NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 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 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”). In the opinion of management,
all adjustments necessary in order for the financial statements to be not misleading have been reflected herein. 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 subsidiary. 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 September 30,
2013 and June 30, 2013, the Company had $4,017 and $89,089 of cash, respectively.
Property
and Equipment
Property
and equipment are recorded at cost and are depreciated, when placed in service, using 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, interest receivable, 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 CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 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 September 30, 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. 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 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.
VANTAGE
HEALTH
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2013
NOTE
2 – PROPERTY AND EQUIPMENT
Major
classes of property and equipment consist of the following as of September 30, 2013 and June 30, 2013:
|
|
September 30, 2013
|
|
|
June 30, 2013
|
|
Vehicles
|
|
$
|
10,318
|
|
|
$
|
10,318
|
|
Less adjustment for currency translation
|
|
|
(1,447
|
)
|
|
|
(1,318
|
)
|
Less accumulated depreciation
|
|
|
(3,266
|
)
|
|
|
(2,841
|
)
|
Property and equipment, net
|
|
$
|
5,605
|
|
|
$
|
6,159
|
|
During
the period ended September 30, 2013 and June 30, 2013, the Company recorded no provisions for the impairment of assets. Depreciation
expense was $425 and $1,928 for the periods ended September 30, 2013 and June 30, 2013, respectively.
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. Presently, the Company is in default on the loans as it has neither
paid the note nor negotiated an extension of the note.
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 year ended June 30, 2013, the Company received loans totaling $16,725 from a shareholder and repaid $100,000 of the outstanding
shareholder loans.
The
total amount due to the shareholders was $499,256 and $555,680
as of September 30, 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.
During
the year ended June 30, 2011, a shareholder forgave loans totaling $50,000 which have been recorded as contributed capital.
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.
VANTAGE
HEALTH
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2013
NOTE
4 – COMMON STOCK (CONTINUED)
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.
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.
There
were 80,125,000 shares issued and outstanding as of September 30, 2013 and June 30, 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
|
|
VANTAGE
HEALTH
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 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.
NOTE
9 – LIQUIDITY AND GOING CONCERN
The
Company has negative 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.
VANTAGE
HEALTH
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2013
NOTE
10 – INCOME TAXES
For
the three months ended September 30, 2013, Vantage Health has incurred a net loss before minority interest of approximately $26,800
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 from continuing operations is approximately $934,000 at September 30, 2013, and
will expire beginning in the year 2030.
The
provision for Federal income tax consists of the following for the three month period ended September 30, 2013 and the year ended
June 30, 2013:
|
|
September 30, 2013
|
|
|
June 30, 2013
|
|
Federal income tax benefit attributable to:
|
|
|
|
|
|
|
|
|
Current operations
|
|
$
|
9,112
|
|
|
$
|
75,012
|
|
Less: valuation allowance
|
|
|
(9,112
|
)
|
|
|
(75,012
|
)
|
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 September 30, 2013 and June 30, 2013:
|
|
September 30, 2013
|
|
|
June 30, 2013
|
|
Deferred tax asset attributable to:
|
|
|
|
|
|
|
|
|
Net operating loss carryover
|
|
$
|
317,560
|
|
|
$
|
308,598
|
|
Valuation allowance
|
|
|
(317,560
|
)
|
|
|
(308,598
|
)
|
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 of approximately $934,000
for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating
loss carry forwards may be limited as to use in future years.
NOTE
11 – SUBSEQUENT EVENTS
On
October 5
th
, 2013, Bayview Terrace Limited, the majority shareholder of Vantage Health entered into negotiations with
an unrelated party in the healthcare field, the purpose of which would cause a change of control within Vantage Health. No binding
document has been entered into as of this time, however negotiations are expected to result in a binding agreement in the near
term
.
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 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 $590,946. The assets of Moxisign are valued at approximately
$95,248. As a result of this transaction, Vantage Health is 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. Vantage Health is currently evaluating alternative business
opportunities.
VANTAGE
HEALTH
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2013
NOTE
11 – SUBSEQUENT EVENTS (CONTINUED)
In
accordance with ASC 855-10, the Company has analyzed its operations subsequent to September 30, 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.