Attached files
| file | filename |
|---|---|
| EX-32 - EXHIBIT 32 - ANDAIN, INC. | exhibit_32.htm |
| EX-31.1 - EXHIBIT 31.1 - ANDAIN, INC. | exhibit_31-1.htm |
| EX-31.2 - EXHIBIT 31.2 - ANDAIN, INC. | exhibit_31-2.htm |
| EXCEL - IDEA: XBRL DOCUMENT - ANDAIN, INC. | Financial_Report.xls |
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2012
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER: 0-51216
(Exact Name of Company as Specified in its Charter)
| Nevada |
20-2066406
|
| (State or Other Jurisdiction of Incorporation | (I.R.S. Employer |
| or Organization) | Identification No.) |
| 400 South Beverly Drive, Suite 312, Beverly Hills, California | 90212 |
| (Address of Principal Executive Offices) | (Zip Code) |
Company’s telephone number: (310) 286-1777
_____________________________________________________
(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report)
Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o
Indicate by check mark whether the Company has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer o | Accelerated filer o |
| Non-accelerated filer o | Smaller reporting company x |
Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act):
Yes o No x
As of June 30, 2012, the Company had 22,534,242 shares of common stock issued and outstanding.
2
This Amendment to the Quarterly Report on Form 10-Q for the periods ended June 30, 2012, originally filed with the Securities and Exchange Commission on August 29, 2012, is being filed solely for the following purposes: (a) to change the depreciation on the Consolidated Statements of Operations to $ (7,804); (b) to change the net loss attributable to Andain Inc. on the Consolidated Statements of Cash Flows to $305,870 to match the net loss attributable to Andain, Inc. stockholders on the Consolidated Statements of Operations; (c) to change the minority interest on the Consolidated Statements of Cash Flows for the six months ended June 30, 2011 to $ (3,926); (d) to change the purchase of equipment for the period of inception to June 30, 2012 under cash flow from investing activities on the Consolidated Statements of Cash Flows in order for the column to foot properly; (e) change of Note 14 to the Consolidated Financial Statements, and Part II, Item 5 of the document, to note that the office space being rented from 1568934 Ontario Limited, a greater than 10% stockholder of the Company, is approximately 1,000 square feet in size, and the 600,000 shares for the rent of this office for 2012 were actually issued and then received by 1568934 Ontario Limited on September 21, 2012; and (f) the furnishing of Interactive Data File disclosure as Exhibit 101 in accordance with Rule 405 of Regulation S-T (this Exhibit was not previously filed).
Other than as expressly set forth above, this Form 10-Q/A does not, and does not purport to, amend, update or restate the information in any other item of this Form 10-Q, or reflect any events that have occurred after this Form 10-Q was originally filed.
3
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ANDAIN, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
|
June 30, 2012
(Unaudited)
|
December 31, 2011
|
|||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 14,268 | $ | 872 | ||||
|
Accounts receivable
|
1,025,290 | 930,177 | ||||||
|
Total current assets
|
1,039,558 | 931,049 | ||||||
|
Property, plant and equipment
|
25,179 | 35,098 | ||||||
|
Intangible assets
|
20,112 | 20,649 | ||||||
|
Other assets
|
194,428 | 360,178 | ||||||
|
Total assets
|
$ | 1,279,277 | $ | 1,346,974 | ||||
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable and accrued expenses
|
$ | 1,109,731 | $ | 1,180,879 | ||||
|
Total current liabilities
|
1,109,731 | 1,180,879 | ||||||
|
Long-term liabilities:
|
||||||||
|
Long-term debt
|
715,902 | 550,312 | ||||||
|
Bank overdrafts
|
-- | 1 | ||||||
|
Total liabilities
|
1,825,633 | 1,731,192 | ||||||
4
ANDAIN, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(continued)
|
June 30, 2012
(Unaudited)
|
December 31, 2011
|
|||||||
|
Capital deficiency:
|
||||||||
|
Andain Inc Stockholders:
|
||||||||
|
Preferred stock, $0.001 par value, 10,000,000 authorized
shares; no shares issued and outstanding
|
-- | -- | ||||||
|
Common stock, $0.001 par value, 500,000,000 shares
authorized; 22,534,242 shares issued and outstanding at
June 30, 2012 and 22,034,242 at December 31, 2011
|
22,534 | 22.034 | ||||||
|
Additional paid-in capital
|
3,939,954 | 3,890,219 | ||||||
|
Capital reserves
|
197,443 | 383,989 | * | |||||
|
Accumulated deficit during development stage
|
(4,566,533 | ) | (4,214,401 | ) * | ||||
|
Accumulated other comprehensive income (loss)
|
(69,572 | ) | 923 | |||||
|
Total Andain, Inc. stockholders’ equity (deficiency)
|
(476,174 | ) | 82,764 | |||||
|
Non-controlling interest
|
(70,182 | ) | (466,982 | ) | ||||
|
Total stockholders’ capital deficiency
|
(546,356 | ) | (384,218 | ) | ||||
|
Total liabilities and capital deficiency
|
$ | 1,279,277 | $ | 1,346,974 | ||||
* Restated – see Note 5.
See accompanying notes to consolidated financial statements
5
ANDAIN, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
For the 3 Month Period
Ended June 30,
|
For the 6 Month Period
Ended June 30,
|
For the Period of Inception
(July 23, 2004) to
|
||||||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
June 30, 2012
|
||||||||||||||||
|
Revenue:
|
||||||||||||||||||||
|
Government grants
|
$ | -- | $ | 37,861 | $ | -- | $ | 141,993 | $ | 682,690 | ||||||||||
|
Consulting income
|
31,597 | -- | 76,246 | 7,439 | 460,581 | |||||||||||||||
|
Other income
|
-- | -- | -- | -- | 15,000 | |||||||||||||||
|
Total revenue
|
31,597 | 37,861 | 76,246 | 149,432 | 1,158,271 | |||||||||||||||
|
Operating expenses:
|
||||||||||||||||||||
|
Research and development
|
(57,572 | ) | -- | (344,772 | ) | -- | (715,411 | ) | ||||||||||||
|
Depreciation
|
(2,860 | ) | (1,163 | ) | (7,804 | ) | (3,908 | ) | (48,429 | ) | ||||||||||
|
General and administrative
|
(40,868 | ) | (187,193 | ) | (113,949 | ) | (454,003 | ) | (4,268,656 | ) | ||||||||||
|
Impairment of goodwill
|
-- | -- | -- | -- | (412,699 | ) | ||||||||||||||
|
Loss on disposal of associate
|
-- | -- | -- | -- | (135,424 | ) | ||||||||||||||
|
Impairment loss
|
-- | -- | -- | -- | (177,729 | ) | ||||||||||||||
|
Total operating expenses
|
(101,300 | ) | (188,356 | ) | (466,525 | ) | (457,911 | ) | (5,758,348 | ) | ||||||||||
|
Loss from operations
|
(69,703 | ) | (150,495 | ) | (390,279 | ) | (308,479 | ) | (4,600,077 | ) | ||||||||||
|
Financial income
|
-- | -- | 16,370 | -- | 62,045 | |||||||||||||||
|
Financial expense
|
(42,375 | ) | (3,874 | ) | (42,255 | ) | (3,874 | ) | (46,989 | ) | ||||||||||
|
Share of loss of equity-accounted
Investee
|
-- | (9,160 | ) | -- | (9,160 | ) | -- | |||||||||||||
6
ANDAIN, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(continued)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
Period of Inception
(July 23, 2004)
Through
|
||||||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
June 30, 2012
|
||||||||||||||||
|
Net loss
|
(112,078 | ) | (163,529 | ) | (416,164 | ) | (321,513 | ) | (4,585,021 | ) | ||||||||||
|
Add: Net (loss) profit attributable
to the non-controlling interest
|
19,072 | (13,016 | ) | 64,032 | 15,643 | 396,177 | ||||||||||||||
|
Net loss attributable to Andain, Inc.
stockholders
|
$ | (93,006 | ) | $ | (176,545 | ) | $ | (352,132 | ) | $ | (305,870 | ) | $ | (4,188,844 | ) | |||||
|
Loss per share - basic:
|
||||||||||||||||||||
|
Net loss attributable to Andain, Inc.
|
(0.01 | ) | (0.01 | ) | (0.02 | ) | (0.02 | ) | ||||||||||||
|
Weighted average common shares
outstanding
|
22,376,464 | 18,345,129 | 22,235,353 | 18,025,930 | ||||||||||||||||
See accompanying notes to consolidated financial statements
7
ANDAIN, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
Period of Inception
(July 23, 2004)
Through
|
||||||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
June 30, 2012
|
||||||||||||||||
|
Net loss attributable to Andain, Inc.
stockholders
|
$ | (93,006 | ) | $ | (176,545 | ) | $ | (352,132 | ) | $ | (305,870 | ) | $ | (4,188,844 | ) | |||||
|
Other comprehensive loss:
|
||||||||||||||||||||
|
Currency translation adjustment
of foreign operation
|
(86,232 | ) | (55,698 | ) | (85,148 | ) | (41,804 | ) | (84,225 | ) | ||||||||||
|
Less: Amount attributed to
non-controlling interest
|
(14,653 | ) | -- | (14,653 | ) | -- | (14,653 | ) | ||||||||||||
|
Net comprehensive loss for the
period
|
$ | (164,585 | ) | $ | (232,243 | ) | $ | (422,627 | ) | $ | (347,674 | ) | $ | (4,258,416 | ) | |||||
See accompanying notes to consolidated financial statements
8
ANDAIN, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
For the 6 Month
Period Ended
June 30,
|
For the Period from Inception
(July 23, 2004) to
|
|||||||||||
|
2012
|
2011 |
June 30, 2012
|
||||||||||
|
Cash flow from operating activities:
|
||||||||||||
|
Net loss attributable to Andain, Inc.
|
$ | (352,132 | ) | $ |
(305,870
|
) | $ | (4,188,844 | ) | |||
|
Income charges/(credits) not effecting cash:
|
||||||||||||
|
Depreciation
|
7,804 | 3,908 | 48,429 | |||||||||
|
Loss from acquisition of subsidiary
|
-- | -- | 135,424 | |||||||||
|
Amortization of goodwill
|
-- | -- | 337,685 | |||||||||
|
Impairment of loan
|
-- | -- | 177,729 | |||||||||
|
Minority interest
|
117,369 | (3,926 | ) | (212,481 | ) | |||||||
|
Shares issued for professional services
|
-- | -- | 11,910 | |||||||||
|
Non-cash compensation expense
|
-- | -- | 6,000 | |||||||||
|
Equity-settled share-based payments
|
105,236 | -- | 465,536 | |||||||||
|
Loss from equity-accounted investee
|
-- | 9,160 | -- | |||||||||
|
Effect of movements in foreign
exchange rates on non-cash items
|
-- | (1,863 | ) | (5,785 | ) | |||||||
|
Changes in operating assets and liabilities:
|
||||||||||||
|
Accounts payable
|
(42,767 | ) | (353,195 | ) | 1,133,135 | |||||||
|
Accounts receivable
|
(57,173 | ) | (118,767 | ) | (987,004 | ) | ||||||
|
Change in other assets
|
54,584 | -- | 54,584 | |||||||||
|
Accrued compensation
|
180,000 | 180,000 | 2,460,000 | |||||||||
|
Accrued expenses – stockholder
|
-- | -- | 37,508 | |||||||||
|
Accrued consulting fees – stockholder
|
-- | -- | 60,000 | |||||||||
|
Net cash provided (used in) by operating activities
|
12,921 | (590,553 | ) | (466,174 | ) | |||||||
|
Cash flow from investing activities:
|
||||||||||||
|
Purchase of equipment
|
-- | (290 | ) |
(70,548
|
) | |||||||
|
Acquisition of subsidiary
|
-- | -- | (578,502 | ) | ||||||||
9
ANDAIN, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(continued)
|
For the 6 Month
Period Ended
June 30,
|
For the Period from Inception
(July 23, 2004) to
|
|||||||||||
|
2012
|
2011
|
June 30, 2012
|
||||||||||
|
Disposal of interest in equity-accounted
investee
|
-- | -- | -- | |||||||||
|
Acquistion of patent
|
-- | -- | (20,649 | ) | ||||||||
|
Net cash used in investing activities
|
-- | (290 | ) | (669,699 | ) | |||||||
|
Cash flow from financing activities:
|
||||||||||||
|
Proceeds from bank overdrafts
|
-- | 1,654 | -- | |||||||||
|
Proceeds from stock issued for cash
|
-- | 305,723 | 519,800 | |||||||||
|
Proceeds from other loans
|
-- | 351,572 | (59,520 | ) | ||||||||
|
Loan from greater than 10% stockholder
|
-- | (710 | ) | (15,754 | ) | |||||||
|
Loans from key management personnel
|
-- | (31,386 | ) | 704,217 | ||||||||
|
Net cash provided by financing activities
|
-- | 626,853 | 1,148,743 | |||||||||
|
Increase in cash and cash equivalents
|
12,921 | 36,010 | 12,870 | |||||||||
|
Effects of exchange rate changes on the balance of cash held in foreign currencies
|
475 | (15,538 | ) | 1,398 | ||||||||
|
Cash and cash equivalents,
beginning of period
|
872 | 23,672 | -- | |||||||||
|
Cash and cash equivalents,
end of period
|
$ | 14,268 | $ | 44,144 | $ | 14,268 |
10
ANDAIN, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(continued)
|
Six Months Ended
June 30,
|
Period of Inception
(July 23, 2004)
Through
|
|||||||||||
| 2012 | 2011 |
June 30, 2012
|
||||||||||
|
Supplementary schedule of
cash flow activities:
|
||||||||||||
|
Non-cash investing and financing
activities:
|
||||||||||||
|
Issuance of common stock for payment
of legal fees and various other services
|
$ | 36,000 | $ | -- | $ | 566,514 | ||||||
|
Issuance of common stock for payment
of services of transfer agent
|
$ | 69,235 | $ | -- | $ | 79,235 | ||||||
|
Issuance of common stock for payment
of rental expense
|
$ | -- | $ | -- | $ | 60,000 | ||||||
|
Issuance of common stock for payment
of management and consulting fees
|
$ | -- | $ | 1,920,000 | $ | 1,921,900 | ||||||
|
Issuance of common stock for
purchase of intellectual property
|
$ | -- | $ | -- | $ | 4,500 | ||||||
|
Issuance of common stock for
purchase of subsidiary
|
$ | -- | $ | -- | $ | 2,500 | ||||||
|
Issuance of common stock for payment
of management and consulting fees
|
$ | -- | $ | -- | $ | 300 | ||||||
|
Non-cash compensation expense
|
$ | -- | $ | -- | $ | 6,000 | ||||||
See accompanying notes to consolidated financial statements
11
ANDAIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – GENERAL
Andain Inc. (“Company”) was established in 2004 in the State of Nevada, U.S.A. Since commencing operations in 2006, the Company has been engaged, both independently and through its consolidated entities (collectively, the “Group”), in the development of medical technology, from early stage development to advanced clinical trials, for a wide range of medical needs.
The Group incurred losses from operations in the amount of $416, $321 and $1,434 (in thousands) during the six months ended June 30, 2012 and 2011, and during the year ended December 31, 2011, respectively.
The above raise substantial doubt about the ability of the Company to continue as a going concern.
The future success of the Company is dependent upon its ability to invest the required resources in research and development, the quality of its technologies, future market and the continued financial support of its shareholders in order to secure the continuity of its research and development operations.
The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited interim consolidated financial statements as of June 30, 2012 and for the six month period then ended (the “interim financial statements”) were prepared in a condensed form in accordance with the instructions for Form 10-Q and, therefore, do not include all disclosures necessary for a complete presentation of financial position, results of operations, changes in equity, cash flows and all the data and notes which are required when preparing annual financial statements, in conformity with generally accepted accounting principles accepted in the United States of America.
The financial statements have been prepared under the historical cost basis.
The accounting principles used in the presentation of the interim financial statements are consistent with those principles used in the presentation of the latest annual financial statements. All significant accounting policies have been applied consistently with the year ended December 31, 2011, except for the correction of the accounting treatment of certain transactions, as described in Note 5.
12
The preparation of the interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. In the opinion of management, all adjustments considered necessary for fair presentation of the interim financial statements have been included. The results of operations for the six month period ended June 30, 2012, are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. The interim financial statements should be read in conjunction with the Company’s annual financial statements as of December 31, 2011 and for the year then ended and the accompanying notes thereto.
NOTE 3 – FUNCTIONAL AND REPORTING CURRENCY
The consolidated financial statements are presented in U.S. Dollars, which is the Company’s functional currency and presentation currency. The financial statements of entities that use a functional currency other than the U.S. Dollar are translated into U.S. Dollars. Assets and liabilities are translated using the exchange rate on the respective balance sheet dates. Items in the income statement and cash flow statement are translated into U.S. Dollars using the average rates of exchange for the periods involved. The resulting translation adjustments are recorded as a separate component of other comprehensive income/ (loss) within stockholders’ equity.
New Israeli Shekel (“NIS”) amounts as of June 30, 2012 have been translated into U.S. Dollars at the representative rate of exchange on June 30, 2012 (USD 1 = NIS 3.923).
NOTE 4 – RESENT ACCOUNTING PRONOUNCEMENTS ISSUED AND ADOPTED IN THE REPORTED PERIODS
In April 2010, the Financial Accounting Standards Board (“FASB”) issued ASU 2010-17, “Revenue Recognition - Milestone Method,” which provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions. Research or development arrangements frequently include payment provisions whereby a portion or all of the consideration is contingent upon milestone events such as successful completion of phases in a drug study or achieving a specific result from the research or development efforts. An entity often recognizes these milestone payments as revenue in their entirety upon achieving the related milestone, commonly referred to as the milestone method. In future research and development transactions, we will analyze the impact and, when the milestones are substantive, we will recognize them according to ASU 2010-17. Accordingly, the adoption of the provisions of ASU 2010-17 did not have any effect on our financial position, results of operations or cash flows.
In May 2011, the FASB issued amended guidance on fair value measurements. This amended accounting standard clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This accounting standard is effective on a prospective basis for interim and annual reporting periods beginning on or after December 15, 2011. As this accounting standard only requires enhanced disclosure, the adoption of this standard did not impact the Company’s financial position or results of operations.
13
In June 2011, the authoritative guidance for presentation of comprehensive income was amended to eliminate the option to present other comprehensive income and its components in the statement of changes in shareholders’ deficit. Companies can elect to present items of net income and other comprehensive income in one continuous statement or in two separate but consecutive statements. The Company adopted this new guidance on January 1, 2012, as required and it did not have an impact on the Company’s financial position or results of operations.
In June 2011, Accounting Standards Codification (“ASC”) Topic 220, “Comprehensive Income,” was amended to increase the prominence of items reported in other comprehensive income. Accordingly, a company can present all non-owner changes in stockholders’ equity either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company adopted this guidance during the first quarter of 2012 and elected to disclose other comprehensive income in a single continuous statement during interim reporting periods.
In December 2011, the FASB issued new guidance impacting the presentation of certain items on the balance sheet. The new guidance requires an entity to disclose both gross and net information about both instruments and transactions that are eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. This guidance is effective for annual periods beginning on or after January 1, 2013 and interim periods within those annual periods. The adoption of this guidance is not expected to impact the Company’s consolidated financial position, results of operations or cash flows, but may result in certain additional disclosures.
In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-12.” The amendments in ASU 2011-12 defer the changes in ASU 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income. The amendments in this ASU are effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2011. See above for the provisions of ASU 2011-05.
14
NOTE 5 – PRIOR PERIOD ADJUSTMENTS
During the period, the Company restated its financial statements for the year ended December 31, 2011 and the three months ended March 31, 2012, to give retrospective effect to the amendments described below:
|
Consolidated Balance Sheet
as of December 31, 2011
(Audited)
|
||||||||||||
|
As Previously
Reported
|
Prior Period Adjustments (1)
|
As Restated
|
||||||||||
|
Accumulated Deficit During the Development Stage
|
$ | (3,836,712 | ) | $ | (377,689 | ) | $ | (4,214,401 | ) | |||
|
Capital Reserves
|
$ | 6,300 | $ | 377,689 | $ | 383,989 | ||||||
(1) On January 14, 2011, the Company resolved to extend the period for exercise of granted options, dated July 19, 2006, to purchase 1,000,000 restricted shares of the Company's common stock from June 30, 2011 to June 30, 2013. This extension was not given effect in the consolidated financial statements as of December 31, 2011. The fair value attributed to the amendment of the option terms of $377,689 was determined on the basis of Black and Scholes option pricing model.
|
Consolidated Balance Sheet
as of March 31, 2012
(Unaudited)
|
||||||||||||
|
As Previously
Reported
|
Prior Period Adjustments (2)
|
As Restated
|
||||||||||
|
Accumulated Deficit During the Development Stage
|
$ | (3,924,428 | ) | $ | (171,411 | ) | $ | (4,095,839 | ) | |||
|
Non-controlling Interest
|
$ | (189,145 | ) | $ | (13,989 | ) | $ | (203,134 | ) | |||
|
Consolidated Statements of Operations
For the Three Months Ended March 31, 2012
(Unaudited)
|
||||||||||||
|
As Previously
Reported
|
Prior Period Adjustments (2)
|
As Restated
|
||||||||||
|
Extraordinary gain on
forgiveness of debt
|
$ | (230,126 | ) | $ | 230,126 | -- | ||||||
|
Net loss
|
$ | 118,778 | $ | 185,400 | $ | 304,178 | ||||||
|
Net loss attributable to
non-controlling interest
|
$ | 31,062 | $ | 13,989 | $ | 45,051 | ||||||
|
Net loss attributable to
Andain, Inc. stockholders
|
$ | 87,716 | $ | 171,411 | $ | 259,127 | ||||||
|
Net loss per share (basic)
attributable to Andain, Inc.
|
$ | 0.00 | $ | (0.01 | ) | $ | (0.01 | ) | ||||
(2) Represents the elimination of the extraordinary gain on forgiveness of debt that was recognized in the unaudited consolidated statements as of March 31 2012. As of the date of this report settlement of $185,400 of the debt to the company's service provider (legal counsel) has not yet been closed, and the remaining $44,726 was reclassified to research and development expenses.
15
NOTE 6 – STOCKHOLDERS’ EQUITY
Changes in during the six-months ended June 30, 2012 are as follows:
(a) On February 5, 2012, the Company issued a total of 300,000 restricted shares of common stock (150,000 each) to Otzarot Tarshsih Nechasim Vehashkaott Ltd., for consulting work, and Uziel Economic Consultant Ltd., for marketing services. Accordingly, the company charged to profit and loss account compensation of $36,000 for the six month period ended June 30, 2012.
(b) On June 14, 2012, the Company issued 200,000 restricted shares of common stock to the Company’s transfer agent, Globex Transfer, LLC, for professional services. Accordingly, the company charged to profit and loss account compensation of $14,235 for the six month period ended June 30, 2012.
NOTE 7 – PROVISION FOR TAXES
At June 30, 2012, the Company had net operating loss carry forwards of $4,875,930 that may be offset against future federal taxable income through 2025. No tax benefit has been reported with respect to these net operating loss carry forwards in the accompanying financial statements because the Company believes that realization is not likely. Accordingly, the potential tax benefits of the net loss carry forwards are fully offset by a valuation allowance.
NOTE 8 – FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Foreign Exchange Risk.
The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the U.S. Dollar and the New Israeli Shekel. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.
Interest Rate Risk.
The Company is subject to cash flow interest rate risk due to fluctuations in the prevailing levels of market interest rates. The investment manager monitors the Company’s overall interest sensitivity on a monthly basis and the general director on a quarterly basis.
Credit Risk.
Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counter-parties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.
16
Liquidity and Capital Risk Management.
The Company’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for stockholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to stockholders, return capital to stockholders, issue new shares or sell assets to reduce debt.
NOTE 9 – RELATED PARTY TRANSATIONS
The following transactions were carried out with related parties:
|
|
For the Six Months | For the Six Months | ||||||
|
|
Ended June 30, 2012 | Ended June 30, 2011 | ||||||
|
|
(Unaudited) | (Unaudited) | ||||||
|
|
$ | $ | ||||||
|
Income statements:
|
||||||||
|
Directors’ remuneration
|
180,000 | 180,000 | ||||||
|
Balance sheets:
|
||||||||
|
Loans receivable from related companies
|
-- | 278,423 | ||||||
|
Loans with related companies – other assets
|
194,428 | 360,178 | ||||||
|
Loans – key management personnel
|
(708,241 | ) | (357,443 | ) | ||||
|
Loans owing to related companies
|
(7,661 | ) | (111,114 | ) | ||||
NOTE 10 – SUBSEQUENT EVENTS
(a) On July 12, 2012, the Company entered into an Addendum to Attorney-Client Contracts with Brian F. Faulkner, the Company’s counsel. Under this contract, Mr. Faulkner will be issued 1,300,000 restricted shares of common stock as settlement of account payable of $294,485 as of June 30, 2012 for services rendered for the period 2006 - 2011.
(b) On July 29, 2012, the Company entered into a Regulation S Stock Purchase Agreement with Eran Elimelech, son of Sam Elimelech and not living in his same household. Under this agreement, Eran Elimelech purchased from the Company 2,000,000 restricted shares of common stock for a total consideration of $2,000 ($0.001 per share). Sam Elimelech disclaims any beneficial ownership of these shares.
(c) On July 31, 2012, the Company entered into an Attorney-Client Contract with Mr. Faulkner. Under this contract, Mr. Faulkner will be issued 700,000 restricted shares of common stock in payment of services rendered, and to be rendered, in the total amount of $50,000 for the 2012 calendar year. The company has recognized expense of $25,000 for the six months ended on June 30, 2012 period.
(d) On January 1, 2011, the Company began using offices provided by 1568934 Ontario Limited, a greater than 10% stockholder of the Company, located in Beverly Hills, California. This office space is approximately 1,000 square feet; the Company pays restricted shares of common stock each month for rent, electricity, telephones, and other expenses of the office. The Company is under a month-to-month lease of these offices. The Company issued 600,000 restricted shares of common stock to 1568934 Ontario Limited as rent for the 2012 calendar year, under a Corporate Office Services Agreement dated January 5, 2012, which shares were received by 1568934 Ontario Limited on September 21, 2012.
17
PART II – OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
Correction to 2011 Form 10-K:
After the Company’s Form 10-K for the year ended December 31, 2011 was filed, management noted the following items that need correction:
Item 12. Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters:The shares of common stock beneficially owned by Sam Elimelech as of February 28, 2012 should have read: “7,010,878.”
Subsequent Events.
(a) On July 12, 2012, the Company entered into an Addendum to Attorney-Client Contracts with Brian F. Faulkner, the Company’s counsel. Under this contract, Mr. Faulkner will be issued 1,300,000 restricted shares of common stock as settlement of account payable of $294,485 as of June 30, 2012 for services rendered for the period 2006 - 2011.
(b) On July 29, 2012, the Company entered into a Regulation S Stock Purchase Agreement with Eran Elimelech, son of Sam Elimelech and not living in his same household (see Exhibit 10.23). Under this agreement, Eran Elimelech purchased from the Company 2,000,000 restricted shares of common stock for a total consideration of $2,000 ($0.001 per share). Sam Elimelech disclaims any beneficial ownership of these shares.
(c) On July 31, 2012, the Company entered into an Attorney-Client Contract with Mr. Faulkner. Under this contract, Mr. Faulkner will be issued 700,000 restricted shares of common stock in payment of services rendered, and to be rendered, in the total amount of $50,000 for the 2012 calendar year.
(d) On January 1, 2011, the Company began using offices provided by 1568934 Ontario Limited, a greater than 10% stockholder of the Company, located in Beverly Hills, California. This office space is approximately 1,000 square feet; the Company pays restricted shares of common stock each month for rent, electricity, telephones, and other expenses of the office. The Company is under a month-to-month lease of these offices. The Company issued 600,000 restricted shares of common stock to 1568934 Ontario Limited as rent for the 2012 calendar year, under a Corporate Office Services Agreement dated January 5, 2012 (see Exhibit 10.22), which shares were received by 1568934 Ontario Limited on September 21, 2012.
The restricted shares of common stock under items (a) and (c) will be sold by the Company in reliance on the exemptive provisions of Rule 506 of Regulation D under the Securities Act of 1933, as amended. At all times relevant the securities were offered subject to the following terms and conditions:
|
·
|
the sales were made exclusively to a sophisticated investor, as defined in Rule 502;
|
18
|
·
|
the purchaser was given the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and to obtain any additional information which the Company possessed or could acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished;
|
|
·
|
at a reasonable time prior to the sale of securities, the purchaser was advised of the limitations on resale in the manner contained in Rule 502(d)2;
|
|
|
|
|
·
|
neither the Company nor any person acting on its behalf sold the securities by any form of general solicitation or general advertising; and
|
|
·
|
all sales were made through Sam Shlomo Elimelech and Gai Mar-Chaim, directors of the Company.
|
The restricted shares of common stock under items (b) and (d) were sold by by the Company in reliance on the exemptive provisions of Regulation S under the Securities Act of 1933, as amended (“Securities Act”). At all times relevant the securities were offered subject to the following terms and conditions:
|
·
|
The purchaser is not a U.S. Person, as defined under Rule 902 of Regulation S.
|
|
·
|
At the time of the origination of contact concerning the agreement and the date of the execution and delivery of the agreement, the purchaser was outside of the United States.
|
|
·
|
The purchaser will not, during the period commencing on the date of issuance of the shares and ending on the first anniversary of such date, or such shorter period as may be permitted by Regulation S or other applicable securities law (“Restricted Period”), offer, sell, pledge or otherwise transfer the Shares in the United States, or to a U.S. Person for the account or benefit of a U.S. Person, or otherwise in a manner that is not in compliance with Regulation S.
|
|
·
|
The purchaser will, after expiration of the Restricted Period, offer, sell, pledge or otherwise transfer the shares only pursuant to registration under the Securities Act or an available exemption therefrom and, in accordance with all applicable state and foreign securities laws.
|
|
·
|
The purchaser has not in the United States, engaged in, and prior to the expiration of the Restricted Period will not engage in, any short selling of or any hedging transaction with respect to the shares, including without limitation, any put, call or other option transaction, option writing or equity swap.
|
|
·
|
Neither the purchaser nor or any person acting on its behalf has engaged, nor will engage, in any directed selling efforts to U.S. Persons with respect to the shares and the purchaser and any person acting on its behalf have complied and will comply with the “offering restrictions” requirements of Regulation S under the Securities Act.
|
19
|
·
|
The transactions contemplated have not been pre-arranged with a buyer located in the United States or with a U.S. Person, and are not part of a plan or scheme to evade the registration requirements of the Securities Act.
|
|
·
|
Neither the purchaser nor any person acting on its behalf has undertaken or carried out any activity for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States, its territories or possessions, for any of the shares. The purchaser agrees not to cause any advertisement of the shares to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to the shares, except such advertisements that include the statements required by Regulation S under the Securities Act, and only offshore and not in the United States or its territories, and only incompliance with any local applicable securities laws.
|
|
·
|
Each certificate representing the shares is endorsed with a restrictive legend restricting their disposition.
|
|
·
|
The purchaser consents to the Company making a notation on its records or giving instructions to any transfer agent of the Company in order to implement the restrictions on transfer of the shares.
|
|
·
|
all sales were made through Sam Shlomo Elimelech and Gai Mar-Chaim, directors of the Company.
|
No commissions were paid in connection with any of these sales. All funds received from the sale of the common stock are to be used for working capital purposes.
Former Auditor’s Consent.
Dov Weinstein & Co. C.P.A. (Isr), the former independent registered public accounting firm for the Company, provided a consent, dated August 5, 2012, to incorporate by reference its independent auditors’ report dated April 8, 2012 on the consolidated balance sheets as of December 31, 2011 and 2010, and the related consolidated statements of operations, changes in stockholders’ (deficit) and cash flows the years ended December 31, 2011 and 2010, included in the Company’s Form 10-K, into the Company’s previously filed registration statement on Form S-8 (File No. 333-175795) (see Exhibit 23).
ITEM 6. EXHIBITS.
Exhibits included or incorporated by reference herein are set forth in the Exhibit Index.
20
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Andain, Inc.
|
|||
|
Dated: September 24, 2012
|
By:
|
/s/ Sam Shlomo Elimelech | |
|
Sam Shlomo Elimelech, President
|
|||
|
(principal executive officer)
|
|||
21
EXHIBIT INDEX
|
Number
|
Description |
|
3.1
|
Articles of Incorporation, dated July 14, 2004 (incorporated by reference to Exhibit 3.1 of the Form 10-SB filed on March 24, 2005).
|
|
3.2
|
Bylaws, dated August 1, 2004 (incorporated by reference to Exhibit 3.2 of the Form 10-SB filed on March 24, 2005).
|
|
4.1
|
Option issued to 1568934 Ontario Limited by the Company, dated January 14, 2011 (incorporated by reference to Exhibit 10.6 of the Form 8-K filed on March 29, 2011).
|
|
4.2
|
Employee Stock Option Plan, dated January 15, 2011 (incorporated by reference to Exhibit 4.2 of the Form 10-Q filed on November 21, 2011).
|
|
4.3
|
Stock Option Grant to Sam Elimelech, dated January 20, 2011 (incorporated by reference to Exhibit 4.3 of the Form 10-Q filed on November 21, 2011).
|
|
4.4
|
Stock Option Grant to Gai Mar-Chaim, dated January 20, 2011 (incorporated by reference to Exhibit 4.4 of the Form 10-Q filed on November 21, 2011).
|
|
4.5
|
2011 Stock and Option Plan, dated July 26, 2011 (incorporated by reference to Exhibit 4 of the Form S-8 filed on July 26, 2011).
|
|
4.6
|
2012 Stock and Option Plan, dated August 5, 2011 (incorporated by reference to Exhibit 4 of the Form S-8 filed on August 14, 2012).
|
|
10.1
|
Affiliation Agreement between the Impact Active Team Ltd. and P.O.C. High-Tech (1992) Ltd. Corporation, dated June 23, 2004 (incorporated by reference to Exhibit 10.8 of the Form SB-2 filed on February 13, 2007).
|
|
10.2
|
Consulting Agreement between the Company and Dr. Leonid Lurya, dated May 16, 2006 (incorporated by reference to Exhibit 10.2 of the Form 10-K filed on December 30, 2010).
|
|
10.3
|
Share Purchase Agreement between the Company and Pangea Investments GmbH, dated June 11, 2006 (not including Schedule 1, Disclosure Schedule) (incorporated by reference to Exhibit 10.1 of the Form 8-K filed on July 5, 2006).
|
|
10.4
|
Technology Purchase Agreement between the Company and Pangea Investments GmbH, dated June 11, 2006 (incorporated by reference to Exhibit 10.2 of the Form 8-K filed on July 5, 2006).
|
|
10.5
|
Finder’s Fee Agreement between the Company and Pangea Investments GmbH, dated June 11, 2006 (incorporated by reference to Exhibit 10.5 of the Form 8-K filed on July 5, 2006).
|
22
|
10.6
|
Consulting Agreement between the Company and Pangea Investments GmbH, dated July 3, 2006 (incorporated by reference to Exhibit 10.3 of the Form 8-K filed on July 5, 2006).
|
|
10.7
|
Business Development Services Agreement between the Company and Pangea Investments GmbH, dated July 3, 2006 (incorporated by reference to Exhibit 10.4 of the Form 8-K filed on July 5, 2006).
|
|
10.8
|
Employment Agreement between the Company and Sam Elimelech, dated July 3, 2006 (incorporated by reference to Exhibit 10.6 of the Form 8-K filed on July 5, 2006).
|
|
10.9
|
Employment Agreement between the Company and Gai Mar-Chaim, dated July 3, 2006 (incorporated by reference to Exhibit 10.7 of the Form 8-K filed on July 5, 2006).
|
|
10.10
|
Regulation S Stock Purchase Agreement between the Company and 1568934 Ontario Limited, dated July 19, 2006 (incorporated by reference to Exhibit 10.11 of the Form 10-K/A filed on February 7, 2011).
|
|
10.11
|
Consulting Agreement between the Company and Meizam - Advanced Enterprise Center Arad Ltd., dated October 25, 2006 (incorporated by reference to Exhibit 10.10 of the Form 10-K filed on December 30, 2010).
|
|
10.12
|
Employment Agreement between the Company and Sam Elimelech, dated January 1, 2011 (incorporated by reference to Exhibit 10.1 of the Form 8-K filed on March 29, 2011).
|
|
10.13
|
Employment Agreement between the Company and Gai Mar-Chaim, dated January 1, 2011 (incorporated by reference to Exhibit 10.2 of the Form 8-K filed on March 29, 2011).
|
|
10.14
|
Regulation S Stock Purchase Agreement between the Company and Sam Elimelech, dated January 5, 2011 (incorporated by reference to Exhibit 10.3 of the Form 8-K filed on March 29, 2011).
|
|
10.15
|
Regulation S Stock Purchase Agreement between the Company and Gai Mar-Chaim, dated January 5, 2011 (incorporated by reference to Exhibit 10.4 of the Form 8-K filed on March 29, 2011).
|
|
10.16
|
Regulation S Stock Purchase Agreement between the Company and 1568934 Ontario Limited, dated January 14, 2011 (incorporated by reference to Exhibit 10.5 of the Form 8-K filed on March 29, 2011).
|
23
|
10.17
|
Stock Purchase Agreement between the Company and Meizam Arad Investments Ltd., dated January 31, 2011 (incorporated by reference to Exhibit 10.7 of the Form 8-K filed on March 29, 2011).
|
|
10.18
|
Stock Purchase Agreement between Meizam – Advanced Enterprise Center Arad Ltd and Meizam Arad Investments Ltd., dated January 31, 2011 (incorporated by reference to Exhibit 10.8 of the Form 8-K filed on March 29, 2011).
|
|
10.19
|
Regulation S Stock Purchase Agreement between the Company and 1568934 Ontario Limited, dated May 24, 2011 (incorporated by reference to Exhibit 10 of the Form 8-K filed on July 19, 2011) (excluding Schedules 2.4, 2.7, and 2.10).
|
|
10.20
|
Regulation S Stock Purchase Agreement between the Company and 1568934 Ontario Limited, dated July 29, 2011 (incorporated by reference to Exhibit 10 of the Form 8-K filed on August 16, 2011) (excluding Schedules 2.4, 2.7, and 2.10).
|
|
10.21
|
Regulation S Stock Purchase Agreement between the Company and 1568934 Ontario Limited, dated December 26, 2011 (incorporated by reference to Exhibit 10 of the Form 8-K filed on February 6, 2012) (including Schedule 1.4 (Option to Purchase Shares of Common Stock) and Schedule 2.4 (Litigation); excluding Schedule 2.7).
|
|
10.22
|
Corporate Office Services Agreement between the Company and 1568934 Ontario Limited, dated January 5, 2012 (incorporated by reference to Exhibit 10.22 of the Form 10-Q filed on August 29, 2012).
|
|
10.23
|
Regulation S Stock Purchase Agreement between the Company and Eran Elimelech, dated July 29, 2012 (incorporated by reference to Exhibit 10.23 of the Form 10-Q filed on August 29, 2012).
|
|
16.1
|
Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K filed on January 5, 2006).
|
|
16.2
|
Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K filed on November 5, 2010).
|
|
16.3
|
Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K filed on July 24, 2012).
|
|
21
|
Subsidiaries of the Company (incorporated by reference to Exhibit 21 of the Form 10-K filed on April 16, 2012).
|
|
23
|
Consent of Dov Weinstein & Co. C.P.A. (Isr) (incorporated by reference to Exhibit 23 of the Form 10-Q filed on August 29, 2012).
|
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Sam Shlomo Elimelech (filed herewith).
|
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Gai Mar-Chaim (filed herewith).
|
|
32
|
Section 1350 Certification of Sam Shlomo Elimelech and Gai Mar-Chaim (filed herewith).
|
|
101
|
Interactive Data File (filed herewith).
|
24