UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarterly Period Ended September 30, 2002
[ ] 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 its charter)
NEVADA 87-0631750
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
4702 OLEANDER DRIVE, SUITE 200, MYRTLE BEACH, SOUTH CAROLINA 29577
(Address of Principal Executive Offices) (Zip Code)
(843) 497-7028
Registrant's telephone number, including area code
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); X Yes No
(2) has been subject to such filing requirements for the past 90 days.
X Yes 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
OUTSTANDING AS OF
CLASS SEPTEMBER 30, 2002
----- ------------------
Common Stock, $0.001 45,020,000
ALTRIMEGA HEALTH CORPORATION
FORM 10-QSB INDEX
Page
Number
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited) 3
Balance Sheets as of September 30, 2002 and
December 31, 2001 4
Statement of Operations
Three and nine months ended September 30, 2002 and 2001
and the period from September 8, 1998 to September 30, 2002 5
Statements of Cash Flows
Nine months ended September 30, 2002 and 2001
and the period from September 8, 1998 to September 30, 2002 6
Notes to Financial Statements. 7
Item 2. Management's Discussion and Analysis or Plan of Operations 9
Item 3. Controls and Procedures 12
PART II - OTHER INFORMATION 10
Item 1. Legal Proceedings 13
Item 2. Changes of Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
-2-
PART I - FINANCIAL INFORMATION
The accompanying balance sheets of Altrimega Health Corporation (development
stage company) at September 30, 2002 and December 31, 2001, and the related
statements of operations and cash flows for the three and nine months ended
September 30, 2002 and 2001 and the period from September 8, 1998 to September
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 September 30, 2002, are not necessarily
indicative of the results that can be expected for the year ending December 31,
2002.
ITEM 1. FINANCIAL STATEMENTS.
-3-
ALTRIMEGA HEALTH CORPORATION
(DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
SEPTEMBER 30, 2002 AND DECEMBER 31, 2001
ASSETS
September 30, December 31,
2002 2001
------------- ------------
Current Assets
Cash $ -- $ --
Total Current Assets $ -- $ --
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 60,886 $ --
------------- ------------
Total Current Liabilities $ 60,886 $ --
============= ============
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; 45,020,000 and 22,020,000 shares
issued and outstanding
At September 30, 2002 and December 31, 2001,
respectively 45,020 22,020
Capital in excess of par value 117,135 117,135
Deficit accumulated during the development
stage (200,041) (139,155)
------------- ------------
Total Stockholders' Deficiency (60,886) --
============= ============
The accompanying notes are an integral part of these financial statements.
-4-
ALTRIMEGA HEALTH CORPORATION
(DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002
AND 2001 AND THE PERIOD SEPTEMBER 8, 1998
1998 (DATE OF INCEPTION) TO SEPTEMBER 30, 2002
Three Months Three Months Nine Months Nine Months September 8,
Ended Ended Ended Ended 1998 to
September 30, September 30, September 30, September 30, September 30,
2002 2001 2002 2001 2002
REVENUES $ -- $ -- $ -- $ -- $ 9,703
--------- --------- --------- --------- ----------
EXPENSES
Product development -- -- -- -- 76,692
Administrative 28,667 22,770 60,886 35,600 131,758
Depreciation $ -- $ -- $ -- $ -- $ 1,294
--------- --------- --------- --------- ----------
$ 28,667 $ 22,770 $ 60,886 $ 35,600 $ 209,744
--------- --------- --------- --------- ----------
NET LOSS $(28,667) $ (22,770) $(60,886) $(35,600) $(200,041)
NET LOSS PER COMMON SHARE
Basic $ -- $ -- $ -- $ -- $ --
--------- --------- --------- --------- ----------
AVERAGE OUTSTANDING SHARES
Basic (stated in 1,000's) 45,020 22,020 45,020 22,020
========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-5-
ALTRIMEGA HEALTH CORPORATION
(DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002
AND 2001 AND THE PERIOD SEPTEMBER 8, 1998
(DATE OF INCEPTION) TO SEPTEMBER 30, 2002
September 30, September 30, September 8, 1998 to
2002 2001 September 30, 2002
------------- ------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (60,886) $ (35,600) $ (200,041)
Adjustments to reconcile net loss to
net cash provided by operating activities
Depreciation -- 420 --
Changes in accounts payable 60,886 30,763 98,549
Contributions to capital - expenses $ -- $ 700 $ 4,492
----------- ----------- ------------
Net Cash Received (Used) in Operations $ -- $ (3,717) $ (97,000)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Advance deposit - lease $ -- $ 3,792 $ --
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock $ -- $ -- $ 97,000
----------- ----------- ------------
Net Increase (decrease) in Cash -- 75 --
Cash at Beginning of Period $ -- $ 33 $ --
----------- ----------- ------------
Cash at End of Period $ -- 108 $ --
=========== =========== ============
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.
-6-
ALTRIMEGA HEALTH CORPORATION
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on September
8, 1998 with the name of Altrimega 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 September 30, 2002 the Company had a net operating loss carryforward of
$200,041. The tax benefit of approximately $ 60,012 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.
-7-
ALTRIMEGA HEALTH CORPORATION
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
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. RECENT ACCOUNTING PRONOUNCEMENTS
On July 21, 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141 (SFAS No. 141), "Business Combinations",
and No. 142 (SFAS No. 142), "Goodwill and Other Intangible Assets." SFAS No. 141
addresses financial accounting and reporting for goodwill and other intangible
assets acquired in a business combination at acquisition. SFAS No. 141 requires
the purchase method of accounting to be used for all business combinations
initiated after June 30, 2001 and establishes specific criteria for the
recognition of intangible assets separately from goodwill; SFAS No. 142
addresses financial accounting and reporting for goodwill and other intangible
assets subsequent to their acquisition. SFAS No. 142 provides that goodwill and
intangible assets which have indefinite useful lives will not be amortized, but
rather will be tested at least annually for impairment. It also provides that
intangible assets that have finite useful lives will continue to be amortized
over their useful lives, but those lives will no longer be limited to forty
years. SFAS No. 141 is effective for all business combinations after June 30,
2001. The provisions of SFAS No. 142 are effective beginning January 1, 2002.
The Company has implemented the provisions of SFAS No. 141 and No. 142 and has
concluded that the adoption does not have a material impact on the Company's
financial statements.
In October 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations," which requires companies to record the fair value of a liability
for asset retirement obligations in the period in which they are incurred. The
statement applies to a company's legal obligations associated with the
retirement of a tangible long-lived asset that results from the acquisition,
construction, and development or through the normal operation of a long-lived
asset. When a liability is initially recorded, the company would capitalize the
cost, thereby increasing the carrying amount of the related asset. The
capitalized asset retirement cost is depreciated over the life of the respective
asset while the liability is accreted to its present value. Upon settlement of
the liability, the obligation is settled at its recorded amount or the company
incurs a gain or loss. The statement is effective for fiscal years beginning
after June 30, 2002. The Company does not expect the adoption to have a material
impact to the Company's financial position or results of operations.
In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets". Statement 144 addresses the accounting and
reporting for the impairment or disposal of long-lived assets. The statement
provides a single accounting model for long-lived assets to be disposed of. New
criteria must be met to classify the asset as an asset held-for-sale. This
statement also focuses on reporting the effects of a disposal of a segment of a
business. This statement is effective for fiscal years beginning after December
15, 2001. The Company does not expect the adoption to have a material impact to
its financial position or results of operations.
-8-
In April 2002, the FASB issued Statement No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." This Statement rescinds FASB Statement No. 4, "Reporting Gains and
Losses from Extinguishment of Debt," and an amendment of that Statement, FASB
Statement No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund
Requirements" and FASB Statement No. 44, "Accounting for Intangible Assets of
Motor Carriers." This Statement amends FASB Statement No. 13, "Accounting for
Leases," to eliminate an inconsistency between the required accounting for
sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. The Company does not expect the adoption to have a material impact
to the Company's financial position or results of operations.
In July 2002, the FASB issued SFAS No. 146 "Accounting for Exit or Disposal
Activities." The provisions of this statement are effective for disposal
activities initiated after December 31, 2002, with early application encouraged.
The Company does not expect the adoption of FASB No. 146 to have a material
impact on the Company's financial position or results of operations.
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
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.
5. 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.
6. SHARE EXCHANGE WITH CREATIVE HOLDINGS, INC.
On August 15, 2002 the Company entered into a definitive Merger Agreement (the
"Merger Agreement") among the Company, Altrimega Acquisition Co., a Nevada
corporation ("Acquisition Co."), Creative Holdings, Inc. a South Carolina
corporation ("Creative Holdings") and the shareholders of Creative Holdings (the
"Shareholders"). Pursuant to the Merger Agreement, Creative Holdings was to be
merged with and into Acquisition Co., which was to be the surviving corporation
and continue its corporate existence under the laws of the State of Nevada as a
wholly-owned subsidiary of the Company. In consideration of the merger, the
Company was to issue a total of 320,000,000 shares of common stock of the
Company to the Shareholders in exchange for all of the common stock of Creative
Holdings. At closing, 20,000,000 shares of common stock of the Company were
issued and delivered to the Shareholders. Upon consummation of the merger and
the approval by a majority of the outstanding shares of capital stock
authorizing an amendment to the Company's Articles of Incorporation increasing
the authorized common stock of the Company to 800,000,000, the remaining
300,000,000 shares of common stock of the Company were to be issued and
delivered to the Shareholders.
On September 2, 2002, the Company, Creative Holdings and the Shareholders
amended the Merger Agreement and restructured the merger into a stock exchange
transaction, whereby Creative Holdings will become a wholly-owned subsidiary of
the Company. Pursuant to the Share Exchange Agreement (the "Share Exchange
Agreement"), effective as of August 15, 2002 by and among the Company, Creative
Holdings and the Shareholders, the Shareholders will exchange with ,and deliver
to the Company the issued and outstanding capital stock of Creative Holdings in
exchange for 20,000,000 shares of common stock of the Company and 1,000,000
shares of Series A Convertible Preferred Stock of the Company. Each shares of
Series A Convertible Preferred stock will be convertible into 300 shares of
common stock of the Company.
Creative Holdings is a real estate holding company. Pursuant to a Joint Venture
Agreement, dated June 27, 2002, by and between Silver Carolina Development
Company, LLC ("Silver Carolina") and Creative Holdings (the "Joint Venture
Agreement"), Creative Holdings has the right to purchase a 49% interest in a
joint venture with respect to the development, construction, lease, sales and
management of a portion of the residential and commercial property known as the
Barefoot Resort and Golf Community in North Myrtle Beach, South Carolina. The
project is under development and contemplates a yacht marina with 167 slips and
a multi-use building for retail and residential units.
-9-
7. SUBSEQUENT EVENTS
On November 12, 2002, the Company, through its subsidiary Sea Garden Funding,
LLC, a South Carolina limited liability company ("Sea Garden Funding"), acquired
real property in the Sea Garden development in North Myrtle Beach, South
Carolina.
Sea Garden is a townhouse condominium project consisting of approximately 116
sold units with an additional 10 units currently under construction and
remaining sites for 49 additional units.
Creative Holdings owns 80% of Sea Garden Funding. Sea Garden Funding paid
$210,000 cash and assumed debt of $1,071, 344.66 to complete the transaction.
The current sales prices for the 2 bedroom 2.5 bath town homes are averaging
$88,000.00. This would create approximately $5,200,000 in revenues upon
sell-out. The construction costs on the remaining units to be completed would be
approximately $2,775,000 at current cost estimates. Horry County State Bank
provided the funding for the purchase.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Overview
--------
On August 15, 2002 the Company entered into a definitive Merger Agreement (the
"Merger Agreement") among the Company, Altrimega Acquisition Co., a Nevada
corporation ("Acquisition Co."), Creative Holdings, Inc. a South Carolina
corporation ("Creative Holdings") and the shareholders of Creative Holdings (the
"Shareholders"). Pursuant to the Merger Agreement, Creative Holdings was to be
merged with and into Acquisition Co., which was to be the surviving corporation
and continue its corporate existence under the laws of the State of Nevada as a
wholly-owned subsidiary of the Company. In consideration of the merger, the
Company was to issue a total of 320,000,000 shares of common stock of the
Company to the Shareholders in exchange for all of the common stock of Creative
Holdings. At closing, 20,000,000 shares of common stock of the Company were
issued and delivered to the Shareholders. Upon consummation of the merger and
the approval by a majority of the outstanding shares of capital stock
authorizing an amendment to the Company's Articles of Incorporation increasing
the authorized common stock of the Company to 800,000,000, the remaining
300,000,000 shares of common stock of the Company were to be issued and
delivered to the Shareholders.
On September 2, 2002, the Company, Creative Holdings and the Shareholders
amended the Merger Agreement and restructured the merger into a stock exchange
transaction, whereby Creative Holdings became a wholly-owned subsidiary of the
Company. Pursuant to the Share Exchange Agreement (the "Share Exchange
Agreement"), effective as of August 15, 2002 by and among the Company, Creative
Holdings and the Shareholders, the Shareholders exchanged with and delivered to
the Company, the issued and outstanding capital stock of Creative Holdings in
exchange for 20,000,000 shares of common stock of the Company and 1,000,000
shares of Series A Convertible Preferred Stock of the Company. Each shares of
Series A Convertible Preferred stock is convertible into 300 shares of common
stock of the Company.
Creative Holdings is a real estate holding company. Pursuant to a Joint Venture
Agreement, dated June 27, 2002, by and between Silver Carolina Development
Company, LLC ("Silver Carolina") and Creative Holdings (the "Joint Venture
Agreement"), Creative Holdings has the right to purchase a 49% interest in a
joint venture with respect to the development, construction, lease, sales and
management of a portion of the residential and commercial property known as the
Barefoot Resort and Golf Community in North Myrtle Beach, South Carolina. The
project is under development and contemplates a yacht marina with 167 slips and
a multi-use building for retail and residential units.
The Joint Venture Agreement has a term of ten years unless terminated by the
earlier to occur of: (i) mutual agreement of the parties; (ii) adjudication of
either party as bankrupt, either party filing of a voluntary petition in
bankruptcy, the filing of any petition against either party under any federal or
state bankruptcy law, or either party filing of a petition or answer seeking the
appointment of a receiver of its assets or an arrangement with creditors under
any such laws; or (iii) breach by either party of any material covenant under
the Joint Venture Agreement. Either party may cure a material breach within 60
days of receiving written notice thereof. The Joint Venture Agreement provides
for capital contributions that are to be made by both parties. The Joint Venture
Agreement provides that on or before August 31, 2002, or within a reasonable
time thereafter as agreed by both parties, Silver Carolina will contribute the
land to the joint venture and Creative Holdings will provide the capital
necessary to payoff the mortgage on the property held by Wachovia Bank, plus up
to $2,000,000 for continuing operation. Pursuant to the Joint Venture Agreement,
the capital required will not exceed $20,000,000.
-10-
The joint venture provides that Silver Carolina has a 51% interest in the joint
venture, including the profits and is chargeable with such percentage of the
losses of the joint venture. Creative Holdings has a right to purchase a 49%
interest in the joint venture, including the profits and is chargeable with such
percentage of the losses of the joint venture. Pursuant to the Joint Venture
Agreement, Silver Carolina is the Manager of joint venture.
Results of Operations
---------------------
RESULT OF OPERATIONS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2002 COMPARED
TO THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2001
The Company had no revenue for the nine-month periods ended September 30, 2002
and September 30, 2001, respectively. The Company had expenses of $60,886 for
the nine-month period ended September 30, 2002 as compared to $35,600 for the
nine-month period ended September 30, 2001, an increase of 71%. The Company had
a net loss of $60,886 for the nine-month period ended September 30, 2002 as
compared to $35,600 for the nine-month period ended September 30, 2001, an
increase of 71%.
RESULTS OF OPERATIONS FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2002
COMPARED TO THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2001
The Company had no revenue for the three-month periods ended September 30, 2002
and September 30, 2001, respectively. The Company had expenses of $28,667 for
the three-month period ended September 30, 2002 as compared to $22,770 for the
three-month period ended September 30, 2001, an increase of 26%. The Company had
a net loss of $28,667 for the three-month period ended September 30, 2002 as
compared to $22,770 for the three-month period ended September 30, 2001, an
increase of 71%.
Liquidity and Capital Resources
-------------------------------
The Company had no cash on-hand as of September 30, 2002. The Company's current
assets exceed its current liabilities as of September 30, 2002. The Company will
require additional working capital to finance its planned activities. The
Company cannot assure you that the additional capital it requires to finance its
operations will be available on acceptable terms, if at all. Any failure to
secure additional financing will force the Company to modify its business plan.
-11-
PART 11 - OTHER INFORMATION
ITEM 3. CONTROLS AND PROCEDURES
QUARTERLY EVALUATION OF THE COMPANY'S DISCLOSURE CONTROLS AND INTERNAL CONTROLS.
Within the 90 days prior to the date of this Quarterly Report on Form 10-QSB,
the Company evaluated the effectiveness of the design and operation of its
"disclosure controls and procedures" (Disclosure Controls), and its "internal
controls and procedures for financial reporting" (Internal Controls). This
evaluation (the Controls Evaluation) was done under the supervision and with the
participation of management, including our Chief Executive Officer (CEO)/Chief
Financial Officer (CFO). Rules adopted by the SEC require that in this section
of the Quarterly Report we present the conclusions of the CEO/CFO about the
effectiveness of our Disclosure Controls and Internal Controls based on and as
of the date of the Controls Evaluation.
CEO/CFO CERTIFICATION. Appearing immediately following the Signatures section of
this Quarterly Report there are two separate forms of "Certifications" of the
CEO/CFO. The second form of Certification is required in accord with Section 302
of the Sarbanes-Oxley Act of 2002 (the Section 302 Certification). This section
of the Quarterly Report which you are currently reading is the information
concerning the Controls Evaluation referred to in the Section 302 Certifications
and this information should be read in conjunction with the Section 302
Certifications for a more complete understanding of the topics presented.
DISCLOSURE CONTROLS AND INTERNAL CONTROLS. Disclosure Controls are procedures
that are designed with the objective of ensuring that information required to be
disclosed in our reports filed under the Securities Exchange Act of 1934
(Exchange Act), such as this Quarterly Report, is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's (SEC) rules and forms. Disclosure Controls are also
designed with the objective of ensuring that such information is accumulated and
communicated to our management, including the CEO/CFO, as appropriate to allow
timely decisions regarding required disclosure. Internal Controls are procedures
which are designed with the objective of providing reasonable assurance that (1)
our transactions are properly authorized; (2) our assets are safeguarded against
unauthorized or improper use; and (3) our transactions are properly recorded and
reported, all to permit the preparation of our financial statements in
conformity with generally accepted accounting principles.
LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS. The Company's management,
including the CEO/CFO, does not expect that our Disclosure Controls or our
Internal Controls will prevent all error and all fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, control may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.
SCOPE OF THE CONTROLS EVALUATION. The CEO/CFO evaluation of our Disclosure
Controls and our Internal Controls included a review of the controls' objectives
and design, the controls' implementation by the Company and the effect of the
controls on the information generated for use in this Quarterly Report. In the
course of the Controls Evaluation, we sought to identify data errors, controls
problems or acts of fraud and to confirm that appropriate corrective action,
including process improvements, were being undertaken. This type of evaluation
will be done on a quarterly basis so that the conclusions concerning controls
effectiveness can be reported in our Quarterly Reports on Form 10-QSB and Annual
Report on Form 10-KSB. Our Internal Controls are also evaluated on an ongoing
basis by our independent auditors in connection with their audit and review
activities. The overall goals of these various evaluation activities are to
monitor our Disclosure Controls and our Internal Controls and to make
modifications as necessary; our intent in this regard is that the Disclosure
Controls and the Internal Controls will be maintained as dynamic systems that
change (including with improvements and corrections) as conditions warrant.
-12-
Among other matters, we sought in our evaluation to determine whether there were
any "significant deficiencies" or "material weaknesses" in the Company's
Internal Controls, or whether the Company had identified any acts of fraud
involving personnel who have a significant role in the Company's Internal
Controls. This information was important both for the Controls Evaluation
generally and because items 5 and 6 in the Section 302 Certifications of the
CEO/CFO require that the CEO/CFO disclose that information to our Board of
Directors and to our independent auditors and to report on related matters in
this section of the Quarterly Report. In the professional auditing literature,
"significant deficiencies" are referred to as "reportable conditions"; these are
control issues that could have a significant adverse effect on the ability to
record, process, summarize and report financial data in the financial
statements. A "material weakness" is defined in the auditing literature as a
particularly serious reportable condition where the internal control does not
reduce to a relatively low level the risk that misstatements caused by error or
fraud may occur in amounts that would be material in relation to the financial
statements and not be detected within a timely period by employees in the normal
course of performing their assigned functions. We also sought to deal with other
controls matters in the Controls Evaluation, and in each case if a problem was
identified, we considered what revision, improvement and/or correction to make
in accord with our on-going procedures.
In accord with SEC requirements, the CEO/CFO notes that, since the date of the
Controls Evaluation to the date of this Quarterly Report, there have been no
significant changes in Internal Controls or in other factors that could
significantly affect Internal Controls, including any corrective actions with
regard to significant deficiencies and material weaknesses.
CONCLUSIONS. Based upon the Controls Evaluation, our CEO/CFO has concluded that,
subject to the limitations noted above, our Disclosure Controls are effective to
ensure that material information relating to the Company is made known to
management, including the CEO/CFO, particularly during the period when our
periodic reports are being prepared, and that our Internal Controls are
effective to provide reasonable assurance that our financial statements are
fairly presented in conformity with generally accepted accounting principles.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not currently a party to any legal proceedings against it.
ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS
RECENT SALES OF UNREGISTERED SECURITIES
---------------------------------------
The following is a summary of sales of unregistered securities for the third
quarter of 2002. All securities were issued as restricted common shares, which
are subject to Rule 144 of the Securities and Exchange Commission. Generally,
Rule 144 requires shareholders to hold the shares for a minimum of one year
before sale. In addition, officers, directors and more than 10% shareholders are
further restricted in their ability to sell such shares. There have been no
underwriters of these securities and no commissions or underwriting discounts
have been paid.
On September 2, 2002, the Company issued 20,000,000 shares of common stock and
1,000,000 shares of Series A Convertible Preferred Stock to the Shareholders of
Creative Holdings, Inc. in exchange for all of the issued and outstanding shares
of common stock of Creative Holdings, Inc.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None
-13-
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(b) The Company filed the following Form 8-K's during the quarter for which this
report is filed:
(i) Form 8-K filed July 19, 2002, reporting Item 5, with respect to
the termination of an Exchange Agreement between the Company and
Advanced Messaging Wireless, Inc.
(ii) Form 8-K filed July 26, 2002, reporting Item 9 with respect to
the execution of a letter of intent between the Company and
Creative Holdings, Inc.
(iii) Form 8-K filed August 16, 2002, reporting Item 2 with respect to
the execution of a Merger Agreement among the Company, Altrimega
Acquisition Co., Creative Holdings, Inc. and the shareholders of
Creative Holdings, Inc.
(iv) Form 8-K filed October 4, 2002, reporting Item 2, with respect
to the amendment of the Merger Agreement into a share exchange
transaction.
(v) Form 8-K filed November 13, 2002, reporting Item 2 with respect
to the acquisition of the Sea Garden property.
-14-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934 the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ALTRIMEGA HEALTH CORPORATION
----------------------------
Date: NOVEMBER 18, 2002 By: /s/ John W. Gandy
-----------------------------
John W. Gandy
President and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Company and in
the capacities and on the dates indicated.
Date: NOVEMBER 18, 2002 By: /s/ John W. Gandy
-----------------------------
John W. Gandy
President and Director
(Principal Executive, Financial
and Accounting Officer)
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 Heath Corporation (the
"Company") on Form 10-Q for the period ended September 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 the Company.
By:/s/ John W. Gandy DATE NOVEMBER 18, 2002
--------------------------------------------
John W. Gandy, President and Director
(Principal Executive Officer)
By: /s/ John W. Gandy DATE NOVEMBER 18, 2002
--------------------------------------------
John W. Gandy, President and Director
(Principal Financial and Accounting Officer)
-15-
CERTIFICATION
PURSUANT TO SECTION 302
I, John W. Gandy, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Altrimega Health
Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 18, 2002 By: /s/ John W. Gandy
-----------------------------------------
John W. Gandy
President and Principal Executive Officer
-16-
CERTIFICATION
PURSUANT TO SECTION 302
I, John W. Gandy, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Altrimega Health
Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 18, 2002 By: /s/ John W. Gandy
---------------------------------------
John W. Gandy
President and Principal Financial
And Accounting Officer
-17-