UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
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(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
-------------- EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
-------------- ACT OF 1934
For the transition period from _________ to _________
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Commission File Number: 2-90519
ProHealth Medical Technologies, Inc
(Exact name of small business issuer as specified in its charter)
Nevada 59-2262718
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(State of incorporation) (IRS Employer ID Number)
211 West Wall Street, Midland, TX 70701-4556
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(Address of principal executive offices)
(915) 682-1761
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(Issuer's telephone number)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
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State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: July 23, 2001: 145,640
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Transitional Small Business Disclosure Format (check one): YES NO X
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ProHealth Medical Technologies, Inc.
Form 10-QSB for the Quarter ended June 30, 2001
Table of Contents
Page
----
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 9
Part II - Other Information
Item 1 Legal Proceedings 10
Item 2 Changes in Securities 10
Item 3 Defaults Upon Senior Securities 10
Item 4 Submission of Matters to a Vote of Security Holders 11
Item 5 Other Information 11
Item 6 Exhibits and Reports on Form 8-K 11
Signatures 11
2
Item 1 - Part 1 - Financial Statements
ProHealth Medical Technologies, Inc.
(formerly DCC Acquisition Corp.)
Balance Sheets
June 30, 2001 and 2000
(Unaudited)
June 30, June 30,
2001 2000
--------- ---------
Assets
------
Assets
Cash on hand and in bank $ -- $ --
--------- ---------
Total Assets $ -- $ --
========= =========
Liabilities and Shareholders' Equity
------------------------------------
Liabilities
Accounts payable - trade $ 1,493 $ 944
--------- ---------
Total liabilities 1,493 944
--------- ---------
Commitments and contingencies
Shareholders' Equity
Common stock -$0.0001 par value
100,000,000 shares authorized
145,640 shares issued and
outstanding, respectively 15 15
Additional paid-in capital 806,182 806,182
Accumulated deficit (807,690) (807,141)
--------- ---------
Total Shareholders' Equity (Deficit) (1,493) (944)
--------- ---------
Total Liabilities and Shareholders' Equity $ -- $ --
========= =========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
3
ProHealth Medical Technologies, Inc.
(formerly DCC Acquisition Corp.)
Statements of Operations and Comprehensive Income
Six and Three months ended June 30, 2001 and 2000
(Unaudited)
Six months Six months Three months Three months
ended ended ended ended
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
------------ ------------ ------------ ------------
Revenues $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------
Expenses
General and administrative expenses 210 381 105 159
------------ ------------ ------------ ------------
Net Loss (210) (381) (105) (159)
Other Comprehensive Income -- -- -- --
------------ ------------ ------------ ------------
Comprehensive Income $ (210) $ (381) $ (105) $ (159)
------------ ------------ ------------ ------------
Loss per weighted-average share
of common stock outstanding,
computed on Net Loss - basic
and fully diluted nil nil nil nil
============ ============ ============ ============
Weighted-average number of shares
of common stock outstanding 145,640 145,640 145,640 145,640
============ ============ ============ ============
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
4
ProHealth Medical Technologies, Inc.
(formerly DCC Acquisition Corp.)
Statements of Cash Flows
Six months ended June 30, 2001 and 2000
(Unaudited)
Six months Six months
ended ended
June 30, June 30,
2001 2000
---------- ----------
Cash Flows from Operating Activities
Net Loss $ (210) $ (381)
Adjustments to reconcile net income to net cash
provided by operating activities
Increase in Accounts payable - trade 210 381
---------- ----------
Net cash used in operating activities -- --
---------- ----------
Cash Flows from Investing Activities -- --
---------- ----------
Cash Flows from Financing Activities -- --
---------- ----------
Increase (Decrease) in Cash and Cash Equivalents -- --
Cash and cash equivalents at beginning of period -- --
---------- ----------
Cash and cash equivalents at end of period $ -- $ --
========== ==========
Supplemental Disclosures of Interest and Income Taxes Paid
Interest paid during the period $ -- $ --
========== ==========
Income taxes paid (refunded) $ -- $ --
========== ==========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
5
ProHealth Medical Technologies, Inc.
(formerly DCC Acquisition Corp.)
Notes to Financial Statements
Note A - Organization and Description of Business
ProHealth Medical Technologies, Inc. (Company) was originally incorporated on
January 26, 1983 under the laws of the State of Florida as Datalink Systems,
Inc. for the purpose of marketing electronic information processing systems to
the medical and healthcare industries. As of December 31, 1986, the Company had
closed this business operation.
The Company changed its corporate name to Datalink Capital Corporation in April
1987 and to Midland Capital Resources, Inc. in April 1991. Subsequent thereto,
the Company forfeited its corporate charter in the State of Florida due to
non-payment of various taxes and fees. In July 1997, the Company's corporate
charter was reactivated with the State of Florida and changed its corporate name
to Datalink Capital Corporation, effective September 24, 1997.
On December 29, 1998, the Company changed its State of Incorporation from
Florida to Nevada by means of a merger with and into DCC Acquisition
Corporation, a Nevada corporation formed solely for the purpose of effecting the
reincorporation. The Articles of Incorporation and Bylaws of the Nevada
corporation are the Articles of Incorporation and Bylaws of the surviving
corporation. Such Articles of Incorporation did not change the capital structure
of the Company and effectively changed the corporate name to DCC Acquisition
Corporation.
In November 1999, in anticipation of a business combination transaction, the
Company experienced a change in control. As a result of the change in control
and the anticipated business combination transaction, the Company changed its
corporate name to ProHealth Medical Technologies, Inc. Subsequently, the
anticipated business combination transaction did not occur.
The Company has had no operations, assets or liabilities since 1989.
Accordingly, the Company is dependent upon management and/or significant
shareholders to provide sufficient working capital to preserve the integrity of
the corporate entity at this time. It is the intent of management and
significant shareholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity. Through June 30,
2001, various Company shareholders have advanced approximately $7,500 through
direct payments for operating expenses on behalf of the Company.
The Company follows the accrual basis of accounting in accordance with generally
accepted accounting principles and has a year-end of December 31.
During interim periods, the Company follows the accounting policies set forth in
its annual audited financial statements filed with the U. S. Securities and
Exchange Commission on its Annual Report on Form 10-KSB for the year ended
December 31, 2000. The information presented within these interim financial
statements may not include all disclosures required by generally accepted
accounting principles and the users of financial information provided for
interim periods should refer to the annual financial information and footnotes
when reviewing the interim financial results presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the U. S. Securities and Exchange Commission's
instructions for Form 10-QSB, are unaudited and contain all material
adjustments, consisting only of normal recurring adjustments necessary to
present fairly the financial condition, results of operations and cash flows of
the Company for the respective interim periods presented. The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending December 30, 2001.
6
ProHealth Medical Technologies, Inc.
(formerly DCC Acquisition Corp.)
Notes to Financial Statements - Continued
Note A - Organization and Description of Business - Continued
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 of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
For Statement of Cash Flows purposes, the Company considers all cash on hand
and in banks, including accounts in book overdraft positions, certificates of
deposit and other highly-liquid investments with maturities of three months
or less, when purchased, to be cash and cash equivalents.
2. Income Taxes
------------
At June 30, 2001, as a result of the November 1999 change in control, the
Company has a net operating loss carryforward for income tax purposes of
approximately $4,000. If this carryforward is not fully utilized, it will
begin to expire in 2019. As of June 30, 2001 and 2000, respectively, the
deferred tax asset related to the Company's net operating loss carryforward
is fully reserved.
3. Earnings (loss) per share
-------------------------
Basic earnings (loss) per share is computed by dividing the net income (loss)
by the weighted-average number of shares of common stock and common stock
equivalents (primarily outstanding options and warrants). Common stock
equivalents represent the dilutive effect of the assumed exercise of the
outstanding stock options and warrants, using the treasury stock method. The
calculation of fully diluted earnings (loss) per share assumes the dilutive
effect of the exercise of outstanding options and warrants at either the
beginning of the respective period presented or the date of issuance,
whichever is later. As of June 30, 2001 and 2000, respectively, the Company
had no warrants and/or options outstanding.
Note C - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
7
ProHealth Medical Technologies, Inc.
(formerly DCC Acquisition Corp.)
Notes to Financial Statements - Continued
Note D - Income Taxes
The components of income tax (benefit) expense for the three months ended June
30, 2000 and 2000, respectively, are as follows:
June 30, June 30,
2001 2000
-------- --------
Federal:
Current $ -- $ --
Deferred -- --
-------- --------
-- --
-------- --------
State:
Current -- --
Deferred -- --
-------- --------
-- --
-------- --------
Total $ -- $ --
======== ========
As of June 30, 2001, as a result of the November 1999 change in control, the
Company has a net operating loss carryforward of approximately $4,000 to offset
future taxable income. Subject to current regulations, this carryforward will
begin to expire in 2019. The amount and availability of the net operating loss
carryforwards may be subject to limitations set forth by the Internal Revenue
Code. Factors such as the number of shares ultimately issued within a three year
look-back period; whether there is a deemed more than 50 percent change in
control; the applicable long-term tax exempt bond rate; continuity of historical
business; and subsequent income of the Company all enter into the annual
computation of allowable annual utilization of the carryforwards.
The Company's income tax expense for the six months ended June 30, 2001 and
2000, respectively, are as follows:
June 30, June 30,
2001 2000
-------- --------
Statutory rate applied to loss before income taxes $ (72) $ (130)
Increase (decrease) in income taxes resulting from:
State income taxes -- --
Other, including reserve for deferred tax asset 72 130
-------- --------
Income tax expense $ -- $ --
======== ========
Temporary differences, consisting primarily of statutory deferrals of expenses
for organizational costs and statutory differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of June 30, 2001 and 2000, respectively:
June 30, June 30,
2001 2000
-------- --------
Deferred tax assets
Net operating loss carryforwards $ 3,900 $ 1,150
Less valuation allowance (3,900) (1,150)
-------- --------
Net Deferred Tax Asset $ -- $ --
======== ========
8
Part I - Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view of
the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.
(2) Results of Operations, Liquidity and Capital Resources
Discussion of Financial Condition
---------------------------------
As of the date of this filing, the Company has no operations, assets or
liabilities. Accordingly, the Company is dependent upon management and/or
significant shareholders to provide sufficient working capital to preserve the
integrity of the corporate entity at this time. It is the intent of management
and significant shareholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity. All expenses
incurred during the quarters ended June 30, 2001 and 2000, respectively, related
to general operating costs necessary to maintain the corporate entity.
The Company will remain illiquid until such time as a business combination
transaction occurs, if ever. No prediction of the future financial condition of
the Company can be made.
Plan of Business
----------------
General
-------
The Company intends to locate and combine with an existing, privately-held
company which is profitable or, in management's view, has growth potential,
irrespective of the industry in which it is engaged. However, the Company does
not intend to combine with a private company which may be deemed to be an
investment company subject to the Investment Company Act of 1940. A combination
may be structured as a merger, consolidation, exchange of the Company's common
stock for stock or assets or any other form which will result in the combined
enterprise's becoming a publicly-held corporation.
Pending negotiation and consummation of a combination, the Company anticipates
that it will have, aside from carrying on its search for a combination partner,
no business activities, and, thus, will have no source of revenue. Should the
Company incur any significant liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as are incurred.
If the Company's management pursues one or more combination opportunities beyond
the preliminary negotiations stage and those negotiations are subsequently
terminated, it is foreseeable that such efforts will exhaust the Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated. In that event, the Company's common stock will
become worthless and holders of the Company's common stock will receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.
9
Combination Suitability Standards
---------------------------------
In its pursuit for a combination partner, the Company's management intends to
consider only combination candidates which are profitable or, in management's
view, have growth potential. The Company's management does not intend to pursue
any combination proposal beyond the preliminary negotiation stage with any
combination candidate which does not furnish the Company with audited financial
statements for at least its most recent fiscal year and unaudited financial
statements for interim periods subsequent to the date of such audited financial
statements, or is in a position to provide such financial statements in a timely
manner. The Company will, if necessary funds are available, engage attorneys
and/or accountants in its efforts to investigate a combination candidate and to
consummate a business combination. The Company may require payment of fees by
such combination candidate to fund the investigation of such candidate. In the
event such a combination candidate is engaged in a high technology business, the
Company may also obtain reports from independent organizations of recognized
standing covering the technology being developed and/or used by the candidate.
The Company's limited financial resources may make the acquisition of such
reports difficult or even impossible to obtain and, thus, there can be no
assurance that the Company will have sufficient funds to obtain such reports
when considering combination proposals or candidates. To the extent the Company
is unable to obtain the advice or reports from experts, the risks of any
combined enterprise's being unsuccessful will be enhanced. Furthermore, to the
knowledge of the Company's officers and directors, neither the candidate nor any
of its directors, executive officers, principal shareholders or general
partners:
(1) will not have been convicted of securities fraud, mail fraud, tax fraud,
embezzlement, bribery, or a similar criminal offense involving
misappropriation or theft of funds, or be the subject of a pending
investigation or indictment involving any of those offenses;
(2) will not have been subject to a temporary or permanent injunction or
restraining order arising from unlawful transactions in securities,
whether as issuer, underwriter, broker, dealer, or investment advisor,
may be the subject of any pending investigation or a defendant in a
pending lawsuit arising from or based upon allegations of unlawful
transactions in securities; or
(3) will not have been a defendant in a civil action which resulted in a
final judgement against it or him awarding damages or rescission based
upon unlawful practices or sales of securities.
The Company's officers and directors will make these determinations by asking
pertinent questions of the management of prospective combination candidates.
Such persons will also ask pertinent questions of others who may be involved in
the combination proceedings. However, the officers and directors of the Company
will not generally take other steps to verify independently information obtained
in this manner which is favorable. Unless something comes to their attention
which puts them on notice of a possible disqualification which is being
concealed from them, such persons will rely on information received from the
management of the prospective combination candidate and from others who may be
involved in the combination proceedings.
Part II - Other Information
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults on Senior Securities
None
10
Item 4 - Submission of Matters to a Vote of Security Holders
The Company has held no regularly scheduled, called or special meetings of
shareholders during the reporting period.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
Exhibits - None
Reports on Form 8-K - None
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ProHealth Medical Technologies, Inc.
July 23 , 2001 /s/ Glenn A. Little
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Glenn A. Little
President and Director
11