NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 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.
On October 9, 2013, Vantage Health executed
an Agreement of Conveyance, Transfer and Assignment of Subsidiary and Assumption of Obligations for the sale of the Company’s
51% interest in Moxisign (PTY) Ltd (“Moxisign”) with Lisa Ramakrishnan, an officer, director and shareholder of the
Company. Pursuant to the terms of the Agreement, Ms. Ramakrishnan agreed to assume all of the debts and liabilities of Moxisign,
totaling approximately $575,971. The assets and beneficial equity relief of Moxisign are valued at approximately $154,316. As a
result of this transaction, we are no longer in the business of becoming a pharmaceutical distributor with the specific intention
of bidding on South African government health care contracts and tenders. This line of business was sold under the Agreement.
We are currently evaluating alternative business opportunities.
Development Stage Company
The accompanying 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 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 filed with the SEC as of
and for the year ended June 30, 2013. 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.
Cash and Cash Equivalents
Vantage Health considers all highly liquid
investments with maturities of three months or less to be cash equivalents. At December 31, 2013 and June 30, 2013, the Company
had $300,000 and $0 of cash from continuing operations, respectively.
Fair Value of Financial Instruments
The Company’s financial instruments consist
of cash and cash equivalents, 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.
Revenue Recognition
The Company recognizes revenue when products
are fully delivered or services have been provided and collection is reasonably assured.
VANTAGE
HEALTH
(A DEVELOPMENT STAGE
COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 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.
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 December 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.
Stock-Based Compensation
Stock-based compensation is accounted for at
fair value in accordance with ASC 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
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 – PREPAID EXPENSES
In relation to a sub-licensing agreement with
NASA, a shareholder has paid royalty fees applicable to 2014 on behalf of the Company. The $100,000 payment was an additional investment
in the Company and is not required to be repaid.
VANTAGE
HEALTH
(A DEVELOPMENT STAGE
COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 3 - SHAREHOLDER LOANS
During the period ended June 30, 2010, the
Company received loans from two shareholders for $100,699, $30,000. The loans were non-interest bearing, unsecured and were due
on July 13, 2013.
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 year ended June 30, 2013, the Company
received loans totaling $16,725 from a shareholder and repaid $100,000 of the outstanding shareholder loans.
On October 9, 2013 the Company entered into
an agreement whereby the originator of the shareholder loans agreed to forgive the existing loan balance in exchange for all the
assets and liabilities of the Company as of October 9, 2013. Therefore, the balance of the loan was reduced to $0 as of that date.
The total amount due to the shareholders was
$0 and $237,754
as of December 31, 2013 and June 30, 2013, 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.
Also, during the year ended June 30, 2011, a shareholder forgave loans totaling $50,000 which have been recorded as contributed
capital. Finally, 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. Also during the year ended June 30, 2012, 100,000 shares of common stock were
issued for issuance costs.
At June 30, 2013, it was determined that the
outstanding stock subscription receivable was uncollectable and the amount was written off. The Company plans to pursue the balance
through all possible means however chances of collectability are unknown.
During the period ended December 31, 2013,
54,900,000 shares of common stock were issued for services rendered in connection with discontinued operations. This stock issuance
was initiated by the former management of the Company. The stock was valued at the market value on the grant date for a total of
$269,010.
There were 135,025,000 and 80,125,000 shares
issued and outstanding as of December 31, 2013 and June 30, 2013 respectively.
VANTAGE
HEALTH
(A DEVELOPMENT STAGE
COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 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 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 ASC 815-40. 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 June 30, 2013. The remaining warrants will expire on January 28, 2014.
Key assumptions used by the Company are summarized
as follows at the original grant date and the date of revision:
|
Modification
|
|
Original
|
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
|
|
On December 16, 2013, the Board of Directors
of the Company approved the election of William S. Rees, Jr. to serve as a member of the Board effective December 16, 2014. Mr.
Rees has not yet been appointed to serve on any committee of the Board. There are no arrangements or understandings between Mr.
Rees and any other person pursuant to which Mr. Rees was appointed as a director. The Company entered into an agreement with Mr.
Rees
pursuant to which it agreed to issue to him, in consideration of his services, a warrant to purchase up to 2,000,000
shares of the Company’s common stock for a period of five years at an exercise price of $0.05 per share. As of December 31,
2013 the stock-based compensation expense related to this issuance was $2,915 and the deferred stock-based compensation was $96,848.
VANTAGE
HEALTH
(A DEVELOPMENT STAGE
COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 5 – STOCK WARRANTS (CONTINUED)
On December 31, 2013, we issued to Accent Healthcare
Advisors, LLC, a California limited liability company, as compensation for their past and future advisory services for the next
several years in the bio-pharmaceutical and healthcare industries, a warrant to purchase up to 25,000,000 shares of the Company’s
common stock, par value $.01 per share, for a period of seven years at an exercise price of $0.049 per share. The exercise price
was calculated based on the prior ten days average closing price per share. The holder may not exercise the Warrant such that the
number of shares of common stock beneficially owned by the holder and its affiliates exceeds 4.9% of the total outstanding shares
of common stock of the Company. The exercise price and number of Warrant Shares are subject to adjustment upon the subdivision
or combination of the Company’s common stock. Further, upon the consolidation, merger or sale of the Company, the holder
is entitled to receive, at the Company’s discretion, either (a) if the Warrant is exercised, the consideration payable with
respect to or in exchange for those Warrant Shares that would have been received if no consolidation, merger or sale had taken
place or (b) cash equal to the value of the Warrant as determined in accordance with the Black-Scholes option pricing formula.
As of December 31, 2013 the stock-based compensation expense related to this issuance was $16,408 and the deferred stock-based
compensation was $2,977,999.
On November 27, 2013, the Company issued 3,875,000
warrants for the Company’s common stock as stock based compensation for a three year period, par value $.01 per share, at
an exercise price per share equal to $0.05. The warrants are exercisable any time after November 27, 2013 for a period of five
years from date of issuance. As of December 31, 2013 the stock-based compensation expense related to this issuance was $6,549 and
the deferred stock-based compensation was $198,355.
On December 10, 2013, the Company issued 5,000,000
warrants for the Company’s common stock as stock based compensation for a three year period, par value $.01 per share, at
an exercise price per share equal to the closing price on December 10, 2013 of $0.0478. The warrants are exercisable any time
after December 10, 2013 for a period of seven years from date of issuance. As of December 31, 2013 the stock-based compensation
expense related to this issuance was $17,674 and the deferred stock-based compensation was $221,251.
NOTE 6 – DISCONTINUED OPERATIONS
On October 9, 2013, Vantage Health executed
an Agreement of Conveyance, Transfer and Assignment of Subsidiary and Assumption of Obligations for the sale of the Company’s
51% interest in Moxisign (PTY) Ltd (“Moxisign”) with Lisa Ramakrishnan, an officer, director and shareholder of the
Company. Pursuant to the terms of the Agreement, Ms. Ramakrishnan agreed to assume all of the debts and liabilities of Moxisign,
totaling approximately $575,971. The assets and beneficial equity relief of Moxisign are valued at approximately $154,316. As a
result of this transaction, we are no longer in the business of becoming a pharmaceutical distributor with the specific intention
of bidding on South African government health care contracts and tenders. This line of business was sold under the Agreement.
We are currently evaluating alternative business opportunities.
The gain on the disposal of the subsidiary
is included as additional paid in capital for the period.
VANTAGE
HEALTH
(A DEVELOPMENT STAGE
COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 7 – COMMITMENTS
On January 1, 2014, the Company entered into
a Sub-License Agreement affiliated with the National Aeronautics and Space Administration (“NASA”) pursuant to which
the Company was granted a royalty-bearing, non-transferable license to certain inventions and patent rights owned by NASA relating
to chemical sensing nanotechnology, for use within the United States and its territories. The License is effective as of December
31, 2013 and subject to an initial five year term, during which the License will be exclusive to the Company. Following the initial
five-year term, the License shall automatically convert to a non-exclusive license. The License may be terminated by NASA following
a 30 day cure period, among other reasons, upon a breach of the License Agreement or upon its determination that the Company has
failed to adequately develop or commercialize the licensed patents. Specific milestones and commercialization requirements are
set forth in the License Agreement. NASA provides no warranties under the License Agreement and assumes no responsibility for our
use, sale or other disposition of the licensed technology. We agree to indemnify NASA against all liabilities arising from such
use, sale or other disposition. We must pay certain royalties in connection with the License as set forth in the License Agreement.
Royalties owed for 2014 have been paid in advance by Nanobeak and will not be charged to Vantage Health, with the next Vantage
Health payment due in 2015.
NOTE 8 – LIQUIDITY AND GOING CONCERN
The Company 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 9 – INCOME TAXES
For the six months ended December 31,
2013, Vantage Health has incurred a net loss from continuing operations of approximately $56,692 and thus 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 from continuing operations is approximately $328,435 at December 31, 2013, and will expire
beginning in the year 2030.
VANTAGE
HEALTH
(A DEVELOPMENT STAGE
COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 9 – INCOME TAXES (CONTINUED)
The provision for Federal income tax consists
of the following for the six months ended December 31, 2013 and 2012:
|
2013
|
|
2012
|
Federal income tax benefit attributable to:
|
|
|
|
|
|
|
|
Continuing operations
|
$
|
19,275
|
|
|
$
|
3,251
|
|
Less: valuation allowance
|
|
(19,275
|
)
|
|
|
(3,251
|
)
|
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 as of December 31, 2013 and June 30, 2013:
|
December 31, 2013
|
|
June 30, 2013
|
Deferred tax asset attributable to:
|
|
|
|
|
|
|
|
Net operating loss carryover
|
$
|
111,668
|
|
|
$
|
92,393
|
|
Valuation allowance
|
|
(111,668
|
)
|
|
|
(92,393
|
)
|
Net deferred tax asset
|
$
|
0
|
|
|
$
|
0
|
|
Due to the change in ownership provisions of
the Tax Reform Act of 1986, net operating loss carry forwards from continuing operations of approximately $328,435 for Federal
income tax reporting purposes are subject to annual limitations. Use of the net operating loss carry forwards is limited due to
a change in control.
NOTE 10 – SUBSEQUENT EVENTS
Effective January 1, 2014, Dr. Ramakrishnan
resigned as a director of the Company.
On January 1, 2014, the Company entered into
a Sub-License Agreement affiliated with the National Aeronautics and Space Administration (“NASA”) pursuant to which
the Company was granted a royalty-bearing, non-transferable license to certain inventions and patent rights owned by NASA relating
to chemical sensing nanotechnology, for use within the United States and its territories. The License is effective as of December
31, 2013 and subject to an initial five year term, during which the License will be exclusive to the Company. Following the initial
five-year term, the License shall automatically convert to a non-exclusive license. The License may be terminated by NASA following
a 30 day cure period, among other reasons, upon a breach of the License Agreement or upon its determination that the Company has
failed to adequately develop or commercialize the licensed patents. Specific milestones and commercialization requirements are
set forth in the License Agreement. NASA provides no warranties under the License Agreement and assumes no responsibility for our
use, sale or other disposition of the licensed technology. We agree to indemnify NASA against all liabilities arising from such
use, sale or other disposition. We must pay certain royalties in connection with the License as set forth in the License Agreement.
Royalties owed for 2014 of $100,000 have been paid in advance by Nanobeak and will not be charged to Vantage Health, with the next
Vantage Health payment due in 2015.
In accordance with ASC 855-10, the Company
has analyzed its operations subsequent to December 31, 2013 through the date these financial statements were issued and has determined
that it does not have any material subsequent events to disclose in these financial statements other than the events described
above.