SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from __________________
to __________________ Commission File Number 0-27009 CIK Number
0001092789
HEALTHEUNIVERSE, INC.
(Exact Name of small business issuer as specified in its charter)
Delaware 33-0619520
(State or other Jurisdiction of I.R.S. Employer Identi-
Incorporation or Organization fication
No.)
1171 West San Bernardino Road, Suite F, Covina, California 91722
(Address of Principal Executive Offices) (Zip Code)
(626) 967-4660
(Issuer's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (i) 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 (of for such shorter period that the
Registrant was required to file such reports) and (ii) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Common Stock, $.001 par value 10,000,000
- ---------------------------------- ----------------------
Title of Class Number of Shares outstanding
at March 31, 2003
Transitional Small Business Format Yes No X
No exhibits included.
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HEALTHEUNIVERSE, INC.
(A Company in the Development Stage)
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, March 31,
2002 2003
Cash in Banks $ 2,280 $ 1,249
Merchandise Inventory 12,913 12,913
Total Current Assets $ 15,193 $ 14,162
PROPERTY AND EQUIPMENT - net 316 283
Other assets - organization costs,
net of amortization 1,400 1,300
TOTAL ASSETS $ 16,909 $ 15,745
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Sales tax payable $ 84 $ 84
Income taxes payable - state 800 800
Loans from stockholders 11,370 11,370
Accrued expenses -- 48,250
Interest payable - related party notes 781 866
TOTAL CURRENT LIABILITIES $ 13,035 $ 61,370
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, $.001 par value; 1,000,000 shares
authorized; no shares issued and outstanding
Common Stock, $.001 par value; 20,000,000 shares
authorized; 10,000,000 shares issued and outstanding 10,000 10,000
Par value 5,000 5,000
Deficit accumulated during the development stage (11,126) (60,625)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 3,874 (45,625)
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) $ 16,901 $ 15,745
The accompanying notes are an integral part of
the financial statements.
2
HEALTHEUNIVERSE, INC.
(A Company in the Development Stage)
CONSOLIDATED STATEMENTS OF OPERATIONS
CUMULATIVE
FOR THE THREE FROM INCEPTION
MONTHS ENDED (April 20, 1994)
March 31, TO
2003 2002 March 31, 2003
REVENUES $ -0- $ 820 $ 11,556
Cost of Goods Sold -- 64 10,130
Gross Margin -- 756 2,622
OPERATING EXPENSES
Interest expense 85 58 846
General and Administrative 49,414 1,121 62,401
TOTAL OPERATING EXPENSES 49,499 1,179 63,247
NET (LOSS) (49,499) (423) $ (60,625)
NET (LOSS) PER SHARE $ (.05) $ (Nil)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 8,500,000 7,000,000
See accompanying Notes to Financial Statements.
3
HEALTHEUNIVERSE, INC.
(A Company in the Development Stage)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE
MONTHS ENDED
March 31,
2003 2002
CASH FLOWS FROM OPERATING
ACTIVITIES
Net (Loss) $ (49,488) $ (423)
Adjustments to reconcile net loss to
net cash provided by operating activities
Depreciation and amortization 133 58
(Increase) decrease in inventory -- 756
Sales tax payable -- 6
Interest payable 85 58
Increase (decrease) in accounts
payable 48,250
Net cash flows from operating
activities (1,031) (455)
CASH FLOWS FROM INVESTING ACTIVITIES
Organizational Costs
CASH FLOWS FROM FINANCING
ACTIVITIES
Sale of Common Stock
Net Cash flows from financing
activities
NET INCREASE (DECREASE) IN CASH (1,031) (455)
CASH BALANCE AT BEGINNING
OF PERIOD 2,280 3,970
CASH BALANCE AT END OF
PERIOD $ 1,249 $ 3,515
See accompanying Notes to Financial Statements.
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HEALTHEUNIVERSE, INC.
(A Company in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 2003
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of HealtheUniverse, Inc., is
presented to assist in understanding the Company' financial statements. The
financial statements and notes are representations of the Company's management
who is responsible for their integrity and objectivity. These accounting
policies conform to generally accepted accounting policies and have been
consistently applied in the preparation of the financial statements.
Description of Developmental Stage Activities:
The Company, located in Covina, California, has been in the
developmental stage since its formation on June 15, 2001. The Company
has been devoting substantial efforts to establishing a new business.
During the development stages, for a short period of time, the Company
was engaged in the business of purchase and sale of jewelry to
wholesalers as well as to direct customers to generate revenues.
The Company, which was originally named S & K Overseas, Inc., applied
on November 22, 2002, with the Secretary of State of California, for a
change name to HealtheUniverse, Inc. HealtheUniverse, Inc. is engaged
in the business of consulting for healthcare institutions with services
of performance enhancement, turnaround management, merger, acquisition,
consolidation and integration services. Their client profile includes
companies engaged in medical related businesses, hospital systems,
academic medical centers, freestanding hospitals and physician groups.
As a result of its continued efforts, the Company has been successful
in obtaining a few contracts with some major companies in the health
care industry. These contracts have been explained in detail in notes
to the financial statements under Note 6 - Subsequent Events.
Basis for Assigning Amounts to Equity Securities Issued Other Than Cash:
Shares of common stock issued for other than cash have been assigned
amounts equivalent to the par value of the common stock. Receivable
from Stockholders of $10,000, were netted out from Payable to
Stockholders (Note 2).
Revenue and Cost Recognition:
Revenue is recognized when the jewelry was delivered and accepted by
the customer.
Property and Equipment:
Property and Equipment consisting of furniture, fixture and equipment
are carried at cost. Depreciation is computed based on the
straight-line method over their useful lives. When assets are retired
or otherwise disposed of, the cost and the related accumulated
depreciation is removed from the accounts and the resulting gain or
loss on disposal is reflected in the financial statements. Expenditures
for major renewals and betterments that extend the useful life of the
property and equipment are capitalized. Expenditures for minor repairs
and maintenance are charged as incurred.
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Property and equipment consist of the following at March 31,
2003:
Accumulated
Cost Depreciation Net
Office equipment $429 $146 $283
5. Reverse Acquisition
On February 14, 2003 the Company (a Delaware corporation,
formerly Rexadon Corporation) acquired all of the common stock
of HealtheUniverse, Inc., a California corporation, in exchange
for 7,000,000 newly issued shares of common stock. The
transaction was accounted for as a reverse acquisition, with
the California corporation deemed as the accounting acquiror.
The accrued liabilities of the Delaware corporation were paid
or forgiven in the transaction.
NOTE 2: RECEIVABLES AND PAYABLES TO AND FROM STOCKHOLDERS
Receivables from stockholders are composed of notes from stockholders which are
due and payable on demand. The notes are in exchange for 200,000 shares of
common stock at $0.05 per share, stock certificates of which were issued on
December 31, 2002. Interest is computed at 3% per annum. No interest income is
reported through March 31, 2003.
Payable to stockholders are composed of loans from stockholders for funds
received and used for operation. Interest expense on these loans is $85 and $58
for the three months ending March 31, 2003 and 2002, respectively.
Receivable from stockholders of $10,000 were netted out from payable to
stockholders of $21,370 resulting in a net payable to stockholders of $11,370 as
of December 31, 2002 and March 31, 2003.
NOTE 3: RELATED PARTY TRANSACTION
In the years 2001 through 2002, the Company was operating in the residence of
one of the stockholders. The Company was not paying rent for the office use of
this home. As of January, 2003, the Company transferred to a new office location
in Covina, California.
NOTE 4: LEASE COMMITMENTS
In January, 2003, the Company entered into a new office lease agreement as a
sub-lessor from one of the stockholders. The lease is on a month to month basis.
The Company does not have any future lease commitment relating to this office
lease.
NOTE 5: INCOME TAX PROVISION AND LIABILITY
The Company has elected to be taxed under the provision of Subchapter S of the
Internal Revenue Service. Under these provisions, the Company does not pay
federal corporate income taxes on its taxable income. In lieu of corporate
income tax, the shareholders are taxed on the Company's taxable income.
Therefore, no
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provision or liability for federal income tax has been included in the financial
statements. The California corporation tax amounted to $800 for each year ended
December 31, 2002 and 2001. This election was revoked in January 2003.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
We have never received revenues from operations. Until we receive
funding from outside sources, such as debt or equity financing, we are seeking
$300,000 in initial funding to finance the first 12 months of our business plan
as follows:
Marketing $100,000
General and Administration $200,000
Marketing expenses will be comprised of printing of marketing materials
and payment of 2 persons to make initial contact with potential customers. We
expect to purchase databases of health care providers. However, we do not
anticipate marketing through direct mail or tele-marketing. We believe that the
selection of the 2 marketing assistants is very important as the position
requires sales ability with some technical background.
General and administrative costs includes salaries estimated at an
aggregate of $12,000 per month for 12 months, lease expense, telephone and
travel expense. Until the desired-for funding is received, we will work on
obtaining consulting agreements. Pending funding management will defer payment
of salaries and will fund business expenses from their own personal resources.
The out of pocket costs pending funding are estimated at $5,000 per month.
We do not have any agreements or understandings with respect to sources
of capital. We have not identified any potential sources. It's likely that we
will not be able to raise the entire amount required initially, in which case
our development time will be extended until such full amount can be obtained.
Even if we are successful in obtaining the required funding, we probably will
need to raise additional funds at the end of 12 months.
Information included in this report includes forward looking
statements, which can be identified by the use of forward-looking terminology
such as may, will, expect, anticipate, believe, estimate, or continue, or the
negative thereof or other variations thereon or comparable terminology. The
statements in "Risk Factors" and other statements and disclaimers in this report
constitute cautionary statements identifying important factors, including risks
and uncertainties, relating to the forward-looking statements that could cause
actual results to differ materially from those reflected in the forward-looking
statements.
Since we have not yet generated any revenues, we are a development
stage company as that term is defined in paragraphs 8 and 9 of SFAS No. 7. Our
activities to date have been limited to seeking capital; seeking supply
contracts and development of a business plan. Our auditors have included an
explanatory paragraph in their report on our financial statements, relating to
the uncertainty of our business as a going concern, due to our lack of operating
history or current revenues, its nature as a start up business, management's
limited experience and limited funds. We do not believe that conventional
financing, such as bank loans, is available to us due to these factors. We have
no bank line of credit available to us. Management believes that it will be able
to raise the required funds for operations from one or more future offerings,
and to be able to affect our business plan.
Item 3. Controls and Procedures.
(a) Evaluation of disclosure controls and procedures. The Company's
principal executive officer and its principal financial officer, based on their
evaluation of the Company's disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14(c) and 15d -14 (c) as of a date within 90 days prior
to the filing of this Quarterly Report on Form 10Q, have concluded that the
Company's disclosure controls and procedures are adequate and effective for the
purposes set forth in the definition in Exchange Act rules.
(b) Changes in internal controls. There were no significant changes
in the Company's internal controls or in other factors that could significantly
affect the Company's internal controls subsequent to the date of their
evaluation.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS - None
Item 2. CHANGES IN SECURITIES - On February 13, 2003 the registrant
effected a three-for-one forward stock split.
Item 3. DEFAULTS UPON SENIOR SECURITIES - None
-------------------------------
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS - None
Item 5. OTHER INFORMATION - None
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Item 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits--None
Reports on Form 8-K--A Current Report on Form 8-K dated February 14,
2003 was filed to report the acquisition of Healtheuniverse, Inc., a California
corporation, and the transfer of control to the shareholders of the California
corporation. The financial statements of the California corporation were filed
with the Form 8-K.
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SIGNATURES
Pursuant to 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.
HEALTHEUNIVERSE, INC.
Date: May 21, 2003 By:/s/ Sandip Shah
Sandip Shah
Chief Financial Officer
(chief financial officer and
accounting officer and duly
authorized officer)
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CERTIFICATIONS
I, Vipul R. Dev, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
HealtheUniverse, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
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6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 21, 2003
/s/ Vipul R. Dev
President and Chief Executive Officer
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CERTIFICATIONS
I, Sandip Shah, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
HealtheUniverse, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
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6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 21, 2003
/s/ Sandip Shah
Chief Financial Officer
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