8-K/A 1 g0587.txt AMENDMENT NO. 1 TO FORM 8-K DATED 5/29/04 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): May 29, 2004 ALPHA NUTRACEUTICALS, INC. (Exact name of Registrant as specified in its charter) California 0-19644 33-0300193 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 1229 Third Avenue, Chula Vista, CA 91911 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (619) 427-3077 Total sequentially numbered pages in this document: 3 Exhibit Index appears on page 3 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. As previously reported on Form 8-K filed with the Securities and Exchange Commission on June 1, 2004, Alpha Nutraceuticals, Inc. ("ANUI") acquired the assets and business of Avidia Nutritional Group, Inc., a California corporation ("ANG"). ANG is in the business of manufacturing nutritional supplements while ANUI was, prior to the acquisition, in the business of retailing such supplements, primarily via mail order sales. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. ITEM 7(a). FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The following financial statements of Avidia Nutritional Group, Inc., a California Corporation, are set forth below: (i) the audited balance sheets dated as of December 31, 2003 and April 30, 2004, the audited statements of operations, stockholders' equity and cash flows for the periods ended December 31, 2003 and April 30, 2004, the notes related thereto and the related auditors' report. ================================================================================ SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ALPHA NUTRACEUTICALS, INC. Date: August 3, 2004 /s/ Louis J. Paulsen ------------------------------ Name: Louis J. Paulsen Title: President ================================================================================ INDEX TO FINANCIAL STATEMENTS AVIDIA NUTRITIONAL GROUP, INC. Audit Report of Armando C. Ibarra, CPA, P.C................................F-1 Balance Sheets dated December 31, 2003 and April 30, 2004..................F-2 Statement of Operations for the periods ended December 31, 2003 and April 30, 2004 ............................................................F-4 Statements of Cash Flow for the periods ended December 31, 2003 and April 30, 2004.............................................................F-5 Statement of Changes In Equity.............................................F-6 Notes to Audited Financial Statements......................................F-7 ARMANDO C. IBARRA Certified Public Accountants A Professional Corporation Armando C. Ibarra, C.P.A. Members of the California Society of Certified Public Accountants Armando Ibarra, Jr., C.P.A., JD Members of the of American Institute of Certified Public Accountants Members of the Better Business Bureau since 1997 INDEPENDENT AUDITORS' REPORT To the Board of Directors Avidia Nutrition, Inc. We have audited the accompanying balance sheets of Avidia Nutrition, Inc. as of April 30, 2004 and the related statements of operations, changes in stockholders' equity and cash flows for the four months then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Avidia Nutrition, Inc. as of April 30, 2004, and the results of their operations and their cash flows for the four months then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Armando C. Ibarra, C.P.A. ---------------------------------- ARMANDO C. IBARRA, CPA July 26, 2004 Chula Vista, Ca. 91910 371 "E" Street, Chula Vista, CA 91910 Tel: (619) 422-1348 Fax: (619) 422-1465 F-1 AVIDIA NUTRITION, INC. Balance Sheets -------------------------------------------------------------------------------- ASSETS As of As of April 30, December 31, 2004 2003 Audited Unaudited -------- -------- CURRENT ASSETS Cash $ 8,413 $ 15,977 Accounts receivable 66,570 28,672 Inventory 8,875 25,164 -------- -------- TOTAL CURRENT ASSETS 83,858 69,813 NET PROPERTY & EQUIPMENT 118,166 119,914 OTHER ASSETS Deposits 5,940 5,940 Loan fees -- 3,536 -------- -------- TOTAL OTHER ASSETS 5,940 9,476 -------- -------- TOTAL ASSETS $207,964 $199,203 ======== ======== See Notes to the Financial Statements F-2 AVIDIA NUTRITION, INC. Balance Sheets -------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
As of As of April 30, December 31, 2004 2003 Audited Unaudited --------- --------- CURRENT LIABILITIES Accounts payable $ 101,163 $ 85,760 Loan payable - Short-term portion 11,850 -- --------- --------- TOTAL CURRENT LIABILITIES 113,013 85,760 LONG-TERM LIABILITIES Loan payable - Long-term portion 124,041 137,879 Shareholder loan payable 46,900 46,900 --------- --------- TOTAL LONG-TERM LIABILITIES 170,941 184,779 --------- --------- TOTAL LIABILITIES 283,954 270,539 STOCKHOLDERS' EQUITY (DEFICIT) Common stock ($0.00 par value, 10,000,000 shares authorized: 10,000,000 shares issued and outstanding as of Aprl 30, 2004 and December 31, 2003) -- -- Retained earnings (deficit) (75,990) (71,336) --------- --------- TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (75,990) (71,336) --------- --------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 207,964 $ 199,203 ========= =========
See Notes to the Financial Statements F-3 AVIDIA NUTRITION, INC. Statements of Operations -------------------------------------------------------------------------------- Four Months Ended Year Ended April 30, December 31, 2004 2003 Audited Unaudited ------------ ------------ REVENUES Sales $ 163,344 $ 438,237 ------------ ------------ TOTAL REVENUES 163,344 438,237 Costs of revenues (113,439) (307,856) ------------ ------------ GROSS PROFIT 49,905 130,381 OPERATING COSTS Depreciation expense 1,748 6,990 Administrative expenses 79,954 179,578 ------------ ------------ TOTAL OPERATING COSTS 81,702 186,568 ------------ ------------ OPERATING INCOME (LOSS) (31,797) (56,187) OTHER INCOME & (EXPENSES) Other income -- 6,000 ------------ ------------ TOTAL OTHER INCOME & (EXPENSES) -- 6,000 ------------ ------------ NET INCOME (LOSS) $ (31,797) $ (50,187) ============ ============ BASIC INCOME (LOSS) PER SHARE $ (0.00) $ (0.01) ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 10,000,000 10,000,000 ============ ============ See Notes to the Financial Statements F-4 AVIDIA NUTRITION, INC. Statement of Stockholders' Equity From December 5, 2002 to April 30, 2004 --------------------------------------------------------------------------------
Additional Common Common Paid-in Retained Shares Stock Capital Earnings Total ------ ----- ------- -------- ----- Balance, December 31, 2002 10,000,000 $ -- $ -- $(21,149) $(21,149) Net loss for the year ended December 31, 2003 (50,187) (50,187) ----------- -------- ----- -------- -------- BALANCE, DECEMBER 31, 2003 10,000,000 -- -- (71,336) (71,336) =========== ======== ===== ======== ======== Prior period adjustment 27,143 27,143 Net loss for the four months ended April 30, 2004 (31,797) (31,797) ----------- -------- ----- -------- -------- BALANCE, APRIL 30, 2004 10,000,000 $ -- $ -- $(75,990) $(75,990) =========== ======== ===== ======== ========
See Notes to the Financial Statements F-5 AVIDIA NUTRITION, INC. Statements of Cash Flows --------------------------------------------------------------------------------
Four Months Ended Year Ended April 30, December 31, 2004 2003 Audited Unaudited -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $(31,797) $(50,187) Depreciation & amortization expense 1,748 7,611 (Increase) decrease in accounts receivable (37,898) (28,672) (Increase) decrease in inventory 16,289 (23,664) (Increase) decrease in intangible assets 1,036 -- Increase (decrease) in accounts payable 15,403 85,760 -------- -------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (35,219) (9,152) CASH FLOWS FROM INVESTING ACTIVITIES Net sale (purchase) of fixed assets -- (10,571) -------- -------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- (10,571) CASH FLOWS FROM FINANCING ACTIVITIES Change in loan fees 2,500 -- Change in loan payable (1,988) (9,121) Prior period adjustment 27,143 -- -------- -------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 27,655 (9,121) -------- -------- NET INCREASE (DECREASE) IN CASH (7,564) (28,844) CASH AT BEGINNING OF PERIOD 15,977 44,821 -------- -------- CASH AT END OF PERIOD $ 8,413 $ 15,977 ======== ======== SUPPLEMENTAL CASH FLOW DISCLOSURES: Cash paid during year for interest $ -- $ -- ======== ======== Cash paid during year for taxes $ -- $ -- ======== ========
See Notes to the Financial Statements F-6 AVIDIA NUTRITION, INC. Notes to Financial Statements As of April 30, 2004 NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS General Avidia Nutrition, Inc. (the Company) was incorporated under the laws of the State of California on August 5, 2002. The Company's offices are located at 20727/29 Dearborn Street, Chatworth, Ca. 91311 (Los Angeles). Nature of Operations The Company is in the business of manufacturing and selling of vitamins and nutritional supplements. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Accounting Method The Company's policy is to use the accrual method of accounting to prepare and present financial statements, which conform to generally accepted accounting principles (GAAP). The Company has elected a December 31, year-end. b. Cash Equivalents The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents. c. Accounts Receivable The Company considers accounts receivable to be fully collectible; accordingly, no allowances for doubtful accounts are required. If amounts become uncollectable, they will be charged to operations when that determination is made. d. Inventory Inventory is stated at the lower of cost (first-in, first-out) or market. Inventory costs include any material, labor and manufacturing overhead incurred by the Company in the production of inventory. F-7 AVIDIA NUTRITION, INC. Notes to Financial Statements As of April 30, 2004 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued e. Property and Equipment Property, equipment and leasehold improvements are stated at costs less accumulated depreciation or amortization. Maintenance and repairs, as well as renewals for minor amounts are charged to expenses. Renewals and betterments of substantial amount are capitalized, and any replaced or disposed units are written off. f. 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 of 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. In accordance with FASB 16 all adjustments are normal and recurring. g. Revenue Recognition and Deferred Revenue Avidia Nutrition Group, Inc. revenue consists of the sale of manufactured vitamins and nutritional supplements and the retail or wholesale of vitamins and nutritional supplements. Revenue is recognized when an order is shipped. h. Related Party Transactions Short-term and Long-term loan payable represents a SBA loan that was personally guaranteed by the Companies shareholders. This loan was established on September 5, 2002 for $150,000. The loan is a 10-year loan with interest being lowest prime rate plus 2.75% (adjusted each calendar quarter). A short-term amount of $11,850 and long-term amount of $124,042 was set as of April 30, 2004. The note payable to shareholders consists of unsecured advances made to the Company for working capital purposes. The advances were made under a promissory note agreement that allows the Company to borrow from certain shareholders. As of April 30, 2004 the note was classified as a non-interest bearing note. F-8 AVIDIA NUTRITION, INC. Notes to Financial Statements As of April 30, 2004 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued i. Basic Earnings per Share In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. SFAS No. 128 supersedes the provisions of APB No. 15, and requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of SFAS No. 128 effective July 20, 1998 (inception). Basic net loss per share amounts is computed by dividing the net income by the weighted average number of common shares outstanding. Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company. j. Income Taxes The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of "temporary differences" by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. NEW ACCOUNTING PRONOUNCEMENTS: In April 2002, the Financial Accounting Standards Board issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections ("SFAS 145"). Among other things, SFAS 145 eliminates the requirement that gains and losses from the extinguishments of debt be classified as extraordinary items. SFAS 145 is effective for fiscal years beginning after May 15, 2002, with early adoption permitted. The adoption of SFAS 145 did not have a material effect on the Company's financial statements. In June 2002, the Financial Accounting Standards Board issued SFAS No. 146. The standard requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. The adoption of SFAS 146 did not have an effect on the Company's financial statements. F-9 AVIDIA NUTRITION, INC. Notes to Financial Statements As of April 30, 2004 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued NEW ACCOUNTING PRONOUNCEMENTS - continued: In October 2002, the Financial Accounting Standards Board issued SFAS No. 147, "Acquisitions of Certain Financial Institutions - an amendment of FASB Statements No. 72 and 144 and FASB interpretation No. 9". SFAS 147 removes acquisitions of financial institutions from the scope of both Statement 72 and interpretation 9 and requires that those transactions be accounted for in accordance with FASB Statements No. 141, Business Combinations, and No. 142 Goodwill and Other Intangible Assets. Thus, the requirement in paragraph 5 of Statement 72 to recognize (and subsequently amortize) any excess of the fair value of liabilities assumed over the fair value of tangible and identifiable intangible assets acquired as an unidentifiable intangible asset no longer applies to acquisitions within the scope of this Statement. In addition, this Statement amends FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, to include in its scope long-term customer-relationship intangible assets of financial institutions such as depositor and borrower relationship intangible assets and credit cardholder intangible assets. Consequently, those intangible assets are subject to the same undiscounted cash flow recoverability test and impairment loss recognition and measurement provisions that Statement 144 requires for other long-lived assets that are held and used. SFAS 147 is effective October 1, 2002. The adoption of SFAS 147 did not have an effect on the Company's financial statements. In December 2002, the Financial Accounting Standards Board issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure" (SFAS 148). SFAS 148 amends SFAS No. 123 "Accounting for Stock-Based compensation" (SFAS 123), to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. SFAS 148 is effective for fiscal years beginning after December 15, 2002. The interim disclosure provisions are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002. The adoption of SFAS 148 did not have an effect on the Company's financial statements. NOTE 3. INVENTORY Inventory at April 30, 2004 and December 31, 2003 is summarized as follows: April 30, December 31, 2004 2003 ------- ------- Inventory $ 8,875 $25,164 ------- ------- Total inventory $ 8,875 $25,164 ======= ======= F-10 AVIDIA NUTRITION, INC. Notes to Financial Statements As of April 30, 2004 NOTE 3. INVENTORY (CONTINUED) Inventory is stated at the lower of cost (first-in, first-out) or market. Inventory costs include any material, labor and manufacturing overhead incurred by the Company in the production of inventory. Inventory is primarily vitamins and nutritional supplements purchased from outside manufacturers then shipped to the retailer for sale. NOTE 4. PROPERTY & EQUIPMENT Property and equipment is stated at cost. Additions, renovations, and improvements are capitalized. Maintenance and repairs, which do not extend asset lives, are expensed as incurred. Depreciation is provided on a straight-line basis over the estimated useful lives ranging from 27.5 years for commercial rental properties, 5 years for tenant improvements, and 5 - 7 years on furniture and equipment. April 30, December 31, 2004 2003 --------- --------- Equipment $ 53,075 $ 53,075 Leasehold Improvements 74,811 74,811 --------- --------- $ 127,886 $ 127,886 Less Accumulated Depreciation (9,720) (7,971) --------- --------- Net Property and Equipment $ 118,166 $ 119,914 ========= ========= Depreciation expense for the periods ended April 30, 2004 and December 31, 2003 was $1,748 and $6,990, respectively. NOTE 5. INCOME TAXES As of April 30, 2004 -------------------- Deferred tax assets: Net operating tax carryforwards $ 14,087 Other 0 -------- Gross deferred tax assets 14,087 Valuation allowance (14,087) -------- Net deferred tax assets $ 0 ======== Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance. F-11 AVIDIA NUTRITION, INC. Notes to Financial Statements As of April 30, 2004 NOTE 6. SCHEDULE OF NET OPERATING LOSSES 2002 Net Operating Loss $(21,149) 2003 Net Operating Loss (50,187) 2004 Net Operating Loss (four months) (4,654) -------- Net Operating Loss $(75,990) ======== As of April 30, 2004, the Company has a net operating loss carryforward of approximately $75,990, which will expire 20 years from the date the loss was incurred. NOTE 7. SUBSEQUENT EVENT On May 1, 2004, the Company entered into an agreement were Alpha Nutraceuticals, Inc. would purchase the assets subject to liabilities of Avidia Nutrition, Inc. The acquisition was recorded as a purchase in accordance with Accounting Principles Board Opinions No. 16 (APB No. 16). Alpha Nutraceutical, Inc. through is subsidiary (Let's Talk Health, Inc.) is in the business of retail sales of nutritional supplements and vitamins via internet and telephone orders. F-12