UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002
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( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 000-26119
ALTRIMEGA HEALTH CORPORATION
----------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
NEVADA 87-0631750
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
5600 BELL STREET, SUITE 111, AMARILLO, TEXAS 79106
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(806) 331-6398
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
(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), YES [X ] NO [ ], AND (2) HAS BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LAST PRACTICABLE DATE.
CLASS OUTSTANDING AS OF JUNE 30, 2002
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COMMON STOCK, $0.001 22,020,000
1
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheets of Altrimega Health Corporation (a development
stage company) at June 30, 2002 and December 31, 2001, and the related
statements of operations and cash flows for the three and six months ended June
30, 2002 and 2001 and the period from September 8, 1998 to June 30, 2002, have
been prepared by the Company's management in conformity with accounting
principles generally accepted in the United States of America. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included and all such
adjustments are of a normal recurring nature.
Operating results for the quarter ended June 30, 2002, are not necessarily
indicative of the results that can be expected for the year ending December 31,
2002.
2
ALTRIMEGA HEALTH CORPORATION
(DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
JUNE 30, 2002 AND DECEMBER 31, 2001
--------------------------------------------------------------------------------
JUN 30, DEC 31,
2002 2001
------------ -------------
ASSETS
CURRENT ASSETS
Cash $ - $ -
------------ -------------
Total Current Assets $ - $ -
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 32,219 $ -
------------ -------------
Total Current Liabilities 32,219 -
------------ -------------
STOCKHOLDERS' EQUITY
Preferred stock
10,000,000 shares authorized at
$0.001 par value; none outstanding - -
Common stock
50,000,000 shares authorized at
$0.001 par value; 22,020,000 shares
issued and outstanding 22,020 22,020
Capital in excess of par value 117,135 117,135
Deficit accumulated during the
development stage (171,374) (139,155)
------------ -------------
Total Stockholders' Deficiency (32,219) -
------------ -------------
$ - $ -
============ =============
The accompanying notes are an integral part of these financial statements.
3
ALTRIMEGA HEALTH CORPORATION
(DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002
AND 2001 AND THE PERIOD SEPTEMBER 8, 1998 (DATE
OF INCEPTION) TO JUNE 30, 2002
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THREE MONTHS SIX MONTHS
----------------------- ------------------------
SEPT 8, 1998
JUN 30, JUN 30, JUN 30, JUN 30, TO JUN 30,
2002 2001 2002 2001 2002
---------- ---------- ---------- ----------- -------------
REVENUES $ - $ - $ - $ - $ 9,703
---------- ---------- ---------- ----------- -------------
EXPENSES
Product development - - - - 76,692
Administrative 21,324 1,750 32,219 12,830 103,091
Depreciation - - - - 1,294
---------- ---------- ---------- ----------- -------------
21,324 1,750 32,219 12,830 181,077
---------- ---------- ---------- ----------- -------------
NET LOSS $(21,324) $ (1,750) $(32,219) $(12,830) $(171,374)
========== ========== ========== =========== =============
NET LOSS PER COMMON SHARE
Basic $ - $ - $ - $ -
---------- ---------- ---------- ----------- -------------
AVERAGE OUTSTANDING SHARES
Basic (stated in 1,000's) 22,020 22,020 22,020 22,020
----------- ---------- ---------- ----------- -------------
The accompanying notes are an integral part of these financial statements.
4
ALTRIMEGA HEALTH CORPORATION
(DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
AND THE PERIOD SEPTEMBER 8, 1998 (DATE OF
INCEPTION) TO JUNE 30, 2002
--------------------------------------------------------------------------------
JUN 30, JUN 30, SEPT 8, 1998 TO
2002 2001 JUN 30, 2002
---------- ----------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (32,219) $ (12,830) $ (171,374)
Adjustments to reconcile net loss to net
cash provided by operating activities
Depreciation - 280 -
Changes in accounts payable 32,219 32,566 69,882
Contributions to capital - expenses - - 4,492
----------- ----------- ------------
Net Cash Received (Used) in Operations - 20,016 (97,000)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Advance deposit - lease - (20,000) -
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock - - 97,000
----------- ----------- ------------
Net Increase (decrease) in Cash - 16 -
Cash at Beginning of Period - 33 -
----------- ----------- ------------
Cash at End of Period $ - $ 49 $ -
=========== =========== ============
NON CASH FLOWS FROM OPERATING AND INVESTING
ACTIVITIES
Contributions to capital - expenses -
related parties - 2001 $ 4,492
----------
Contributions to capital - forgiveness
of debt - related party - 2001 37,663
----------
The accompanying notes are an integral part of these financial statements.
5
ALTRIMEGA HEALTH CORPORATION
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
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1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on September
8, 1998 with the name of Mega International Health Corporation with authorized
common stock of 50,000,000 shares with a par value of $0.001 and preferred stock
of 10,000,000 shares with a par value of $0.001. The board of directors will
determine the powers and rights of the preferred stock when it is issued. On
June 23, 1999 the name was changed to Altrimega Health Corporation. The Company
was organized for the purpose of marketing nutritional products.
The Company is in the development stage.
On March 5, 2001 the Company completed a forward stock split of four shares for
each outstanding share. This report has been prepared showing after stock split
shares from inception.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING METHODS
------------------
The Company recognizes income and expenses based on the accrual method of
accounting.
DIVIDEND POLICY
---------------
The Company has not adopted a policy regarding payment of dividends.
INCOME TAXES
------------
On June 30, 2002 the Company had a net operating loss carryforward of $171,374.
The tax benefit of approximately $51,412 from the loss carry forward has been
fully offset by a valuation reserve because the use of the future tax benefit is
doubtful, since the Company has no operations on which to project future net
profits. The loss carryover will expire in 2023.
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE
---------------------------------------------
Basic net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding. Diluted net income (loss) per
share amounts are computed using the weighted average number of common shares
and common equivalent shares outstanding as if shares had been issued on the
exercise of the preferred share rights unless the exercise becomes antidilutive
and then only the basic per share amounts are shown in the report.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FINANCIAL INSTRUMENTS
---------------------
The carrying amounts of financial instruments, including accounts payable, are
considered by management to be their estimated fair values.
ESTIMATES AND ASSUMPTIONS
-------------------------
Management uses estimates and assumptions in preparing financial statements in
accordance with accounting principles generally accepted in the United States of
America. Those estimates and assumptions affect the reported amounts of the
assets and liabilities, the disclosure of contingent assets and liabilities, and
the reported revenues and expenses. Actual results could vary from the estimates
that were assumed in preparing these financial statements.
OTHER RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements to have any material impact on its financial statements.
3. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officers-directors of the Company have acquired 28% of the outstanding common
stock.
A former president-director has made a contribution to the capital by the
forgiveness of debt due him from the Company of $37,663.
Former officers-directors have made contributions to the capital of the Company
by the payment of expenses incurred by the Company of $4,492.
4. GOING CONCERN
The Company will need additional working capital to service its debt and for its
future planned activity and continuation of the Company as a going concern is
dependent upon obtaining sufficient working capital to be successful in that
effort and the management of the Company has developed a strategy, which it
believes will accomplish this objective through additional equity funding, and
long term financing, which will enable the Company to operate for the coming
year.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Altrimega Health Corporation was incorporated under the laws of the State of
Nevada on September 8, 1998 as Mega Health Corporation. On June 23, 1999 the
name of the Corporation was changed to Altrimega Health Corporation.
Our initial plan of operation focused on marketing natural medicines and
nutritional supplements. We attempted to establish a distribution network with
various marketing firms with experience in marketing nutritional supplements,
however, these marketing efforts proved unsuccessful.
We began seeking potential business acquisition or opportunities to enter in an
effort to continue business operations. In July 2001, we entered into a Plan and
Agreement of Merger to acquire all of the issued and outstanding shares of
YellowOnline.com, a California corporation. The transaction contemplated that
upon closing, both the common and preferred shareholders of YellowOnline.com
would together own no less than 84% of our then issued and outstanding shares.
This transaction was not completed and was terminated on November 1, 2001.
On November 9, 2001, our president and controlling shareholder, Howard Abrams
sold 13,200,000 shares of our common stock owned by him to Rio Investment Group,
LLC, a Delaware limited liability company. The 13,200,000 shares represented
approximately 59.9% of our issued and outstanding shares. In connection with the
transaction, Abrams resigned as an officer and director and Ashley Choate, Ft.
Worth, Texas, was appointed to replace him.
On December 11, 2001, Altrimega Health Corporation, a Nevada corporation,
entered into an Exchange Agreement with Advanced Messaging Wireless, Inc., a
Texas corporation. Pursuant to the Exchange Agreement, the shareholders of
Advanced were to exchange all of the outstanding shares of common stock of
Advanced Messaging for an aggregate of 10,000,000 shares of common stock.
Pursuant to the proposed transaction, Advanced was to become a wholly owned
subsidiary of Altrimega. On July 15, 2002, Altrimega terminated the Exchange
Agreement with Advanced due to its failure to satisfy its conditions subsequent.
On July 25, 2002, Altrimega entered into a non-binding letter of intent with
Creative Holdings, Inc., a South Carolina corporation. Pursuant to the Letter of
Intent and upon the consummation of a definitive agreement, Atrimega will
acquire Creative Holdings. Upon consummation of the merger, Creative Holdings
will become a wholly owned subsidiary of Altrimega. At closing, Altrimega will
issue 20,000,000 shares of common stock to the former shareholders of Creative
Holdings. Further, Altrimega is obligated to seek shareholder approval to
increase its authorized capital stock to 800,000,000 shares of common stock.
Upon obtaining such approval, Altrimega will be obligated to issue an additional
300,000,000 shares of common stock to the former shareholders of Creative
Holdings, such that they will own a total of 320,000,000 shares of common stock
upon completion of the transaction.
Creative Holdings is a real estate holding company. Creative Holdings holds an
option to purchase a 49% interest in a joint venture project in North Myrtle
Beach, South Carolina known as the Barefoot Resort and Golf Community. The
project is under development and contemplates a yacht marina with 167 slips and
a multi-use building for retain and residential units. The project will require
additional funding to complete.
RESULTS OF OPERATIONS
---------------------
We are a development stage company and had limited operations during the
three-month period ended June 30, 2002, wherein we incurred $21,324 in
administrative expenses. Since our inception on September 8, 1998, we have
generated net losses of $171,374, based on limited operating capital. As a
result, the report of our auditor at December 31, 2001 contains a going concern
modification as to our ability to continue as a going concern. Our continuation
as a going concern is dependent on our ability to meet our obligations and
obtain additional debt or equity financing required until we complete the
proposed merger with Creative Holdings and are able to obtain profitability
through our operations. Until such time, we have taken the following steps to
revise our operating and financial requirements in an effort to enable us to
continue in existence:
o We have reduced administrative expenses to a minimum by consolidating
management responsibilities to our chief executive officer.
o We will seek, if required, either equity or further debt funding from
principal shareholders.
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o We will attempt to obtain the professional services of third-parties
through favorable financing arrangements or payment by the issuance of our
common stock.
o We believe that the foregoing plan will enable us to generate sufficient
funds to continue its operations for the next twelve months.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Altrimega had no cash or assets as of June 30, 2002. Altrimega is dependent upon
its ability to consummate the transaction with Creative Holdings and thereafter
to raise capital from the sale of debt or equity securities. Such capital will
be required in order for Altrimega to continue operations, which consist
primarily of its need to pay administrative expenses until the merger of
Creative Holdings is consummated. Altrimega has no commitments for financing.
Administrative expenses are expected to consist primarily of professional fees
necessary to file its periodic reports with the Securities and Exchange
Commission, including the review and audit of its financial statements.
Altrimega has minimized its expenses as discussed above. Upon consummation of
the acquisition of Creative Holdings, Altrimega anticipates that its need for
capital will also include helping to fund the Barefoot Resort joint venture.
Creative Holdings owns a 49% interest in Barefoot Resort. No assurances can be
given that the acquisition of Creative Holdings will be consummated due to a
number of factors, including the finalization of definitive agreements,
shareholder approval for an increase in Altrimega's authorized capital stock and
approval of the acquisition by the shareholders of Creative Holdings.
CRITICAL ACCOUNTING POLICIES
----------------------------
Below is a summary of Altrimega's critical accounting policies.
ACCOUNTING METHODS. Altrimega recognizes income and expenses based on the
accrual method of accounting.
DIVIDEND POLICY. Altrimega has not adopted a policy regarding payment of
dividends.
INCOME TAXES. On June 30, 2002, Altrimega had a net operating loss
carryforward of $171,374. The tax benefit of approximately $51,412 from the loss
carry forward has been fully offset by a valuation reserve because the use of
the future tax benefit is doubtful, since the Company has no operations on which
to project future net profits. The loss carryover will expire in 2023.
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE. Basic net income (loss) per
share amounts are computed based on the weighted average number of shares
actually outstanding. Diluted net income (loss) per share amounts are computed
using the weighted average number of common shares and common equivalent shares
outstanding as if shares had been issued on the exercise of the preferred share
rights unless the exercise becomes antidilutive and then only the basic per
share amounts are shown in the report.
FINANCIAL INSTRUMENTS. The carrying amounts of financial instruments,
including accounts payable, are considered by management to be their estimated
fair values.
ESTIMATES AND ASSUMPTIONS. Management uses estimates and assumptions in
preparing financial statements in accordance with accounting principles
generally accepted in the United States of America. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing these financial statements.
9
PART II
OTHER INFORMATION
-----------------
ITEM 1. LEGAL PROCEEDINGS.
There is no pending litigation against us.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
(a), (b), (c) and (d) None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
Not applicable.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS.
EXHIBIT
NO. DESCRIPTION LOCATION
------- -------------------------------------------------- -------------------------------------------------
2.1 Agreement and Plan of Merger dated July 19, 2001, Incorporated by reference to Exhibit 2.1 to the
by and among Altrimega Health Corporation, Corporation's 8-K filed with the SEC on July 31,
Altrimega Merger Sub, Inc. and YellowOnline.com 2001
2.2 Exchange Agreement between Altrimega Health Incorporated by reference to Exhibit 2.01 to the
Corporation and Advanced Messaging Wireless, Inc. Corporation's 8-K filed with the SEC on March
dated December 11, 2001 27, 2002
3.1 Articles of Incorporation Incorporated by reference to Exhibit 3.1.1 to
the Corporation's 10-SB filed with the SEC on
January 21, 2000
3.2 Amendment to Articles of Incorporation Incorporated by reference to Exhibit 3.1.2 to
the Corporation's 10-SB filed with the SEC on
January 21, 2000
3.3 Certificate of Amendment to Articles of Incorporated by reference to Exhibit A to the
Incorporation Corporation's PRE 14C filed on January 31, 2002
3.4 Bylaws Incorporated by reference to Exhibit 3.2 to the
Corporation's 10-SB filed with the SEC on
January 21, 2000
10.1 Letter of Intent dated July 25, 2002, by and Incorporated by reference to Exhibit 99.1 to the
between Altrimega Health Corporation and Creative Corporation's 8-K filed on July 26, 2002
Holdings Inc.
(B) REPORTS ON FORM 8-K.
On July 19, 2002, Altrimega filed a Form 8-K announcing the termination
of the proposed acquisition of Advanced Messaging Wireless, Inc.
On July 26, 2002, Altrimega filed a Form 8-K announcing the letter of
intent to acquire Creative Holdings, Inc.
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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.
Date: August 14, 2002 ALTRIMEGA HEALTH CORPORATION
By: /s/ Kelley Magee
-------------------------------
Kelley Magee
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Altrimega Health Corporation
(on Form 10-QSB for the period ended June 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), each of the
undersigned, in the capacities and on the dates indicated below, hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of Altrimega
Health Corporation.
August 14, 2002 /s/ Kelley Magee
------------------------------- --------------------------------------
Date Kelley Magee
President and Chief Executive Officer
August 14, 2002 /s/ Kelley Magee
------------------------------- --------------------------------------
Date Kelley Magee
Chief Financial Officer
12