,000 prior to the opening of the Paediatric services as well as any out-of-pocket expenses. In the event that the Company is unable to make such payments, they are given the option to issue 3,500,000 shares for such services. On June 17, 2011, the Company issued 3,500,000 shares of common stock at a fair value of $52,500, registered under the June 2, 2011 S-8 Registration Statement.
|
g)
|
On April 1, 2011, the Company entered into an administrative services agreement with a consultant on a month to month basis. In consideration for such services, the Company is required to make a payment of $5,000 per month as well as any out-of-pocket expenses. In the event that the Company is unable to make such payments, they are given the option to issue 2,500,000 shares for such services. On June 20, 2011, the Company issued 2,500,000 shares of common stock at a fair value of $37,500, registered under the June 2, 2011 S-8 Registration Statement.
|
h)
|
On April 15, 2011, the Company entered into an Agreement for Services with Virmmac, LLC (“Virmmac”) for a period of ninety days whereby Virmmac is to provide the Company with various investor relations services. Pursuant to the Agreement, the Company agreed to pay Virmmac a monthly cash payment of $2,500 and a total of $30,000 worth of restricted common shares of the Company to be paid in increments of $10,000 and to be based on the closing price of the Company’s common shares on the last trading day of the month. On May 12, 2011, the Company issued 588,235 restricted common shares at a fair value of $10,000 and on June 8, 2011, the Company issued 502,513 restricted common shares at a fair value of $10,000 to Virmmac pursuant to the Agreement.
|
i)
|
On May 10, 2011, and pursuant to an April 18, 2011 administrative services agreement, the Company issued 1,800,000 shares of common stock at a fair value of $24,300, registered under the January 5, 2011 S-8 Registration Statement.
|
j)
|
On May 10, 2011, the Company entered into a management advisory services agreement with a consultant for an initial period of one year. In consideration for such services, the Company is required to make payments of $25,000 per quarter as well as any out-of-pocket expenses. In the event that the Company is unable to make such payments, they are given the option to issue shares for such services totalling 7,500,000. On June 29, 2011, the Company issued 3,750,000 shares of common stock at a fair value of $57,000, registered under the June 2, 2011 S-8 Registration Statement.
|
k)
|
On May 16, 2011, the Company entered into a business consulting services agreement with a consultant for an initial period of thirty days after delivery of the shares to the consultant. In consideration for such services, the Company will issue 7,500,000 shares for such services. On June 2, 2011, the Company issued 7,500,000 shares of common stock at a fair value of $138,750, registered under the June 2, 2011 S-8 Registration Statement. Additionally, the Company is to issue 5,000,000 shares of restricted common stock, and on June 9, 2011, the Company issued the 5,000,000 shares at a fair value of $68,000.
|
l)
|
On May 16, 2011, the Company entered into a business consulting services agreement with two consultants for a period of two years. In consideration for such services, the Company will issue 250,000 shares each for such services. On June 16, 2011, the Company issued 500,000 restricted shares of common stock at a fair value of $6,800.
|
m)
|
On June 25, 2011, the Company entered into an investor relations services agreement with a consultant from the date of the agreement to September 7, 2011. In consideration for such services, the Company is required to make a payment of $30,000 as well as any out-of-pocket expenses. On June 1, 2011, the Company paid the $30,000.
|
8.
|
Subsequent Events
|
a)
|
On July 1, 2011, the Company entered into a Convertible Promissory Note agreement for $10,000. Pursuant to the agreement, the loan is convertible into shares of common stock at a variable conversion price equal to the lower of 80% of the average of the lowest three closing bid prices for the common stock during the 10 trading days prior to the date of the conversion notice. The loan bears interest at 6% per year and the principal amount and any interest thereon are due on June 30, 2012.
|
b)
|
On July 15, 2011, the Company issued 6,406,891 restricted shares of common stock upon the conversion of the convertible notes as described in Notes 3(h);(i);(j);(k) and 8(a).
|
c)
|
On July 20, 2011, the Company entered into a Securities Purchase Agreement with Asher for the sale of a Convertible Promissory Note (the “Note”) in the principal amount of $32,500. The Company received net proceeds from the issuance of the Note in the amount of $30,000 and incurred debt financing costs of $2,500, which will be amortized over the term of the Note. The Note, which is due on April 23, 2012, bears interest at the rate of 8% per annum. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 22% per annum from the due date thereof until the same is paid. All principal and accrued interest on the Note is convertible into shares of the Company’s common stock at the election of Asher at any time after 180 days from July 20, 2011 at a conversion price equal to a 39.9% discount to the average of the 3 closing bid prices of the common stock during the 10 trading day period prior to conversion.
|
d)
|
On August 1, 2011, the Company amended the Executive Officer employment agreement with its Chief Operating Officer (“COO”). Pursuant to the amended agreement, the Company agreed to issued 8,000,000 shares of common stock.
|
e)
|
On August 2, 2011, the Company entered into an agreement for investor relation services in which the Company agreed to issue 3,500,000 shares of common stock as follows: 1,000,000 on or before August 8, 2011; 625,000 on or before September 1, 2011; 625,000 on or before October 1, 20111; 625,000 on or before November 1, 2011 and 625,000 on or before December 1, 2011.
|
f)
|
On August 4, 2011, the Company resolved amend the September 13, 2010 Lock-Up Agreement and remove the restriction on the 38,000,000 shares of common stock held by the CEO of the Company.
|
g)
|
On August 8, 2011, the Company issued 1,851,852 restricted shares of common stock upon the partial conversion of the convertible note as described in Note 4(b).
|
Exhibit No.
|
Document Description
|
31.1
|
Certification of Principal Executive Officer pursuant to 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended.
|
31.2
|
Certification of Principal Financial Officer pursuant to 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended.
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal Executive Officer).
|
32.2
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal Financial Officer).
|
MEDICAL CARE TECHNOLOGIES INC.
|
||
Dated: August 22, 2011
|
BY:
|
/s/ Ning C. Wu
|
Ning C. Wu
|
||
President, Principal Executive Officer,
and a member of the Board of Directors.
|
Dated: August 22, 2011
|
BY:
|
/s/ Hui Liu
|
Hui Liu
|
||
Principal Financial Officer,
Principal Accounting Officer, Treasurer
and a member of the Board of Directors.
|
Exhibit No.
|
Document Description
|
31.1
|
Certification of Principal Executive Officer pursuant to 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended.
|
31.2
|
Certification of Principal Financial Officer pursuant to 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended.
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal Executive Officer).
|
32.2
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal Financial Officer).
|
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