10-Q 1 e66065_10-q.txt FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2008 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2008 -------------- [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from __________ to __________ Commission File No. 000-52910 CENTRACAN INCORPORATED (Name of Small Business Issuer in Its Charter) Florida 65-0736042 ---------------------------------------------- ----------------- (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) c/o Olshan Grundman Frome et al. 65 East 55th Street, New York, New York 10022 -------------------------------------------------- --------------- (Address of Principal Executive Offices) (Zip Code) Issuer's telephone number, including area code: (212) 451-2254 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes [X] No [ ] As of March 31, 2008, there were 392,457 shares of common stock outstanding. 1 CENTRACAN INCORPORATED FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2008 TABLE OF CONTENTS PART I Page Item 1. FINANCIAL STATEMENTS 3 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 11 Item 4T. CONTROLS AND PROCEDURES 14 PART II Item 1. LEGAL PROCEEDINGS 14 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 14 Item 3. DEFAULTS UPON SENIOR SECURITIES 14 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIY HOLDERS 14 Item 5. OTHER INFORMATION 15 Item 6. EXHIBITS 15 SIGNATURES 15 EXHIBITS 2 PART I Item 1. Financial Statements. CENTRACAN, INC. (A DEVELOPMENT STAGE COMPANY) FINANCIAL STATEMENTS FINANCIAL STATEMENTS AS OF MARCH 31, 2008 AND DECEMBER 31, 2007 AND FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 AND FOR THE PERIOD MARCH 21, 1997 3 CENTRACAN, INC. (A Development Stage Company) TABLE OF CONTENTS -------------------------------------------------------------------------------- FINANCIAL STATEMENTS AS OF MARCH 31, 2008 AND DECEMBER 31, 2007 AND FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 AND FOR THE PERIOD MARCH 21, 1997 (DATE OF INCEPTION) THROUGH MARCH 31, 2008 Balance sheets 5 Statements of operations 6 Statements of cash flows 7-8 4 CENTRACAN, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS --------------------------------------------------------------------------------
UNAUDITED ASSETS MARCH DECEMBER 31, 2008 2007 ------------- ------------- CURRENT ASSETS: Cash $ 9 $ 84 ------------- ------------- Total current assets 9 84 ------------- ------------- TOTAL ASSETS $ 9 $ 84 ============= ============= LIABILITIES AND STOCKHOLDERS' DEFICIENCY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 109,823 $ 105,308 Notes payable - related party 61,759 61,009 ------------- ------------- Total current liabilities 171,582 166,317 ------------- ------------- STOCKHOLDERS' DEFICIENCY: Preferred stock, par value $.0001 per share; 10,000,000 shares authorized; none issued and outstanding -- -- as of June 30, 2007 and December 31, 2006, respectively Common stock, par value $.0001 per share; 50,000,000 shares authorized; 392,457 shares issued and outstanding 40 40 as of June 30, 2007 and December 31, 2006, respectively Additional paid-in capital 137,008 137,008 Deficit accumulated during the development stage (308,621) (303,281) ------------- ------------- Total stockholders' deficiency (171,573) (166,233) ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 9 $ 84 ============ =============
The accompanying notes are an integral part of these financial statements. 5 CENTRACAN, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS --------------------------------------------------------------------------------
THREE MONTHS ENDED FOR THE PERIOD MARCH 31, MARCH 21, 1997 (DATE OF INCEPTION) TO 2008 2007 MARCH 31, 2008 ------------- ------------- -------------------- DEVELOPMENT STAGE REVENUES $ 0 $ 0 $ 24,728 DEVELOPMENT STAGE EXPENSES: Accounting and Auditing 1,500 0 122,371 Advertising 0 0 30,560 Bank charges 75 0 1,005 Consulting fees 0 0 5,082 Legal fees 0 0 48,947 Licenses and taxes 200 2,782 Meals and entertainment 0 0 5,248 Miscellanous expenses 0 0 1,828 Office general 0 0 8,928 Payroll and commissions 0 0 14,430 Shareholder related services (EDGAR ) 1424 0 3,959 Transfer agent fees 888 200 19,895 ------------- ------------- -------------------- TOTAL DEVELOPMENT STAGE EXPENSES 4,087 200 265,035 ------------- ------------- -------------------- LOSS FROM OPERATIONS (4,087) (200) (240,307) LOSS ON INVESTMENT - HEALTHCARE 0 0 (50,016) INTEREST EXPENSE (1,553) (1,137) (18,298) ------------- ------------- -------------------- NET LOSS $ (5,640) $ (1,337) $ (308,621) ============= ============= ==================== LOSS PER COMMON SHARE Basic & diluted $ (0.01) $ (0.00) ============= ============= Weighted-average number of common shares outstanding 392,457 392,457 ============= =============
The accompanying notes are an integral part of these financial statements. 6 CENTRACAN, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS --------------------------------------------------------------------------------
THREE MONTHS ENDED FOR THE PERIOD MARCH 31, MARCH 21, 1997 (DATE OF INCEPTION) OPERATING ACTIVITIES 2008 2007 TO MARCH 31, 2008 ------------- ------------- ------------------- Net loss $ (5,340) $ (1,337) $ (308,621) Adjustment to reconcile net loss to net cash used by operations Shares issued for consulting services 0 0 36,148 Shares issued for termination of HMC 0 0 50,000 Changes in assets and liabilities Increase in accounts payable and accrued expenses 2,962 (5,000) 88,606 Increase in accounts payable and accrued expenses - related party 1,553 1,137 21,217 ------------- ------------- ------------------- Net cash used by operating activities (825) (5,200) (112,650) ------------- ------------- ------------------- FINANCING ACTIVITES Proceeds from promissory notes (750) 7,000 61,759 Proceeds from issuance of common stock 0 0 50,900 ------------- ------------- ------------------- Net cash provided by financing activites (750) 7,000 112,659 ------------- ------------- ------------------- INCREASE IN CASH (75) 1,800 9 CASH, BEGINNING OF PERIOD 84 2,484 0 ------------- ------------- ------------------- CASH, END OF PERIOD $ 9 $ 4,284 $ 9 ============= ============= ===================
The accompanying notes are an integral part of these financial statements. 7 CENTRACAN, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF CASH FLOWS (continued) --------------------------------------------------------------------------------
FOR THE PERIOD MARCH 21, 1997 THREE MONTHS ENDED (DATE OF INCEPTION) MARCH 31, TO 2008 2007 MARCH 31, 2008 -------- -------- ----------------- Supplemental cash flow information: Interest paid $ 0 $ 0 $ 0 ======= ======= =============== Income taxes paid $ 0 $ 0 $ 0 ======= ======= =============== Noncash investing and financing activities: Shares issued to founder for consulting services $ 0 $ 0 $ 81 ======= ======= =============== Shares issued for legal services rendered $ 0 $ 0 $ 500 ======= ======= ===============
The accompanying notes are an integral part of these financial statements. 8 CENTRACAN, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 1. ORGANIZATION Interim Financial Information - The unaudited condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The condensed financial statements should be read in conjunction with the description of business and management's plan of operations, contained in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2007. The results of operations for the three months ended March 31, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008, or for any future period. In the opinion of management, the accompanying financial statements of Centracan, Inc., contains all adjustments necessary to present fairly the Company's financial position as of March 31, 2008 and December 31, 2007, the statements of operations for the three months ended March 31, 2008 and 2007 and cash flows for the three months ended March 31, 2008 and 2007. The results of operations for the three months ended March 31, 2008 and 2007 are not necessarily indicative of the results to be expected for the full year. The accounting policies followed by the Company are set forth in Note 2 to the Company's financial statements included in its Annual Report on Form 10-KSB for the year ended December 31, 2006. DESCRIPTION OF BUSINESS Premier Supplements, Corp. ("the Company") was incorporated on March 21, 1997 under the laws of the State of Florida. On May 15, 1998 the Company changed its name to Centracan, Inc. The Company's operations have been devoted primarily to structuring and positioning itself to take advantage of opportunities available in the pharmaceutical industry. The Company intends to grow through internal development, strategic alliances and acquisitions of existing business. The Company is a development stage company and has had limited activity. GOING CONCERN The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As reflected in the financial statements, development stage losses from 9 CENTRACAN, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- March 21, 1997 (inception) to March 31, 2008 aggregated $308,621 and raise substantial doubt about the Company's ability to continue as a going concern. The Company's cash flow requirements during this period have been met by contributions of capital and debt financing. Management's plans include the potential development of its own business or merging with an operating company. The Company anticipates that financing will be required until such time that the Company has been able to develop its own business or find an appropriate merger candidate. Currently, the Company can not determine when either will occur and as such the Company will need to obtain financing to cover its costs for the foreseeable future. No assurance can be given that these sources of financing will continue to be available. If the Company is unable to generate profits, or unable to obtain additional funds for its working capital needs, it may have to cease operations. The financial statements do not include any adjustments relating to the recoverability and classification of assets or liabilities that might be necessary should the Company be unable to continue as a going concern. 2. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at March 31, 2008 and December 31, 2007 consisted of the following:
March 31, December 31, 2008 2007 -------------- ------------- Accrued expenses, primarily professional fees $ 88,606 $ 85,645 Account payable - to related parties 2,918 2,918 Accrued interest - to related parties 18,299 16,745 -------------- ------------- Total accounts payable and accrued expenses $ 109,823 $ 105,308 ============== =============
3. NOTE PAYABLE - RELATED PARTY Through March 31, 2008, the Company executed notes aggregating a total of $61,759, which bear interest of 10% per annum.. These notes are convertible into shares of common stock at any time at the conversion rate of $.01 per share. The value of the conversion feature was not considered material. A note payable in the amount of $24,409, became due January 1, 2007 and accordingly is in default, but otherwise is similar to all other notes that are due on demand. 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Plan of Operation We intend to seek to acquire assets or shares of an entity actively engaged in business that generates revenues, in exchange for its securities, although we have no particular acquisitions in mind and have not entered into any negotiations regarding such an acquisition. None of our officers, directors, or affiliates have engaged in any preliminary contact or discussions with any representative of any other company regarding the possibility of an acquisition or merger between us and such other company as of the date of this registration statement. Results of Operation We have not had any operating income since 1998. As of March 31, 2008, we had an accumulated deficit of $308,621, comprised of costs mainly associated with administrative expenses. General Business Plan Our purpose is to seek, investigate and, if such investigation warrants, merge or acquire an interest in business opportunities presented to us by persons or companies that desire to seek the perceived advantages of a public reporting company. We will not restrict our search to any specific business, industry, or geographical location and we may participate in a business venture of virtually any kind or nature. This discussion of the proposed business is purposefully general and is not meant to be restrictive to our virtually unlimited discretion to search for and enter into potential business opportunities. We may seek a business opportunity with entities which have recently commenced operations, or that wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly owned subsidiaries in various businesses or acquire existing businesses as subsidiaries. Our executive officers and directors intend to contact a number of broker-dealers, investment bankers, venture capitalist and other members of the financial community likely to find us a suitable vehicle capable of meeting the needs of their clients, associates and contacts. We cannot be sure that these efforts will in fact result in our being presented with any private companies seeking to consummate a reverse merger/acquisition transaction. To date, we have not been approached and have not approached any person or entity with regard to any specific proposed reverse merger/acquisition transaction. We anticipate that the selection of a business opportunity in which to participate will be complex and extremely risky. Due to general economic conditions, rapid technological advances being made in some industries and shortages of available capital, we believe that there are 11 numerous companies seeking the perceived benefits of a publicly registered corporation. Such perceived benefits may include: o Providing increased liquidity for its existing principals and stockholders. o Facilitating or improving the terms by which additional equity financing may be sought. o Creating an "alternative currency" (i.e., publicly traded shares) that can be used for acquisitions. o Providing increased liquidity for incentive stock option plans or similar employee benefit plans in order to attract and retain key employees. o Providing an exit mechanism or retirement strategy for its owners. Potentially, available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We have, and will continue to have, no capital with which to provide the owners of business opportunities with any significant cash or other assets which going public through an initial public offering would provide. There is, however, significant other benefits to going public through a merger or acquisition transaction with a blank check company such as ours, as opposed to an initial public offering, which management believes will make us attractive to a potential merger or acquisition candidate, such as: o The costs are significantly less than the costs required for an initial public offering. o The time required completing a merger or acquisition transaction with a blank check company is considerably less than for an initial public offering. o Additional risks are involved in an initial public offering in that the initial public offering may be withdrawn due to an unstable market condition even after most of the up-front costs have been expended. o Initial public offerings generally require greater attention from top management. o While an initial public offering requires a business to have a relatively long and stable earnings history, the lack of an earnings history does not normally keep a private company from completing a merger or acquisition transaction with a blank check company. o The private company does not require an underwriter. o There is less dilution of ownership control. The owners of the business opportunities will, however, incur significant legal and accounting costs in connection with acquisition of a business opportunity, including the costs of preparing Form 8-K's or 10-K's, agreements and related reports and documents. The Exchange Act specifically requires that any merger or acquisition candidate comply with all applicable reporting requirements, which include providing audited financial statements to be included within the numerous filings relevant to complying with the Exchange Act. Nevertheless, our officers and directors have not conducted market research and are not aware of statistical data that would support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity. Management believes that any transaction, whether a merger or acquisition with a private company will require us to issue a substantial majority of our common stock to the owners of the 12 private company in exchange for all of their privately held shares. The transaction will effectively result in the owners and management of the private business acquiring actual or effective operating control of us, with our existing stockholders continuing only as minority passive investors. This type of transaction is popularly known as a "reverse merger" or "reverse acquisition." It is referred to as a reverse merger or reverse acquisition because, although for legal purposes, we will acquire the private company, the transaction can be viewed as if we have been acquired by the private company due to the fact that the former owners of the private company will own a substantial majority of our common stock after the transaction. The Securities and Exchange Commission considers this type of reverse merger/acquisition transaction to be a capital transaction in substance, rather than a business combination. That is, the transaction will be equivalent to the issuance of stock by the private company for our net monetary assets, accompanied by a recapitalization. As a result, our post-reverse merger/acquisition comparative historical financial statements will be those of the private company, with appropriate footnote disclosure concerning the changes in the capital structure of the private company effected at the reverse merger/acquisition transaction date. Evaluation of Acquisition Opportunities We intend to request that we be provided with written materials regarding the private company, prior to considering a reverse merger/acquisition transaction with that company. We will request such items as: o a description of products, service and company history; o management resumes; o audited financial information; o available projections with related assumptions upon which they are based; o an explanation of proprietary products and services; o evidence of existing patents, trademarks or service marks or rights thereto; o present and proposed forms of compensation to management; o a description of transactions between the privately-held company and its affiliates during relevant prior periods; o a description of present and required facilities; o an analysis of risks and competitive conditions; o a financial plan of operation and estimated capital requirements; and o other information deemed relevant. We will endeavor to personally meet with management and key personnel of companies that are serious candidates for concluding a reverse merger or acquisition. We will also attempt to obtain independent analysis or verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of our limited financial resources. We will not acquire or merge with any company for which current audited financial statements cannot be obtained prior to closing the proposed transaction. Requiring audited financial statements prior to closing will ensure that we can meet our regulatory filing obligations for such transactions at the time of closing. We intend to take into consideration the following factor when analyzing a company for its potential as a reverse merger/acquisition candidate: o Potential for growth, indicated by new technology, anticipated market expansion or new products; 13 o Competitive position as compared to other companies of similar size and experience within the privately-held company's industry segment as well as within the industry as a whole; o Strength and diversity of management, either in place or scheduled for recruitment; o Capital requirements and anticipated availability of required funds, to be provided by us or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources; o The extent to which the business of the privately-held company can be advanced; o The regulatory environment within the privately-held company's industry; o The market performance of equity securities of similarly situated companies in the privately-held company's industry; and o Reputation of owners, principals and/or managers for complying with and not violating federal and/or state securities laws. The time, effort and expense required to evaluate a private company for a reverse merger/acquisition transaction with us and to effectuate such a transaction cannot be predicted with any degree of accuracy. We do not have any full-time employees and our executive officers and directors, are not required to devote any specific amount of time to our business. We do not foresee entering into a merger or acquisition transaction with any business with which our officers or directors are currently affiliated. Should we determine in the future, contrary to foregoing expectations that a transaction with an affiliate would be in our best interests, Florida law generally permits us to enter into such a transaction. Item 4T. Controls and Procedures This quarterly report does not include a report of management's assessment regarding internal control over financial reporting due to a transition period established by rules of the Securities and Exchange Commission for newly public companies. PART II Item 1. Legal Proceedings. None. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None. Item 3. Defaults Upon Senior Securities. A promissory note payable in the amount of $24,409 became due January 1, 2007 and accordingly is in default. Item 4. Submission of Matters to a Vote of Security Holders. None. 14 Item 5. Other Information. None. Item 6. Exhibits. Index to Exhibits. 3.1* Articles of Incorporation 3.2* Amendment No. 1 to Articles of Incorporation 3.3* Amendment No. 2 to Articles of Incorporation 3.4* By-laws 31.1 Rule 13(a) -- 14(a)/15(d) -- 14(a) Certification (Principal Executive Officer) 31.2 Rule 13(a) -- 14(a)/15(d) -- 14(a) Certification (Principal Financial Officer) 32.1 Section 1350 Certification (Principal Executive Officer) 32.2 Section 1350 Certification (Principal Financial Officer) * Incorporated by Reference to the Company's Registration Statement on Form 10-SB filed on November 13, 2007. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CENTRACAN INCORPORATED Dated: May 29, 2008 By: /s/Jerome Goubeaux --------------------------------------- Jerome Goubeaux, Chief Executive Officer and Director 15