Americare Health Scan (AMIT) 10-Q 2008 Q3 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period endedSeptember 30, 2008
	or
o	TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ______________ to _______________
	COMMISSION FILE NUMBER 000-29062
AMERICARE HEALTH SCAN, INC.
(Exact name of registrant as specified in its charter)

FLORIDA	65-0714523
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

20 N.W. 181st Street
Miami, Florida	33169
(Address of principal executive offices)	(Zip code)

(305) 770-1141

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yeso   Nox

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Act).

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso   Nox

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of October 23, 2008 the Issuer had 19,242,459 Shares of Common Stock outstanding.

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	2
	Balance sheets as of September 30, 2008 (unaudited) and December 31, 2007 (audited)	3
	Statements of loss for cumulative amounts from development stage (January 1, 2005) through September 30, 2008 and for the three and nine months ended September 30, 2008 and 2007 (unaudited)	4
	Statements of cash flows for the nine months ended September 30, 2008 and 2007 (unaudited)	5
	Notes to the financial statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis or Plan Operation	7
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9
Item 4.	Controls and Procedures	9
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	9
Item 2.	Unregistered sales of equity securities and use of proceeds	9
Item 3.	Defaults upon senior securities	9
Item 4.	Submission of matters to a vote of security holders	9
Item 5.	Other Information	9
Item 6.	Exhibits and reports on Form 8-K	9

1

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

The accompanying unaudited condensed financial statements of Americare Health Scan, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and rules and regulations of the United States Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments consisting of a normal and recurring nature considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2008, may not necessarily be indicative of the results that may be expected for the year ended December 31, 2008.

As used in this Quarterly Report, the terms “we,” “us,” “our,” the “Company” and “Americare” mean Americare Health Scan, Inc. unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

2

AMERICARE HEALTH SCAN, INC. (A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

	September 30, 2008 (UNAUDITED)			December 31, 2007 (AUDITED)
ASSETS
Cash and cash equivalents	$	—		$	1,144
Deferred tax asset		—			—
Total current assets		—			1,144
TOTAL ASSETS	$	—		$	1,144
LIABILITIES AND DEFICIENCY IN ASSETS
Current liabilities
Accounts payable and accrued expenses	$	99,506		$	34,364
Accrued interest		2,334,178			2,030,893
Accrued officer’s compensation		2,548,000			2,392,000
Due to shareholder		54,400			54,400
Notes payable - related parties		2,932,585			2,923,764
Total current liabilities		7,968,669			7,435,421
Deficiency in assets
Capital stock; $0.001 par value; 50,000,000 shares authorized; 19,242,459 shares issued and outstanding		19,242			19,242
Additional paid-in capital		1,662,250			1,662,250
Accumulated deficit		(6,899,211	)		(6,899,211	)
Accumulated deficit from development stage		(2,750,950	)		(2,216,558	)
Total deficiency in assets		(7,968,669	)		(7,434,277	)
TOTAL LIABILITIES AND DEFICIENCY IN ASSETS	$	—		$	1,144

See accompanying notes.

3

AMERICARE HEALTH SCAN, INC. (A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF LOSS (UNAUDITED)

	Cumulative Amounts from Development Stage (January 1, 2005 through September 30, 2008)			For the Three Months Ended September 30, 2008			For the Three Months Ended September 30, 2007			For the nine Months Ended September 30, 2008			For the nine Months Ended September 30, 2007
REVENUE	$	—		$	—		$	—		$	—		$	—
GENERAL AND ADMINISTRATIVE EXPENSES
Auto expense		3,226			—			—			—			18
Bank fees and service charges		10,818			—			40			39			40
Insurance		23,044			—			—			—			—
Legal and professional		106,632			64,087			—			64,087			6,552
Management fees		72,195			—			—			—			11,798
Meals and entertainment		4,073			—			—			—			—
Office expense		7,336			—			—			—			510
Officer’s compensation		780,000			52,000			52,000			156,000			156,000
Penalties and interest		23,353			—			—			1,645			50
Postage and delivery		2,060			—			—			275			—
Repairs and maintenance		3,730			—			838			—			838
Salaries and wages		199,818			—			—			—			—
Taxes and licenses		20,317			—			—			241			75
Telephone		20,828			—			—			—			3,343
Travel		27,216			—			—			—			—
Utilities		46,441			—			—			—			4,434
Total general and administrative expenses		1,351,087			116,087			52,878			222,287			183,658
Loss before other income (expenses)		(1,351,087	)		(116,087	)		(52,878	)		(222,287	)		(183,658	)
OTHER INCOME (EXPENSES)
Other income		90,451			—			—			—			6,431
Interest expense		(1,479,692	)		(103,103	)		(115,227	)		(303,284	)		(347,327	)
Other expense		(10,622	)		—			—			(8,821	)		—
Total other expenses		(1,399,863	)		(103,103	)		(115,227	)		(312,105	)		(340,896	)
Loss before income taxes		(2,750,950	)		(219,190	)		(168,105	)		(534,392	)		(524,554	)
Provision for income taxes		—			—			—			—			—
Net loss	$	(2,750,950	)	$	(219,190	)	$	(168,105	)	$	(534,392	)	$	(524,554	)
Net loss per share - basic and diluted				$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.03	)
Weighted average number of shares of common stock outstanding - basic and diluted					19,242,459			19,242,459			19,242,459			19,242,459

See accompanying notes.

4

AMERICARE HEALTH SCAN, INC. (A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS (UNAUDITED)

For the nine months ended September 30,	2008			2007
CASH FLOWS FROM DEVELOPMENT STAGE ACTIVITIES
Net loss	$	(534,392	)	$	(524,554	)
Change in assets and liabilities:
Increase (Decrease) in accounts payable and accrued expenses		65,142			(74,083	)
Increase in accrued interest		303,285			347,327
Increase in accrued officer’s compensation		156,000			156,000
NET CASH USED IN DEVELOPMENT STAGE ACTIVITIES		(9,965	)		(95,310	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net transactions from notes payable - related parties		8,821			69,526
Due to shareholder		—			25,707
NET CASH PROVIDED BY FINANCING ACTIVITIES		8,821			95,233
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(1,144	)		(77	)
CASH AND CASH EQUIVALENTS, beginning of period		1,144			1,221
CASH AND CASH EQUIVALENTS, end of period	$	—		$	1,144
SUPPLEMENTAL DISCLOSURES:
Income taxes paid	$	—		$	—
Interest paid	$	—		$	—

See accompanying notes.

5

AMERICARE HEALTH SCAN, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2008

1.	DEVELOPMENT STAGE ACTIVITIES
	Americare Health Scan, Inc. (the “Company”) was incorporated under the laws of the State of Florida on February 3, 1994, and is engaged in the business of developing technological solutions for medical, dental, and high tech industries, and consequently bringing the developed technologies to the market place. The Company has been researching products for development. The Company has not yet obtained necessary approvals to market the products it is developing. Commencing January 1, 2005, the Company is considered to be in the development stage.
	BASIS OF PRESENTATION
	The accompanying interim financial statements have been prepared by the company in conformity with generally accepted accounting principles in the United States of America for interim financial statements. In the opinion of management, the accompanying interim financial statements contain all adjustments necessary (consisting of normal recurring accruals) to present fairly the financial information contained therein. These interim financial statements do not include all disclosures required by generally accepted accounting principles in the United States of America. The results of operations for the nine months ended September 30, 2008, are not necessarily indicative of the results to be expected for the year ending December 31, 2008.
	RECLASSIFICATION
	Certain amounts in the prior year financial statements have been reclassified for comparative purposes to conform to the current year presentation. There was no material changes in classifications made to previously issued financial statements.
2.	GOING CONCERN
	As reflected in the accompanying financial statements, the Company incurred net losses of $219,190 and $168,105 for the quarters ended September 30, 2008 and 2007, due principally to expenses incurred for general and administrative expenses and interest expense. To date the Company has not generated sufficient cash flows to sustain the operations. Management of the Company is developing a plan to finance its continuing research and development activities through the issuance of debt or equity securities. The ability of the Company to continue as a going concern is dependent on the success of the plan and the continued support of the Company’s major shareholder. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
3.	NET LOSS PER COMMON SHARE
	Net loss per common share has been computed (basic and dilutive) for all periods presented and is based on the weighted average number of shares outstanding during the period.
4.	DUE TO RELATED PARTIES
	The Company received loans from stockholders in exchange for on-demand promissory notes. These notes accrued interest at a compounded rate of the prime rate (5.00% at September 30, 2008) plus 2% as of the last day of the quarter, but no less than 8% or greater than 18%. Therefore, the applicable interest rate at September 30, 2008 was 8%. The aggregate principal balance of these notes at September 30, 2008 amounted to $2,932,585. Interest expense for the quarter ended September 30, 2008 amounted to $103,103.
5.	COMMITMENTS AND CONTINGENCIES
	The Company has an employment agreement with the President and Chief Executive Officer for an indefinite period of time or until there is a majority vote by the Board of Directors to elect a new President and Chief Executive Officer. The agreement calls for compensation in the amount of $52,000 per calendar quarter ($208,000 per calendar year), which has been accrued and amounts to $2,548,000 at September 30, 2008.

The Company has not filed its 2006 or 2007 income tax returns.

6

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report constitute “forward-looking statements.” These statements, identified by words such as “plan,” “anticipate,” “believe,” “estimate,” “should,” “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption “Management’s Discussion and Analysis or Plan of Operation” and elsewhere in this Quarterly Report. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our Annual Reports on Form 10-K and our Current Reports on Form 8-K.

GENERAL

Americare Health Scan, Inc. is a development stage company that was incorporated under the laws of the State of Florida on February 3, 1994. We developed the first non-invasive, rapid, non-radioactive technology for the direct detection of the disease process known as Active Helicobacter Pylori (“H-Pylori”) for patients with Peptic Ulcer diseases. The Ana-Sal(R) Saliva Test for H. Pylori is simple, provides a cost-effective means for direct sampling, and requires only a thirty second procedure for the detection of active H. Pylori infection. Estimates suggest that almost 10 million Americans are diagnosed each year with Peptic Ulcers. Although saliva diagnostic testing is in its infancy, the broader diagnostic test market is highly competitive. As a result, it will be difficult for saliva diagnostic tests to take market share from serum and urine diagnostic tests. We believe that the market for the ANA-SAL(R) saliva based tests have a significant growth potential. Demand for point of care and field diagnostics, especially at border crossing points between countries, is also increasing. We also believe that a saliva-based non-invasive method of testing will expand this opportunity significantly.

PLAN OF OPERATION

Our ultimate objective is to build a fully integrated research and development, manufacturing, marketing and distribution organization capable of providing the medical diagnostic and drug delivery markets with products that offer accuracy, efficacy, ease of use and reduced costs. In order to accomplish this objective, we have developed the following strategy:

Provide a Broad Range of Products

We believe that a diversified product base can increase potential business opportunities, provide a stream of new product introductions over time, and reduce the risks associated with reliance on a single product or technology.

Focus on Large Market Opportunities

We will concentrate our development efforts on large existing markets in which we believe there could be significant demand for our products.

Enter into Strategic Alliances

We intend to enter into strategic alliances with large medical diagnostic and pharmaceutical companies for the marketing of our medical diagnostic products. Since these companies have significantly greater financial, marketing and other resources than we have, they would be able to market the our products through a broad range of distribution channels. Our strategy with respect to the development and commercialization of its transdermal drug delivery products is to enter into strategic alliances with third parties that can, in some cases, fund a portion of product development costs, participate in clinical testing, obtain regulatory approval, and market the products. In an effort to exercise control over the quality of our products and capture a larger portion of the revenues, we will seek to retain manufacturing rights to products developed under such strategic alliances.

7

Cash Requirements for Next Twelve Months

We anticipate that we will incur over $600,000 over the twelve months beginning January 1, 2008 for general and administrative, and interest expenses, including professional legal and accounting expenses associated with our reporting obligations under the U.S. Securities and Exchange Act of 1934 and the estimated costs of providing products. Based on our cash position, we will require additional financing to enable us to pay for our expenses. We anticipate that additional funding will be in form of equity financing from the sale of our common stock during the fourth quarter of 2008.

Revenue

We have incurred a net loss of $534,392 during the nine months ended September 30, 2008. We do not anticipate earning revenues until such time as we have entered all technologies or products for sale in the United States. As such, there are no costs of revenue. These previously mentioned products or technologies have not been approved by the Food and Drug Administration (“FDA”). Except for the Saliva Collector and HIV Saliva Test, none of our technologies is ready for sale outside of the United States either. The completion of research and development that would be necessary to turn our technologies into working prototypes and viable products will require a significant influx of funding. We do not currently have the funds to undertake any research and development efforts with regard to our technologies, and there is no assurance that we will ever be able to obtain such funding.

Interest Expense

On-demand promissory note agreements entered into with stockholders currently accrue compounded interest for the quarter ended September 30, 2008 at 8%. Since January 2004, the Company has not paid interest on these notes. Once additional equity financing is received, management intends to repay these notes and unpaid interest. Additional financing is anticipated in the fourth quarter of 2008.

LIQUIDITY AND FINANCIAL CONDITION

Working Capital
	September 30, 2008			September 30, 2007			Percentage Increase / (Decrease)
Current Assets	$	—		$	1,145			(100.00	)%
Current Liabilities		7,968,669			7,270,876			(8.72	)%
Working Capital Deficiency	$	(7,968,669	)	$	(7,269,731	)		(8.73	)%
Cash Flows
				Nine Months Ended September 30, 2008			Nine Months Ended September 30, 2007
Cash Flows Used in Development Stage Activities				$	(9,965	)	$	(95,310	)
Cash Flows Provided By Investing Activities				$	—		$	—
Cash Flows Provided By Financing Activities				$	8,821		$	95,233
Net Decrease in Cash and Cash Equivalents During Period				$	(1,144	)	$	(77	)

Future Financing Requirements

We require additional financing if we are to continue as a going concern to finance our business operations. We anticipate that any additional financing would be through the sale of our common stock. We are presently in the process of negotiating private placements of securities to raise working capital to finance our operations. However, we expect to raise the additional capital that we require to continue operations. In the event that we are unable to raise additional financing on acceptable terms, we intend to reduce our exploration expenditures and may implement additional actions to reduce general and administrative expenditures. We anticipate that our working capital will continue to decline until we receive additional funding.

8

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our primary risk exposures or management of market risks from those disclosed in our Form 10-KSB for the year ended December 31, 2007.

ITEM 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2008, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS.
None.
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5.	OTHER INFORMATION.
None.
ITEM 6.	EXHIBITS AND REPORTS ON FROM 8K.

(A)

31.1 Certification of the Chief Executive Officer required by Rule 13a-14(a)/15d-14(a)

32.1 Certification of the Chief Executive Officer required by Rule 13a-14(a)-15d-14(a) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(B) Reports on Form 8-K

None.

9

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

/s/ AMERICARE HEALTH SCAN, INC.
	(Registrant)
By:	/s/ Dr. Joseph P. D’Angelo
	DR. JOSEPH P. D’ANGELO
	PRESIDENT AND CHIEF EXECUTIVE OFFICER

Date: November 5, 2008

In accordance with the Exchange Act, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	By: /s/ Dr. Joseph P. D’Angelo
	DR. JOSEPH P. D’ANGELO
	PRESIDENT AND CHIEF EXECUTIVE OFFICER
Date: November 5, 2008
	By: /s/ Robert Cano
	ROBERT CANO
	CHIEF FINANCIAL OFFICER
Date: November 5, 2008