UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly report filed under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2002
or [ ] Transitional report filed under Section 13 or 15 (d) of
the Exchange Act.
Commission File No. 0-33153
STARMED GROUP, INC.
------------------------
(Name of Small Business Issuer in its Charter)
Nevada 52-2220728
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification Number
2029 Century Park East, Suite 1112, Los Angeles, Ca. 90067
-----------------------------------------------------------
(Address of principal executive office)
Issuer's telephone number: (310) 226-2555
--------------
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
been subject to such filing requirements for the past ninety (90) days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practical date:
As of March 31, 2002, there were 4,945,384 shares of Common Stock, par
value $.01 per share, outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X
1
TABLE OF CONTENTS PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Consolidated Balance Sheet 3
(b) Consolidated Statement of Operations 4
(c) Consolidated Statement of Cash flows 5
(d) Consolidated Statement of Shareholders' Equity 6
(e) Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults On Senior Securities 13
Item 4. Submission of Items to a Vote 13
Item 5. Other Information 13
Item 6. 13
(a) Exhibits
(b) Reports on Form 8K
SIGNATURES 14
2
STARMED GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2002 AND DECEMBER 31, 2001
March 31, 2002 December 31,
(un-audited) 2001
-------------- --------------
ASSETS
Current assets
Cash $ 170,145 $ 189,349
Inventory 42,160 18,820
-------------- --------------
Total current assets 212,305 208,169
Equipment and furniture
Office furniture and computers 68,363 68,363
Accumulated depreciation 4,883 2,442
-------------- --------------
Total equipment and furniture 63,480 65,921
-------------- --------------
Total assets $ 275,785 $ 274,090
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 1,730 $ 1,780
Current portion of capital lease obligation 12,419 11,934
-------------- --------------
Total current liabilities 14,149 13,714
Long term debt
Note payable with accrued interest due August 23, 2003 414,899 305,205
Capital lease obligation payable monthly through
March 2005 with interest at 12% less current portion 45,964 50,269
-------------- --------------
Total liabilities 475,012 369,188
Shareholders' equity
Common stock (par value $0.01) 50,000,000 shares authorized;
March 31, 2002 and December 31, 2001, 4,945,384 shares
issued and outstanding 49,454 49,454
Paid in capital 55,094 55,094
(Deficit) accumulated during development stage (303,775) (199,646)
-------------- --------------
Total shareholders' equity (199,227) (95,098)
Total liabilities and shareholders' equity $ 275,785 $ 274,090
============== ==============
The accompanying notes are an integral part of these financial statements.
3
STARMED GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
AND TOTAL DEFICIT ACCUMULATED IN DEVELOPMENT STAGE TO
MARCH 31, 2002
(UN-AUDITED)
Total (deficit)
accumulated in
For the For the development
three three stage from
months ended months ended inception
March 31, March 31, January 10, 2000 to
2002 2001 March 31, 2002
------------ ------------ ------------
INCOME:
Revenue from royalty $ 2,274 $ - $ 3,292
EXPENSES:
Compensation 28,930 2,500 142,400
Professional fees 26,235 2,487 52,631
Accounting fees 5,675 - 9,950
Office 11,009 1,050 31,451
Rent 5,997 - 20,747
Insurance 1,839 - 3,368
Advertising 11,710 - 15,203
Travel and entertainment 2,004 - 2,004
Depreciation 2,441 - 4,883
Impairment of goodwill - - 4,698
------------ ------------ ------------
Total expenses 95,840 6,037 287,335
Loss from operations before interest and income taxes
(93,566) (6,037) (284,043)
Interest expense 10,563 - 19,732
------------ ------------ ------------
Loss from operations before income taxes (104,129 (6,037) (303,775)
Income taxes - - -
------------ ------------ ------------
Net loss $ (104,129) $ (6,037) $ (303,775)
============ ============ ============
Net loss per share-basic and diluted $ (0.02) $ (0.00) $ (0.06)
============ ============ ============
Weighted average number of shares outstanding 4,945,384 4,149,342 4,945,384
============ ============ ============
The accompanying notes are an integral part of these financial statements.
4
STARMED GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
AND FROM INCEPTION JANUARY 10 TO MARCH 31, 2002
(UN-AUDITED)
For the For the three From inception
three months months ended January 10, 2000
ended March March 31, to March 31,
31, 2002 2001 2002
------------ ------------ ------------
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) during development stage $ (104,129) $ (6,037) $ (303,775)
Adjustments to reconcile net (loss) to net cash
Depreciation of computers and furniture 2,441 - 4,883
Shares issued for compensation - - 69,000
Impairment loss goodwill - - 4,698
(Increase) decease in operating assets
Inventory (23,340) - (42,160)
Increase (decrease) in operating liabilities
Accounts payable (50) - 1,730
------------ ------------ ------------
Net cash (used in) operating activities (125,078) (6,037) (265,624)
CASH FLOWS FROM INVESTING ACTIVITIES
(Acquisition) of computers and furniture - (253) (68,363)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in loans and interest 109,694 - 414,899
Capitalized lease (3,820) - 58,383
Proceeds from issuance of common stock - - 30,850
------------ ------------ ------------
Net cash provided by financing activities 105,874 - 504,132
------------ ------------ ------------
Net increase in cash in bank (19,204) (6,290) 170,145
Cash in bank as of the beginning of the year 189,349 25,789 -
------------ ------------ ------------
Cash in bank as of the end of the period $ 170,145 $ 19,499 $ 170,145
============ ============ ============
SUPPLEMENTAL INFORMATION ON NON-CASH INVESTING AND
FINANCIAL ACTIVITIES
Stock issued for compensation $ - $ - $ 69,000
Stock issued for acquisition of subsidiary $ - $ - $ 4,698
Payments of interest $ 869 $ - $ 3,964
Payments of income taxes $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
5
STARMED GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FROM INCEPTION JANUARY 10, 2000 TO MARCH 31, 2002
(UN-AUDITED)
Common Stock
--------------------------------------- (Deficit)
Paid in accumulated
Par value capital in
Number of $0.01 per (discount development
shares per share from par) stage
----------- ----------- ----------- -----------
Balance at revival January 10, 2000 4,040,592 $ 40,406 $ (40,406) $ -
Common shares issued for cash October 2000 at
average price per share $0.23 135,000 1,350 29,500
Common shares issued for compensation for
services in October 2000 valued at average
price per share of shares issued for cash $0.23
300,000 3,000 66,000
Net loss (74,060)
----------- ----------- ----------- -----------
Balance at December 31, 2000 4,475,592 44,756 55,094 (74,060)
Acquisition July 27, 2001 of all of the 469,792
shares (par value $0.01) outstanding of Sierra
Medicinal, Inc. for 469,792 shares of the Company
Sierra had no assets and no liabilities. The fair
market value of net assets acquired was zero. The
fair market value of the shares issued is not
determinable since there is no market for the
Company's stock. The Company has used the common
stock par value $0.01 to value the acquisition
469,792 4,698
Net loss (125,586)
----------- ----------- ----------- -----------
Balance at December 31, 2001 4,945,384 (49,454) 55,094 (199,646)
Net loss (104,129)
----------- ----------- ----------- -----------
Balance at March 31, 2002 4,945,384 $ (49,454) $ 55,094 $ (303,775)
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
6
STARMED GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
(UN-AUDITED)
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was first incorporated on November 3, 1961 under the name of
Riverside Homes, Inc. in North Carolina. On December 18, 1969 the Company's
Articles of Incorporation were amended to change the name of the Company to Port
Star Industries, Inc. In February, 1972, the Company had to sell all of its
assets to pay existing debts. The Company became inactive until August 3, 1981
when its domicile was changed to Nevada from North Carolina. On March 20, 1984
the Company's shareholders voted to acquire a company called Energy Dynamics,
Inc. and to change its name to Energy Dynamics, Inc. On March 20, 1985 this
proposed acquisition was rescinded because of non-performance and the Company
changed its name to Heathercliff Group Inc. The Company became inactive for
several years. Heathercliff Group, Inc. was in real estate development, and
Herman Rappaport, either directly or through his family trust, was a majority
shareholder of that company.
On January 10, 2000, the Company was revived and received its Certificate of
Revival from the State of Nevada on Jan. 24, 2001. At the time of its revival
the Company had no assets and no liabilities. It had 4,040,592 shares of $0.01
par value stock issued and outstanding.
On October 2, 2000, the Company changed its name to Starmed Group, Inc.
On July 27, 2001 the Company acquired all of the 469,792 par value $0.01 shares
of Sierra Medicinals, Inc.(Sierra), an Arizona corporation, incorporated March
2, 2000 in an exchange of shares on a one for one basis. The Company issued
469,792 par value $0.01 shares.
Sierra plans to develop, manufacture and sell herbal health products.
The Company has been in the development stage since it's revival January 10,
2000 and the acquired subsidiary Sierra is also in the development stage.
The accompanying financial statements, which have been prepared in conformity
with accounting principles generally accepted in the United States of America,
contemplates the continuation of the Company as a going concern. However, the
Company has been in the development stage since its inception (January 10,
2000), sustained significant losses and has used capital raised through the
issuance of stock and loans to fund activities. Continuation of the Company as a
going concern is contingent upon establishing and achieving profitable
operations. Such operations will require management to secure additional
financing for the Company in the form of debt or equity.
Management believes that actions currently being taken to revise the Company's
funding requirements will allow the Company to continue its development stage
operations. However, there is no assurance that the necessary funds will be
realized by securing debt or through stock offerings.
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of Starmed Group, Inc. (the Company) as of March 31,
2002 and for the three months ended March 31, 2002 and 2001 and from inception
(January 10, 2000) through March 31, 2002, and related footnote information are
un-audited. All adjustments (consisting only of normal recurring adjustments)
have been made which, in the opinion of management, are necessary for a fair
presentation. Results of operations for the three months ended March 31, 2002
and 2001 and from inception (January 10, 2000) through March 31, 2002 are not
necessarily indicative of the results that may be expected for any future
period. The balance sheet at December 31, 2001 was derived from audited
financial statements. These financial statements should be read in conjunction
with the audited financial statements and notes for the period from inception
(January 10, 2000) to December 31, 2001.
7
USE OF ESTIMATES
The preparation of financial statements in accordance 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, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
INVENTORY
The Company contracts a third party to process and package its formulated herbal
products. The Company accounts for its inventory of finished goods on a
first-in, first-out basis or market, if it should be lower.
INCOME TAXES
Deferred income taxes are reported using the liability method. Deferred tax
assets are recognized for deductible temporary differences and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
OFFICE FURNITURE AND COMPUTERS
Property and equipment is stated at cost and depreciated using the straight-line
method over the estimated useful life of the assets, which was seven years. The
Company has acquired its computers under a capital lease.
NET LOSS PER SHARE
In February 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 128 "Earnings Per Share" which requires the Company to present basic and
diluted earnings per share, for all periods presented. The computation of loss
per common share (basic and diluted) is based on the weighted average number of
shares actually outstanding during the period. The Company has no common stock
equivalents, which would dilute earnings per share.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 2001, the FASB issued SFSA No. 141, "Business Combinations", and SFAS
No. 142, "Goodwill and Other Intangible Assets". Under these new standards, all
acquisitions subsequent to June 30, 2001 must be accounted for under the
purchase method of accounting, and purchased goodwill is no longer amortized
over its useful life. Rather, goodwill will be subject to a periodic impairment
test based upon it fair value.
In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS 143). SFAS 143 establishes accounting standards for
recognition and measurement of a liability for the costs of asset retirement
obligations. Under SFAS 143, the costs of retiring an asset will be recorded as
a liability when the retirement obligation arises, and will be amortized to
expense over the life of the assets.
In October 2001, the FASB issued SFAS No, 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" (SFAS 144"). SFAS 144 addresses financial
accounting reporting for the impairment or disposal of long-lived assets and
discontinued operations.
These pronouncements have no impact on the financial position and results of
operations of the Company. The Company has adopted these standards
8
3. RELATED PARTY TRANSACTIONS
During the year 2000 and until the Sierra acquisition on July 27, 2001, the
Company's office was furnished by a stockholder at no cost to the Company. Since
there was very minimal activity no value has been recorded for this service.
4. LEASES
The Company leases it offices on a month-to-month basis for $2,950 per month.
5. CAPITAL STOCK
On January 10, 2000, the Company was revived and received its Certificate of
Revival from the State of Nevada on Jan. 24, 2001. At the time of its revival
the Company had no assets and no liabilities. It had 4,040,592 shares of $0.01
par value stock issued and outstanding. The Company valued it 4,040,592 shares
of outstanding stock at its par value $0.01 per share $40,406 and immediately
recorded a discount from par value of $40,406 in accordance with generally
accepted accounting principles.
In October 2000 the Company issued 135,000 shares for cash at $0.23 per share
and issued 300,000 shares as compensation for services. The Company valued the
services at the same value as shares issued for cash, $0.23 per share.
On July 27, 2001 the Company acquired all of the 469,792 par value $0.01 shares
of Sierra Medicinals, Inc. (Sierra), an Arizona corporation, incorporated March
2, 2000 in an exchange of shares on a one for one basis.
Sierra issued 469,792 shares of $0.01 par value stock for services in connection
with its formation on March 2, 2000. Sierra had no further activity until it was
acquired by the Company on July 27, 2001. The Company issued 469,792 shares to
acquire all of the outstanding shares of Sierra. Sierra had no assets and no
liabilities. The fair market value of net assets acquired was zero. The fair
market value of the shares issued is not determinable since there is no market
for the Company's stock. The Company has used the common stock par value $0.01
to value the acquisition, $4,698, and recorded goodwill for that same amount.
In accordance with SFAS 121, "Accounting for the Impairment of Long-lived Assets
and for Long-lived Assets to be Disposed of", the Company reviewed goodwill and
determined that the carrying amount of the asset may not be recoverable and
charged $4,698 to impairment loss in the year ended December 31, 2001
6. INCOME TAXES
The components of the deferred tax asset is as follows:
December 31, December 31,
2001 2001
------------ ------------
Deferred tax assets:
Net operating loss carry-forward $ (90,460) $ (50,165)
Valuation allowance $ 90,460 $ 50,165
------------ ------------
Net deferred tax assets $ - $ -
============ ============
The Company had available approximately $227,000 and $126,000 of unused
Federal and state net operating loss carry-forwards at March 31, 2002 and
December 31, 2001 respectively, that may be applied against future taxable
income. These net operating loss carry-forwards expire for Federal purposes in
2022. There is no assurance that the Company will realize the benefit of the net
operating loss carry-forwards.
SFAS No. 109 requires a valuation allowance to be recorded when it is more
likely than not that some or all of the deferred tax assets will not be
realized. At March 31, 2002 and December 31, 2001 valuations for the full amount
of the net deferred tax asset were established due to the uncertainties as to
the amount of the taxable income that would be generated in future years.
9
Reconciliation of the differences between the statutory tax rate and the
effective income tax rate is as follows:
March 31, December 31,
2002 2001
------------ ------------
Statutory federal tax (benefit) rate (34.0)% (34.0)%
Statutory state tax (benefit) rate (5.83)% (5.83)%
------------ ------------
Effective tax rate (39.83)% (39.83)%
Valuation allowance 39.83% 39.83%
------------ ------------
Effective income tax rate 0.00% 0.00%
============ ============
7. LONG TERM DEBT
NOTE PAYABLE
The Company has borrowed $400,000 from a venture capital firm Citadel Capital
Management Group, (Nevada corporation), to fund its working capital. The Company
shall have the right but not obligation to borrow from Citadel, up to $600,000
at the interest rate of 10% per annum on all advances made, from and after the
date of each advance, and shall mature on August 31, 2003 at which time the
outstanding principal and accrued but unpaid interest shall be due and payable.
Citadel shall have the right at any time as long as the note is outstanding to
convert all or any part of the outstanding principal balance of the note, and
all accrued but unpaid interest, into shares of Common Stock of the Company on
the following terms and conditions. If Citadel elects to convert less than the
entire principal balance of the note into equity, or in the event that the
entire principal balance of the note is less than $600,000, then the number of
shares of Common Stock of the Company to which Citadel shall be entitled, shall
equal the product of 10% of the outstanding shares of Common Stock, the
numerator of which shall be the principal balance of the note which Citadel
intend to convert from debt to equity, and the denominator of which shall be
$600,000.
At March 31, 2002 Citadel has the right to convert $414,899 into 347,769 shares
($0.82 per share).
CAPITAL LEASE
The Company has a five-year lease on computers. The monthly payment is $1,563
per month. The Company will acquire the computers for $1 at the end of the
lease. The Company has calculated the present value of the computers assuming a
12% interest rate as $65,875 and has capitalized that value for depreciation.
The balance of the capital lease obligation was $58,383 and $62,203 at March 31
2002 and December 31, 2001 respectively, of which $12,419 was current at March
31, 2002.
10
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS PRELIMINARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Plan of Operation of this Quarterly Report on Form
10-QSB include "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 as amended (the "Securities Act") and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which could cause the actual results of the Company (sometimes
referred to as "we", "us" or the "Company"), performance (financial or
operating) or achievements expressed or implied by such forward-looking
statements not to occur or be realized. Such forward-looking statements
generally are based upon the Company's best estimates of future results, general
merger and acquisition activity in the marketplace, performance or achievement,
based upon current conditions and the most recent results of operations.
Forward-looking statements may be identified by the use of forward-looking
terminology such as "may," "will," "project," "expect," "believe," "estimate,"
"anticipate," "intends," "continue", "potential," "opportunity" or similar
terms, variations of those terms or the negative of those terms or other
variations of those terms or comparable words or expressions. (See the Company's
Form 10SB for a description of certain of the known risks and uncertainties of
the Company.)
Overview of the Company's Business
- ----------------------------------
StarMed Group, Inc., a Nevada corporation, referred herein to as "we",
"StarMed Group" or the "Company", is a holding company of Sierra Medicinals,
Inc., an Arizona corporation, and our wholly-owned subsidiary ("Sierra
Medicinals"). StarMed Group, through Sierra Medicinals is engaged in the
development and marketing of natural alternative medicinals. The Company was
first incorporated on November 3, 1961 under the name of Riverside Homes, Inc.
in North Carolina. On December 18, 1969 the Company's Articles of Incorporation
were amended to change the name of the Company to Port Star Industries, Inc. In
February, 1972, the Company had to sell all of its assets to pay existing debts.
The Company became inactive until August 3, 1981 when its domicile was changed
to Nevada from North Carolina.
On March 20, 1984 the Company's shareholders voted to acquire a company
called Energy Dynamics, Inc. and to change its name to Energy Dynamics, Inc. On
March 20, 1985 this proposed acquisition was rescinded because of
non-performance and the Company changed its name to Heathercliff Group Inc. The
Company became inactive for several years. Heathercliff Group, Inc. was in real
estate development, and Herman Rappaport, either directly or through his family
trust, was a majority shareholder of that company.
On January 10, 2000, the Company was revived and its name was changed
to StarMed Group, Inc. At the time of its revival, the Company had no assets and
no liabilities. Mr. Rappaport was a majority shareholder of StarMed Group, Inc.
(either directly or through his family trust)
On July 27, 2001, the Company acquired Sierra Medicinals, Inc., an
Arizona corporation incorporated in March, 2000, in an share exchange of a total
of 469,792 shares, on a one for one basis. The number of shares outstanding of
StarMed Group, Inc. is 4,945,384 as of December 31, 2001. Following the merger,
the Company has a wholly-owned subsidiary of Sierra Medicinals, Inc., an Arizona
corporation. Mr. Rappaport, either directly or through his family trust, was a
majority shareholder of Sierra Medicinals, Inc.
We continue our operations through Sierra Medicinals, Inc. because of
the market recognition of the Sierra Medicinal label and the SierraMed website,
as well as the marketing of its existing nutraceuticals e.g. Sight D, Sight W,
Colon IB, JT Penetrating Cream, and others.
On August 23, 2001, the venture capital company, Citadel Capital
Management Company, agreed to provide funding in the amount of $600,000 as a
two-year loan to StarMed Group's subsidiary, Sierra Medicinals, convertible to
10% of the common stock of the Company and guaranteed by the Company. As of
March 31, 2002, the Company had borrowed $400,000.
11
Plan of Operations
- ------------------
The Company's initial products include two products to help maintain
eyesight, four products to assist those suffering from arthritis, and two
products for colon distress. The Company's physicians recognize that each
patient is unique and, therefore, they have formulated several levels of
nutritionals for different levels of need. Our plan is to market two eyesight
products first, followed by four products for varying degrees of arthritic
problems, and then its two colon nutritionals.
The Company recognizes the need for product education not only to the
public, but also to doctors who are not trained in alternative medicine. The
Company, therefore, has as one of its primary efforts, the preparation of
educational material, including research data to support its products.
The Company has engaged the services of two medical authors to write
two books on illnesses of that effect the general public, especially the
elderly. The Company plans to produce and market the products that help
alleviate the problems discussed in the books
We anticipate marketing of Company products to start by mid-May , 2002.
Marketing will be undertaken by a major marketing company CPNM/IMC on a
non-exclusive basis. Sierra Medicinals will also market its products on the
Internet and other direct marketing channels. The Company does not anticipate
requiring additional capital but only if opportunities to expand exports
materialize. This is not expected to occur during the next 12 months.
For the three months period ending March 31, 2002, the Company's
expenditures were $95,840 (un-audited), which are not comparable to the three
month ended March 31, 2001 of $6,037 (un-audited) as the Company did not start
up operations until August of 2001. The Company will be expending more for
advertising and travel in the coming periods as sales and marketing become more
extensive.
The net loss for the three months period ending March 31, 2002 was
$104,129 (un-audited) compared to the net loss from the first three months ended
March 31, 2001 of $6,037 (un-audited) that included an increase in payment of
professional fees and general and administrative expenses. Currently there are
no signed contracts that will produce revenue and there can be no assurances
that management will be successful in negotiating such contracts.
12
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS- NONE
ITEM 2 - CHANGES IN SECURITIES- 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 FORM 8-K
(a) Exhibits. None
(b) Reports on Form 8-K. Forms 8-K AND Form 8-K/A were filed during the quarter
ended March 31, 2002 with respect to Item 4. Change in the Registrant's
Certifying Accountant.
13
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
STARMED GROUP, INC.
/s/ Herman Rappaport May 14, 2002
--------------------------
By: Herman Rappaport, President
14