These financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information
and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation
have been included. Operating results for the interim period ended March 31, 2013 are not necessarily indicative of the results
that can be expected for the full year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
NOTE 1 –
SUMMARY OF ACCOUNTING POLICIES
Nature of Business
Vantage Health (“Vantage Health”
and the “Company”) is a development stage company and was incorporated in Nevada on April 21, 2010.
The Company intends to
build
and operate an Active Pharmaceutical Ingredient (“APIs”) manufacturing plant alongside a formulation
and packaging plant in South Africa to meet the growing market need for generic medicines in South Africa and the neighboring
African countries. The company intends to build an Active Pharmaceutical Ingredient (API) manufacturing plant in South Africa
in order to supply the growing demand in the fight against HIV/AIDS and chronic disease in Africa.
Development Stage Company
The accompanying consolidated financial statements
have been prepared in accordance with generally accepted accounting principles related to development-stage companies. A development-stage
company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no
significant revenues there from.
Basis of Presentation
The accompanying interim consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the
rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial
statements and notes thereto contained in the Company’s Form 10-K/A filed with the SEC as of and for the period ended June
30, 2012. In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have
been reflected herein. The results of operations for interim periods are not necessarily indicative of the results expected for
the full year. The Company has adopted a June 30 year end.
Principles of Consolidation
The consolidated financial statements include
the accounts of the Company and its majority-owned subsidiaries. Significant intercompany accounts and transactions have been eliminated.
Cash and Cash Equivalents
Vantage Health considers all highly liquid
investments with maturities of three months or less to be cash equivalents. At March 31, 2013 and June 30, 2012, the Company had
$100,423 and $300,687 of cash, respectively.
Property and Equipment
Property and equipment are recorded at cost
and are depreciated, when placed in service, using principally the straight-line method over the estimated useful lives of the
related assets. Estimated useful lives generally range from two to seven years for furniture, equipment and automobiles. Leasehold
improvements are amortized over the estimated useful lives of the related assets or leases, whichever is shorter.
Fair Value of Financial Instruments
The Company’s financial instruments consist
of cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses and shareholder loans. The carrying amount
of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing
market rates unless otherwise disclosed in these financial statements.
VANTAGE
HEALTH
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
NOTE 1 –
SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are computed using the asset and
liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the
differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted
tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence,
are not expected to be realized.
Revenue Recognition
The Company recognizes revenue when products
are fully delivered or services have been provided and collection is reasonably assured.
Use of Estimates
The preparation of financial statements in
conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements
and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated
by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during
the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders
by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding
is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents
outstanding as of March 31, 2013.
Other Comprehensive Income (Loss)
Comprehensive income (loss) consists of net
income (loss) and other gains and losses affecting stockholder’s equity that, under GAAP, are excluded from net income (loss),
including foreign currency translation adjustments, gains and losses related to certain derivative contracts, and gains or losses,
prior service costs or credits, and transition assets or obligations associated with pension or other postretirement benefits that
have not been recognized as components of net periodic benefit cost.
Foreign Currency Translation
The functional currency of the Company is the
United States Dollar. The financial statements of the Company’s South African subsidiary are translated from the South African
Rand to U.S. dollars using the period exchange rates as to assets and liabilities and average exchange rates as to revenues and
expenses. The financial statements of the Company’s Tanzania subsidiary are translated from the Tanzanian Shilling to U.S.
dollars using the period exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital
accounts are translated at their historical exchange rates when the capital transaction occurs. Net gains and losses resulting
from foreign exchange translations are included in the statements of operations and changes in stockholders’ equity as other
comprehensive income (loss).
Stock-Based Compensation
Stock-based compensation is accounted for at
fair value in accordance with SFAS No. 123 and 123 (R) (ASC 718). To date, the Company has not adopted a stock option plan and
has not granted any stock options.
VANTAGE
HEALTH
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements
The Company does not expect the adoption of
recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial
position or cash flow.
NOTE 2 – PROPERTY AND EQUIPMENT
Major classes of property and equipment consist of the following:
|
|
March 31, 2013
|
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
Vehicles
|
|
|
9,443
|
|
|
|
10,318
|
|
Less accumulated depreciation
|
|
|
(2,392
|
)
|
|
|
(913
|
)
|
|
|
$
|
7,051
|
|
|
$
|
9,405
|
|
During the period ended March 31, 2013 and the fiscal year ended
June 30, 2012, the Company recorded no provisions for the impairment of assets.
NOTE 3 – SHAREHOLDER LOANS
During the period ended June 30, 2010 the company
received loans from two shareholders for $100,699, $30,000 and $3,500. The loans are non-interest bearing, unsecured and are due
on July 13, 2013.
During the year ended June 30, 2011, the $3,500
loan was repaid in full.
An additional $247,623 was loaned from a shareholder
during the year ended June 30, 2011.
During the year ended June 30, 2011, a shareholder
forgave loans totaling $50,000 which have been recorded as contributed capital.
An additional $311,951 was loaned from a shareholder
during the year ended June 30, 2012.
During the nine months ended March 31, 2013,
the Company repaid $76,067 of the outstanding shareholder loans.
The total amount due to the shareholders was
$564,206 and $640,273 as of March 31, 2013 and June 30, 2012, respectively.
NOTE 4 – COMMON STOCK
The Company has 250,000,000 shares of $0.001
par value common stock.
During the period ended June 30, 2010 the Company
issued 74,150,000 shares of common stock ranging from $0.001 to $0.003 per share. Vantage received total proceeds of $89,710.
During the year ended June 30, 2011, a shareholder
forgave loans totaling $50,000 which have been recorded as contributed capital.
VANTAGE
HEALTH
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
NOTE 4 – COMMON STOCK (CONTINUED)
On June 30, 2011 a director of the company
was issued 100,000 shares of restricted common stock valued at $32,000 for services rendered.
During the year ended June 30, 2012 warrants
were exercised for 5,775,000 common shares of stock, for $20,000 in cash and notes receivable totaling $268,750, subscriptions
receivable were collected in the amount of $170,000.
During the year ended June 30, 2012, 100,000
shares of common stock were issued for issuance costs.
There are 80,125,000 shares issued and outstanding
as of March 31, 2013.
NOTE 5 – STOCK WARRANTS
The Company issued 7,859,375 stock warrants
in connection with the issuance of common stock. The Company has accounted for these warrants as equity instruments in accordance
with EITF 00-19 (ASC 815-40), Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s
Own Stock, and as such, will be classified in stockholders’ equity as they meet the definition of “…indexed
to the issuer’s stock” in EITF 01-06 (ASC 815-40) The Meaning of Indexed to a Company’s Own Stock. The Company
has estimated the fair value of the warrants issued in connection with the private placement at $13 as of the grant dates using
the Black-Scholes option pricing model. Each common stock purchase warrant has an exercise price of $3.00 and will expire 36 months
from the effective date of the S-1. The Company has the right to call the common stock purchase warrants within ten days
written notice if the Company’s common stock is trading at or above $3.00 per share and has average daily trading volume
of 200,000 shares of twenty consecutive days. No adjustment was made to the financial statements due to materiality.
On August 4, 2011 the exercise price for all
the outstanding warrants was revised from $3.00 to $0.05 per share. The warrants were revalued on that date at $1,611,135. The
stock and warrants were originally sold for total value of $13,541. As the value of the warrants cannot exceed the total value
of the equity sale, no further adjustments are necessary.
During the quarter ended September 30, 2011
warrants were exercised for 5,775,000 common shares of stock, for $20,000 in cash and notes receivable totaling $268,750. There
are 2,084,375 stock warrants remaining as of December 31, 2012.
Key assumptions used by the Company are summarized
as follows at the original grant date and the date of revision:
|
|
August 4, 2011
|
|
|
June 30, 2010
|
|
Stock price
|
|
$
|
0.25
|
|
|
$
|
0.00275
|
|
Exercise price
|
|
$
|
0.05
|
|
|
$
|
3.00
|
|
Expected volatility
|
|
|
86
|
%
|
|
|
105
|
%
|
Expected dividend yield
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
Risk-free rate over the estimated expected life of the warrants
|
|
|
0.27
|
%
|
|
|
0.84
|
%
|
Expected term (in years)
|
|
|
1.92
|
|
|
|
3
|
|
VANTAGE
HEALTH
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
NOTE 6 – NON-CONTROLLING INTEREST
On June 14, 2010, Vantage acquired 51% of an
entity under common control for cash totaling $3,643. For purposes of these financial statements, the subsidiary has been consolidated
via the acquisition method. We have recorded a deemed dividend of $85,200 since the book value of Moxisign’s liabilities
exceeded the book value of its assets. The assets and liabilities of Moxisign have been recorded at amounts equal to the carrying
value on Moxisign’s books as per ASC 805-020. At the acquisition date, Moxisign had current assets of $27,751, current liabilities
of $1,928 and long-term liabilities of $102,669.
NOTE 7 – DISCONTINUED OPERATIONS
On June 1, 2011, Vantage acquired 51% of a
newly established entity (Vantage Health Tanzania Limited) for a note totaling $2,295. The subsidiary commenced operations in the
second quarter of fiscal year ended June 30, 2012. For purposes of interim financial statements for the second and third quarters
of fiscal year ended June 30, 2012, the subsidiary was consolidated via the acquisition method. The assets and liabilities of Vantage
Health Tanzania Limited were recorded at amounts equal to the carrying value on Vantage Tanzania Limited’s books as per ASC
805-020. At the acquisition date, Vantage Health Tanzania Limited had current assets of $0, current liabilities of $0 and long-term
liabilities of $0.
During the fourth quarter of fiscal year ended
June 30, 2012 the subsidiary (Vantage Health Tanzania Limited) was forced to discontinue its operations due to gross misappropriation
of resources by high level employees, with the result being that the subsidiary discontinued operations and lost all of its assets.
All operations of the subsidiary have been
removed from these annual financial statements and the Company has recognized a loss on the discontinued operations of $8,885,
representing amounts invested in and amounts loaned to the subsidiary for which the Company will not be able to collect.
NOTE 8 – COMMITMENTS
Other than a vehicle, Vantage Health neither
owns nor leases any real or personal property. An officer has provided office services without charge. There is no obligation for
the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected
herein. The officers and directors are involved in other business activities and most likely will become involved in other business
activities in the future.
On January 30, 2013 Vantage Health entered
into an agreement with
a US biopharmaceutical company
. with the intent of forming a future partnership with that company
in order to develop, manufacture and commercialize biosimilar molecules. The cost of this partnership to the Company is to be determined
at a future time upon further structuring of the agreement.
On March 1, 2013 Vantage Health entered into
a distribution agreement with The Himalaya Drug Company (Pty) Ltd. This agreement gives the Company the privilege of distributing
herbal pharmaceuticals in South Africa. The dollar obligation of this agreement is not determinable at this time.
VANTAGE
HEALTH
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
NOTE 9 – LIQUIDITY AND GOING CONCERN
The Company has limited working capital, has
incurred losses since inception, and has not yet received material revenues from sales of products or services. These factors create
substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any
adjustment that might be necessary if the Company is unable to continue as a going concern.
The ability of Vantage Health to continue as
a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and
attaining future profitable operations. Management’s plans include selling its equity securities and obtaining debt financing
to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these
efforts.
NOTE 10 – INCOME TAXES
For the nine months ended March 31, 2013, Vantage
Health has incurred a net loss before minority interest of approximately $166,500 and, therefore, has no tax liability. The net
deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward
is approximately $567,000 at March 31, 2013, and will expire beginning in the year 2030. The provision for Federal income tax consists
of the following for the nine months ended March 31, 2013 and 2012:
|
|
March 31, 2013
|
|
|
March 31, 2012
|
|
Federal income tax benefit attributable to:
|
|
|
|
|
|
|
|
|
Current operations
|
|
$
|
56,610
|
|
|
$
|
84,660
|
|
Less: valuation allowance
|
|
|
(56,610
|
)
|
|
|
(84,660
|
)
|
Net provision for Federal income taxes
|
|
$
|
0
|
|
|
$
|
0
|
|
The cumulative tax effect at the expected rate
of 34% of significant items comprising our net deferred tax amount is as follows:
|
|
March 31, 2013
|
|
|
June 30, 2012
|
|
Deferred tax asset attributable to:
|
|
|
|
|
|
|
|
|
Net operating loss carryover
|
|
$
|
217,430
|
|
|
$
|
160,820
|
|
Valuation allowance
|
|
|
(217,430
|
)
|
|
|
(160,820
|
)
|
Net deferred tax asset
|
|
$
|
0
|
|
|
$
|
0
|
|
VANTAGE
HEALTH
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
NOTE 11 – SUBSEQUENT EVENTS
On April 3, 2013, Vantage Health entered into
an agreement with Neuland Laboratories Limited to purchase technology to manufacture various active pharmaceutical ingredients.
The future cost of this contract is not specifically identified at this time, however the contract calls for a cost of between
$250,000 and $400,000 per active pharmaceutical ingredient technology purchased.
On April 17, 2013, Vantage Health entered into
an agreement to either directly or indirectly lease land with the intention of building a manufacturing facility in the Coega Industrial
Development Zone. The land has not been specifically identified and thus the financial obligation associated with this contract
is not determinable at this time.
Management has evaluated subsequent events
through the date on which the financial statements were issued, and has determined it does not have any material subsequent events
to disclose other than those mentioned above.