NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2014
(UNAUDITED)
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 March 31, 2014
the Company had $60,000 of cash, and June 30, 2013, the Company had $85,730 of cash related to discontinued operations.
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.
VANTAGE
HEALTH
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2014
NOTE
1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Investment
Securities
Under
Accounting Standards Codification (ASC) 320-10, Investments – Debt and Equity Securities, investment securities must be
classified as held-to-maturity, available-for-sale, or trading. Management has determined the appropriate classification at the
time of purchase to be available-for-sale. The classification of investment securities is significant since it directly impacts
the accounting for unrealized gains and losses on securities. Investment securities not classified as held-to-maturity are classified
as available-for-sale and are carried at fair value, with the unrealized gains and losses, net of tax, reported in other comprehensive
income and do not affect earnings until realized. Investment in stock is carried at cost. The Company has no trading account investment
securities. The fair values of the Company’s investment securities are generally determined by reference to quoted prices
from reliable independent sources utilizing observable inputs.
The
Company evaluates all the securities in its investment securities portfolio on a quarterly basis, and more frequently when economic
conditions warrant additional evaluations, to determine if an other-than-temporary impairment (OTTI) exists pursuant to guidelines
established in ASC 320-10. In evaluating for possible impairment, consideration is given to many factors including the length
of time and the extent to which the fair value has been less than cost, whether the market decline was affected by macroeconomic
conditions, the financial condition and near-term prospects of the issuer, and the Company’s ability and intent to retain
its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing
an issuer’s financial condition, the Company may consider whether the investment securities are issued by the federal government
or its agencies or government sponsored agencies, whether downgrades by bond rating agencies have occurred, and the results of
reviews of the issuer’s financial condition. The assessment of whether an other-than-temporary decline exists involves a
high degree of subjectivity and judgment and is based on the information available to management at a point in time.
If
management determines that an investment experienced an OTTI, management must then determine the amount of the OTTI to be recognized
in earnings. If management does not intend to sell the investment security and it is more likely than not that the Company will
not be required to sell the investment security before recovery of its amortized cost basis less any current period loss, the
OTTI will be separated into the amount representing the credit loss and the amount related to all other factors. The amount of
the OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized
in earnings. The amount of the OTTI related to other factors will be recognized in other comprehensive income, net of applicable
taxes. The previous amortized cost basis less the OTTI recognized in earnings will become the new amortized cost basis of the
investment. If management intends to sell the investment security or it is more likely than not the Company will be required to
sell the investment security before recovery of its amortized cost basis less any current period credit loss, the OTTI will be
recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at
the balance sheet date. Any recoveries related to the value of these investment securities are recorded as an unrealized gain
(as other comprehensive income [loss] in shareholders’ equity) and not recognized in income until the investment security
is ultimately sold. From time to time, management may dispose of an impaired investment security in response to asset/liability
management decisions, market movements, business plan changes, or if the net proceeds can be reinvested at a rate of return that
is expected to recover the loss within a reasonable period of time.
VANTAGE
HEALTH
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2014
(UNAUDITED)
NOTE
1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Management
evaluates all investment securities on a quarterly basis, and more frequently when economic conditions warrant additional evaluations,
for determining if an OTTI exists pursuant to guidelines established in ASC 320-10, Investments – Debt and Equity Securities.
Current accounting guidance generally provides that if a marketable security is in an unrealized loss position, whether due to
general market conditions or industry or issuer-specific factors, the holder of the investment securities must assess whether
the impairment is other-than-temporary.
Revenue
Recognition
The
Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
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 March 31, 2014.
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.
VANTAGE
HEALTH
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2014
(UNAUDITED)
NOTE
1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Stock-Based
Compensation
The
Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718,
Compensation
– Stock Compensation
which requires all share-based payments to employees, including grants of employee stock options,
to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is
charged directly to compensation expense and credited to additional paid-in capital over the period during which services are
rendered.
The
Company follows ASC Topic 505-50, formerly EITF 96-18, “
Accounting for Equity Instruments that are Issued to Other than
Employees for Acquiring, or in Conjunction with Selling Goods and Services
,” for stock options and warrants issued to
consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as
compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the
estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity
instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are
rendered.
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.
In
addition, the Company has prepaid rent through December 2014, with a remaining prepaid balance of $55,950 as of March 31, 2014.
NOTE
3 – SECURITIES AVAILABLE FOR SALE
On
January 16, 2014, the Company acquired 2,000,000 restricted common shares of common stock of a publicly traded company.
See note 6 for more details. The investment was acquired at market value of $0.03 per share, and is held for future trade.
The value of the investment will be adjusted quarterly to reflect the change in market value of the holding. The investment
does not represent a controlling interest in the publicly traded company. The company has elected the fair value option under
ASC 825 allowing gains and losses to be recorded in earnings each period. From receipt of the shares on January 16, 2014
through March 31, 2014 the securities were reduced in value from $60,000 to $40,000 due to a change in the publicly traded
company’s stock price. These securities are measured under level 1 of ASC 820.
NOTE
4 – RELATED PARTY TRANSACTIONS
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 are 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 March 31, 2014 and June 30, 2013,
respectively.
VANTAGE
HEALTH
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2014
(UNAUDITED)
NOTE
4 – RELATED PARTY TRANSACTIONS (CONTINUED)
During
the nine months ended March 31, 2014, the Company received the rights to Vantage Health Sensor’s nanotechnology that has
been internally developed by a related and controlling party. The Company has issued 7,875,000 shares of common stock with a market
value of $630,000 in exchange for the exclusive rights to this technology. In accordance with generally accepted accounting principles,
the Company recognizes no book value for internally generated technology acquired from a controlling entity. Therefore, the entire
$630,000 was absorbed as a reduction in the stock valuation passing through additional paid in capital.
NOTE
5 – CONVERTIBLE NOTE PAYABLE
On
March 7, 2014, the Company issued a convertible promissory note in the amount of $100,000
.
The note is due on March 10, 2015 and bears interest at 8% per annum. The loan is secured by shares of the Company’s common
stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into
shares of the Company’s common stock at a rate of 58%
multiplied by the
market price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day
period ending on the latest complete trading day prior to the conversion date.
During the period ended March 31, 2014,
the Company has not converted any portion of this note into shares of common stock.
NOTE
6 – COMMON STOCK
The
Company has 250,000,000 shares of $0.001 par value common stock authorized.
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 .
During
the nine months ending March 31, 2014, the Company issued 7,650,000 shares of common stock for current and future consulting services.
The value of the shares at the dates of issuance was $625,750, and is being amortized over the life of each contract to a stock
based compensation expense. As of March 31, 2014 the stock-based compensation expense related to this issuance was $151,457 and
the deferred stock-based compensation was $474,293 .
During
the nine months ending March 31, 2014, the Company issued 7,875,000 shares of common stock with a market value of $630,000 for
rights to internally generated technology from a controlling party. Subsequently, the Company has valued the technology at $0
and recorded the adjustment to additional paid in capital.
During
the nine months ending March 31, 2014, the Company received donated capital from a controlling party of $253,154.
During
the nine months ending March 31, 2014, the Company issued 4,000,000 shares of common stock for cash of $140,000 and an investment
in securities with a market value at the trade date of $60,000 . The Company also issued 4,000,000 shares of common stock to satisfy exercised warrants for cash of $200,000.
VANTAGE
HEALTH
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2014
(UNAUDITED)
NOTE
6 – COMMON STOCK (CONTINUED)
There
were 158,550,000 and 80,125,000 shares issued and outstanding as of March 31, 2014 and June 30, 2013 respectively.
NOTE
7 – STOCK WARRANTS
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 March 31, 2014 the stock-based compensation expense related to this issuance was $11,115 and the deferred
stock-based compensation was $88,649
.
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 March 31, 2014 the stock-based compensation expense related
to this issuance was $262,525 and the deferred stock-based compensation was $2,731,883 .
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 March 31, 2014 the stock-based compensation
expense related to this issuance was $23,391 and the deferred stock-based compensation was $181,513 .
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 March 31, 2014 the stock-based compensation expense related to this issuance was $37,311 and the deferred stock-based compensation
was $201,613 .
On
January 10, 2014 the Company granted stock warrants for 4,000,000 shares of common stock to an investor at no cost to the
investor. These options had an expiration date of January 10, 2021, however, they were fully exercised on January 10, 2014
for $20,000 cash.
VANTAGE
HEALTH
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2014
(UNAUDITED)
NOTE
8 – 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 of $421,655, on the disposal of the subsidiary is included as additional paid in capital for the period.
NOTE
9 – 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 a related party and will not be charged
to Vantage Health, with the next Vantage Health payment due in 2015.
NOTE
10 – LIQUIDITY AND GOING CONCERN
The
Company has incurred losses since inception, and has not yet received any 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 FINANCIAL STATEMENTS
MARCH
31, 2014
(UNAUDITED)
NOTE
11 – SUBSEQUENT EVENTS
On
April 18, 2014, the Company issued a convertible promissory note entitling them to draw up to the amount of $720,000. As of the
date of these financial statements, the Company has only drawn $100,000 against this note. The note is due on July 18, 2015 and
bears interest at 8% per annum. The loan is secured by shares of the Company’s common stock. The loan becomes convertible
180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common
stock at a rate of the lesser of a 50% discount of the lowest reported sale price of the common stock for the 20 trading business
days immediately prior to (i) the date of the Purchase Agreement, or (ii) the Voluntary Conversion Date.
As
of the date of these financial statements the Company has not converted any portion of this note into shares of common stock.