SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ACT OF 1934 For the quarterly period ended February 28, 2005. [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 000-12561 MEDITECH PHARMACEUTICALS, INC. ---------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NEVADA 95-3819300 - --------------- ------------------- (STATE OR OTHER (I.R.S.EMPLOYER JURISDICTION OF IDENTIFICATION NO.) ORGANIZATION) 2591 Dallas Parkway, Suite 102 Frisco, TX 75034 ------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (469) 633-0100 -------------------------------------------------- (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON STOCK, $ .001 PAR VALUE 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. YES X NO ----- ----- ON FEBRUARY 28, 2005, THERE WERE 2,156,855 SHARES OF THE ISSUER'S COMMON STOCK OUTSTANDING. TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): YES NO X ----- ----- DOCUMENTS INCORPORATED BY REFERENCE NONE. INDEX Part I. Financial Information Item 1. Financial Statements Balance Sheets at February 28, 2005 (Unaudited) and May 31, 2004 F-1 Statements of Operations for the three months ended February 28, 2005 and 2004 (Unaudited) F-2 Consolidated Statements of Cash Flows for the three months ended February 28, 2005 and 2004 (Unaudited) F-3 Notes to Financial Statements F-4-F-9 Item 2. Management's Discussion and Analysis or Plan of Operation Item 3. Control and Procedures Item 4. Other Information MEDITECH PHARMACEUTICALS, INC (Development Stage Companies) CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - -------------------------------------------------------------------------------- ASSETS February 28, 2005 May 31, 2004 ----------------- ----------------- Current assets: Cash and cash equivalents $ -- $ 58,964 Other current assets -- -- ----------------- ----------------- Total current assets -- 58,964 ----------------- ----------------- Property and equipment Property and equipment -- 5,366 Less: Accumulated depreciation -- (4,508) ----------------- ----------------- Total property and equipment, net -- 858 ----------------- ----------------- Other assets -- 7,448 ----------------- ----------------- TOTAL ASSETS -- 67,270 ================= ================= LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts Payable and accrued expenses $ -- $ 257,893 Accrued compensation -- 3,493,187 Advances from affilitates -- 4,509,346 ----------------- ----------------- Total current liabilities -- 8,260,426 ----------------- ----------------- Minority interest in consolidated subsidiary -- 191,300 ----------------- ----------------- Commitments and contigencies Stockholders' deficit: Preferred stock, $0.001 par value; 25,000,000 shares authorized; no shares issued and outstanding -- -- Common stock, $0.001 par value; 400,000,000 shares authorized; 2,156,855 shares issued and outstanding 380,697 198,672 Subscription receivable -- (165,000) Additional paid-in-capital 12,591,186 8,963,610 Deficit accumulated during development stage (12,971,883) (17,381,738) ----------------- ----------------- Total stockholders' deficit -- (8,384,456) ----------------- ----------------- Total liabilities and stockholders' deficit $ -- $ 67,270 ================= ================= F-1 MEDITECH PHARMACEUTICALS, INC (Development Stage Companies) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - -------------------------------------------------------------------------------- For the Three For the period Months Ended May 14, 1982 February 28, (Date of inception) 2005 February 28, 2005 ------------------- ------------------- Revenue $ -- $ 152,132 ------------------- ------------------- Operating expenses Research and development -- 1,899,450 General and administrative 34,424 14,121,194 General -- 325,400 ------------------- ------------------- Total operating expenses 34,424 16,346,044 ------------------- ------------------- Loss before other income (expense) (34,424) (16,193,912) ------------------- ------------------- Other income (expense) Interest expense -- (3,439,382) Interest income 23 305,944 Other income -net -- 81,612 Gain on write-down of accounts payable -- 1,405,232 ------------------- ------------------- Total other income (expense) 23 (1,646,594) ------------------- ------------------- Loss before minority interes in losses of subsidiary (34,401) (17,840,506) Minority interest in losses of subsidiary -- 329,800 ------------------- ------------------- Net (loss) income $ (34,401) $ (17,510,706) =================== =================== Net (loss) income available to common stockholders; per common share: (0.034) =================== Net (loss) income per common share - basic and diluted (0.034) =================== Weigted average shares oustanding: Basic 1,024,271 =================== Diluted 1,024,271 =================== F-2 MEDITECH PHARMACEUTICALS, INC (Development Stage Companies) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - -------------------------------------------------------------------------------- For the Three For the period Months Ended May 14, 1982 February 28, (Date of inception) 2005 February 28, 2005 ------------------- ------------------- Cash flows from operating activities: Net loss $ (34,401) $ (17,510,724) Adjustment to reconcile net (loss) income to net cash used in operating activities: Depreciation and amortization 212 142,228 Warrants and options issued to employees, vendors and consultants (6,045) 877,455 Minority interest in losses of subsidiary (191,300) (329,800) Stock issued to employees, vendors and consultants 26,500 1,708,800 Contributed services -- 463,050 Accrued interest on advances from affiliates -- 3,439,346 Gain on write-down of accounts payable (99,530) (1,504,762) Changes in operating assets and liabilities: Other receivables -- (2,545) Trademark 166 (23) Other assets -- (9,365) Accounts payable and acrrued expenses (237,516) 1,325,057 Accrued compensation (3,448,751) 102,352 ------------------- ------------------- Net cash used in operating activities (3,990,665) (11,298,931) Write off of Assets and Liabilities 4,538,823 4,538,823 Cash flows used in investing activities Purchases of furniture and equipment 5,366 (135,600) Cash flows from financing activities Proceeds from advances from affiliates, net -- 2,280,800 Proceeds from notes payable 155,000 236,000 Proceeds from sale of stock and exercise options, net -- 5,384,568 Cost incurred to register securities (726,247) (788,583) Principal payments on advances from stockholder -- (43,500) ------------------- ------------------- Net cash provided by financing activities (571,247) 7,069,285 ------------------- ------------------- Net change in cash and cash equivalent (17,723) 173,577 Cash and cash equivalent, beginning of period 17,723 17,723 ------------------- ------------------- Cash and cash equivalent, end of period $ -- $ -- =================== =================== Supplemental disclosure of cash and cash flow information: Cash paid during the period for: Interest $ -- $ -- =================== =================== Noncash financing transactions: Conversion of debt to equity Conversion of restricted common stock $ 1,500,000 Additional paid-in capital 918,304 ------------------- Total advances converted to equity $ 2,418,304 =================== F-3 MEDITECH PHARMACEUTICALS, INC AND SUBSIDIARY (Development Stage Companies) NOTES TO FINANCIAL STATEMENTS February 28, 2005 (Unaudited) - -------------------------------------------------------------------------------- NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business activity (Company and Subsidiaries) Meditech Pharmaceuticals, Inc. ("Meditech") is a drug development company, which is focused in the areas of research, development, and marketing in the biomedical industry, with an emphasis on anti-infective drugs. Meditech was incorporated in Nevada on March 21, 1983. Since then, it has been engaged in research and development activities associated with bringing its products to market. Development Stage Enterprise The Company is a development stage company as defined in Statement of Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by Development Stage Enterprises." The Company is devoting substantially all of its present efforts to establish a new business, and its planned principal operations have not yet commenced. The Company has not generated significant revenues from operations and has no assurance of any future revenues. All losses accumulated since inception have been considered as part of the Company's development stage activities. The Company will require substantial additional funding for commercialization of its products. There is no assurance that the Company will be able to obtain sufficient additional funds when needed, or that such funds will be obtainable on terms satisfactory to the Company. The Company's products, to the extent that they may be deemed medical devices or biologics, are governed by the Federal Food, Drug and Cosmetics Act and by the regulations of state agencies and various foreign government agencies. There can be no assurance that the Company will maintain or obtain the regulatory approvals required to market its products. Basis of Presentation The accompanying financial statements have been prepared by Meditech pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of managements, necessary to fairly represent the operating results for the respective periods. Certain information and footnote disclosures normally present in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The results of the three months ended February 28, 2005 are not necessarily indicative of the results to be expected for the full year ending May 31, 2005. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Cash and Cash Equivalents The company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. F-4 MEDITECH PHARMACEUTICALS, INC AND SUBSIDIARY (Development Stage Companies) NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2005 (Unaudited) - -------------------------------------------------------------------------------- Revenue Revenue represents license fees that are recognized when earned over the period of the applicable license agreement. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net cash flows expected to be generated by the assets. If the assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Based on its analysis, the Company believes that no impairment of the carrying value on its long-lived assets exists at February 28, 2005. There can be no assurance, however, that market conditions will not change which could result in impairment on long-lived assets in the future. Stock-Based Compensation The Company accounts for non-employee stock-based compensation under Statement of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation." SFAS 123 defines a fair value based method of accounting for stock-based compensation. However, SFAS 123 allows an entity to continue to measure compensation cost related to stock and stock options issued to employees using the intrinsic method of accounting prescribed by Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees." Under APB 25, compensation cost, if any, is recognized over the respective vesting period based on the difference, on the date of grant, between the fair value of the Company's common stock and the grant price. Entities electing to remain with the accounting method of APB 25 must make pro forma disclosures of net income (loss) and earnings per share, as if the fair value method of accounting defined in SFAS 123 had been applied. The Company has elected to account for its stock-based compensation to employees under APB 25. For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the option vesting period. Adjustments are made for options forfeited prior to vesting. The effect on compensation expense and net (loss) income had compensation cost for the Company's stock option issues been determined based on fair value on the date of grant consistent with the provisions of SFAS 123 is as follows for the years ended May 31: 2004 2003 --------- --------- Net (loss) income, as reported (612,896) (612,896) Additional compensation expense under SFAS 123 -- -- --------- --------- Pro forma net (loss) income $(612,896) (612,896) ========= ========= Pro forma net (loss) income per share $ -- $ -- ========= ========= Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax F-5 MEDITECH PHARMACEUTICALS, INC AND SUBSIDIARY (Development Stage Companies) NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2005 (Unaudited) - -------------------------------------------------------------------------------- rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is provided for significant deferred tax assets when it is more likely than not those assets will not be recovered. Loss Per Share Basic loss per share is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. For the three months ended February 28, 2005 and 2004, the Company incurred net losses; therefore, potential common shares are ignored as their effect would be anti-dilutive. Comprehensive Income Comprehensive income is not presented in the Company's consolidated financial statements since the Company did not have any items of comprehensive income in any period presented. Segments of an Enterprise and Related Information As the Company operates in one segment, the Company has not made segment disclosures in the accompanying consolidated financial statements. New Accounting Standard In April 2002, the Financial Accounting Standards Board (FASB) issued the Statement of Financial Accounting Standards (SFAS) No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement 13, and Technical Corrections. SFAS No. 145 permits the recognition of an extraordinary gain or loss from extinguishments only when it meets the criteria of Accounting Principles Board (APB) Opinion No. 30. APB No. 30 states that extraordinary items are events and transactions that are distinguishable by both their unusual nature and by the frequency of their occurrence. This provision of SFAS No. 145 is effective for fiscal years beginning after May 15, 2002, with earlier application encouraged. Any extraordinary gain or loss from the extinguishments of debt in prior periods presented that do not meet conditions of APB No. 30 must be reclassified. Upon adoption of SFAS No.145 in 2002, the Company reclassified the extraordinary gain on loan forgiveness in 2001 as a separate component of other income and presented as a component of continuing operations. On April 30, 2003, the FASB issued a Financial Interpretation No. 45, "Disclosure Requirements Mandate Fair Value at Inception." FIN 45 states that "a guarantor is required to recognize, at the inception of a guarantee, a liability for the obligations it has undertaken in issuing the guarantee, including its ongoing obligations to stand ready to perform over the term of the guarantee of the event that the specified triggering events or conditions occur. The objective of the initial measurement of that liability is the fair value of the guarantee at its inception." FIN 45 covers guarantee contracts such as financial and market value guarantees, performance guarantees, and indirect guarantees of the indebtedness of others. As of November 30, 2004, the Company does not have any guarantee contracts affected by this interpretation. In April 2003, the FASB issued SFAS No.149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities," ("SFAS No. 149"), which amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under SFAS No. 133. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003 except for the provisions that were cleared by the FASB in prior pronouncements. As of November 30, 2004, the Company does not have any contracts affected by this interpretation. On May 31, 2003 the FASB issued Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics F-6 MEDITECH PHARMACEUTICALS, INC AND SUBSIDIARY (Development Stage Companies) NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2005 (Unaudited) - -------------------------------------------------------------------------------- of Both Liabilities and Equity." This statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. Some of the provisions of this Statement are consistent with the current definition of liabilities in FASB Concepts Statement No. 6, Elements of Financial Statements. The remaining provisions of this statement are consistent with the Board's proposal to revise that definition to encompass certain obligations that a reporting entity can or must settle by issuing its own equity shares, depending on the nature of the relationship established between the holder and the issuer. Application of the provisions of SFAS 150 is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS No. 150 did not have a material impact on the Company's financial position or results of operations. Reclassifications Certain reclassifications have been made to prior year amounts in the consolidated financial statements in order to conform to the current year presentation. These reclassifications have no effect on previously reported results of operations. NOTE B - COMMITMENTS AND CONTINGENCIES Leases Currently, the Company uses its operating facilities provided by its Chief Executive Officer, without a license agreement. During the six months ended February 28, 2005, and the year ended May 31, 2004, the Company incurred approximately $4,500 and $18,000, respectively, of rent expense related to this lease. There is no guarantee the officer will be willing to provide these facilities in the future. Employment Agreements There are no employment agreements in effect as of February 28, 2005. Litigation The Company may become involved in various legal proceedings and claims which arise in the ordinary course of its business. Management does not believe that these matters will have a material adverse effect on the Company's consolidated financial position or results of operations. License Agreement On February 3, 2000, the Company received $25,000 from Immune Network Research, Ltd. ("INR"), a Canadian pharmaceutical development company, under a letter of intent. The payment was made for a one-year irrevocable option granting INR the right to negotiate for an exclusive license for pharmaceutical applications worldwide outside of the United States. The Company then received an additional $100,000 from INR in anticipation of a definitive agreement. Under the terms of the letter, if an agreement is reached, the Company will issue an option to INR for up to 10,000,000 shares of common stock, exercisable at $0.03 per share. In return, the Company will receive royalties equal to 7% of net sales for all MTCH-24 (TM) products sold and 4% of net sales for all Viraplex (R) products sold by INR. The option was valued at $400,000 using the Black-Scholes option-pricing model, which was recorded as an operating expense on the date granted. On May 25, 2001, the Company and INR entered into a definitive licensing agreement, which terminated the letter of intent. Under this licensing agreement the Company assigned its rights and interests in two applications of its proprietary products. In consideration of the assignment, INR agreed to pay a royalty equal to 2% of the gross worldwide sales of each of the products. The term of the royalty is the longer of 10 years or the life of any patent based on the products. The Company has not yet recognized any royalty revenue related to this agreement. F-7 MEDITECH PHARMACEUTICALS, INC AND SUBSIDIARY (Development Stage Companies) NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2005 (Unaudited) - -------------------------------------------------------------------------------- NOTE C - STOCKHOLDERS' DEFICIT During the three months ended February 28, 2005, the Company issued a total of 1,805,000 shares of restricted common stock as follows: 25,000 shares in repayment of a $25,000 note payable; 280,000 shares as stock incentive compensation for $280.00; and 1,500,000 shares for conversion of $2,418,303.90 debt to equity. NOTE D - RELATED PARTY TRANSACTIONS Since inception, the Company has received advances from Petro-Med, Inc., an affiliate, to fund its working capital requirements. At May 31, 2004, the Company maintained short-term advances from affiliates of $4,509,346 which are due on demand. Accrued interest is attributed to and included in the outstanding balance as incurred. The advances bear interest at 9% per annum on any outstanding balance. During fiscal year ended May 31, 2003, both partners agreed to stop accruing interest on these advances. On October 25, 2004, the Company and Petro-Med entered into a debt exchange agreement, thereby, paying in full the advances due to Petro-Med. The Company maintains its primary place of business in facilities owned by the Chief Executive Office, for which it is charged rent expense (see Note B). NOTE E - STOCK SPLIT On January 12, 2005 the Company effected a 1 for 1000 reverse split of its common Stock. NOTE F - SUBSEQUENT EVENT In March 2005, Registrant underwent a change of control when it issued 9,853,740 shares of common stock in exchange for $5,748,015 and the contribution of a Chinese operating company. Details of the transaction and the new company has been set forth in a Form 8K filed by the Company. Registrant's pharmaceutical development business was transferred to its subsidiary East West Distributors, Inc., which will be distributed to the company's shareholders after East West provides disclosure information about the new company. F-8 Item 2. Management's Discussion and Analysis of Financial Condition and --------------------------------------------------------------- Results of Operations --------------------- You should read the following discussion of our financial condition and operations in conjunction with the condensed consolidated financial statements and the related notes included elsewhere in this filing. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Overview We are a drug development company, founded in 1982, focused in the areas of research, development, and marketing in the biomedical industry, with an emphasis on anti-infective drugs. The Company has completed various stages of planning and developing products containing its proprietary drugs Viraplex (R) and MTCH-24(TM). Our development activities since inception (May 4, 1982) have included efforts to secure financing, create a management and business structure, and develop and test Viraplex (R) and MTCH-24(TM) for release as both over-the-counter (OTC) and ethical products. These activities have produced very little in operating revenues. Since we became a public company, our operations have related primarily to securing patents, initiating and continuing clinical tests, recruiting personnel and raising capital. Through May 31, 2003, we have derived our revenues from the sale of a license option to INR to develop and market new patented products. Going Concern Our financial statements for the six months ended February 28, 2005, and the fiscal year ended May 31, 2004 were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the consolidated financial statements, we experienced a loss of $34,401 during the three months ended February 28, 2005, had a cash balance of $0, and an accumulated deficit of $12,971,883 as of February 28, 2005. These factors, among others, raise substantial doubt about our ability to continue as a going concern. We must raise additional funds in order to actively reinstate our research and development efforts, to complete existing product testing which was suspended in 1987, or commence new testing on such products, and to conduct additional testing on our products. We must raise additional capital in order to continue and complete our research and development and testing. Our future success is dependent upon raising additional money to provide for the necessary operations of the Company. If we are unable to obtain such additional financing, there would be a material adverse effect on our business, financial position, and results of operations. Our continuation as a going concern is dependent on our ability to generate sufficient capital to meet our obligations on a timely basis, and to continue and complete our research and development and testing efforts. However, no assurance can be given that additional capital, if needed, will be available when required or upon terms acceptable to the Company. RESULTS OF OPERATIONS FOR THE THREE MONTHS AND SIX MONTHS ENDED FEBRUARY 28, 2005 AND 2004. Revenues There were no revenues for the three months and six months ended February 28, 2005 and 2004. Operating Expenses Our expenses include research and development and general and administrative. Research and development consists of laboratory expenses, consulting expenses, test expenses, and other costs associated with the development of products not yet being marketed. General and administrative expenses include the salaries and benefit costs of management and other non-manufacturing employees, sales and marketing expenses, rent, accounting, legal and operational costs. Personnel compensation and facilities costs represent a high percentage of our operating expenses and are relatively fixed in advance of each quarter. Research and Development Costs There were no research and development costs for the three months and six months ended February 28, 2005 and 2004. General and Administrative Expenses Direct costs were $34,424 for the three months ended February 28, 2005, as compared with $69,426 for the three months ended February 28, 2004. The decrease was primarily due to lower miscellaneous expenses, accounting fees, and accrual of interest charged on accounts payable. Net Loss Net loss was approximately $34,401 for the three months ended February 28, 2005 as compared to $69,422 for the three months ended February 28, 2004. The decrease in the net loss is due primarily to the decrease in general and administrative expenses. LIQUIDITY AND CAPITAL RESOURCES Since inception, we have funded our operations and investments in property and equipment through cash from equity financings and cash from licensing fees. Our cash and cash equivalents were $0 at February 28, 2005. We have incurred recurring operating losses and negative cash flows from operating activities and have negative working capital. We believe that our available equity financing arrangement with Swartz will be sufficient to meet our working capital and capital expenditure requirements for at least the next two years. However, there can be no assurance that we will receive financing from Swartz, that we will not require additional financing within this time frame or that such additional financing, if needed, will be available on terms acceptable to us, if at all. Item 3. Controls and Procedures - -------------------------------- As of the end of the period covered by this Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of its chief executive officer and chief financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13-a-15-e or 15-d-15-e under the Securities Exchange Act of 1934). Based on this evaluation, the Company's chief executive officer and chief financial officer concluded that as of the evaluation date, such disclosure controls and procedures were reasonably designed to ensure that information required to be disclosed by the Company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Item 4. Other Information - -------------------------- Item 1. Legal Proceedings Not applicable. Item 2. Change in Securities During the six months ended February 28, 2005, we issued 1,985,500 shares of restricted common stock. On January 12, 2005 the Company effected a 1 for 1000 share reverse split of its common stock. Item 3. Defaults Upon Senior Securities Not applicable. Item 4. Submission of Matters to a Vote of Security Holders Not applicable. Item 5. Exhibits The following exhibits are included herein: 31.1 Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.1 Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Meditech Pharmaceuticals, Inc. By: /s/ Kevin Halter, Jr. - --------------------------- Kevin Halter, Jr., Director Dated: 04/13/05 ------------ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and/or the class indicated. /s/ Kevin Halter, Jr. Dated: 04/13/05 - --------------------------- Kevin Halter, Jr., Director