UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-KSB
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(Mark one)
XX ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
------ OF 1934
For the annual period ended December 31, 2001
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES 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
(Address of principal executive offices)
(915) 682-1761
(Issuer's telephone number)
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Securities registered under Section 12 (b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: Common Stock
$0.0001 par value
Check whether the issuer has (1) filed all reports required to be files by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period the Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of Company's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]
The issuer's revenues for the fiscal year ended December 31, 2000 were $0.
The aggregate market value of voting common equity held by non-affiliates as of
December 31, 2001 was approximately $2,174, using the closing historical price
of $0.03 per share as quoted on www.edreyfus.com
As of January 8, 2002, there were 10,145,640 shares of Common Stock issued and
outstanding.
Transitional Small Business Disclosure Format : Yes No X
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1
PROHEALTH MEDICAL TECHNOLOGIES, INC.
TABLE OF CONTENTS
Page Number
-----------
Part I
Item 1 - Description of Business 3
Item 2 - Description of Property 4
Item 3 - Legal Proceedings 4
Item 4 - Submission of Matters to a Vote of Security Holders 4
Part II
Item 5 - Market for Company's Common Stock and Related Stockholders 5
Matters
Item 6 - Management's Discussion and Analysis or Plan of Operation 6
Item 7 - Index to Financial Statements F-1
Item 8 - Changes in and Disagreements with Accountants
on Accounting and Financial Disclosures 6
Part III
Item 9 - Officers and Directors 6
Item 10 - Executive Compensation 7
Item 11 - Security Ownership of Certain Beneficial Owners 7
And Management
Item 12 - Certain Relationships and Related Transactions 8
Item 13 - Exhibits and Reports on 8-K 9
Signatures 10
2
Caution Regarding Forward-Looking Information
Certain statements contained in this quarterly filing, including, without
limitation, statements containing the words "believes", "anticipates", "expects"
and words of similar import, constitute forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
Such factors include, among others, the following: international, national and
local general economic and market conditions: demographic changes; the ability
of the Company to sustain, manage or forecast its growth; the ability of the
Company to successfully make and integrate acquisitions; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Form 10-KSB and investors are
cautioned not to place undue reliance on such forward-looking statements. The
Company disclaims any obligation to update any such factors or to publicly
announce the result of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
PART I
Item 1 - Description of Business
General
-------
ProHealth Medical Technologies, Inc. (ProHealth or Company), originally named
Datalink Systems, Inc. (Datalink), filed a Registration Statement under The
Securities Act of 1933 on Form S-1 with the U. S. Securities and Exchange
Commission for a public offering of its equity securities. The offering became
effective on July 29, 1985 and was completed October 29, 1985. The offering
raised an aggregate of $300,000 from the sale of 3,000,000 shares of common
stock at $.10 per share.
The Company was engaged in the business of providing electronic information
processing services to the medical/health care industry. This venture was not
successful and management attempted to redirect the focus of the company through
merger with a viable private entity. Several Letters of Intent were signed but
later abandoned by all parties.
The corporate name was changed in April 29, 1987 to Datalink Capital Corporation
and the capital restated to 100,000,000 shares of $.0001 par value common stock.
The corporate charter was revoked on November 4, 1988 by the State of Florida
for failure to file required documents and pay associated fees.
A change in control of the majority stockholder resulted in a change in control
of the Company and the company's charter was reestablished on December 5, 1990.
The new management was unable to complete a merger with a private entity or
recapitalize the company and the company remained dormant. On April 26, 1991 the
corporate name was changed to Midland Capital Resources, Inc.
The corporate charter was revoked again on October 9, 1992 by the State of
Florida for failure to file required documents and pay associated fees. On July
30, 1997, the charter was reinstated by the State of Florida and on September
24, 1997 the name was changed to Datalink Capital Corporation.
3
On May 1, 1997 a stock purchase agreement was entered into between the then
majority stockholder and Glenn A. Little. In March 1998, this agreement was
renegotiated and effective control of the company was obtained by Mr. Little by
the purchase of 37.4% of the outstanding shares.
Effective December 29, 1998 the Company changed its state of incorporation from
Florida to Nevada, pursuant to a change-of-state-of-incorporation merger. In the
merger transaction, the Company's name was changed from "DataLink Capital
Corporation" to "DCC Acquisition Corporation".
On June 8, 1999, in a Current Report on Form 8-K, the Company announced its
acquisition of all of the issued and outstanding common shares of New Cinema
Partners Inc. (NCP) in consideration of and in exchange for common stock of the
Company issued from treasury (Acquisition Transaction), which transaction
constituted a change in control of the Company.
On August 15, 1999, the Company filed a Current Report on Form 8-K reporting
that the June 8, 1999 Form 8-K announcement of the Acquisition Transaction and
the filing of the June 8, 1999 Form 8-K Current Report in respect thereof was
premature. The Acquisition Transaction had not been, and will not be,
consummated. The Board of Directors of the Company did not approve, authorize or
ratify the Acquisition Transaction. Due to mis-communication between
representatives of NCP and its shareholders and the agent for the Company, NCP
and its shareholders were of the view that all requisite approvals and
authorizations in respect of the Acquisition Transaction had been obtained and
all other conditions precedent to the completion of the Acquisition Transaction
satisfied and, accordingly, the June 8, 1999 Current Report on Form 8-K was
filed in accordance with applicable law.
The Company continued its efforts to locate and combine with an existing,
privately-held company that is profitable or, in management's view, has growth
potential, irrespective of the industry in which it is engaged.
On November 17, 1999, in the Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1999, the Company announced that on November 1, 1999, the
Company experienced a change in control and acquired a majority of the shares of
stock of two corporations, ProHealth Laboratories, Inc (ProHealth) and STL
Group, Inc. (STL) in exchange for shares of the Company's common stock. Although
discussed in the November 17, 1999 Form 10-QSB filing, the Company never filed
any required Current Report on Form 8-K which contained more detailed
information about the terms of the acquisitions of ProHealth and STL and their
business and financial information.
On January 11, 2001, the Company filed a Current Report on Form 8-K announcing
that the two Agreements and Plans of Reorganization (Agreements) disclosed and
discussed in the November 17, 1999 Form 10-QSB filing never closed and
prematurely announced as such.
In anticipation of the closing of these transaction and in accordance with the
Agreements, the Company convened a Board of Directors Meeting on October 22,
1999 and changed the name from DCC Acquisition Corp to ProHealth Medical
Technologies, Inc. and approved and enacted a 1:10 reverse split of its Common
Stock, $0.0001 par value, with fractional shares rounded up to the nearest whole
share. All share and per share amounts in this filing reflect the effect of the
reverse split as of the first day of the first period presented.
As a result of each of the private entity's inability to fulfill its obligations
under each Agreement with the Company, the closing of the acquisitions has never
taken place as planned and announced.
In January 2001, Glenn A. Little and Matthew Blair, the former officers and
directors of the Company, reached an agreement with the parties to the
Agreements to recognize the failure of the merger and agreed to return as
Management of the Company. All books and records were returned to the former
management of the Company and the various companies and parties to the
Agreements mutually released and discharged each other with regard to the failed
transaction.
4
Pursuant to the rescission agreement, any and all shares which may have been
issued pursuant to the Agreements were rescinded and returned to the Company's
treasury, and the Company appointed Glenn A. Little as President and Director
and Matthew Blair as Secretary and Director.
The Company intends to comply with the periodical reporting requirements of the
Securities Exchange Act of 1934 and to seek to complete a business acquisition
transaction.
The Company may be referred to as a shell corporation and once trading on the
NASD Bulletin Board, a trading and reporting shell corporation. Shell
corporations have zero or nominal assets and typically no stated or contingent
liabilities. Private companies wishing to become publicly trading may wish to
merge with a shell (a reverse merger) whereby the shareholders of the private
Company become the majority of the shareholders of the combined Company. The
private Company may purchase for cash all or a portion of the common share of
the shell corporation from its major stockholders. Typically, the Board and
officers of the private Company become the new Board and officers of the
combined Company and often the name of the private Company becomes the name of
the combined Company.
The Company has very limited capital, and it is unlikely that the Company will
be able to take advantage of more than one such business opportunity. The
Company intends to seek opportunities demonstrating the potential of long-term
growth as opposed to short-term earnings. At the present time, the Company has
not identified any business opportunity that it plans to pursue, nor has the
Company reached any agreement or definitive understanding with any person
concerning an acquisition.
Proposed Business
-----------------
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.
It is anticipated that the Company's officers and directors will contact
broker-dealers and other persons with whom they are acquainted who are involved
with corporate finance matters to advise them of the Company's existence and to
determine if any companies or businesses that they represent have a general
interest in considering a merger or acquisition with a blind pool or blank check
or shell entity. No assurance can be given that the Company will be successful
in finding or acquiring a desirable business opportunity, given the limited
funds that are expected to be available for acquisitions. Furthermore, no
assurance can be given that any acquisition, which does occur, will be on terms
that are favorable to the Company or its current stockholders.
The Company's search will be directed toward small and medium-sized enterprises,
which have a desire to become public corporations. In addition these enterprises
may wish to satisfy, either currently or in the reasonably near future, the
minimum tangible asset requirement in order to qualify shares for trading on
NASDAQ or on an exchange such as the American Stock Exchange. The Company
anticipates that the business opportunities presented to it will (i) either be
in the process of formation, or be recently organized with limited operating
history or a history of losses attributable to under-capitalization or other
factors; (ii) experiencing financial or operating difficulties; (iii) be in need
of funds to develop new products or services or to expand into a new market, or
have plans for rapid expansion through acquisition of competing businesses; (iv)
or other similar characteristics. The Company intends to concentrate its
acquisition efforts on properties or businesses that it believes to be
undervalued or that it believes may realize a substantial benefit from being
publicly owned. Given the above factors, investors should expect that any
acquisition candidate may have little or no operating history, or a history of
losses or low profitability.
The Company does not propose to restrict its search for investment opportunities
to any particular geographical area or industry, and may, therefore, engage in
essentially any business, to the extent of its limited resources. This included
industries such as service, finance, natural resources, manufacturing, high
technology, product development, medical, communications and others. The
5
Company's discretion in the selection of business opportunities is unrestricted,
subject to the availability of such opportunities, economic conditions, and
other factors.
Any entity, which has an interest in being acquired by, or merging into the
Company, is expected to be an entity that desires to become a public Company and
establish a public trading market for its securities. In connection with such a
merger or acquisition, it is highly likely that an amount of stock constituting
control of the Company would either be issued by the Company or be purchased
from the current principal stockholders of the Company by the acquiring entity
or its affiliates. If stock is purchased from the current principal
stockholders, the transaction is very likely to be a private transaction rather
than a public distribution of securities, but is also likely to result in
substantial gains to the current principal stockholders relative to their
purchase price for such stock. In the Company's judgment, none of the officers
and directors would thereby become an underwriter within the meaning of the
Section 2(11) of the Securities Act of 1933, as amended as long as the
transaction is a private transaction rather than a public distribution of
securities. The sale of a controlling interest by certain principal shareholders
of the Company would occur at a time when minority stockholders are unable to
sell their shares because of the lack of a public market for such shares.
Depending upon the nature of the transaction, the current officers and directors
of the Company may resign their management and board positions with the Company
in connection with a change of control or acquisition of a business opportunity.
In the event of such a resignation, the Company's current management would
thereafter have no control over the conduct of the Company's business.
It is anticipated that business opportunities will come to the Company's
attention from various sources, including its officers and directors, its other
stockholders, professional advisors such as attorneys and accountants,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. The Company has no
plans, understandings, agreements, or commitments with any individual for such
person to act as a finder of opportunities for the Company.
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.
Combination Suitability Standards
---------------------------------
The Company does not foresee that it will enter into a merger or acquisition
transaction with any business with which its officers or directors are currently
affiliated. Should the Company determine in the future, contrary to the forgoing
expectations, that a transaction with an affiliate would be in the best
interests of the Company and its stockholders, the Company is, in general,
permitted by Nevada law to enter into a transaction if:
The material facts as to the relationship or interest of the affiliate and
as to the contract or transaction are disclosed or are known to the Board
of Directors, and the Board in good faith authorizes, approves or ratifies
the contract or transaction by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors constitute
less than a quorum; or
The material facts as to the relationship or interest of the affiliate and
as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically authorized, approved or ratified in good faith by vote of the
stockholders; or the contract or transaction is fair as to the Company as
of the time it is authorized, approved or ratified, by the Board of
Directors or the stockholders.
6
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.
It is the intention of the current management to maintain its SEC reporting to
date in order that the Company might be potentially attractive to a private
business that might be interested in becoming a publicly-held company, without
the expense and time delay involved in distributing its securities to the
public.
Governmental Regulation
-----------------------
It is impossible to predict the government regulation, if any, to which the
Company may be subject. The use of assets and/or conduct of businesses that the
Company may operate within could subject it to environmental, public health and
safety, land use, trade, or other governmental regulations and state or local
taxation. Management will endeavor to ascertain and monitor the effects of such,
if any, government regulation on the business of the Company. In certain
circumstances, however, it may not be possible to predict with any degree of
accuracy the impact of government regulation. The inability to ascertain the
effect of government regulation on a particular business activity will make the
acquisition of an interest in such business a higher risk.
7
Competition
-----------
The Company may be involved in intense competition with other business entities,
many of which could have a competitive edge over the Company by virtue of their
stronger financial resources and prior experience in business. There is no
assurance that the Company will be successful in a competitive business
environment.
Employees
---------
The Company currently has no employees. The sole executive officer, who is not
compensated for his time contributed to the Company, devotes only such time to
the affairs of the Company, which is minimal at this time.
Item 2 - Description of Properties
The Company has no property and currently maintains a mailing address at 211
West Wall, Midland, Texas 79701. The Company's telephone number there is (915)
682-1761. Other than this mailing address, the Company does not currently
maintain any other office facilities, and does not anticipate the need for
maintaining office facilities at any time in the foreseeable future. The Company
pays no rent or other fees for the use of the mailing address or use of office
facilities.
Item 3 - Legal Proceedings
The Company is not a party to any material pending legal proceedings, and to the
best of its knowledge, no such proceedings by or against the Company have been
threatened.
Item 4 - Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders in the fiscal years ended
December 31, 2001 or 2000, respectively.
PART II
Item 5 - Market for Common Equity and Related Stockholder Matters
Market Information
------------------
As of January 14, 2002, there were approximately 400 holders on record of the
Company's common stock holding a total of 10,145,640 shares.
During 1999, the Company filed a request for clearance of quotations on the OTC
Bulletin Board under SEC Rule 15c2-11, Subsection (a)(5) with NASD Regulation
Inc. A Clearance Letter was issued to ProHealth Medical Technologies, Inc. in
October 1999 and the Company was issued its trading symbol PHMT. The Company's
first posted trade was conducted on November 2, 1999. Between November 1999 and
December 1999, the Company's securities were involved in 10 separately listed
transactions. There were no listed trades between January 2000 and April 2000
and very limited activity through August 2000. In August 2000, trading in the
Company's securities was suspended. The Company reapplied for trading clearance
in 2001 and such approval was granted in October 2001, with the first posted
trade dated October 18, 2001. The quoted market prices of the Company's common
stock on the NASDAQ Electronic Bulletin Board, per data listed by National
Quotation Bureau, Inc., are as follows:
8
High Low
----- ---
First quarter 2000 no posted trades
Second quarter 2000 $0.75 $0.75
Third quarter 2000 $0.062 $0.062
Fourth quarter 2000 no posted trades
First quarter 2001 trading suspended
Second quarter 2001 trading suspended
Third quarter 2001 trading suspended
Fourth quarter 2001 $0.03 $0.03
Dividend Policy
---------------
The Company has never paid any dividends on its common stock and does not have
any current plan to pay any dividends in the foreseeable future.
Item 6 - Management's Discussion and Analysis of Financial Condition, Results of
Operations and Plan of Operation
Results of Operations
---------------------
Years Ended December 31, 2001 and 2000
--------------------------------------
The Company had no revenue for the years ended December 31, 2001 and 2000,
respectively.
General and administrative expenses for the years ended December 31, 2001 and
2000 were approximately $8,580 and $720, respectively. General and
administrative expenses during these years consisted principally of fees
associated with the maintenance of the Company's shareholder ledger. The Company
realized a net loss of approximately $8,580 and $720 for the years ended
December 31, 2001 and 2000, respectively.
The Company does not expect to generate any meaningful revenue or incur
operating expenses unless and until such time that the Company's operating
subsidiary begins meaningful operations.
Liquidity and Capital Resources
-------------------------------
At December 31, 2001, and for all periods subsequent thereto, the Company had
working capital of $135.
On September 25, 2001, the Company sold 10,000,000 shares of restricted,
unregistered common stock at $0.001 per share for gross proceeds of $10,000,
pursuant to a private placement memorandum to Glenn A. Little, the Company's
President and Chief Executive Officer. These funds were used to support the
working capital needs of the Company. The Company relied upon Section 4(2) of
The Securities Act of 1933, as amended, for an exemption from registration on
these shares.
It is the intent of management and significant stockholders to provide
sufficient working capital necessary to support and preserve the integrity of
the corporate entity. However, there is no legal obligation for either
management or significant stockholders to provide additional future funding.
Should this pledge fail to provide financing, the Company has not identified any
alternative sources. Consequently, there is substantial doubt about the
Company's ability to continue as a going concern.
The Company's need for capital may change dramatically as a result of any
business acquisition or combination transaction. There can be no assurance that
the Company will identify any such business, product, technology or company
suitable for acquisition in the future. Further, there can be no assurance that
the Company would be successful in consummating any acquisition on favorable
terms or that it will be able to profitably manage the business, product,
technology or company it acquires.
9
Item 7 - Financial Statements
The financial statements of the Company appear at the end of this report
beginning with the Index to Financial Statements on page F-1.
Item 8 - Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 9 - Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(A) of The Securities Exchange Act of 1934
Directors and Officers
The following table sets forth the names, ages, and positions with the Company
for the sole director and officer of the Company.
Name Age Position Held and Tenure
---- --- ------------------------
Glenn A. Little 48 President, Director
Matthew Blair 44 Secretary, Treasurer Director
The directors named above will serve until the next annual meeting of the
Company's stockholders or until their successors are duly elected and have
qualified. Directors will be elected for one-year terms at the annual
stockholders meeting. Officers will hold their positions at the pleasure of the
board of directors, absent any employment agreement, of which none currently
exists or is contemplated. There is no arrangement or understanding between any
of the directors or officers of the Company and any other person pursuant to
which any director or officer was or is to be selected as a director or officer,
and there is no arrangement, plan or understanding as to whether non-management
shareholders will exercise their voting rights to continue to elect the current
directors to the Company's board. There are also no arrangements, agreements or
understandings between non-management shareholders that may directly or
indirectly participate in or influence the management of the Company's affairs.
The directors and officers will devote their time to the Company's affairs on an
as needed basis, which, depending on the circumstances, could amount to as
little as two hours per month, or more than forty hours per month, but more than
likely will fall within the range of five to ten hours per month. There are no
agreements or understandings for any officer or director to resign at the
request of another person, and none of the officers or directors are acting on
behalf of, or will act at the direction of, any other person.
Biographical Information
Glenn A. Little, is a graduate of The University of Florida, Gainesville
(Bachelor of Science in Business Administration) and the American Graduate
School of International Management (Master International Management) and has
been the principal of Little and Company Investment Securities (LITCO), a
Securities Broker/Dealer with offices in Midland, Texas since 1979. Mr. Little
currently serves as an officer of other inactive public corporations having the
same business purpose as the Company.
Before founding LITCO, Mr. Little was a stockbroker with Howard, Weil, Labouisse
Friedrich in New Orleans and Midland and worked for the First National Bank of
Commerce in New Orleans, Louisiana.
10
Matthew Blair was formerly a solo practitioner of law in Midland, Texas and is
presently a Title IV-D Master in Midland County Texas. Before opening his
practice he served in the Legal Department of the Federal Deposit Insurance
Corporation (FDIC), Midland, Texas where he gained exposure to corporate
structures and debt workouts. His employment before the FDIC appointment was
with Texas American Energy and Exxon Corporation. Mr. Blair received a Bachelor
of Arts in Government from The University of Texas at Austin (1975) and Juris
Doctor from Texas Tech University School of Law (1979). He is licensed in every
state court in Texas, United States District Court (Texas) and in The United
States Supreme Court.
Item 10 - Executive Compensation
There was no compensation paid during either of the years ended December 31,
2001 and 2000.
None of the Company's current officers or directors receives or has received any
salary from Company during the preceding five years. The Company does not
anticipate entering into employment agreements with any of its officers or
directors in the near future. Directors do not receive compensation for their
services as directors and are not reimbursed for expenses incurred in attending
board meeting.
Item 11 - Security Ownership of Management, Certain Beneficial Owners and
Management
The following table sets forth as of January 8, 2002, the number and percentage
of the 10,145,640 outstanding shares of common stock that were beneficially
owned by (i) each person who is currently a director, (ii) each executive
officer, (iii) all current directors and executive officers as a group and (iv)
each person who, to the knowledge of the Company is the beneficial owner of more
than 5% of the outstanding common stock. Except as otherwise indicated, the
persons named in the table have sole voting and dispositive power with respect
to all shares beneficially owned, subject to community property laws where
applicable.
Name and Address Common Shares Percent of Class (1)
---------------- ------------- --------------------
Glenn A. Little 10,073,186 99.29%
211 W. Wall Street
Midland TX 79701
Matthew Blair 0 0.00%
201 W. Wall Street
Midland TX 79701
All officers and directors as a 10,073,186 99.29%
Group (2 persons)
(1) Based on 10,145,640 shares outstanding as of January 8, 2002.
Item 12 - Certain Relationships and Related Transactions
On September 25, 2001, the Company sold 10,000,000 shares of restricted,
unregistered common stock at $0.001 per share for gross proceeds of $10,000,
pursuant to a private placement memorandum to Glenn A. Little, the Company's
President and Chief Executive Officer. These funds were used to support the
working capital needs of the Company. The Company relied upon Section 4(2) of
The Securities Act of 1933, as amended, for an exemption from registration on
these shares.
The Company's President, Glenn A. Little, has agreed to provide funds to the
Company sufficient to cover Company expenses relating to its SEC periodic
reporting and other minor corporate expenses.
11
Except for the transactions described above there are no proposed transactions
and no transactions during the past two years to which the Company was a party
and in which any officer, director, or principal stockholder, or their
affiliates or associates, was also a party.
Item 13 - Exhibits and Reports on Form 8-K
Copies of the following documents are included as exhibits to this report
pursuant to Item 601 of Regulation S-B.
Exhibits - None
--------
Form 8-K Filings - None
----------------
12
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Act of 1933, as
amended, the Company caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
ProHealth Medical Technologies, Inc.
Dated: January 14, 2002 By: /s/ Glenn A. Little
---------------- ------------------------------
Glenn A. Little
President, Director and
Chief Executive Officer
In accordance with the Securities Exchange Act of 1934, as amended, this report
has been signed below by the following persons on behalf of the Company and in
the capacities and on the date as indicated.
Dated: January 14, 2002 By: /s/ Glenn A. Little
---------------- ------------------------------
Glenn A. Little
President, Director and
Chief Executive Officer
Dated: January 14, 2002 By: /s/ Matthew Blair
---------------- ------------------------------
Matthew Blair
Director
13
ProHealth Medical Technologies, Inc.
Contents
Page
----
Report of Independent Certified Public Accountants F-2
Financial Statements
Balance Sheets
as of December 31, 2001 and 2000 F-3
Statements of Operations
for the years ended December 31, 2001 and 2000 F-4
Statement of Changes in Shareholders' Equity
for the years ended December 31, 2001 and 2000 F-5
Statements of Cash Flows
for the years ended December 31, 2001 and 2000 F-6
Notes to Financial Statements F-7
F-1
S. W. HATFIELD, CPA
certified public accountants
Member: Texas Society of Certified Public Accountants
Press Club of Dallas
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
Board of Directors and Stockholders
ProHealth Medical Technologies, Inc.
We have audited the accompanying balance sheets of ProHealth Medical
Technologies, Inc. (a Nevada corporation) as of December 31, 2001 and 2000 and
the related statements of operations and comprehensive income, changes in
shareholders' equity and cash flows for the each of the two years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ProHealth Medical Technologies,
Inc. as of December 31, 2000 and 1999 and the related statements of operations
and comprehensive income, changes in shareholders' equity and cash flows for the
each of the two years then ended, in conformity with generally accepted
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note A to the
financial statements, the Company has no viable operations or significant assets
and is dependent upon significant shareholders to provide sufficient working
capital to maintain the integrity of the corporate entity. These circumstances
create substantial doubt about the Company's ability to continue as a going
concern and are discussed in Note A. The financial statements do not contain any
adjustments that might result from the outcome of these uncertainties.
S. W. HATFIELD, CPA
Dallas, Texas
January 9, 2002
Use our past to assist your future sm
(secure mailing address) (overnight delivery/shipping address)
P. O. Box 820395 9002 Green Oaks Circle, 2nd Floor
Dallas, Texas 75382-0395 Dallas, Texas 75243-7212
214-342-9635 (voice) (fax) 214-342-9601
800-244-0639 SWHCPA@aol.com
F-2
ProHealth Medical Technologies, Inc.
Balance Sheets
December 31, 2001 and 2000
December 31, December 31,
2001 2000
------------ ------------
ASSETS
------
Current assets
Cash on hand and in bank $ 135 $ --
------------ ------------
Total current assets 135 --
------------ ------------
Total Assets $ 135 $ --
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities
Current liabilities
Accounts payable - trade $ -- $ 1,283
------------ ------------
Total current liabilities -- 1,283
------------ ------------
Commitments and contingencies
Shareholders' equity (deficit)
Common stock - $0.0001 par value
100,000,000 shares authorized
10,145,640 and 145,640 shares
issued and outstanding, respectively 1,015 15
Additional paid-in capital 815,182 806,182
Accumulated deficit (816,062) (807,480)
------------ ------------
Total Shareholders' Equity (Deficit) 135 (1,283)
------------ ------------
Total Liabilities and Shareholders' Equity $ 135 $ --
============ ============
The accompanying notes are an integral part of these financial statements.
F-3
ProHealth Medical Technologies, Inc.
Statements of Operations and Comprehensive Income
Years ended December 31, 2001 and 2000
Year ended Year ended
December 31, December 31,
2001 2000
------------ ------------
Revenues $ -- $ --
------------ ------------
Expenses
General and administrative expenses 8,582 720
------------ ------------
Total operating expenses 8,582 720
------------ ------------
Income (Loss) from continuing operations
before provision for income taxes (8,582) (720)
Provision for income taxes -- --
------------ ------------
Net Income (Loss) (8,582) (720)
Other Comprehensive Income -- --
------------ ------------
Comprehensive Income (Loss) $ (8,582) $ (720)
============ ============
Earnings per share of common stock
outstanding computed on net loss -
basic and fully diluted nil $ (0.01)
============ ============
Weighted-average number of shares
outstanding - basic and fully diluted 2,830,572 145,640
============ ============
The accompanying notes are an integral part of these financial statements.
F-4
ProHealth Medical Technologies, Inc.
Statement of Changes in Shareholders' Equity
Years ended December 31, 2001 and 2000
Common Stock Additional
------------ paid-in Accumulated
Shares Amount capital deficit Total
----------- ----------- ----------- ----------- -----------
Balances at January 1, 2000 145,640 $ 15 $ 805,782 $ (806,760) $ (963)
Capital contributed to
support operations -- -- 400 -- 400
Net loss for the year -- -- -- (720) (720)
----------- ----------- ----------- ----------- -----------
Balances at December 31, 2000 145,640 15 806,182 (807,480) (1,283)
Private placement of
common stock 10,000,000 1,000 9,000 -- 10,000
Net loss for the year -- -- -- (8,582) (8,582)
----------- ----------- ----------- ----------- -----------
Balances at December 31, 2001 10,145,640 $ 1,015 $ 815,182 $ (816,062) $ 135
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
F-5
ProHealth Medical Technologies, Inc.
Statements of Cash Flows
Years ended December 31, 2001 and 2000
Year ended Year ended
December 31, December 31,
2001 2000
------------ ------------
Cash Flows from Operating Activities
Net income (loss) for the period $ (8,582) $ (720)
Adjustments to reconcile net loss
to net cash provided by operating activities
Increase (Decrease) in
Accounts payable - trade (1,283) 320
------------ ------------
Net cash used in operating activities (9,865) (400)
------------ ------------
Cash Flows from Investing Activities -- --
------------ ------------
Cash Flows from Financing Activities
Cash received on private placement of common stock 10,000 --
Cash advanced by shareholder -- 400
------------ ------------
Net cash provided by financing activities 10,000 400
------------ ------------
Increase (Decrease) in Cash 135 --
Cash at beginning of period -- --
------------ ------------
Cash at end of period $ 135 $ --
============ ============
Supplemental Disclosure of Interest and Income Taxes Paid
Interest paid for the year $ -- $ --
============ ============
Income taxes paid for the year $ -- $ --
============ ============
The accompanying notes are an integral part of these financial statements.
F-6
ProHealth Medical Technologies, Inc.
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. In September 2001,
the Company sold 10,000,000 restricted, unregistered shares of common stock at
$0.001 per share, for gross proceeds of $10,000, to the Company's President to
provide working capital to satisfy all debts incurred in the maintenance of the
corporate entity.
The Company follows the accrual basis of accounting in accordance with generally
accepted accounting principles and has a year-end of December 31.
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.
F-7
ProHealth Medical Technologies, Inc.
Notes to Financial Statements - Continued
Note B - Summary of Significant Accounting Policies - Continued
2. Income Taxes
------------
At December 31, 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 $12,000. If this carryforward is not fully utilized, it
will begin to expire in 2019. As of December 31, 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 December 31, 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.
Note D - Income Taxes
The components of income tax (benefit) expense for the year ended December 31,
2001 and 2000, respectively, are as follows:
December 31, December 31,
2001 2000
------------ ------------
Federal:
Current $ -- $ --
Deferred
------------ ------------
-- --
------------ ------------
State:
Current -- --
Deferred -- --
------------ ------------
-- --
------------ ------------
Total $ -- $ --
============ ============
F-8
ProHealth Medical Technologies, Inc.
Notes to Financial Statements - Continued
Note D - Income Taxes - Continued
As of December 31, 2001, as a result of the November 1999 change in control, the
Company has a net operating loss carryforward of approximately $12,000 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 nine months ended September 30, 2001
and 2000, respectively, are as follows:
December 31, December 31,
2001 2000
------------ ------------
Statutory rate applied to loss before income taxes $ (2,918) $ (245)
Increase (decrease) in income taxes resulting from:
State income taxes -- --
Other, including reserve for deferred tax asset 2,918 245
------------ ------------
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 September 30, 2001 and 2000, respectively:
December 31, December 31,
2001 2000
------------ ------------
Deferred tax assets
Net operating loss carryforwards $ 4,080 $ 1,150
Less valuation allowance (4,080) (1,150)
------------ ------------
Net Deferred Tax Asset $ -- $ --
============ ============
Note E - Common Stock Transactions
On September 25, 2001, the Company sold 10,000,000 shares of restricted,
unregistered common stock at $0.001 per share for gross proceeds of $10,000,
pursuant to a private placement memorandum to the Company's President and Chief
Executive Officer. These funds were used to support the working capital needs of
the Company. The Company relied upon Section 4(2) of The Securities Act of 1933,
as amended, for an exemption from registration on these shares.
F-9
ProHealth Medical Technologies, Inc.
Notes to Financial Statements - Continued
Note F - Selected Financial Data (Unaudited)
The following is a summary of the quarterly results of operations for the years
ended December 31, 2001 and 2000, respectively.
Quarter ended Quarter ended Quarter ended Quarter ended Year ended
March 31 June 30 September 30 December 31 December 31
------------- ------------- ------------- ------------- -----------
2001
----
Net revenues $ -- $ -- $ -- $ -- $ --
Gross profit -- -- -- -- --
Net loss from operations (105) (105) (8,372) -- (8,582)
Basic and fully diluted
earnings per share nil nil $ (0.02) nil nil
Weighted-average
number of shares
outstanding 145,640 145,640 365,420 10,145,640 2,830,572
2000
----
Net revenues $ -- $ -- $ -- $ -- $ --
Gross profit -- -- -- -- --
Net loss from operations (222) (159) (180) (159) (720)
Basic and fully diluted
earnings per share nil nil nil nil nil
Weighted-average
number of shares
outstanding 145,640 145,640 145,640 145,640 145,640
F-10