Quarterly Report (10-q)

 

 

 

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, 2012
[  ]	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)

 

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

 

105 West 55th Street #3B New York NY 10019

(Address of principal executive offices)

 

[phone]

(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: 80,125,000 as of December 31, 2012.

 

 

 

 

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	7
	PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	8
Item 1A:	Risk Factors	8
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	8
Item 3:	Defaults Upon Senior Securities	8
Item 4:	Mine Safety Disclosures	8
Item 5:	Other Information	8
Item 6:	Exhibits	8

 

2

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

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

 

F-1	Consolidated Balance Sheets as of December 31, 2012 and June 30, 2012;
F-2	Consolidated Statements of Operations for the three and six months ended December 31, 2012 and 2011 and period from April 21, 2010 (Inception) to December 31, 2012;
F-3	Consolidated Statements of Other Comprehensive Income (Loss) for the three and six months ended December 31, 2012 and 2011 and the period from April 21, 2010 (Inception) to December 31, 2012;
F-4	Consolidated Statements of Stockholders’ Deficit as of December 31, 2012;
F-5	Consolidated Statements of Cash Flows for the six months ended December 31, 2012 and 2011 and period from April 21, 2010 (Inception) to December 31, 2012;
F-6	Notes to Consolidated 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, 2012 are not necessarily indicative of the results that can be expected for the full year.

 

3

 

VANTAGE HEALTH (A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS (unaudited)

AS OF DECEMBER 31, 2012 AND JUNE 30, 2012

 

		December 31, 2012				June 30, 2012
ASSETS
Current Assets
Cash and equivalents		$	105,729			$	300,687
Interest receivable			7,219				7,219
Total Current Assets			112,948				307,906
Property and equipment, net			8,177				9,405
TOTAL ASSETS		$	121,125			$	317,311
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued expenses		$	27,382			$	48,991
Long – Term Liabilities
Shareholder loans			576,272				640,273
Total Liabilities			603,654				689,264
Stockholders’ Deficit
Common Stock, $.001 par value, 250,000,000 shares authorized, 80,125,000 and 80,125,000 shares issued and outstanding, respectively			80,125				80,125
Additional paid-in capital			380,335				380,335
Stock subscription receivable			(118,750	)			(118,750	)
Non-controlling interest			(277,870	)			(222,616	)
Accumulated other comprehensive income (loss)			79,249				67,441
Deficit accumulated during the development stage			(625,618	)			(558,488	)
Total Stockholders’ Deficit			(482,529	)			(371,953	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	121,125			$	317,311

 

See accompanying notes to financial statements.

 

F- 1

 

VANTAGE HEALTH (A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

FOR THE PERIOD FROM APRIL 21, 2010 (INCEPTION) TO DECEMBER 31, 2012

 

		Three Months Ended December 31, 2012				Three Months Ended December 31, 2011				Six Months Ended December 31, 2012				Six Months Ended December 31, 2011				Period from April 21, 2010 (Inception) to December 31, 2012
REVENUES, NET OF COST OF SALES		$	(60	)		$	723			$	(41	)		$	723			$	(41	)
OPERATING EXPENSES
Professional fees			10,474				4,805				41,942				10,721				151,188
Office expenses			27,672				119,185				46,731				120,879				136,832
Officer/Director Compensation			0				1,500				0				3,500				11,500
Stock Based Compensation			0				0				0				0				32,000
Consulting			(100	)			27,012				3,935				27,012				289,512
Deposit impairment			0				0				0				0				50,000
Depreciation			489				0				1,003				0				1,916
Travel and entertainment			16,903				59,887				27,855				68,016				139,199
Bank fees			474				717				877				1,132				4,502
TOTAL OPERATING EXPENSES			55,912				213,106				122,343				231,260				816,649
LOSS FROM OPERATIONS			(55,972	)			(212,383	)			(122,384	)			(230,537	)			(816,690	)
OTHER INCOME (EXPENSE)
Interest income			0				0				0				0				7,288
TOTAL OTHER INCOME (EXPENSE)			0				0				0				0				7,288
LOSS BEFORE NON-CONTROLLING INTEREST			(55,972	)			(212,383	)			(122,384	)			(230,537	)			(809,402	)
LESS: LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST			23,176				98,123				55,254				104,027				277,870
LOSS BEFORE PROVISION FOR INCOME TAXES			(32,796	)			(114,260	)			(67,130	)			(126,510	)			(531,532	)
PROVISION FOR INCOME TAXES			0				0				0				0				0
NET LOSS CONTINUING OPERATIONS			(32,796	)			(114,260	)			(67,130	)			(126,510	)			(531,532	)
LOSS ON DISCONTINUED OPERATIONS			0				0				0				0				8,885
NET LOSS		$	(32,796	)		$	(114,260	)		$	(67,130	)		$	(126,510	)		$	(540,417	)
LOSS PER SHARE: BASIC AND DILUTED		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: BASIC AND DILUTED			80,125,000				80,025,000				80,125,000				78,276,223

   

See accompanying notes to financial statements.

 

F- 2

 

VANTAGE HEALTH (A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE (LOSS) (unaudited)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

FOR THE PERIOD FROM APRIL 21, 2010 (INCEPTION) TO DECEMBER 31, 2012

 

		Three Months Ended December 31, 2012				Three Months Ended December 31, 2011				Six Months Ended December 31, 2012				Six Months Ended December 31, 2011				Period from April 21, 2010 (Inception) to December 31, 2012
Net Loss		$	(32,796	)		$	(114,260	)		$	(67,130	)		$	(126,510	)		$	(540,417	)
Foreign Currency Translation:
Change in cumulative translation adjustment			9,366				8,073				11,808				61,904				79,249
Income tax benefit (expense)			0				0				0				0				0
Total		$	9,366			$	8,073			$	11,808			$	61,904			$	79,249

 

See accompanying notes to financial statements.

 

F- 3

 

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT (unaudited)

FOR THE PERIOD FROM APRIL 21, 2010 (INCEPTION) TO DECEMBER 31, 2012

 

		Common Stock								Additional Paid				Stock Subscription				Non- Controlling				Accumulated Other Comprehensive Income				Deficit Accumulated During the Development
		Shares				Amount				in Capital				Receivable				Interest				(Loss)				Stage				Total
Inception, April 21, 2010			0			$	0			$	0			$	0			$	0			$	0			$	0			$	0
Shares issued to founder for cash			60,000,000				60,000				-				-				-				-				-				60,000
Shares issued for cash at $0.0015 per share			3,712,500				3,713				1,856				-				-				-				-				5,569
Shares issued for cash at $0.002 per share			5,000,000				5,000				5,000				-				-				-				-				10,000
Shares issued for cash at $0.0025 per share			3,700,000				3,700				5,550				-				-				-				-				9,250
Shares issued for cash at $0.00275 per share			1,287,500				1,287				2,254				-				-				-				-				3,541
Shares issued for cash at $0.003 per share			450,000				450				900				-				-				-				-				1,350
Deemed dividend created by acquisition of 51% of entity under common control			-				-				-				-				-				-				(85,200	)			(85,200	)
Net loss for the year ended June 30, 2010			-				-				-				-				(637	)			6,010				(6,627	)			(1,254	)
Balance, June 30, 2010			74,150,000				74,150				15,560				0				(637	)			6,010				(91,827	)			3,256
Debt forgiven shareholder			-				-				50,000				-				-				-				-				50,000
Shares issued for services			100,000				100				31,900				-												-				32,000
Net loss for the year ended June 30, 2011			-				-				-				-				(141,601	)			(16,495	)			(289,074	)			(447,170	)
Balance, June 30, 2011			74,250,000				74,250				97,460				0				(142,238	)			(10,485	)			(380,901	)			(361,914	)
Warrants exercised for cash or notes at $0.05 per share			5,775,000				5,775				282,975				(118,750	)			-				-				-				170,000
Stock issued for issuance costs			100,000				100				(100	)																			0
Net loss for the year ended June 30, 2012			-				-				-				-				(80,378	)			77,926				(177,587	)			(180,039	)
Balance, June 30, 2012			80,125,000				80,125				380,335				(118,750	)			(222,616	)			67,441				(558,488	)			(371,953	)
Net loss for the period ended December 31, 2012			-				-				-				-				(55,254	)			11,808				(67,130	)			(110,576	)
Balance, December 31, 2012			80,125,000			$	80,125			$	380,335			$	(118,750	)		$	(277,870	)		$	79,249			$	(625,618	)		$	(482,529	)

 

See accompanying notes to financial statements.

 

F- 4

 

VANTAGE HEALTH (A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

FOR THE SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

FOR THE PERIOD FROM APRIL 21, 2010 (INCEPTION) TO DECEMBER 31, 2012

 

		Six Months Ended December 31, 2012				Six Months Ended December 31, 2011				Period from April 21, 2010 (Inception) to December 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period		$	(67,130	)		$	(126,510	)		$	(540,417	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Stock-based compensation			0				0				32,000
Deposit impairment			0				0				50,000
Depreciation			1,003				0				1,916
Loss attributable to non-controlling interest			(55,254	)			(104,027	)			(277,870	)
Changes in assets and liabilities:
(Increase) decrease in interest receivable 23,349			0				(36,441	)			(7,219	)
(Increase) decrease in prepaid expenses			0				0				0
Increase (decrease) in accounts payable and accrued expenses			(21,609	)			(8,434	)			27,382
Net Cash Used by Operating Activities			(142,990	)			(275,412	)			(714,208	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for acquisition of furniture and fixtures			225				(2,160	)			(10,093	)
Cash paid for deposit			0				0				(50,000	)
Cash paid for acquisition of 51% interest in Moxisign			0				0				(3,643	)
Net Cash Used by Investing Activities			225				(2,160	)			(63,736	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sales of common stock			0				0				89,710
Proceeds from exercise of stock warrants			0				20,000				170,000
Proceeds from notes payable – related parties			0				195,987				612,216
Payments on notes payable – related parties			(64,001	)			0				(67,502	)
Net Cash Provided by (Used by) Financing Activities			(64,001	)			215,987				804,424
Effect of exchange rate changes on cash			11,808				61,904				79,249
NET INCREASE (DECREASE) IN CASH			(194,958	)			319				105,729
Cash, beginning of period			300,687				14,223				0
Cash, end of period		$	105,729			$	14,542			$	105,729
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 of subsidiary		$	0			$	0			$	85,200
Exercise of stock warrants for stock subscription receivable		$	0			$	268,750			$	118,750
Stock issued for equity issuance costs		$	0			$	0			$	5,000

 

See accompanying notes to financial statements.

 

F- 5

 

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

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.

 

The Company intends to build and operate an Active Pharmaceutical Ingredient (“APIs”) manufacturing plant alongside a formulation and packaging plant in South Africa to meet the growing market need for generic medicines in South Africa and the neighboring African countries. The company intends to build an Active Pharmaceutical Ingredient (API) manufacturing plant in South Africa in order to supply the growing demand in the fight against HIV/AIDS and chronic disease in Africa.

 

Development Stage Company

 

The accompanying consolidated 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 consolidated 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/A filed with the SEC as of and for the period ended June 30, 2012. 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.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. Significant intercompany accounts and transactions have been eliminated.

 

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, 2012 and June 30, 2012, the Company had $105,729 and $300,687 of cash, respectively.

 

Property and Equipment

 

Property and equipment are recorded at cost and are depreciated, when placed in service, using principally the straight-line method over the estimated useful lives of the related assets. Estimated useful lives generally range from two to seven years for furniture, equipment and automobiles. Leasehold improvements are amortized over the estimated useful lives of the related assets or leases, whichever is shorter.

 

Fair Value of Financial Instruments

 

The Company’s financial instruments consist of cash and cash equivalents, prepaid expenses, 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.

 

F- 6

 

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

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.

 

Revenue Recognition

 

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

 

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, 2012.

 

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.

 

Foreign Currency Translation

 

The functional currency of the Company is the United States Dollar. The financial statements of the Company’s South African subsidiary are translated from the South African Rand to U.S. dollars using the period exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. The financial statements of the Company’s Tanzania subsidiary are translated from the Tanzanian Shilling to U.S. dollars using the period exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transaction occurs. Net gains and losses resulting from foreign exchange translations are included in the statements of operations and changes in stockholders’ equity as other comprehensive income (loss).

 

Stock-Based Compensation

 

Stock-based compensation is accounted for at fair value in accordance with SFAS No. 123 and 123 (R) (ASC 718). To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

F- 7

 

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

 

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 – PROPERTY AND EQUIPMENT

 

Major classes of property and equipment consist of the following:

 

		December 31, 2012				June 30, 2012
Vehicles			10,093				10,318
Less accumulated depreciation			(1,916	)			(913	)
		$	8,177			$	9,405

 

During the period ended December 31, 2012 and the fiscal year ended June 30, 2012, the Company recorded no provisions for the impairment of assets.

 

NOTE 3 – SHAREHOLDER LOANS

 

During the period ended June 30, 2010 the company received loans from two shareholders for $100,699, $30,000 and $3,500. The loans are non-interest bearing, unsecured and are due on July 13, 2013.

 

During the year ended June 30, 2011, the $3,500 loan was repaid in full.

 

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 six months ended December 31, 2012, the Company repaid $64,001 of the outstanding shareholder loans.

 

The total amount due to the shareholders was $576,272 and $640,273 as of December 31, 2012 and June 30, 2012, respectively.

 

F- 8

 

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

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.

 

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

 

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.

 

During the year ended June 30, 2012, 100,000 shares of common stock were issued for issuance costs.

 

There are 80,125,000 shares issued and outstanding as of December 31, 2012.

 

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 EITF 00-19 (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 EITF 01-06 (ASC 815-40) The Meaning of Indexed to a Company’s Own Stock. 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 December 31, 2012.

 

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

 

		August 4, 2011				June 30, 2010
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

 

F- 9

 

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

NOTE 6 – NON-CONTROLLING INTEREST

 

On June 14, 2010, Vantage acquired 51% of an entity under common control for cash totaling $3,643. For purposes of these financial statements, the subsidiary has been consolidated via the acquisition method. We have recorded a deemed dividend of $85,200 since the book value of Moxisign’s liabilities exceeded the book value of its assets. The assets and liabilities of Moxisign have been recorded at amounts equal to the carrying value on Moxisign’s books as per ASC 805-020. At the acquisition date, Moxisign had current assets of $27,751, current liabilities of $1,928 and long-term liabilities of $102,669.

 

NOTE 7 – DISCONTINUED OPERATIONS

 

On June 1, 2011, Vantage acquired 51% of a newly established entity (Vantage Health Tanzania Limited) for a note totaling $2,295. The subsidiary commenced operations in the second quarter of fiscal year ended June 30, 2012. For purposes of interim financial statements for the second and third quarters of fiscal year ended June 30, 2012, the subsidiary was consolidated via the acquisition method. The assets and liabilities of Vantage Tanzania Limited were recorded at amounts equal to the carrying value on Vantage Tanzania Limited’s books as per ASC 805-020. At the acquisition date, Vantage Tanzania Limited had current assets of $0, current liabilities of $0 and long-term liabilities of $0.

 

During the fourth quarter of fiscal year ended June 30, 2012 the subsidiary (Vantage Health Tanzania Limited) was forced to discontinue its operations due to gross misappropriation of resources by high level employees. The result being that the subsidiary discontinued operations and lost all of its assets.

 

All operations of the subsidiary have been removed from these annual financial statements and the Company has recognized a loss on the discontinued operations of $8,885, representing amounts invested in and amounts loaned to the subsidiary for which the Company will not be able to collect.

 

NOTE 8 – COMMITMENTS

 

Vantage Health neither owns nor leases any real or personal property. An officer has provided office services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

 

NOTE 9 – LIQUIDITY AND GOING CONCERN

 

The Company has limited working capital, 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.

 

F- 10

 

VANTAGE HEALTH

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

NOTE 10 – INCOME TAXES

 

For the six months ended December 31, 2012, Vantage Health has incurred a net loss before minority interest of approximately $122,000 and, therefore, 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 is approximately $540,000 at December 31, 2012, and will expire beginning in the year 2030. The provision for Federal income tax consists of the following for the three months ended December 31, 2012 and 2011:

 

		December 31, 2012				December 31, 2011
Federal income tax benefit attributable to:
Current operations		$	41,610			$	43,013
Less: valuation allowance			(41,610	)			(43,013	)
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:

 

		December 31, 2012				Jun 30, 2012
Deferred tax asset attributable to:
Net operating loss carryover		$	202,430			$	160,820
Valuation allowance			(202,430	)			(160,820	)
Net deferred tax asset		$	0			$	0

 

NOTE 11 – SUBSEQUENT EVENTS

 

Vantage Health’s South African subsidiary, Moxisign (Pty) Ltd., is in the final stages of entering into a 5 year contract with a health and beauty focused retail and supply group with over 590 stores across southern Africa. This contact is expected to generate approximately $1,000,000 in gross revenue for that entity. This contract is not yet finalized.

 

Vantage Health has made progress in finalizing a Technology Partner for a manufacturing facility and is the early stage of negotiation with potential partners (letter of intent stage).

 

Vantage Health has also secured the rights for distribution of a unique range of European Cosmetics and signed a 12 month “Gentleman’s Agreement” on November 1 ^st 2012 for this range. This agreement contains minimum purchase requirements, the dollar value of which is currently not determinable .

 

Management has evaluated subsequent events through the date on which the financial statements were issued, and has determined it does not have any material subsequent events to disclose other than those mentioned 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.

 

Company Overview  

 

Our mission is to contribute to the pharmaceutical value chain by producing chemical inputs for the industry. We are in the development stage, have no revenues, minimal assets and have incurred losses since inception.

 

Vantage intends to build an API manufacturing facility in South Africa and has commenced a pre-feasibility study to assess this project.

 

We operate primarily through our wholly owned South African subsidiary, Moxisign (PTY) Ltd (“Moxisign”). Moxisign was formed as a pharmaceutical distributor with the specific intention of bidding on South African government health care contracts and tenders. These include: HIV/AIDS medications, and also other health related government tenders including medical equipment, TB drugs and other medical equipment. In addition, Moxisign intends to broaden its governmental and private sector customer base. This expanded reach may add to the scale and flexibility to the Moxisign business model to help us grow substantially within the next five years.

 

The following are current activities that Moxisign has been involved in:

 

●

Moxisign is in the final stages of entering into a contract with a health and beauty focused retail, distribution and supply group with over 590 stores across southern Africa. This contact is expected to generate approximately $1,000,000 in gross revenues. This contract is not yet finalized.

 

●

We have also approached a national pharmacy chain to supply them with over-the-counter treatments and medications. A formal purchase order has yet to be signed as we are still at the stage of deciding upon the appropriate products and compiling the necessary paperwork to file at the Medicine Control Council. Supply is not expected to begin until the MCC (Medicine Control Council) has finished the approval process for each drug dossier.

 

●

Vantage Health has also secured the rights for distribution of a unique range of European Cosmetics and signed a 12 month “Gentleman’s Agreement” on November 1 st 2012 for this range. This agreement contains minimum purchase requirements, the dollar value of which is currently not determinable .

 

●

Moxisign is currently commencing sales of a recently approved herbal antioxidant. A pipeline of other generics is in process of registration.

 

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We are in the process of forming a second South Africa subsidiary which will be called Vantage Health South Africa, formed to build and operate the API pharmaceutical manufacturing facility.

 

The manufacturing sector has been targeted by the South African government and is identified as a key pillar in the recent State of the nation address and in the 2010-2013 Industrial Policy Action Plan II and there are, at present, a number of taxation and financial incentives, including grants from the state available to encourage a vibrant manufacturing sector.

 

The pharmaceutical partnerships established have agreed to provide Vantage with the requisite technology and skills transfer to establish the plant. At present, Vantage is conducting preliminary feasibility assessment towards the building of the API / secondary formulation plant within South Africa.

 

Vantage Health has also secured the rights for distribution of a unique range of European Cosmetics and signed a 12 month agreement on November 1, 2012 for this range. This agreement contains minimum purchase requirements, the dollar value of which is currently not determinable.

 

Results of operations for the three and six months ended December 31, 2012 and 2011 and for the period from April 21, 2010 (date of inception) through December 31, 2012

 

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

 

We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

 

We had ($41) in revenues, net cost of sales, from inception to December 31, 2012.

 

Below are our operating expenses for the three and six months ended December 31, 2012 and 2011

 

		Three Months Ended December 31, 2012				Three Months Ended December 31, 2011				Six Months Ended December 31, 2012				Six Months Ended December 31, 2011
Professional fees		$	10,474			$	4,805			$	41,942			$	10,721
Office expenses			27,672				119,185				46,731				120,879
Officer/Director Compensation			0				1,500				0				3,500
Stock Based Compensation			0				0				0				0
Consulting			(100	)			27,012				3,935				27,012
Deposit impairment			0				0				0				0
Depreciation			489				0				1,003				0
Travel and entertainment			16,903				59,887				27,855				68,016
Bank fees			474				717				877				1,132
Total		$	55,912			$	213,106			$	122,343			$	231,260

 

We incurred significantly more operating expenses for the three and six months ended December 31, 2011 as compared with the same periods in 2012, largely as a result of increased office expenses, travel and entertainment, and consulting expenses.

 

During the period from inception (April 21, 2010) to December 31, 2012 we incurred operating expenses of $816,690.

 

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Our net loss for the three-month period ended December 31, 2012 was $32,796 compared to a net loss of $114,260 for the three months ended December 31, 2011. Our net loss for the six-month period ended December 31, 2012 was $67,130 compared to a net loss of $126,510 for the six months ended December 31, 2011.

 

During the period from inception (April 21, 2010) to December 31, 2012 our net loss was $540,417.

 

Liquidity and Capital Resources

 

As of December 31, 2012, our total assets were $121,125 and our total liabilities were $603,654.

 

We have not attained profitable operations and are dependent upon obtaining financing to continue with our business plan. For these reasons, there is substantial doubt that we will be able to continue as a going concern.

 

As at December 31, 2012, our current assets were $112,948 and our current liabilities were 27,382. We had working capital of $85,566 as of December 31, 2012.

 

We have not generated positive cash flows from operating activities. For the six month period ended December 31, 2012, net cash flows used in operating activities were $142,990, compared to $275,412 for the six months ended December 31, 2011 and $714,208 for the period from April 21, 2010 (Inception) to December 31, 2012. Our negative cash flow was mainly the result of our net loss and loss attributable to non-controlling interests for all periods above.

 

For the six month period ended December 31, 2012, net cash flows provided by investing activities were $225, compared to $2,160 net cash flows used in investing activities for the six months ended December 31, 2011 and $63,736 for the period from April 21, 2010 (Inception) to December 31, 2012.

 

Cash flows used in financing activities were $64,001 for the six months ended December 31, 2012, as compared with $215,987 net cash flows provided by financing activities for the same period ended December 31, 2012. Our negative cash flow for the six months ended December 31, 2012 was a result of notes payable to related parties.

 

The success of our business plan 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, 2012, there were no off balance sheet arrangements.

 

Going Concern

 

We have limited working capital, have incurred losses since 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.

 

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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, 2013, 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, 2012 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

 

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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

 

None

 

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
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, 2012 formatted in Extensible Business Reporting Language (XBRL).

 

** Provided herewith

 

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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 11th, 2013
By:	/s/ Lisa Ramakrishnan
Title:	Chief Executive Officer

 

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