UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
For the transition period from to
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Commission file number 000-49915
MT ULTIMATE HEALTHCARE CORP.
----------------------------
(Exact name of small business issuer as specified in its charter)
NEVADA 88-0477056
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
45 Main Street, Suite 617, Brooklyn, New York 11201
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(Address of principal executive offices)
(718) 943-3400
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(Registrant's telephone number)
N/A
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(Former name and address)
Check whether the registrant (1) has 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) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
As of November 19, 2004, 54,032,040 shares of common stock, $.001 par value of
the issuer were outstanding ("Common Stock").
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MT ULTIMATE HEALTHCARE CORP
CONSOLIDATED BALANCE SHEET
Unaudited
A S S E T S
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SEPTEMBER 30, DECEMBER 31,
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Current Assets 2004 2003
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Cash $ - $ 54,758
Accounts Receivable, net of allowance 367,059 197,034
Other Current Assets 316,630 20,172
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Total Current Assets 683,689 271,964
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Property, plant and equipment, net of accumulated depreciation 123,778 131,859
Other Assets 119,006
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Total Assets $ 926,473 $ 403,823
============ ============
L I A B I L I T I E S
----------------------
Current Liabilities
Accounts Payable and accrued liabilities 41,659 59,867
Cash Overdraft 4,723 -
Notes Payable 537,416 -
Current Portion Capital Lease 8,386 7,502
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Total Current Liabilities 592,184 67,369
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Long-Term Liabilities:
Bank Note 100,070 188,697
Note Payable 250,000 -
Capital Leases 5,847 12,252
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Total Long Term Liabilities 355,917 200,949
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Total Liabilities 948,101 268,318
S T O C K H O L D E R S ' E Q U I T Y
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Common Stock 53,160 50,600
Additional Paid-in-Capital 811,242 149,658
Accumulated Deficit (886,030) (64,753)
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Total Stockholders' Equity (21,628) 135,505
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Total Liabilities and Stockholders' Equity $ 926,473 $403,823
============ ============
See accompanying notes to Financial Statements.
MT ULTIMATE HEALTCARE
STATEMENT OF OPERATIONS
UNAUDITED
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
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SEPTEMBER,30 SEPTEMBER,30
2004 2003 2004 2003
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REVENUES:
- --------
Revenues $ 446,452 $ 310,812 $ 1,327,783 $ 752,681
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Total Revenues 446,452 310,812 1,327,783 752,681
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COST OF REVENUES:
- ----------------
Cost of Revenues $ 351,971 $ 236,122 $ 1,016,580 $ 543,758
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Gross Profit $ 94,481 $ 74,690 $ 311,203 $ 208,923
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EXPENSES:
- --------
Salaries & Wages 109,322 22,793 290,391 53,299
Stock Issued For Professional Services 175,000 - 465,000 -
Professional Fees 37,720 16,242 107,643 30,336
Rent 21,918 3,600 65,082 9,600
Depreciation 8,222 5,909 23,502 15,408
Amortization 6,263 6,263
Interest Expense 7,562 8,117 12,756 18,479
Operating Expenses 67,691 31,083 161,843 71,330
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Total Expenses 433,698 87,744 1,132,480 198,452
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Net Income / ( loss ) from Operations (339,217) (13,054) (821,277) 10,471
PROVISION FOR INCOME TAXES:
- --------------------------
Income Tax Benefit - - - -
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Net Income (Loss) $ (339,217) $ (13,054) $ (821,277) $ 10,471
======================================================
Basic & Diluted Earnings Per Common Share $ (0.01) $ (0.00) $ (0.01) $ 0.00
------------ ------------ ------------ ------------
Weighted Average number of Common Shares 53,160,040 50,000,000 52,060,040 39,334,000
======================================================
used in per share calculations
See accompanying notes to Financial
Statements.
MT ULTIMATE HEALTHCARE
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
FOR THE NINE MONTHS ENDED
-------------------------
SEPTEMBER, 30
2004 2003
-------------------------
CASH FLOWS FROM OPERATING ACTIVTIES:
------------------------------------
Net Income (Loss) $(821,277) $ 10,471
Adjustments to Reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation & Amortization 29,765 15,408
Stock Issued For Services 465,000
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Accounts Receivable (170,025) (77,760)
Other Current Assets (296,458) 4,050
Other Assets (125,000)
Accounts Payable and accrued liabilities (18,208) 28,028
-------------------------
NET CASH PROVIDED FROM (USED IN)OPERATING ACTIVITIES (936,203) (19,803)
-------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- ---------------------------------------
Property, plant and equipment (21,684) (19,715)
-------------------------
NET CASH USED IN INVESTING ACTIVITIES (21,684) (19,715)
-------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
- ---------------------------------------
Bank Note (83,904) 50,000
Notes Payable 787,416 34,950
Issuance of Stock 200,000
Capital Leases (5,521) 16,979
-------------------------
NET CASH PROVIDED FROM (USED IN) FINANCING ACTIVITIES 897,991 101,929
-------------------------
NET INCREASE IN CASH (59,896) 62,411
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CASH BALANCE, BEGIN PERIOD 54,758 33,690
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CASH BALANCE, END PERIOD $ (4,723) $ 96,101
======================
Supplemental Disclosures:
Cash Paid for interest $ 12,756 $ 18,479
======================
Cash Paid for income taxes $ - $ -
======================
See accompanying notes to Financial Statements
MT Ultimate Healthcare Corp
Notes to Financial Statements
September 30, 2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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ORGANIZATION
- ------------
The Company was originally incorporated under the laws of the State of
Nevada on September 13, 2001 for the purpose to promote and carry on any lawful
business for which a corporation may be incorporated under the laws of the State
of Nevada. The company has a total of 400,000,000 authorized shares with a par
value of $.001 per share and with 53,160,040 shares issued and outstanding as of
September 30, 2004. The Company filed an amended Articles of Incorporation with
the State of Nevada on August 15, 2003 to change the name to MT Ultimate
Healthcare Corp from Java Juice.net and to increase the authorized shares to
400,000,000 common shares. Also, the Company agreed to a 80 to 1 forward split
of the shares in this amended filing. On September 29, 2003, the Company agreed
to a 1 for 4 reverse split. On July 1st, 2004 the Company expanded its
operations by acquiring the customers of a sole proprietor in New Jersey and
incorporated that operation under BP Senior Care, Inc a new incorporated
subsidiary. These financial statements reflect these filings.
FINANCIAL STATEMENT PRESENTATION
- ----------------------------------
The consolidated un-audited interim financial statements of the Company as
of September 30, 2004 and for the three and nine months ended September 30,
2004, included herein have been prepared in accordance with the instructions for
Form 10QSB under the Securities Exchange Act of 1934, as amended, and Article 10
of Regulation S-X under the Securities Act of 1933, as amended. Certain
information and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations relating to interim
consolidated financial statements.
In the opinion of management, the accompanying consolidated un-audited
interim financial statements reflect all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial position of the
Company at September 30, 2004, and the results of their operations for the three
and nine months ended September 30, 2004 and 2003, and their cash flows for the
nine months ended June 30, 2004 and 2003.
The results of operations for such periods are not necessarily indicative
of results expected for the full year or for any future period. These financial
statements should be read in conjunction with the audited consolidated financial
statements as of December 31, 2003 and related notes included in the Company's
Form 10-KSB,as amended filed with the Securities and Exchange Commission.
BASIS OF PREPARATION AND PRESENTATION:
The accompanying consolidated financial statements have been prepared to
reflect the legal acquisition on August 8, 2003 of MT Marketing Int. Corp.
("Marketing") by MT Ultimate Healthcare Inc. (MT Ultimate) formerly Java
Juice.net. The consolidated financial statements of Ultimate give effect to the
acquisition under which the shareholders of Marketing exchanged all of their
common shares of Marketing for common shares of MT Ultimate.
MT Ultimate Healthcare Corp
Notes to Financial Statements
September 30, 2004
Notwithstanding its legal form, the acquisition has been accounted for as a
reverse takeover, as the former shareholders of Marketing own in aggregate
approximately 72% of the common shares of Ultimate, and so are now the majority
shareholders of Ultimate. Also, as MT Ultimate was an inactive company with
nominal net non-monetary assets, the Acquisition has been accounted for as an
issuance of stock by Marketing accompanied by a recapitalization As required
under reverse takeover accounting, these financial statements have been issued
under the name of Ultimate and reflect the share capital structure of Ultimate.
However, they reflect the financial statements of Marketing and account for the
Acquisition as an acquisition of Ultimate by Marketing. The consolidated
financial statements therefore include:
(a) a consolidated balance sheet prepared from the audited balance sheets
of Ultimate and Marketing at December 31, 2003.
(b) a consolidated balance sheet prepared from the un-audited balance
sheets of Ultimate and BP Senior Care, Inc as of September 30, 2004.
(c) consolidated statements of operations, cash flows and changes in
shareholders' equity prepared from the audited statements of
operations, cash flows and changes in shareholders' equity (deficit)
of MT Ultimate for the periods from January 1, 2004 to September, 30,
2004 with a comparative figures for the similar period from January 1,
2003 to September, 30, 2003.
PRINCIPLES OF CONSOLIDATION
- -----------------------------
The accompanying consolidated financial statements include the accounts of
MT Ultimate Healthcare Corp and it's wholly owned subsidiaries of MT Marketing
Int. Corp. and B.P. Senior Care, Inc. collectively "the Company"). Investments
in which the Company does not have a majority voting or financial controlling
interest are accounted for under the equity method of accounting unless its
ownership constitutes less than a 20% interest in such entity for which such
investment would then be included in the consolidated financial statements on
the cost method. All significant inter-company transactions and balances have
been eliminated in consolidation.
ACCOUNTING METHOD
- ------------------
The Company's financial statements are prepared using the accrual method of
accounting. Revenues are recognized when earned and expenses when incurred.
Fixed assets are stated at cost. Depreciation and amortization using the
straight-line method for financial reporting purposes and accelerated methods
for income tax purposes. A total of $14,485 and $5,909 have been recorded in the
financial statements for the three months period ended September 30, 2004 and
September 30, 2003.
MT Ultimate Healthcare Corp
Notes to Financial Statements
September 30, 2004
EARNINGS PER COMMON SHARE
----------------------------
The Company adopted Financial Accounting Standards (SFAS) No. 128,"Earnings
Per Share," which simplifies the computation of earnings per share requiring the
restatement of all prior periods.
Basic earnings per share are computed on the basis of the weighted average
number of common shares outstanding during each year.
Diluted earnings per share are computed on the basis of the weighted
average number of common shares and dilutive securities outstanding. Dilutive
securities having an anti-dilutive effect on diluted earnings per share are
excluded from the calculation.
NOTE 2 - COMMON STOCK
- -----------------------
In February 2004, a total of 1,160,000 shares of common stock were issued
for professional services to consultants. These shares have been valued at $.25
per share for a total of $290,000. In February, a $50,000 note was converted
into 200,00 shares of common stock. In August, a $100,000 note was converted
into 400,000 shares valued at $.25 per share. Also in August a total of 700,000
shares of common stock were issued for professional services to consultants.
These shares had a fair market value of $.25 per share for a total of $175,000.
NOTE 3 - RELATED PARTIES
- --------------------------
The Company has significant related party transactions and/or relationships
with the Company's President, MacDonald Tudeme. He has guaranteed the Company's
bank indebtedness up to $200,000 without charging a fee.
Shareholders also advanced $57,614 the company on demand notes without
interest.
NOTE 4 - NOTES PAYABLE
- ------------------------
The company has a $200,000 SBA line of credit which is payable on demand on
January 1st.,2009 which bears at bank prime rate plus 1% for any outstanding
operating indebtedness. As of September,30th 2004 , the short term balance was
$71,621 and long term balance was $100,070.
On July,1st 2004 the company acquired BP Senior Care with a financial
arrangement whereby the seller took a demand note without interest for $125,000
and job with the Company as operations manger for the new incorporated
subsidiary BP Senior Care. Inc. The seller's starting salary was $60,000 and as
of September 30, 2004 the balance of the note was $115,384.
MT Ultimate Healthcare Corp
Notes to Financial Statements
September 30, 2004
On August 31st, 2004 entered into a securities purchase agreement whereby
callable, secured convertible notes of $500,000 bearing interest at a rate of
10% per annum for outstanding indebtedness was sold to AJW Partners, LLC and its
associates. The term of the notes are two years at a conversion price of $.124
which is and exercisable into $500,000 shares of common stock and warrants that
are exercisable at a price of $0.45 per share in a transaction that was
registered under the Securities Act of 1933 (the Act) for an aggregate of
$500,000 as of September 30, 2004. The conversion price is determined at the
time of conversion and is calculated as the lesser of the Variable Conversion
Price or $0.90. Generally, the Variable Conversion Price is the average of the
Three (3) lowest trading prices of the Registrant's common stock, $.001 par
value per share (the "Common Stock") during the twenty (20) trading day period
ending one trading day before the date that a Buyer sends notice of conversion
to the Registrant. The warrants expire in 5 years.
NOTE 5 -CAPITAL LEASES
- -----------------------
The company entered into lease arrangements to acquire equipment which has
been financed by a long liability. The liability recorded under the capital
lease represents the minimum lease payments payable of imputed interest at an
average of 19.0% per annum over three (3) years. The current portion of the
Capital lease Obligation is $8,386 and the long term portion is $5,847.
NOTE 6 -TRADE RECEIVABLES
- --------------------------
A summary of net trade Receivables as of September 30, 2004 and
September 30, 2003 is shown in the following table:
SEPTEMBER 30TH, 2004 SEPTEMBER 30TH, 2003
- -------------------------------------------------------------------------------
Hospital Staffing 69,842 183,752
Homecare Staffing 102,178 16,249
Infusion & No fault 200,589 -0-
Bad Debt Allowance (5,550) (5,000)
TOTAL NET TRADE RECEIVABLE $367,059 $195,001
- -------------------------------------------------------------------------------
The company provides an allowance for losses on trade receivables based on
a review of the current status of existing receivables and management's
evaluation of periodic aging of accounts.
NOTE 7. SUBSEQUENT EVENTS
- -------------------------
On October 1 ,2004 the Company acquired Abundant Nursing, Inc. a
Pennsylvania corporation using prepaid assets of $251,515 and entered into a
five year promissory note with the seller in the principal amount of $295,000
that accrues interest at a rate of 7% per annum on the outstanding indebtedness.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
THIS REPORT CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THE COMPANY'S ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE SET FORTH ON THE FORWARD LOOKING STATEMENTS AS A
RESULT OF THE RISKS SET FORTH IN THE COMPANY'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, GENERAL ECONOMIC CONDITIONS, AND CHANGES IN THE ASSUMPTIONS
USED IN MAKING SUCH FORWARD LOOKING STATEMENTS.
OVERVIEW
The Registrant was originally incorporated under the name JavaJuice.net
("JavaJuice") on September 13, 2000. On August 8, 2003, the Registrant acquired
100% of the outstanding shares of M.T. Marketing Int. Corp., a Nevada
corporation (hereinafter "MT"), pursuant to an Exchange Agreement. As a result
of the Exchange Agreement, the business of MT became the business of the
Registrant, control of the Registrant shifted to the former MT shareholders and
the Registrant subsequently changed its name to MT Ultimate Healthcare Corp.
The Company, through its wholly-owned Nevada subsidiary, MT, operates a
payroll nurse staffing and homecare business. The Company provides healthcare
professionals such as Certified Nursing Assistants, Nurse Technicians, Licensed
Practical Nurses and Registered Nurses to hospitals, nursing homes, licensed
home care services agencies ("LHCSAs"), other health-related businesses, to the
homes of the elderly, sick and incapacitated. The Registrant is a holding
company for MT. All operations discussed in this Form 10-QSB were conducted by
MT.
In September 2003, the Company completed an 80:1 forward stock split of its
issued and outstanding Common Stock. Also in September 2003, the Company
completed a 1:4 reverse stock split of its issued and outstanding Common Stock.
The effects of both stock splits have been retroactively reflected in this
report.
In January 2004, the Company received a license from the State of New York,
Department of Health, effective December 9, 2003, to operate as a LHCSA in the
five boroughs of New York City: The Bronx, Brooklyn, Manhattan, Queens and
Staten Island, as well as in Nassau County, New York.
In February 2004, the Company established a high tech infusion nursing
department that will allow staff to provide highly-specialized nursing services
to the Company's clients. With the addition of this new department, the
Company's clients can now be referred by doctors, insurance companies or
infusion companies to receive highly skilled, in-home specialty health care
service by the Company's staff of appropriately qualified registered nursing
professionals.
In July 2004, the Company acquired all of the issued and outstanding common
stock of B.P. Senior Care, Inc., a New Jersey corporation ("BP") from BP's sole
shareholder, in exchange for 200,000 shares of the Company's Common Stock. As
additional consideration, the Company agreed to pay BP's sold shareholder an
aggregate of $150,000 cash, payable as follows: a) $25,000 upon closing the
transaction; and b) $125,000 payable in equal monthly installments of $4,808
over a twenty-five month period beginning June 2004, and a final payment of
$4,800 for the twenty-sixth month following June 2004. BP provides 24-hour
healthcare services to senior citizens in the New Jersey metropolitan area.
Hereinafter, a reference to the Company includes a reference to MT and BP unless
otherwise provided.
On August 31, 2004 (the "Closing"), the Company entered into a Securities
Purchase Agreement (the "Agreement") with AJW Partners, LLC ("Partners"), AJW
Offshore, Ltd. ("Offshore"), AJW Qualified Partners, LLC ("Qualified"), and New
Millennium Capital Partners II, LLC ("New Millennium") to purchase callable
secured convertible notes having an aggregate principal amount of $700,000, a
10% annual interest rate payable quarterly, with a term of two (2) years (the
"Convertible Notes" or "Notes"). Partners, Offshore, Qualified and New
Millennium are collectively referred to herein as the "Selling Security
Holders." The Agreement also provides for the issuance of warrants to purchase
up to an aggregate of 700,000 shares of Common Stock, with an exercise price of
$0.45 per share (the "Warrants"). We will not receive any proceeds from the
resale of our Common Stock issuable upon conversion of the Notes. We will
however receive proceeds from the sale of the Convertible Notes and exercise of
the Warrants. As of the date of this filing, we have sold $500,000 of the
Convertible Notes. We have agreed to sell an additional $200,000 of Convertible
Notes upon the effectiveness of the Registration Statement. Investors should
note that the Notes are secured by substantially all of the Company's assets.
In September 2004, the Company entered into an agreement with Option Care
of New York, Inc. ("Option"), under which Option will provide various products,
supplies and equipment to the Company, which the Company will use for patients
therapy. The agreement was entered into on September 13, 2004 and will be
effective for the term of one year.
KNOWN TRENDS, EVENTS AND UNCERTAINTIES
The Company is aggressively seeking to expand its operations both within
New York City and the surrounding areas (New Jersey, Connecticut, and upstate
New York.). The Company is also actively seeking to broaden its service and
product offerings. Continuing its plan from the first, second, and third
quarters, the Company is focusing on expanding its business during the fourth
quarter, and throughout the remainder of 2004. Management expects that much of
the growth will come from acquisitions and by new internal business development.
In particular, the Company plans to extend its high-tech nursing business
throughout the area. The Company acquired BP and Abundant in accordance with
the Company's acquisition plan.
COMPARISON OF OPERATING RESULTS
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO
THE THREE MONTHS ENDED SEPTEMBER 30, 2003
Revenues increased $135,640 (or 43.6%) from $310,812 for the three months
ended September 30, 2003 to $466,452 for the three months ended September 30,
2004. The increase in revenues was generally due to the results of new business
development activities.
Cost of revenues increased $115,849 (or 49.1%) from $236,122 for the three
months ended September 30, 2003 to $351,971 for the three months ended September
30, 2004. The increase in cost of revenues was directly attributable to the
increase in revenues.
Gross profit increased $19,791 (or 26.5%) from $74,690 for the three months
ended September 30, 2003 to $94,481 for the three months ended September 30,
2004. The increase in gross profit was attributable to the increase in revenues.
Gross profit as a percentage of sales ("gross profit margin") increased
2.9% from 21.1% for the three months ended September 30, 2004 to 24% for the
three months ended September 30, 2003.
The Company had total expenses of $433,698 for the three months ended
September 30, 2004, as compared to total expenses of $87,744 for the three
months ended September 30, 2003, an increase of $345,954. The expenses for the
three months ended September 30, 2004 consisted of the following: salaries and
wages of $109,332, stock issued for professional services of $175,000,
professional fees of $37,720, rent of $21,918, depreciation of $8,222,
amortization expense of $6,263, interest expense of $7,562, and operating
expenses of $67,691. In comparison, the expenses for the three months ended
September 30, 2003 consisted of salaries and wages of $22,793, professional fees
of $16,242, rent of $3,600, depreciation of $5,909, interest expense of $8,117
and operating expenses of $31,083. The increase in expenses was primarily due
to the Company's expansion efforts, increases in salaries and wages, stock for
professional services and professional fees paid by the Company.
For the three months ended September 30, 2004, the Company had a net loss
from operations of $339,217, as compared to a net loss from operations of
$13,054 for the three months ended September 30, 2003. The Increase in net loss
from operations was primarily due to the Company's increase in expenses for the
three months ended September 30, 2004.
Although the Company has incurred a net operating loss ("NOL"), no tax
benefit is being recorded at this time because there is no assurance that the
Company will recover the NOL.
The Company had a net loss of $339,217 for the three months ended September
30, 2004, as compared to a net income of $13,054 for the three months ended
September 30, 2003. The Increase in net loss was primarily due to the Company's
increase in expenses for the three months ended September 30, 2004.
As of September 30, 2004, the Company had an accumulated deficit of
$866,030.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 2003
Revenues increased $575,102 (or 76.4%) from $752,681 for the nine months
ended September 30, 2003 to $1,327,783 for the nine months ended September 30,
2004. The increase in revenues was due to new business development activities,
notably in the "high tech" nursing practice.
Cost of revenues increased $472,822 (or 87%) from $543,758 for the nine
months ended September 30, 2003 to $1,016,580 for the nine months ended
September 30, 2004. The increase in cost of revenues was directly attributable
to the increase in revenues.
Gross profit increased $102,280 (or 49%) from $208,923 for the nine months
ended September 30, 2003 to $311,203 for the nine months ended September 30,
2004. The increase in gross profit was attributable to the increase in revenues
that was offset by the increase in cost of revenues.
Gross profit as a percentage of sales ("gross profit margin") was 23.4% for
the nine months ended September 30, 2004, as compared to 27.8% for the nine
months ended September 30, 2003. The decrease in gross profit margin is
attributable to the increase in cost of revenues.
The Company had total expenses of $1,132,480 for the nine months ended
September 30, 2004, as compared to total expenses of $198,452 for the nine
months ended September 30, 2003. The expenses for the nine months ended
September 30, 2004 consisted of the following: salaries and wages of $290,391,
stock issued for professional services of $465,000, professional fees of
$107,643, rent of $65,082, depreciation of $23,502, amortization expense of
$6,263, interest expense of $12,756, and operating expenses of $161,843. In
comparison, the expenses for the nine months ended September 30, 2003 consisted
of salaries and wages of $53,299, professional fees of $30,336, rent of $9,600,
depreciation of $15,408, interest expense of $18,479 and operating expenses of
$71,330. The increase in expenses was primarily due to the Company's expansion
efforts, increases in salaries and wages, stock for professional services and
professional fees paid by the Company.
For the nine months ended September 30, 2004, the Company had a net loss
from operations of $821,277, as compared to net income from operations of
$10,471 for the nine months ended September 30, 2003. The change in position
from net income from operations to net loss from operations was due to the
increase in cost of revenues and the increase in expenses.
Although the Company has incurred a net operating loss ("NOL"), no tax
benefit is being recorded at this time because there is no assurance that the
Company will recover the NOL.
The Company had a net loss of $821,277 for the nine months ended September
30, 2004, as compared to a net income of $10,471 for the nine months ended
September 30, 2003. The change in position from net income to net loss was due
to the increase in cost of revenues and the increase in expenses.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2004, total current assets were $683,689 which
consisted of accounts receivable, net of an allowance for doubtful accounts, of
$367,059, and other current assets of $316,630.
As of September 30, 2004, total current liabilities were $592,184 which
consisted of accounts payable and accrued liabilities of $41,659, a cash
overdraft of $4,723, a note payable of $537,416, and the current portion of
capital leases of $8,386.
Net working capital was $91,505 at September 30, 2004. The ratio of
current assets to current liabilities was 1.15.
Net cash used in operating activities was $936,203 for the nine months
ended September 30, 2004, as compared to net cash used in operating activities
of $19,803 for the nine months ended September 30, 2003. For the nine months
ended September 30, 2004, the Company had net loss of $821,277, a decrease in
accounts receivable of $170,025, a decrease in other current assets of $296,458
and a decrease in accounts payable and accrued liabilities of $18,208 that was
offset by $29,765 of depreciation and $465,000 of stock issued for services.
Net cash used in investing activities was $21,684 for the nine months ended
September 30, 2004, as compared to net cash used in investing activities of
$19,715 for the nine months ended September 30, 2003. The Company made
investments in property, plant and equipment during these periods.
Net cash provided from financing activities was $897,991 for the nine
months ended September 30, 2004, as compared to net cash provided from financing
activities of $101,929 for the nine months ended September 30, 2003. The
Company's primary source of cash from financing activities for the nine months
ended September 30, 2004 was $787,416 notes payable, as discussed in Note 4 to
the Notes to Financial Statements set forth in the section entitled "ITEM 1.
FINANCIAL STATEMENTS."
The Company had a net decrease in cash of $59,481 for the nine months ended
September 30, 2004.
The Company does not have any commitments or identified sources of
additional capital from third parties or from its officers, directors or
majority shareholders. The Company does expect to raise $200,000 from the sale
of Convertible Notes, upon the effectiveness of its Registration Statement.
Additionally, the Company has a $150,000 SBA loan and a $50,000 line of credit
which is payable on demand on January 1, 2009, and bears interest at bank prime
rate plus 1% for any outstanding operating indebtedness. However, there is no
assurance that additional financing will be available on favorable terms, if at
all. If the Company is unable to raise such additional financing, it would have
a materially adverse effect upon the Company's ability to implement its business
plan and may cause the Company to curtail or scale back its current operations.
RISK FACTORS
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WE HAVE A PRESENT NEED FOR CAPITAL IN ADDITION TO $500,000 ALREADY RAISED AND A
$200,000 COMMITMENT.
It is imperative that we raise $2 million of financing to support strategic
acquisitions and the current expansion plan for the next 18 to 24 months, which
is in addition to $500,000 already raised and a $200,000 commitment. We
recently received an aggregate of $500,000 of Convertible Note financing from
four (4) unrelated parties. We also received a commitment from these parties to
purchase an additional $200,000 of convertible debt. The sale of the additional
Convertible Notes is subject to the satisfaction of certain conditions including
the effectiveness of the Registration Statement. In connection with the
Convertible Note financing, we issued Warrants to purchase 500,000 shares of our
Common Stock at an exercise price of $0.45 per share. We will issue identical
Warrants to purchase 200,000 shares of our Common Stock along with the
commitment to purchase an additional $200,000 of convertible debt. At this
time, no financing other than the $200,000 commitment has been secured or
identified. Our growth and continued operations could be impaired by
limitations on our access to the capital markets. There can be no assurance
that capital from outside sources will be available, or if available, that it
will be on terms that management deems sufficiently favorable. If we are unable
to obtain additional financing on favorable terms, or at all, it would have a
material adverse impact upon our ability to continue our business operations and
pursue our expansion strategy. In the event we do not raise additional capital
from conventional sources, it is likely that our growth will be restricted and
we may need to scale back or curtail our business plan.
THE ISSUANCE AND SALE OF COMMON STOCK UNDERLYING THE CONVERTIBLE NOTES AND THE
WARRANTS MAY DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.
As of the November 19, 2004, we had 54,032,040 shares of Common Stock
issued and outstanding. We are registering 13,789,380 shares of Common Stock
pursuant to our SB-2 Registration Statement ("Registration Statement"),
consisting of 12,389,380 shares of Common Stock issuable upon conversion of
$700,000 of Convertible Notes, and 1,400,000 shares of Common Stock issuable
upon exercise of the Warrants. As sequential conversions and sales take place,
the price of our Common Stock may decline, and if so, the holders of the
Convertible Notes would be entitled to receive an increasing number of shares,
which could then be sold, triggering further price declines and conversions for
even larger numbers of shares, to the detriment of the investors in this
Offering. All of the shares issuable upon conversion of the Notes and upon
exercise of our Warrants, may be sold without restriction upon the effectiveness
of the Registration Statement. The sale of these shares may adversely affect the
market price of our Common Stock.
THE ISSUANCE OF COMMON STOCK UNDERLYING THE CONVERTIBLE NOTES AND THE WARRANTS
WILL CAUSE IMMEDIATE AND SUBSTANTIAL DILUTION.
The issuance of Common Stock upon conversion of the Convertible Notes and
exercise of the Warrants will result in immediate and substantial dilution to
the interests of other stockholders since the Selling Security Holders may
ultimately receive and sell the full amount issuable on conversion or exercise.
Although the Selling Security Holders may not convert their Convertible Notes
and/or exercise their Warrants if such conversion or exercise would cause them
to own more than 4.9% of our outstanding Common Stock, this restriction does not
prevent the Selling Security Holders from converting and/or exercising some of
their holdings, selling those shares and then converting the rest of their
holdings. In this way, the Selling Security Holders could sell more than this
limit while never holding more than this limit. If the Selling Security Holders
choose to do this, it will cause substantial dilution of our Common Stock.
WE HEAVILY DEPEND ON MACDONALD S. TUDEME, MARGUERITE M. TUDEME AND WAYNE F.
RICHARDSON.
The success of the Company depends heavily upon the personal efforts and
abilities of MacDonald S. Tudeme, Wayne F. Richardson, and Marguerite M. Tudeme.
Mr. Tudeme serves as the Company's Chief Executive Officer and its Marketing
Manager, and as a director of the Company. The Company has not entered into an
employment agreement with Mr. Tudeme. Mr. Richardson has entered into an
engagement letter with the Company whereby Mr. Richardson serves as the
Company's Chief Financial Officer. Mr. Richardson also serves as a director of
the Company. Ms. Tudeme serves as the Company's Secretary and its Operations
Manager, and as a director of the Company. The Company has not entered into an
employment agreement with Ms. Tudeme. Mr. Tudeme, Mr. Richardson and Ms. Tudeme
may voluntarily terminate their services at any time. The loss of Mr. Tudeme,
Mr. Richardson, Ms. Tudeme or other key employees could have a material adverse
effect on our business, results of operations or financial condition. In
addition, the absence of Mr. Tudeme, Mr. Richardson or Ms. Tudeme will force us
to seek a replacement who may have less experience or who may not understand our
business as well, or we may not be able to find a suitable replacement. If this
were to happen, the Company may be forced to curtail or abandon its business
plan.
THERE IS A SHORTAGE OF WORKERS IN THE HEALTHCARE INDUSTRY THAT MAY IMPEDE OUR
ABILITY TO ACQUIRE QUALIFIED HEALTHCARE PROFESSIONALS FOR OUR CONTINUED GROWTH.
Presently, the healthcare industry is experiencing a growing shortage of
healthcare professionals especially Licensed Practical Nurses and Registered
Nurses. We operate a payroll nurse staffing and homecare business that provides
healthcare professionals such as Certified Nursing Assistants, Nurse
Technicians, Licensed Practical Nurses and Registered Nurses to hospitals,
nursing homes, LHCSAs, other health-related businesses, and to the homes of the
elderly, sick and incapacitated. During the last twelve months, our need for
qualified healthcare professionals grew as we obtained a license from the State
of New York to operate as a LHCSA, established a high tech infusion nursing
department, acquired BP which provides 24-hour healthcare services, and entered
into discussions to acquire other healthcare businesses. One of our major
marketing efforts is to recruit these professionals in the United States and to
attract foreign professionals. There can be no assurance that we will be able
to acquire qualified healthcare professionals within the United States or abroad
to meet our growing needs. If we are not successful in our efforts to acquire
qualified healthcare professionals, it would prevent us from continuing our
current business strategy, which would have an adverse effect on the value of
our Common Stock.
GROWTH WILL PLACE SIGNIFICANT STRAINS ON OUR MANAGERIAL, ADMINISTRATIVE AND
OTHER RESOURCES.
Any growth that we experience is expected to place a significant strain on
our managerial and administrative resources. MacDonald S. Tudeme, Wayne F.
Richardson, and Marguerite M. Tudeme are our only officers. We have limited
employees who perform a management or administrative function. Further, if our
business grows, we will be required to manage multiple relationships with
various clients, healthcare professionals and third parties. These requirements
will be exacerbated in the event of further growth. There can be no assurance
that our other resources such as our systems, procedures or controls will be
adequate to support growing operations or that we will be able to achieve the
rapid execution necessary to successfully offer our services and implement our
business plan. Assuming that our business grows, our future success will depend
on our ability to add additional management and administrative personnel and
other resources. If we are unable to add additional managerial and
administrative resources, it will prevent us from continuing our business plan,
which calls for expanding our operations, and could have an adverse effect on
the value of our securities.
OUR OPERATIONS AS A LHCSA ARE HEAVILY REGULATED BY THE DEPARTMENT OF HEALTH OF
THE STATE OF NEW YORK.
The Department of Health of the State of New York (the "Department")
regulates our operations as a LHCSA. In January 2004, we received a license
from the Department effective December 9, 2003, to operate as a LHCSA in the
five boroughs of New York City and in Nassau County, New York. We were required
to prepare operating manuals as part of the approval process. Home healthcare
licensure requires us to make sure that our staff is appropriately qualified,
trained and supervised to provide skilled, in-home healthcare services. We will
be subject to unannounced surveys to assess our compliance with state and
federal standards governing the quality and scope of the services that we
provide. If we fail to comply with the government regulations, we could lose
our license to operate as a LHCSA, be forced to expend additional capital to
regain our LHCSA license, or even be forced to shut down our operations. If
this were to happen, we could be forced to discontinue business operations and
any investment you have in our Company as an investor could be lost.
OUR INDUSTRY IS HIGHLY FRAGMENTED AND COMPETITIVE.
The medical staffing industry is both highly fragmented and highly
competitive. There are a large number of firms engaged in providing medical
personnel. A significant number of these companies are small competitors
operating on a localized basis. There are however, a few larger companies that
operate on a national basis. If we are unable to realize a competitive
advantage we may never generate revenues and be forced to curtail or abandon our
business plan. If this were to happen, any investment in the Company's
securities could become worthless.
MACDONALD S. TUDEME, WAYNE F. RICHARDSON AND MARGUERITE M. TUDEME CAN VOTE AN
AGGREGATE OF 66.9% OF OUR COMMON STOCK AND CAN EXERCISE CONTROL OVER CORPORATE
DECISIONS.
MacDonald S. Tudeme, Wayne F. Richardson and Marguerite M. Tudeme can vote
an aggregate of 36,173,520 shares (or 66.9%) of our outstanding Common Stock.
Accordingly, Mr. Tudeme, Mr. Richardson and Ms. Tudeme will exercise control in
determining the outcome of all corporate transactions or other matters,
including the election of directors, mergers, consolidations, the sale of all or
substantially all of our assets, and also the power to prevent or cause a change
in control. The interests of Mr. Tudeme, Mr. Richardson and Ms. Tudeme may
differ from the interests of the other stockholders and thus result in corporate
decisions that are adverse to other shareholders.
A DEFAULT BY US UNDER THE CONVERTIBLE NOTES WOULD ENABLE THE HOLDERS OF THE
CONVERTIBLE NOTES TO TAKE CONTROL OF SUBSTANTIALLY ALL OF OUR ASSETS.
The Convertible Notes are secured by security agreements under which we
pledged substantially all of our assets including our equipment, inventory,
contract rights, receivables, general intangibles, and intellectual property. A
default by us under the Convertible Notes would enable the holders to take
control of substantially all of our assets. The holders of the Convertible Notes
have no operating experience in our industry that could force us to
substantially curtail or cease our operations.
WE ENTERED INTO AN AGREEMENT TO ACQUIRE ABUNDANT NURSING, INC. WHICH ACQUISITION
IS CONTINGENT ON US SATISFYING OUR OBLIGATIONS UNDER A $295,000 PROMISSORY NOTE.
In October 2004, we entered into an agreement to acquire Abundant Nursing,
Inc. in exchange for $150,000 paid on October 1, 2004 and a $295,000 promissory
note payable in five (5) years at seven percent (7%) interest per annum. Our
acquisition of Abundant is contingent on our paying the $295,000 as
contemplated. In addition, we pledged all of the common stock of Abundant to
secure our performance under the promissory note. Until we have fully paid
$295,000 due under the promissory note, we are required to keep Abundant as a
separate Pennsylvania corporation, including without limitation, no merger or
consolidation of Abundant with MT Ultimate Healthcare Corp., and maintain the
separate assets of Abundant as they existed on October 1, 2004. In addition, we
may not issue, sell or transfer any stock of Abundant or permit or allow any
liens on the assets of Abundant until we have paid the $295,000 due under the
promissory note. In the event that we do not satisfy our obligations under the
$295,000 promissory note and related agreements, the former shareholder of
Abundant may take control over Abundant. In such event, we will not receive a
credit for the $150,000 that we paid on October 1, 2004.
THE MARKET PRICE OF OUR COMMON STOCK HISTORICALLY HAS BEEN VOLATILE.
The market price of our Common Stock historically has fluctuated
significantly based on, but not limited to, such factors as: general stock
market trends, announcements of developments related to our business, actual or
anticipated variations in our operating results, our ability or inability to
generate new revenues, conditions and trends in the event production industry
and in the industries in which our customers are engaged. These market
fluctuations, as well as general economic, political and market conditions, such
as recessions, interest rates or international currency fluctuations may
adversely affect the market price of our Common Stock.
OUR AUDITORS HAVE EXPRESSED AN OPINION THAT THERE IS SUBSTANTIAL DOUBT AS TO OUR
ABILITY TO CONTINUE AS A GOING CONCERN.
Our auditors have expressed an opinion that there is substantial doubt
about our ability to continue as a going concern primarily because we have a
working capital deficiency. As of September 30, 2004 we had a working capital
deficiency of $334,289 and an accumulated deficit of $886,030. The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. The financial statements do not include any adjustments that
might result from our inability to continue as a going concern. Our continuation
as a going concern is dependent upon future events, including obtaining
financing (discussed above) for expansion and to implement our business plan. If
we are unable to continue as a going concern, you will lose your entire
investment in our Company.
OUR REGISTRATION STATEMENT MAY NOT BE DECLARED EFFECTIVE WHICH WOULD CAUSE US TO
INCUR SUBSTANTIAL PENALTIES
Under our Registration Rights Agreement entered into, in connection with
the Securities Purchase Agreement discussed herein, the Company is subject to a
$10,000 per month penalty payable to the Note holders, if the Company's
Registration Statement fails to become effective within one hundred and sixty
(160) days of the Closing. If the Company's Registration Statement fails to
become effective within 160 days and is forced to pay the penalties to the Note
holders it could have a materially adverse affect on the Company's assets, and
could force the Company to curtail or abandon its business plan.
CRITICAL ACCOUNTING POLICIES
Our discussion and analysis of our financial condition and results of
operations is based upon our financial statements, which have been prepared in
accordance with accounting principals generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of any contingent assets and liabilities. On
an on-going basis, we evaluate our estimates, including those related to
uncollectible receivables, investment values, income taxes and contingencies.
We base our estimates on various assumptions that we believe to be reasonable
under the circumstances, the results of which form the basis for making
judgments about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.
We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our financial
statements:
Federal Income Tax. The Company has adopted the provisions of Financial
Accounting Standards Board Statement No. 109, Accounting for Income Taxes. The
Company accounts for income taxes pursuant to the provisions of the Financial
Accounting Standards Board Statement No. 109, "Accounting for Income Taxes",
which requires an asset and liability approach to calculating deferred income
taxes. The asset and liability approach requires the recognition of deferred tax
liabilities and assets for the expected future tax consequences of temporary
differences between the carrying amounts and the tax basis of assets and
liabilities. The Company has incurred an NOL, however, because there is no
assurance of recovery of the NOL, it has been fully offset and the Company does
not have a deferred tax asset with respect to any portion thereof. The valuation
allowance will be evaluated, considering positive and negative evidence about
whether the deferred tax asset will be realized. The allowance will either be
increased or reduced. A reduction could result in the complete elimination of
the allowance if positive evidence indicates that the value of the deferred tax
assets is no longer impaired and the allowance is no longer required.
Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure on contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Accounting Method. The Company's financial statements are prepared using
the accrual method of accounting. Revenues are recognized when earned and
expenses when incurred. Fixed assets are stated at cost. Depreciation and
amortization using the straight-line method for financial reporting purposes and
accelerated methods for income tax purposes. A total of $14,485 and $5,909 has
been recorded in the financial statements for the three months ended September
30, 2004 and September 30, 2003.
Cash and Cash Equivalents. The Company considers all highly liquid debt
instruments with a maturity of three months or less at the time of purchase to
be in cash equivalents. Cash and cash equivalents consist of checking accounts
and money market funds.
Fair Value of Financial Instruments. The carrying amounts of financial
instruments including cash and cash equivalents, accounts receivable and
payable, accrued and other current liabilities and current maturities of
long-term debt approximate fair value due to their short maturity.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Our chief executive
officer and chief financial officer, after evaluating the effectiveness of the
Company's "disclosure controls and procedures" (as defined in the Securities
Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period
covered by this quarterly report (the "Evaluation Date"), have concluded that as
of the Evaluation Date, our disclosure controls and procedures were adequate and
designed to ensure that material information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act of 1934
is 1) recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms; and 2) accumulated and
communicated to him as appropriate to allow timely decisions regarding required
disclosure.
(b) Changes in internal control over financial reporting. There were no
significant changes in our internal control over financial reporting during our
most recent fiscal quarter that materially affected, or were reasonably likely
to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of the date of filing of this report, the Company was not a party to,
any legal proceedings involving the Company. However, the Company has received
correspondence threatening legal action regarding the use of the Company's name
"MT Ultimate Healthcare Corp."
ITEM 2. CHANGES IN SECURITIES
(c) In May 2004, the Company issued 300,040 shares of Common Stock which
were not registered under the Securities Act of 1933 (the "Act") to an entity
for conversion of a $50,000 advancement that the entity made to the Company
during the first quarter of 2004. The Company claims an exemption from
registration afforded by Section 4(2) of the Act since the foregoing issuances
did not involve a public offering, the recipients took the shares for investment
and not resale and the Company took appropriate measures to restrict transfer.
No underwriters or agents were involved in the foregoing issuances and no
underwriting discounts or commissions were paid by the Company.
In June 2004, the Company agreed to issue 400,000 shares of Common Stock
which were not registered under the Act to an entity in consideration for
$100,000. The Company claims an exemption from registration afforded by Section
4(2) of the Act since the foregoing issuances did not involve a public offering,
the recipients took the shares for investment and not resale and the Company
took appropriate measures to restrict transfer. No underwriters or agents were
involved in the foregoing issuances and no underwriting discounts or commissions
were paid by the Company.
In July 2004, the Company issued 500,000 shares of Common Stock which
were not registered under the Act to an individual in consideration for
consulting services rendered from September 2003 to the present. The Company
claims an exemption from registration afforded by Section 4(2) of the Act since
the foregoing issuances did not involve a public offering, the recipients took
the shares for investment and not resale and the Company took appropriate
measures to restrict transfer. No underwriters or agents were involved in the
foregoing issuances and no underwriting discounts or commissions were paid by
the Company.
In August 2004, the Company issued 200,000 shares of Common Stock which
were not registered under the Act to an entity for $50,000. The Company
claims an exemption from registration afforded by Section 4(2) of the Act since
the foregoing issuance did not involve a public offering, the recipient took the
shares for investment and not resale and the Company took appropriate measures
to restrict transfer. No underwriters or agents were involved in the foregoing
issuance and no underwriting discounts or commissions were paid by the Company.
In August 2004, the Company issued 200,000 shares of Common Stock which
were not registered under the Act to Wayne F. Richardson for his services as a
director of the Company and the Company's Chief Financial Officer. The Company
claims an exemption from registration afforded by Section 4(2) of the Act since
the foregoing issuance did not involve a public offering, the recipient took the
shares for investment and not resale and the Company took appropriate measures
to restrict transfer. No underwriters or agents were involved in the foregoing
issuance and no underwriting discounts or commissions were paid by the Company.
In August 2004, the Company issued an aggregate of 400,000 shares of Common
Stock which were not registered under the Act consisting of 200,000 shares to
the former BP shareholder in exchange for 100% of the common stock of BP, and
200,000 to an individual unrelated to the Company as consideration for
consulting services. The Company claims an exemption from registration afforded
by Section 4(2) of the Act since the foregoing issuances did not involve a
public offering, the recipients took the shares for investment and not resale
and the Company took appropriate measures to restrict transfer. No underwriters
or agents were involved in the foregoing issuances and no underwriting discounts
or commissions were paid by the Company.
In August 2004, the Registrant sold Notes with a principal amount of
$500,000 and Warrants that, as of August 31, 2004, were convertible into
4,032,258 shares of Common Stock based upon a conversion price of $0.124, and
exercisable into 500,000 shares of Common Stock at an exercise price of
$0.45 per share, respectively, in a transaction that was not registered under
the Act for an aggregate of $500,000. The Registrant will sell pursuant to
the effectiveness of the Registration Statement additional Notes with a
principal amount of $200,000 and additional Warrants that, if such sell had
occurred on August 31, 2004, would have been convertible into 1,612,903 shares
of Common Stock, and exercisable into 200,000 shares of Common Stock,
respectively. The Company claims an exemption from registration afforded by
Rule 506 of Regulation D under the Act.
In October 2004, the Company issued an aggregate of 472,000 shares of
Common Stock which were not registered under the Act consisting of 172,000
shares to an entity in consideration for consulting services, and 300,000 shares
to an entity in consideration for research conducted. The Company claims an
exemption from registration afforded by Section 4(2) of the Act since the
foregoing issuances did not involve a public offering, the recipients took the
shares for investment and not resale and the Company took appropriate measures
to restrict transfer. No underwriters or agents were involved in the foregoing
issuances and no underwriting discounts or commissions were paid by the Company.
SUBSEQUENT EVENTS
In October 2004, the Company entered into an Agreement and Plan of
Acquisition and Merger ("A&M Agreement") to acquire Abundant Nursing, Inc., a
Pennsylvania corporation ("Abundant") in exchange for $150,000 paid at closing
and a five-year promissory note in the principal amount of $295,000 that accrues
interest at a rate of seven percent (7%) per annum. Abundant may be merged with
and into the Company after the Company has fully-paid all amounts due under the
M&A Agreement. Until such time as the Company pays the full consideration
pursuant to the M&A Agreement, Abundant will be operated by the Company as a
stand alone subsidiary. Abundant is located in Mount Joy, Pennsylvania and
provides staffing in the central area of Pennsylvania and the Lancaster area.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
Shareholders of the Company have advanced the Company $57,614 on
demand notes, without interest.
Related Party Transactions
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The Company has significant related party transactions and/or relationships with
the Company's President, MacDonald Tudeme. Mr. Tudeme has guaranteed the
Company's bank indebtedness up to $200,000 without charging a fee.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit No. Description
10.1(1) Securities Purchase Agreement dated
August 31, 2004
10.2(1) Callable Secured Convertible Note with AJW
Partners, LLC, dated August 31, 2004
10.3(1) Callable Secured Convertible Note with AJW
Offshore, Ltd., dated August 31, 2004
10.4(1) Callable Secured Convertible Note with AJW
Qualified Partners, LLC, dated August 31, 2004
10.5(1) Callable Secured Convertible Note with New
Millennium Capital Partners II, LLC, dated
August 31, 2004
10.6(1) Stock Purchase Warrant with AJW Partners, LLC,
dated August 31, 2004
10.7(1) Stock Purchase Warrant with AJW Offshore,
Ltd., dated August 31, 2004
10.8(1) Stock Purchase Warrant with AJW Qualified
Partners, LLC, dated August 31, 2004
10.9(1) Stock Purchase Warrant with New Millennium
Capital Partners II, LLC, dated August 31,
2004
10.10(1) Registration Rights Agreement dated
August 31, 2004
10.11(1) Security Agreement dated August 31, 2004
10.12(1) Intellectual Property Security Agreement
dated August 31, 2004
10.13(1) Engagement Letter with Wayne F. Richardson
10.14(1) Guarantee and Pledge Agreement dated
August 31, 2004
10.15(2) Agreement and Plan of Acquisition with
Abundant Nursing, Inc.
31.1* Certificate of the Chief Executive
Officer pursuant Section 302 of the
Sarbanes-Oxley Act of 2002
31.2* Certificate of the Chief Financial
Officer pursuant Section 302 of the
Sarbanes-Oxley Act of 2002
32.1* Certificate of the Chief Executive
Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
32.2* Certificate of the Chief Financial
Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
(1) Filed as Exhibits to the SB-2 Registration Statement filed October 5, 2004.
(2) Filed as Exhibit 2.1 to the Form 8-K filed on October 5, 2004.
* Filed Herein.
b) Reports on Form 8-K
The Company filed a report on Form 8-K on September 10, 2004, to report
that on August 31, 2004, the Company entered into a securities purchase
agreement with AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners,
LLC, and New Millennium Capital Partners II, LLC to purchase callable secured
convertible notes having an aggregate principal amount of $700,000, a 10% annual
interest rate payable quarterly, and term of two (2) years.
The Company filed a report on Form 8-K on October 5, 2004, to report that
on October 1, 2004, the Company entered into an agreement and plan of
acquisition and merger to acquire Abundant Nursing, Inc., a Pennsylvania
corporation in exchange for $150,000 paid on the October 1, 2004 and a five-year
promissory note in the principal amount of $295,000 that accrues interest at a
rate of seven percent (7%) per annum.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MT ULTIMATE HEALTHCARE CORP.
DATED: November 22, 2004 By: /s/ MacDonald Tudeme
------------------------
MacDonald Tudeme
Chief Executive Officer
DATED: November 22, 2004 By: /s/ Wayne Richardson
------------------------
Wayne Richardson
Chief Financial Officer