<PAGE>2
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHNAGE ACT OF 1934
For the transition period from N/A to N/A
Commission File No. 01-28911
NATIONAL HEALTHCARE TECHNOLOGY, INC.
(Exact name of Registrant as specified in its charter)
Colorado, USA 91-1869677
(State of Incorporation) (IRS Employer Identification No.)
21800 Oxnard Street, #440, Woodland Hills, California 91367
(Address of principal executive offices)
Issuer's Telephone Number, (818) 598-8888
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. []Yes[]No
APPLICABLE ONLY TO CORPORATE ISSUERS
State number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Class Outstanding at December 31, 1999
Common Stock, $.001 5,575,000 shares
par value Outstanding Securities
Transitional Small Business Disclosure Format (check one): Yes[] No[x]
<PAGE>3
NATIONAL HEALTHCARE TECHNOLOGY, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NATIONAL HEALTHCARE TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1999
ASSETS
CURRENT ASSETS
Cash $1,919
Loan receivable 8,678
Prepaid insurance 2,000
---------
TOTAL ASSETS $12,597
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 8,875
California franchise tax payable 800
-------
TOTAL CURRENT LIABILITIES $ 9,675
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value
500,000 shares authorized
-0- shares issued and outstanding
Common stock, $.001 per share
25,000,000 shares authorized
5,575,500 shares issued and outstanding $5,575
Paid in capital in excess of par value of stock 1,216,919
Deficit accumulated during the development stage (1,219,572)
----------
TOTAL STOCKHOLDERS' EQUITY 2,922
----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $12,597
==========
<PAGE>4
NATIONAL HEALTHCARE TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999, December 31, 1998 AND
FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1999
<TABLE>
<CAPTION>
November 5, 1995
(Date of
Three Months Three Months Inception)
Ended Ended Through
December 31, December 31 December 31,
1999 1998 1999
--------------- ----------------- ------------
<S> <C> <C> <C>
REVENUE $ 0 $ 0 $ 0
DEVELOPMENT COSTS 14,612 95,933 1,217,972
--------- ---------- ----------
NET (LOSS) BEFORE INCOME TAXES ( 14,612) ( 95,933) (1,217,972)
INCOME TAXES 0 0 1,600
--------- ---------- -----------
NET (LOSS) $( 14,612) $ ( 95,933) $(1,219,572)
========= =========== ===========
NET (LOSS) PER COMMON SHARE
Basic and diluted $( .003) $ (.017)
======== ========
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic and diluted 5,575,500 5,550,000
========= ==========
</TABLE>
<PAGE>5
NATIONAL HEALTHCARE TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999, DECEMBER 31, 1998 AND
FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1999
<TABLE>
<CAPTION>
November 5, 1995
(Date of
Three Months Three Months Inception)
Ended Ended Through
December 31, December 31, December 31,
1999 1999 1999
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ ( 14,612) $(95,933) $( 1,219,572)
Adjustments to reconcile net (loss) to net cash
(used) by operating activities:
Depreciation and amortization 0 0 22,977
Common stock issued as payment for
interest expense 0 0 12,300
Common stock issued for services 0 0 217,900
Loss on abandoned assets 0 25,721 120,387
Gain on sale of assets 0 0 ( 500)
Increases (decreases) in:
Prepaid insurance ( 2,000) 0 ( 2,000)
Accounts payable 8,875 (5,737) ( 8,664)
California franchise tax payable 0 0 800
Accrued payroll and payroll taxes 0 0 9,664
-------- ------- -------
NET CASH FLOWS (USED) BY OPERATING
ACTIVITIES ( 7,737) (75,949) ( 846,708)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment 0 0 ( 87,314)
Proceeds from sale of equipment 0 0 5,500
NET CASH FLOWS (USED) BY INVESTING
ACTIVITIES 0 0 ( 81,814)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 0 0 195,000
Repayments on notes payable 0 0 ( 20,000)
Proceeds from issuance of common stock
and subscriptions 0 0 798,500
Payments on offering costs 0 0 ( 43,059)
-------- ------- ----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 0 0 930,441
-------- ------- ----------
</TABLE>
<PAGE>6
NATIONAL HEALTHCARE TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND
FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1999
<TABLE>
<CAPTION>
November 5, 1995
(Date of
Three Months Three Months Inception)
Ended Ended Through
December 31, December 31, December 31,
1999 1999 1999
<S> <C> <C> <C>
NET INCREASE (DECREASE) IN CASH $ ( 7,737) $ (75,949) 1,919
CASH BALANCE, BEGINNING OF PERIOD 9,656 140,596 0
---------- ---------- ----------
CASH BALANCE, END OF PERIOD $ 1,919 64,647 $ 1,919
========== ========== ==========
SUPPLEMENTARY DISCLOSURE OF
CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 0 $ 0 $ 55
========== =========== =========
Taxes $ 0 $ 0 $ 0
========== =========== =========
NON CASH INVESTING AND FINANCING
ACTIVITIES
Common stock issued for notes payable $ 0 $ 0 $ 175,000
========== =========== =========
Common stock issued for patent rights $ 0 $ 0 $ 1,562
========== =========== =========
Common stock issued for equipment $ 0 $ 0 $ 60,287
========== =========== =========
Common stock issued for services and
directors' fees $ 0 $ 0 $ 215,750
========== =========== =========
</TABLE>
<PAGE>7
NATIONAL HEALTHCARE TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Nature of Business
National Healthcare Technology, Inc. was organized on
November 5, 1995, under the laws of the State of Colorado
for the purpose of developing, manufacturing and
marketing an intravenous drug and several high technology
products for use in the medical industry. In the current
year, the company abandoned all of its development
programs and is pursuing new areas to develop.
Accounting Estimates
Management uses estimates and assumptions in preparing
financial statements in accordance with generally
accepted accounting principles. Those estimates and
assumptions affect the reported amounts of 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
used.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the company
considers all highly liquid debt instruments purchased
with an original maturity of three months or less to be
cash equivalents.
Income Taxes
Provisions for income taxes are based on taxes payable or
refundable for the current year and deferred taxes on
temporary differences between the amount of taxable
income and pretax financial income and between the tax
bases of assets and liabilities and their reported
amounts in the financial statements. Deferred tax assets
and liabilities are included in the financial statements
at currently enacted income tax rates applicable to the
period in which the deferred tax assets and liabilities
are expected to be realized or settled as prescribed in
FASB Statement No. 109, Accounting for Income Taxes. As
changes in tax laws or rate are enacted, deferred tax
assets and liabilities are adjusted through the provision
for income taxes.
Net Earnings Per Share
The company adapted Statement of Financial Accounting
Standards No. 128 that requires the reporting of both
basic and diluted earnings per share. Basic earnings per
share is computed by dividing net income available to
common shareowners by the weighted average number of
common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution that
could occur if securities or other contracts to issue
common stock were exercised or converted into common
stock. In accordance with FASB 128, any anti-dilutive
effects on net loss per share are excluded.
NOTE 2 INCOME TAXES
(Loss) from operations before income taxes $ ( 14,612)
----------
The provision for income taxes is estimated as follows:
Currently payable $ 0
----------
Deferred receivable $ 0
----------
A reconciliation of the provision for income taxes
compared with the amounts at the U.S. Federal statutory
rate was as follows:
Tax (refund) at U.S. Federal statutory income
tax rate $ 0
----------
<PAGE>8
Deferred income tax assets and liabilities reflect the
impact of temporary differences between amounts of
assets and liabilities for financial reporting purposes
and the basis of such assets and liabilities as measured
by tax laws. The net deferred tax asset is $ 0
----------
Temporary differences and carryfowards that give use to
deferred tax assets and liabilities included the following:
Deferred Tax
-------------------------------
Assets Liabilities
--------- -----------
Net operating loss $ 480,385 $ 0
Valuation allowance 480,385 0
--------- ----------
Total deferred taxes $ 0 $ 0
========= ==========
As discussed in note 6, there is doubt about the company's ability to
continue as a going concern. Consequently, the company must maintain a
100% valuation allowance for the deferred tax asset as there is doubt
that the company will generate profits which will be absorbed by the
tax differences. A reconciliation of the valuation allowance is as
follows:
Balance, October 1, 1999 $ 475,000
Addition to allowance for three months ended
December 31, 1999 5,385
---------
Balance, December 31, $ 480,385
NOTE 3 TAX CARRYFORWARD
The company has the following tax carryforwards at December 31, 1999:
Expiration
Year Ended Amount Date
September 30, 1999 $ 215,474 2019
September 30, 1998 614,265 2018
September 30, 1997 279,456 2012
September 30, 1996 78,959 2011
----------
$1,188,154
NOTE 4 RENT
The company rents its facilities on a month to month basis from an
affiliated company. The rent expense for the three months ended
December 31, 1999 was $4,391.
NOTE 5 STOCK OPTION PLAN
The company adopted the National Healthcare Technology, Inc. 1998 stock
option plan. The board of directors is required to designate a
committee of not less then three directors to administer the plan. The
committee has the power to:
A. Designate participants
B. Determine the number of shares to be covered by options
C. Determine the terms and conditions of any options
D. Administer the plan
The maximum number of shares that may be issued under the option plan
is 5,000,000. In addition, no participant shall be granted more than
500,000 shares in any one fiscal year.
The company did not grant any options during the current year.
The option plan terminates on September 30, 2000.
NOTE 6 GOING CONCERN
These financial statements are presented on the basis that the company
is a going concern. Going concern contemplates the realization of
assets and the satisfaction of liabilities in the normal cause of
business over a reasonable length of time. The company has incurred
<PAGE>9
development losses of $1,219,572 from inception. In addition, the
company has abandoned all development activities. These factors raise
doubt as to the company's ability to continue as a going concern.
NOTE 7 PREFERRED STOCK
No rights or preferences have been assigned to the preferred stock.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
GENERAL
National Healthcare Technology, Inc. (the Company) was organized
February 29, 1996 as "Patriot Holding Corporation" and subsequently
changed its name to "National Healthcare Technology, Inc." on August
26, 1996. Between 1996 and 1999, the Company was unsuccessful in
raising sufficient capital to begin and complete a proposed double-
blind study of an intravenous drug called Magekelate. The Company did
raise $1,000,000 which was used to pay its operating expenses and
general and administrative expenses as well as expenses related to
starting the double-blind study. Following its inability to raise
capital and needing to conserve its financial resources, the Company
dismissed all of its employees in early 1999. The developer of
Magkelate passed away in the fall of 1999 and the Magkelate patent has
expired. Since 1999, the Company has been substantially inactive. The
Company is in the development stage as defined in Statement of
Financial Accounting Standards No. 7.
When used in this Form 10-QSB, the words "anticipate", "estimate",
"expect", "project" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain
risks, uncertainties and assumptions including the possibility that the
Company's proposed plan of operation will fail to generate projected
revenues. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those anticipated, estimated or
projected.
LIQUIDITY AND CAPITAL RESOURCES
The Company is in the development stage and since inception has
experienced no significant change in liquidity or capital resources or
stockholders equity other than the receipt of $1,000,000 from an
offering conducted under Rule 504 of Regulation D in 1997. The
Company's balance sheet as of December 31, 1999 reflects limited
assets and limited liabilities. Further, there exists no agreements or
understandings with regard to loan agreements by or with the Officers,
Directors, principals, affiliates or shareholders of the Company.
The Company will attempt to carry out its plan of business and hopes to
enter into a business combination with another entity. The Company
cannot predict to what extent its lack of liquidity and capital
resources will hinder its business plan prior to the consummation of a
business combination.
RESULTS OF OPERATIONS
During the period from November 5, 1989 (inception) through December
31, 1999, the Company engaged in limited operations and attempted to
initiate its double blind study of its drug, Magkelate. The Company
received no revenues during this period. The capital raised was
expended for general office and administrative expenses and the
proposed double-blind study of Magkelate, which double-blind study the
Company was unable to start due to lack of capital.
The Company anticipates that until a business combination is completed
with an acquisition candidate, it will not generate revenues and may
operate at a loss after completing a business combination, depending
upon the performance of the acquired business.
The Company will attempt to carry out its business plan as discussed
above. The Company cannot predict to what extent its lack of liquidity
and capital resources will hinder its business plan prior to the
consummation of a business combination.
NEED FOR ADDITIONAL FINANCING
The Company believes that its existing capital will not be sufficient
to meet the Company's cash needs, including the costs of compliance
with the continuing reporting requirements of the Securities Exchange
<PAGE>10
Act of 1934, as amended. Once a business combination is completed, the
Company's needs for additional financing are likely to increase
substantially.
No commitments to provide additional funds have been made by management
or other stockholders. Accordingly, there can be no assurance that any
funds will be available to the Company to allow it to cover its
expenses.
The Company might seek to compensate providers of services by issuances
of stock in lieu of cash.
<PAGE>11
PART II
Item No. 1 - Legal Proceedings
Not Applicable.
Item No. 2 - Changes in Securities
Not Applicable.
Item No. 3 - Defaults upon Senior Securities
Not applicable.
Item No. 4 - Submission of Matter to a vote of Securities Holders
Not applicable.
Item No. 5 - Other Information
Not applicable.
Item No. 6 - Exhibits and Reports on Form 8-K
(a) No reports on Form 8-K were filed during the three
months ended December 31, 1999.
(b) Exhibits
27 Financial Data Schedule
<PAGE>25
SIGNATURES
In accordance with the requirements 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.
NATIONAL HEALTHCARE TECHNOLOGY, INC.
Date: February 15, 2000
By /s/ James Smith
James Smith, CEO
By /s/Toni A. Hussain
Toni A. Hussain, Secretary/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1999
<CASH> 1,919
<SECURITIES> 0
<RECEIVABLES> 8,678
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,597
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,597
<CURRENT-LIABILITIES> 9,675
<BONDS> 0
<COMMON> 5,575
0
0
<OTHER-SE> 2,922
<TOTAL-LIABILITY-AND-EQUITY> 12,597
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 14,612
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (14,612)
<INCOME-TAX> 0
<INCOME-CONTINUING> (14,612)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (14,612)
<EPS-BASIC> (.003)
<EPS-DILUTED> (.003)
</TABLE>
