U.S. Securities and
Exchange Commission
Washington, D.C.
20549
Form 10-Q
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15
(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 2008
[ ]
TRANSITION REPORT UNDER
SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
transition period from
to
Commission File No.
333-123774
Fountain Healthy Aging, Inc. (formerly Immureboost, Inc.)
(Name of Registrant in its
Charter
)
NEVADA
86-1098668
---------------
--------------------
(State or
Other Jurisdiction of
(I.R.S. Employer I.D. No.)
incorporation
or organization)
2764 Lake Sahara Drive, Suite 111, Las Vegas, NV 89117
(Address
of Principle Executive Offices)
Registrant’s
Telephone Number:
(604) 331-1459
Immureboost, Inc.
(Former name, former address and former
fiscal year, if changed since last report)
Check whether the registrant (1) filed all reports
required to be filed by section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the Company was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
(1) Yes
X No
(2) Yes X
No
Indicate by check mark whether the
registrant is a large accelerated filer, an accelereated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer,” and “smaller reporting
company,” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
[
]
Accelerated
filer
[
]
Non-accelerated
filer
[
] (Do not check if a smaller reporting company)
Smaller
reporting company
[X]
Indicate by check mark whether the registrant is a shell
company (as defined in Rule12b-2 of the Exchange Act)
Yes X No
------
-------
1
(APPLICABLE
ONLY TO CORPORATE ISSUERS)
State the
number of shares outstanding of each of the Issuer’s classes of common equity,
as of the latest practicable date:
November 19, 2008: Common Stock
–
50,925,000
shares
DOCUMENTS
INCORPORATED BY REFERENCE
A description
of any “Documents Incorporated by Reference” is contained in Item 6 of this
report.
2
Fountain Healthy Aging, Inc.
(formerly Immureboost, Inc.)
TABLE OF
CONTENTS
PART I.
FINANCIAL INFORMATION
PAGE
Item 1. Financial
Statements (unaudited):
Balance Sheets
5
Statements of Operations
6
Statements of Cash Flows
7
Notes to Financial Statements
(unaudited)
8-10
Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of Operation
11
Item 3. Quantitative and
Qualitative Disclosures About Market Risk
12
Item 4T. Controls and
Procedures
16
PART II. OTHER INFORMATION
Item 1. Legal
Proceedings
16
Item 1A. Risk Factors
Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds
16
Item 3. Defaults
upon Senior Securities
16
Item 4. Submission
of Matters to a Vote of Securities Holders
16
Item 5. Other
Information
16
Item 6.
Exhibits
16
Signatures
16
3
PART
I - FINANCIAL INFORMATION
Item 1. Financial
Statements
The
accompanying interim unaudited financial statements of Fountain Healthy Aging,
Inc. (a Nevada corporation) are condensed and, therefore, do not include all
disclosures normally required by accounting principles generally accepted in the
United States of America. These statements should be read in conjunction with
the Company's most recent annual financial statements for the year ended
December 31, 2007 included in a Form10-KSB filed with the U.S. Securities and
Exchange Commission (“SEC”) on May 16, 2008. In the opinion of management, all
adjustments necessary for a fair presentation have been included in the
accompanying interim financial statements and consist of only normal recurring
adjustments. The results of operations presented in the accompanying interim
financial statements for the three and nine months ended September 30, 2008 are
not necessarily indicative of the operating results that may be expected for the
full year ending December 31, 2008.
4
FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST,
INC.)
(A
Development Stage Company)
Unaudited Financial Statements
For
the Nine Months Ended September 30, 2008 and 2007,
and
the Period of February 25, 2004 (date of inception)
through September 30, 2008
5
FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST,
INC.)
(A Development Stage Company)
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
September 30
|
|
December 31
|
|
|
|
|
2008
|
|
2007
|
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current assets
|
|
|
.
|
|
|
Cash
|
$
213
|
|
$
7,473
|
|
|
Accounts receivable (Note 5)
|
6,536
|
|
10,752
|
|
|
Prepaid expense
|
-
|
|
525
|
|
|
|
Total current assets
|
6,749
|
|
18,750
|
|
Fixed assets
|
|
|
|
|
|
Office and computer equipment
|
4,222
|
|
4,222
|
|
|
Less accumulated depreciation
|
(4,187)
|
|
(4,152)
|
|
|
|
Net fixed assets
|
35
|
|
70
|
|
|
Total assets
|
$
6,784
|
|
$
18,820
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Deficit
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable
|
$
8,294
|
|
$
17,603
|
|
|
Accrued compensation – officer (Note 2)
|
-
|
|
283,830
|
|
|
Accrued interest – notes payable (Note 7)
|
6,306
|
|
1,673
|
|
|
Accrued interest – related party (Notes 2 &
7)
|
-
|
|
853
|
|
|
Short-term loans (Note 7)
|
72,894
|
|
37,994
|
|
|
Notes payable – related party (Notes 2 &
7)
|
-
|
|
32,000
|
|
|
Note payable – timeshare, current portion (Note
7)
|
2,641
|
|
2,570
|
|
|
|
Total current liabilities
|
90,135
|
|
376,523
|
|
Long-term liabilities
|
|
|
|
|
|
Note payable – timeshare, less current portion
(Note 7)
|
18,559
|
|
20,494
|
|
|
|
Total long-term liabilities
|
18,559
|
|
20,494
|
|
|
Total liabilities
|
108,694
|
|
397,017
|
|
|
|
|
|
|
|
|
Stockholders' deficit (Note 4):
|
|
|
|
|
|
Common stock; $.001 par value, 1,000,000,000
shares
|
|
|
|
|
|
authorized,
50,925,000 shares issued and outstanding
|
50,925
|
|
50,925
|
|
|
Additional paid-in capital
|
652,281
|
|
25,275
|
|
|
Deficit accumulated during development stage
|
(805,116)
|
|
(454,397)
|
|
|
|
Total stockholders' deficit
|
(101,910)
|
|
(378,197)
|
|
|
Total liabilities and stockholders' deficit
|
$
6,784
|
|
$
18,820
|
See
accompanying notes to financial statements.
6
FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST,
INC.)
(A Development Stage Company)
Statements of Operations
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September
30,
|
|
Nine Months Ended September
30,
|
|
February 25, 2004 (inception) to
September 30,
|
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
|
|
|
|
|
|
(Restated –
Note 9)
|
|
|
|
(Restated – Note 9)
|
|
|
|
Revenues
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
8,741
|
|
151,692
|
|
342,919
|
|
173,732
|
|
(796,743)
|
|
|
Net
loss from operations
|
(8,741)
|
|
(151,692)
|
|
(342,919)
|
|
(173,732)
|
|
(792,743)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
(2,643)
|
|
(1,590)
|
|
(7,800)
|
|
(2,874)
|
|
(20,637)
|
|
|
|
Impairment of intangible asset (Note 3)
|
-
|
|
-
|
|
-
|
|
-
|
|
(32,200)
|
|
|
|
Gain on disposal of assets (Note 3)
|
-
|
|
13,488
|
|
-
|
|
13,488
|
|
40,464
|
|
|
Total
other income (expenses)
|
(2,643)
|
|
11,898
|
|
(7,800)
|
|
10,614
|
|
(12,373)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and deficit accumulated during
development stage
|
$ (11,384)
|
|
$(139,794)
|
|
$(350,719)
|
|
$(163,118)
|
|
$
(805,116)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit loss per common share
|
$ (0.00)
|
|
$ (0.00)
|
|
$
(0.01)
|
|
$ (0.00)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding , basic
and diluted
|
50,925,000
|
|
50,925,000
|
|
50,925,000
|
|
50,925,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
7
FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST,
INC.)
(A Development Stage Company)
Statements of Cash Flows
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 25, 2004
|
|
|
|
|
Nine Months Ended
|
|
(inception) to
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
|
|
|
|
|
(Restated –
Note 9)
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
|
Net loss
|
$
(350,719)
|
|
$
(163,118)
|
|
$
(805,116)
|
|
|
|
Adjustments to
reconcile net loss to net cash
|
|
|
|
|
|
|
|
|
used
in operations:
|
|
|
|
|
|
|
|
|
Depreciation
|
35
|
|
117
|
|
4,187
|
|
|
|
Gain
on disposal of assets
|
-
|
|
-
|
|
(40,464)
|
|
|
|
Stock
issued for services
|
-
|
|
-
|
|
500
|
|
|
|
Impairment
of intangible asset
|
-
|
|
-
|
|
32,200
|
|
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
(Increase)
decrease in accounts receivable
|
4,216
|
|
-
|
|
(6,536)
|
|
|
|
Decrease
in prepaid expense
|
525
|
|
-
|
|
-
|
|
|
|
Increase
(decrease) in accounts payable
|
(9,309)
|
|
(26,738)
|
|
49,658
|
|
|
|
Increase
in accrued compensation – officer
|
309,043
|
|
137,967
|
|
592,873
|
|
|
|
Increase
in accrued interest – notes payable
|
4,633
|
|
558
|
|
6,306
|
|
|
|
Increase
in accrued interest – related party
|
1,280
|
|
284
|
|
2,133
|
|
|
Net cash used
in operating activities
|
(40,296)
|
|
(50,930)
|
|
(164,259)
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
Purchase of
fixed assets
|
-
|
|
-
|
|
(4,222)
|
|
|
Net cash used
in investing activities
|
-
|
|
-
|
|
(4,222)
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
Issuance of
common stock for cash
|
-
|
|
-
|
|
75,400
|
|
|
|
Proceeds from
short-term loans
|
34,900
|
|
23,294
|
|
73,194
|
|
|
|
Proceeds from
notes payable – related party
|
-
|
|
32,000
|
|
32,000
|
|
|
|
Principal
payments on note payable
|
(1,864)
|
|
(1,714)
|
|
(11,900)
|
|
|
Net cash
provided by financing activities
|
33,036
|
|
53,580
|
|
168,694
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash
|
(7,260)
|
|
2,650
|
|
213
|
|
|
|
Cash at
beginning of period
|
7,473
|
|
-
|
|
-
|
|
|
|
Cash at end of
period
|
$
213
|
|
$
2,650
|
|
$
213
|
|
Supplemental
disclosures:
|
|
|
|
|
|
|
|
Interest paid
for in cash
|
$
3,272
|
|
$
2,032
|
|
$
13,792
|
|
|
Income taxes
paid for in cash
|
$
-
|
|
$
-
|
|
$
-
|
|
|
Non-cash
investing and financing activities:
|
|
|
|
|
|
|
|
|
Purchase of
investment property with note payable
|
$
-
|
|
$
-
|
|
$
30,104
|
|
|
|
Conversion of
debt to equity – related party
|
$
627,006
|
|
$
-
|
|
$
627,306
|
See accompanying notes to financial statements.
8
FOUNTAIN
HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.)
(A Development Stage
Company)
Notes to Financial Statements
(unaudited)
For the Nine Months Ended September 30,
2008
1. Organization and Summary of
Significant Accounting Policies
This summary of
significant accounting policies of Fountain Healthy Aging, Inc. (formerly
Immureboost, Inc.) (a development stage company) (“the Company”) is presented to
assist in understanding the Company's financial statements. These accounting
policies conform to accounting principles generally accepted in the United
States of America and have been consistently applied in the preparation of the
accompanying financial statements. The Company has realized minimal revenues
from its planned principal business purpose and, accordingly, is considered to
be in its development stage in accordance with SFAS No. 7.
Business
Description
Fountain Healthy Aging, Inc. is a Nevada
corporation originally organized on February 25, 2004 as Celtic Cross, Ltd. to
acquire timeshares and like entities and facilitate rentals and sales of the
entities and travel packages via its full-service travel website.
The Company has elected a fiscal year end of December 31.
On July 17, 2006, the Board of Directors
voted to change the name of the Company from Celtic Cross, Ltd., to
eSavingsStore.com, Inc. to more accurately reflect the Company’s business plan.
On July 5, 2007, the stockholders of the Company approved the name change
to Immureboost, Inc. On August 19, 2008, the Board of Directors changed
the name to Fountain Healthy Aging, Inc.
On August 18, 2007, the Company entered
into an asset purchase agreement with Immureboost Inc. of Thailand, with the
intention to purchase intellectual property to develop products that affect the
human body’s immune system. No assets have been acquired or stock issued
to date as a result of this agreement (Note 6).
Income Taxes
The Company recognizes the tax effects of
transactions in the year in which such transactions enter into the determination
of net income, regardless of when reported for tax purposes. Deferred taxes are
provided in the financial statements under SFAS No. 109 to give effect to the
resulting temporary differences which may arise from differences in the bases of
fixed assets, depreciation methods, allowances, and start-up costs based on the
income taxes expected to be payable in future years. Development stage deferred
tax assets approximating $282,000 arising as a result of net operating loss
carryforwards totaling $804,056 have been offset completely by a valuation
allowance due to the uncertainty of their utilization in future periods.
The valuation allowance increased by approximately $123,000 and
$57,000 during the nine months ended September 30, 2008 and 2007,
respectively.
Estimates
Preparation of financial statements in
accordance with accounting principles generally accepted in the United States of
America requires the use of estimates, such as depreciation and valuation of
timeshare points. Because of the use of estimates inherent in the financial
reporting process, actual results could differ significantly from those
estimates.
Fixed Assets
Fixed assets are
stated at cost and consist of computers and other office equipment. Depreciation
is computed using the accelerated double-declining method based on estimated
useful lives of 3 years.
Cash and
Cash Equivalents
For the purpose of the statements of cash
flows, the Company considers all highly liquid debt instruments purchased with a
maturity of Six Months or less to be cash equivalents. The Company had $213 and
$7,473 in cash at September 30, 2008 and December 31, 2007, respectively.
Advertising
The Company generally expenses advertising
costs as incurred. No advertising costs were incurred during the period of
February 25, 2004 (inception) through September 30, 2008.
9
FOUNTAIN
HEALTHY AGING, Inc. (formerly IMMUREBOOST, INC.)
(A Development Stage
Company)
Notes to Financial Statements
(unaudited)
For the Nine Months Ended September 30,
2008
1. Organizaton and Summary of
Significant Accounting Policies (continued)
Recently Issued Accounting
Pronouncements
In March 2008, the FASB issued SFAS No.
161,
“Disclosures about Derivative Instruments and Hedging Activities (an
amendment to SFAS No. 133).”
This statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008 and requires enhanced disclosures with respect to derivative and
hedging activities. The Company will comply with the disclosure requirements of
this statement if it utilizes derivative instruments or engages in hedging
activities upon its effectiveness.
In December 2007, the FASB issued SFAS No.
141 (revised 2007),
“Business Combinations.”
This revision to SFAS No.
141 requires an acquirer to recognize the assets acquired, the liabilities
assumed, and any noncontrolling interest in the acquiree at the acquisition
date, at their fair values as of the acquisition date, with limited exceptions.
This revision also requires that acquisition-related costs be recognized
separately from the assets acquired and that expected restructuring costs be
recognized as if they were a liability assumed at the acquisition date and
recognized separately from the business combination. In addition, this revision
requires that if a business combination is achieved in stages, that the
identifiable assets and liabilities, as well as the noncontrolling interest in
the acquiree, be recognized at the full amounts of their fair values. The
Company believes that when and if its development stage activities in seeking a
reverse acquisition of an operating entity occur, this accounting statement may
have relevance.
In December 2007, the FASB issued SFAS No.
160,
“Noncontrolling Interests in Consolidated Financial Statements, an
amendment of ARB No. 51
.” The objective of this statement is to improve the
relevance, comparability, and transparency of the financial statements by
establishing accounting and reporting standards for the Noncontrolling interest
in a subsidiary and for the deconsolidation of a subsidiary. The Company
believes that this statement will not have any impact on its financial
statements, unless it becomes an entity requiring consolidation with one or more
corporations.
In September 2006, the FASB issued SFAS No.
158
, “Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and
132(R).”
This Statement improves financial reporting by requiring an
employer to recognize the overfunded or underfunded status of a defined benefit
postretirement plan (other than a multiemployer plan) as an asset or liability
in its statement of financial position and to recognize changes in that funded
status in the year in which the changes occur through comprehensive income of a
business entity or changes in unrestricted net assets of a not-for-profit
organization. This Statement also improves financial reporting by requiring an
employer to measure the funded status of a plan as of the date of its year-end
statement of financial position, with limited exceptions. An employer with
publicly traded equity securities is required to initially recognize the funded
status of a defined benefit postretirement plan and to provide the required
disclosures as of the end of the first fiscal year ending after December 15,
2006.
In September 2006, the FASB issued SFAS No.
157,
“Fair Value Measurements.”
This Statement defines fair
value, establishes a framework for measuring fair value in generally accepted
accounting principles (GAAP), and expands disclosures about fair value
measurements. This Statement applies under other accounting pronouncements that
require or permit fair value measurements, the Board having previously concluded
in those accounting pronouncements that fair value is the relevant measurement
attribute. Accordingly, this Statement does not require any new fair value
measurements. However, for some entities, the application of this Statement will
change current practice. SFAS 157 is effective in the first fiscal year
that begins after November 15, 2007.
None of the above new pronouncements has
current application to the Company, but may be applicable to the Company’s
future financial reporting.
10
FOUNTAIN
HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.)
(A Development Stage
Company)
Notes to Financial Statements
(unaudited)
For the Nine Months Ended September 30,
2008
1. Organization and Summary of Significant Accounting
Policies (continued)
Revenue
Recognition
As described in Note 3, the Company has
acquired an interest in a timeshare property. Revenues were originally intended
to be recognized upon sale of timeshare points redeemable for utilization of the
property, or when the Company performs other travel related services. The
Company has recognized minimal revenue of $4,000 from its initial intended
business purpose since inception through September 30, 2008.
As more fully
described in Note 6, the Company entered into an asset purchase agreement in
August 2007 with Immureboost, Inc. of Thailand, whereby it plans to develop
processes, products and pharmaceuticals that interact with the immune system.
The Company will reexamine its revenue recognition policy upon completion
of the agreement, which has not yet occurred.
Earnings (Loss) Per Share
The computation of net income (loss) per
share of common stock is based on the weighted average number of shares
outstanding during the period presented. There were no potentially dilutive
common share equivalents outstanding during the periods shown and, accordingly,
the computation of net loss per share on a fully dilutive basis is the same as
basic net loss per share.
2. Related Party
Transactions
On April 22, 2004,
the Company entered into a consulting agreement with an entity affiliated with
its former president/director. The entity was engaged to perform consulting
services and provide office space for the Company for a term of six months
commencing April 22, 2004, in exchange for $15,000. On December 30, 2004, the
president/director resigned from his position with the Company.
For the period of February 25, 2004
(inception) through April 22, 2004 (see above paragraph), and for the period of
July 2006 to the present (Note 5), office space and services have been provided
without charge by the Company's CEO. Such costs are immaterial to the financial
statements and have not been reflected therein.
In February 2007, the Company’s then sole
Officer (“the Former Officer”) loaned the Company $300 to pay for operating
expenses. Upon the resignation from his positions with the Company
effective August 28, 2007, the Former Officer forgave the amounts owed to him.
The Company has written off the debt to additional paid-in capital.
On June 15, 2007, the Company appointed a
new Director to its Board of Directors. On August 28, 2007, this
individual was appointed as the Company’s CEO (“the Officer”). In March
2007, prior to these appointments, the Officer advanced the Company a total of
$32,000 pursuant to two promissory notes (Note 7). The notes were due on
demand and accrued interest at 8% per annum. On July 6, 2007, the Company
entered into an employment agreement with the Officer, whereby the Officer would
perform various services for the Company in exchange for annual compensation of
300,000 Euros, plus 100,000 Euros for annual Director's fees. The
compensation was translated from Euros into US dollars using a weighted average
exchange rate pro-rated for the period of July 2007 through June 2008, resulting
in $309,043 compensation expense for the six months ended June 30, 2008 and
total accrued compensation of $592,873 at June 30, 2008. In August 2008,
the Officer resigned from his positions with the Company and released all claims
he had against the Company for debts owed to him. The $32,000 in notes
payable (plus $2,133 in accrued interest) and $592,873 in accrued compensation
were written off to additional paid-in capital at September 30, 2008.
11
FOUNTAIN
HEALTHY AGING INC. (formerly IMMUREBOOST, INC.)
(A Development Stage
Company)
Notes to Financial Statements
(unaudited)
For the Nine Months Ended September 30,
2008
3. Intangible
Asset
The Company has acquired an undivided
interest in the Wyndham Vacation Resorts (formerly Fairfield Resorts, Inc.)
(WVR) timeshare resort, along with the rights to participate in timeshare use,
or to allow certain others the use, of a specified number of days lodging in WVR
timeshare properties. These rights are granted in the form of points. In June of
2004, the Company purchased 315,000 points from WVR and was given a bonus of
300,000 additional points as an incentive, and will receive 315,000 points on
each anniversary date for the next 99 years. The points operate as
currency and are redeemable at any time at any WVR resort during the year.
Although the points represent a specific interest in the Grand Desert Resort in
Las Vegas, Nevada, they can be used at any time in exchange for accommodations
at any of the other properties around the world owned by WVR. The contract sales
price of the points was $33,100 and is being financed through WVR (Note 7).
On August 25, 2006,
the Company entered into an agreement with a consultant (“the Consultant”)
whereby the Company transferred 600,000 travel points (valued by the Consultant
at $0.046 per point) to the Consultant to settle debts totaling $27,576,
resulting in a balance of 645,000 points at December 31, 2006. During
2007, the Company paid 300,000 points (also valued at $0.046 per point) pursuant
to a consulting agreement (Note 5), resulting in remaining total available
points of 660,000 at December 31, 2007.
As explained more
fully in Note 9, the point transfers result in a reduction of the intangible
asset equal to the original cost of the points transferred. The difference
between the fair market value and the cost of the points is reported as a gain
on disposal of assets in the Other Income (Expense) section of the Statements of
Operations. The per-point original cost of $0.001 resulted in a reduction
in the intangible asset of $600 and $300 during the years ended December 31,
2007 and 2006, respectively, due to each of the points transfers, resulting in a
carrying value of the intangible asset of $32,200 and $32,500 at December 31,
2007 and 2006 (restated), respectively. The Company recognized a gain on
disposal of assets of $13,488 and $26,976 during the years ended December 31,
2007 and 2006 (restated), respectively. As of September 30, 2008, the
Company had received a total of 1,560,000 travel points. No point
transfers occurred during the Nine Months Ended September 30, 2008.
In light of the
asset purchase agreement entered into during August 2007 (Note 6), the Company
has decided to focus on its immune boosting business and is currently seeking to
dispose of the intangible asset. As a result, the carrying value of the
asset was impaired down to $0 during the fourth quarter of 2007. The
impairment was recorded as a separate component of other income and expenses in
the statements of operations.
12
FOUNTAIN
HEALTHY AGING INC. (formerly IMMUREBOOST, INC.)
(A Development Stage
Company)
Notes to Financial Statements
(unaudited)
For the Nine Months Ended September 30,
2008
4. Stockholders' Equity
During March and April 2004, the Company issued common
stock for cash in accordance with separate private offering memorandums as
follows:
Number of
shares
Price
per share
Cash received
13,500,000
$
.000067
$
900
14,250,000
.00067
9,500
15,000,000
.002
30,000
5,700,000
.0033
19,000
2,400,000
.0067
16,000
50,850,000
$
75,400
The Board of Directors authorized a 30:1
forward stock split on July 1, 2006, and a 2:1 reverse stock split on June 12,
2007. The number of shares issued in accordance with private offerings in
2004 as listed above have been retroactively restated to include the effects of
the splits.
Pursuant to a Form 8-K filed with the SEC
on July 28, 2006, the Board of Directors voted to increase the Company’s
authorized common shares from 75,000,000 to 1,000,000,000 shares.
On October 1, 2006, the Company issued
75,000 shares of common stock at $.0067 per share to its transfer agent for $500
in services, resulting in 50,925,000 common shares issued and outstanding at
September 30, 2008 and December 31, 2007.
5. Consulting Agreement
In October 2006, the Company entered into
an agreement with an unrelated consultant (“the Consultant”), who would perform
services for the Company during the fourth quarter of 2006. As
compensation, the Company was required to pay the Consultant $9,000 cash and
300,000 timeshare points. The points were valued at $0.046, which is
proportionate to the 600,000 points transferred to another consultant to satisfy
$27,576 in debt owed to that consultant (Note 3). Accordingly, the 300,000
points were assigned a value of $13,788, resulting in a payable due the
Consultant of $22,788 at December 31, 2006. The points were transferred to
the Consultant during the year ended December 31, 2007, resulting in a $300
reduction of the original cost of the intangible asset (timeshare investment)
and a gain on disposal of assets of $13,488. Upon transfer of the points,
the Company failed to record a corresponding reduction in the consulting fees
due the Consultant, and paid additional cash in an attempt to satisfy the
perceived remaining payable, resulting in an overpayment. Also during
2007, the Consultant forgave debts owed by the Company totaling $3,036.
The net of the inadvertent $13,788 overpayment and $3,036 debt forgiveness
resulted in a net receivable due from the Consultant of $10,752 at December 31,
2007. During the nine months ended September 30, 2008, the Consultant has
paid $4,216 of expenses on behalf of the Company reducing the receivable to
$6,536. The accounting treatment of the points transfer is more fully
discussed in Notes 3 and 10. The agreement was not renewed for a
subsequent term.
6. Asset Purchase Agreement
On August 18, 2007,
the Company entered into an Asset Purchase Agreement with Immureboost of
Thailand, a Thai corporation (the "Seller") that develops processes, products
and pharmaceuticals that interact with the immune system. Under the terms of the
Agreement, the Company was to acquire certain assets of the Seller, including
patents and trademarks. In consideration of these assets, certain shareholders
of the Seller were to receive 20,370,000 restricted shares (as defined in Rule
144 of the Securities Act of 1933) of the Company's common stock, which would
have constituted 40% of the stock issued and outstanding at December 31, 2007,
and 29% of total shares issued and outstanding after the shares are issued.
The Company does not believe that the Seller will be able
to deliver the assets as set forth in the Agreement, and the Seller may not have
rights to patents and trademarks as represented in the Agreement.
Therefore, the Company is of the opinion the Seller has breeched the
Agreement, and is in the process of enforcing the Company’s termination rights
thereunder. No shares were issued or assets transferred pursuant to the
Agreement.
13
FOUNTAIN
HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.)
(A Development Stage
Company)
Notes to Financial Statements
(unaudited)
For the Nine Months Ended September 30,
2008
7.
Notes Payable
|
|
|
|
|
|
|
Principal balance
|
|
|
September 30
|
|
December 31
|
|
|
2008
|
|
2007
|
|
Note payable – timeshare:
|
|
|
|
|
Wyndham Vacation Resorts (Note 3) for $33,100 –
June 2004 inception, June 2014 maturity, $415 monthly payments, 10.99%
annual interest, collateralized by the timeshare property. Interest
expense of $2,361 and $1,382 for the nine months ended September 30, 2008
and 2007, respectively. Accrued interest of $474 and $0 at September
30, 2008 and December 31, 2007, respectively. Future maturities due
during the year ended December 31 are as follows:
2008
$
2,570
2009
2,867
2010
3,198
2011
3,568
2012
3,980
Thereafter
6,881
Total
$
23,064
|
$
21,200
|
|
$
23,064
|
|
,
|
|
|
|
|
Short-term loans
|
|
|
|
|
Independent investor for $22,994 – March 2007
inception, September 2007 maturity, 5.25% annual interest plus 1% interest
per month late fee each month after maturity, unsecured. Interest
expense of $2,199 and $1,066 for of the nine months ended September 30,
2008 and 2007, respectively. Accrued interest of $3,722 and $1,523
at September 30, 2008 and December 31, 2007, respectively.
|
22,994
|
|
22,994
|
|
|
|
|
|
|
Independent investor for $15,000 – November 2007
inception, due on demand, 8% annual interest, unsecured. Interest
expense of $900 and $0 for the nine months ended September 30, 2008 and
2007, respectively. Accrued interest of $1,050 and $150 as of
September 30, 2008 and December 31, 2007, respectively.
|
15,000
|
|
15,000
|
|
|
|
|
|
|
Independent investor for $26,500 – April, 2008
inception, due on demand, 8% interest, unsecured. Interest
expense was $1,060 for the six months ended September 30, 2008, and
accrued interest of $1,060 at September 30, 2008.
|
26,500
|
|
-
|
|
|
|
|
|
|
Independent investor for $8,400 – August 2008
inception, due on demand, 4.25% annual interest, unsecured. Interest
was minimal for August and September 2008.
|
8,400
|
|
-
|
|
Total short-term
loans
|
72,894
|
|
37,994
|
|
|
|
|
|
|
Related party notes payable (written off at
September 30, 2008 – Note 2):
|
|
|
|
|
Officer loan for $10,000 – August 2007 inception,
due on demand, 8% annual interest, unsecured. Interest expense of
$400 and $133 for the nine months ended September 30, 2008 and 2007,
respectively. Accrued interest of $0 and $267 as of September 30,
2008 and December 31, 2007, respectively.
|
-
|
|
10,000
|
|
|
|
|
|
|
Officer loan for $22,000 – August 2007 inception,
due on demand, 8% annual interest, unsecured. Interest expense of
$880 and $293 for the nine months ended September 30, 2008 and 2007,
respectively. Accrued interest of $0 and $586 as of September 30,
2008 and December 31, 2007, respectively.
|
-
|
|
22,000
|
|
|
|
|
|
|
Total related
party notes payable
|
-
|
|
32,000
|
|
|
|
|
|
|
Total notes payable
|
94,094
|
|
93,058
|
|
Less current portions and short-term loans
|
75,535
|
|
72,564
|
|
Total notes payable – long-term
|
$
18,559
|
|
$
20,494
|
14
FOUNTAIN HEALTHY AGING, INC. (formerly
IMMUREBOOST, INC.)
(A Development Stage
Company)
Notes to Financial Statements
(unaudited)
For the Nine Months Ended September 30,
2008
8. Going Concern and Liquidity
Considerations
The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern, which contemplates, among other things, the realization of
assets and satisfaction of liabilities in the normal course of business.
As of September 30, 2008, the Company has a working capital deficit of $
82,326 and an accumulated deficit of $804,056. Unanticipated costs and
expenses or the inability to generate revenues could require additional
financing, which would be sought through bank borrowings, equity or debt
financing, or asset sales. To the extent financing is not available, the Company
may not be able to, or may be delayed in, developing its services and meeting
its obligations.
The Company will
continue to evaluate its projected expenditures relative to its available cash
and to evaluate additional means of financing in order to satisfy its working
capital and other cash requirements. The accompanying financial statements do
not reflect any adjustments that might result from the outcome of these
uncertainties.
9.
Restatement of Prior Year Audited Financial Statements
The Company has
restated its September 30, 2007 and December 31, 2006 financial statements,
primarily due to improper accounting for the transfer of its timeshare points
acquired from Wyndham Vacation Resorts (formerly Fairfield Resorts, Inc.)
(“WVR”) for $33,100 in June 2004 (Note 3). Since the Company’s interest in
the WVR conglomerate was deemed to have a nominal value, the entire purchase
price was assigned to the points, represented in the financial statements as an
intangible asset. Although the term of the sales contract stated the
Company was to receive additional points annually for 99 years, the Company
initially determined that the points did not have a finite useful life over
which to amortize their cost, so the intangible asset would be tested for
impairment in accordance with SFAS No. 142,
"Goodwill and Other Intangible
Assets."
The Company noted no impairment of the intangible during 2004
through 2006, and when points were transferred to other parties in the two
transactions described in Note 3, there was no corresponding depletion of the
asset. If a sales transaction were to occur, there would be no way to
determine cost of goods sold.
The Company
determined to assign the sales contract price ratably to the potential points
the Company is entitled to receive over the life of the contract. The
Company is entitled to receive 315,000 points for 99 years, plus 300,000 bonus
points granted upon inception, which equates to 31,485,000 potential points over
the contract life, resulting in a per-point value (cost) of $.001.
In a revenue-generating transaction, the
intangible asset will be reduced by the cost of the points sold, with an
offsetting entry to cost of sales. Revenue will be recorded in the amount
of consideration received, resulting in a gross margin of the difference between
the asset cost and fair market value. When points are transferred to other
parties as repayment for services or debt in lieu of cash, a gain on disposal of
an asset is recorded in the ‘Other Income’ section of the statements of
operations. This is not considered a revenue transaction, but rather a
disposal of the intangible asset.
The restatement relates to the August 2006
transfer of 600,000 points to satisfy debt of $27,576 (Note 3), which was
originally accounted for as $27,576 in revenues. Application of the
correct accounting treatment results in a reduction of the intangible asset by
the points’ original cost of $600 at $.001 per point. The difference
between the points’ original cost and their fair market value (i.e., the debt
amount) has been recorded as a gain on disposal of assets, resulting as a net
$600 adjustment to the accumulated deficit opening balance. This
restatement is considered a correction of an error in previously issued
financial statements pursuant to SFAS No. 154,
"Accounting Changes and Error
Corrections."
The error has been addressed as a prior
period adjustment in the attached restated September 30, 2007 financial
statements, as demonstrated in the below table. No change in loss per
share was noted as a result of the restatement.
15
FOUNTAIN
HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.)
(A Development Stage
Company)
Notes to Financial Statements
(unaudited)
For the Nine Months Ended September 30,
2008
9. Restatement of Prior
Year Audited Financial Statements (continued)
|
|
|
|
|
|
|
Original
|
Restatement
|
Restated
|
|
Account
|
Balance
|
Adjustment
|
Balance
|
|
|
Nine Months Ended September 30,
2007
|
|
Cash
|
$
2,650
|
$
-
|
$
2,650
|
|
Equipment
|
4,222
|
-
|
4,222
|
|
Accumulated depreciation
|
(4,121)
|
-
|
(4,121)
|
|
Intangible asset
|
33,100
|
(900)
|
32,200
|
|
Accounts payable
|
(18,370)
|
13,788
|
(4,582)
|
|
Notes payable - related party
|
(55,294)
|
23,294
|
(32,000)
|
|
Short term loans
|
-
|
(23,294)
|
(23,294)
|
|
Accrued interest - notes payable
|
-
|
(558)
|
(558)
|
|
Accrued interest - related party
|
-
|
(284)
|
(284)
|
|
Accrued compensation
|
-
|
(137,967)
|
(137,967)
|
|
Current portion of notes payable - timeshare
|
(2,500)
|
-
|
(2,500)
|
|
Notes payable - timeshare
|
(21,133)
|
-
|
(21,133)
|
|
Common stock
|
(50,925)
|
-
|
(50,925)
|
|
Additional paid-in capital
|
(24,975)
|
-
|
(24,975)
|
|
Deficit accumulated during dev stage
|
99,549
|
600
|
100,149
|
|
Revenues
|
-
|
-
|
-
|
|
General and administrative expenses
|
35,765
|
137,967
|
173,732
|
|
Interest expense
|
2,032
|
842
|
2,874
|
|
Gain on disposal of assets
|
|
(13,488)
|
(13,488)
|
|
Total
|
$
-
|
$
-
|
$
-
|
|
|
|
|
|
|
|
|
|
Original
|
Restatement
|
Restated
|
|
Account
|
Balance
|
Adjustment
|
Balance
|
|
|
Three Months Ended September 30,
2007
|
|
Cash
|
$
2,650
|
$
-
|
$
2,650
|
|
Equipment
|
4,222
|
|
4,222
|
|
Accumulated depreciation
|
(4,121)
|
|
(4,121)
|
|
Intangible asset
|
33,100
|
(900)
|
32,200
|
|
Accounts payable
|
(18,370)
|
13,788
|
(4,582)
|
|
Notes payable - related party
|
(55,294)
|
23,294
|
(32,000)
|
|
Short term loans
|
-
|
(23,294)
|
(23,294)
|
|
Accrued interest - notes payable
|
-
|
(558)
|
(558)
|
|
Accrued interest - related party
|
-
|
(284)
|
(284)
|
|
Accrued compensation
|
-
|
(137,967)
|
(137,967)
|
|
Current portion of notes payable - timeshare
|
(2,500)
|
|
(2,500)
|
|
Notes payable - timeshare
|
(21,133)
|
|
(21,133)
|
|
Common stock
|
(50,925)
|
|
(50,925)
|
|
Additional paid-in capital
|
(24,975)
|
|
(24,975)
|
|
Deficit accumulated during dev stage
|
122,873
|
600
|
123,473
|
|
Revenues
|
-
|
|
-
|
|
General and administrative expenses
|
13,725
|
137,967
|
151,692
|
|
Interest expense
|
748
|
842
|
1,590
|
|
Gain on disposal of assets
|
-
|
(13,488)
|
(13,488)
|
|
Total
|
$
-
|
$
-
|
$
-
|
16