8-K/A 1 a4583721.txt ALPHA NUTRACEUTICALS 8-K/A 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): January 1, 2004 ALPHA NUTRACEUTICALS, INC. (Exact name of Registrant as specified in its charter) California 0-19644 33-0300193 (State or other (Commission File Number) (I.R.S. Employer jurisdiction of Identification No.) incorporation) 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 January 16, 2004, Sierra-Rockies Corporation, a California corporation, acquired the assets of Let's Talk Health, Inc., also a California corporation, pursuant to a Plan of Reorganization approved by the United States Bankruptcy Court for the Southern District of California. Sierra-Rockies agreed to issue 3,000,000 shares to the owners of Let's Talk Health in exchange for that company's assets, and the President of Let's Talk Health was named President of Sierra-Rockies. Sierra-Rockies subsequently changed its name to Alpha Nutraceuticals, Inc., a California corporation (the "Registrant"). This Form 8-K/A is being filed for the purpose of providing the required audited and unaudited financial information concerning the Registrant. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. ITEM 7(a). FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The following financial statements of Let's Talk Health, Inc., a California Corporation, are set forth below: (i) the audited balance sheets dated as of December 31, 2002 and 2003, the audited statements of operations, stockholders' equity and cash flows for the years ended December 31, 2002 and 2003, the notes related thereto and the related auditors' reports, and (ii) the pro forma, unaudited, consolidated balance sheet as of December 31, 2003 and the pro forma, unaudited, consolidated statement of operations for the year ended December 31, 2003. INDEX TO FINANCIAL STATEMENTS LET'S TALK HEALTH, INC. AND CONSOLIDATED WITH ALPHA NUTRACEUTICALS, INC. Audit Report of Armando C. Ibarra, CPA, P.C.........................F-1 Balance Sheets dated December 31, 2002 and 2003.....................F-2 Statement of Operations for the years ended December 31, 2002 and 2003 ................ ..............................................F-4 Statements of Cash Flow for the years ended December 31, 2002 and 2003................................................................F-5 Statement of Changes In Equity......................................F-6 Notes to Audited Financial Statements...............................F-7 Review Report of Armando C. Ibarra, C.P.A., P.C....................F-14 Pro Forma Consolidated Balance Sheet dated December 31, 2004.......F-15 Pro Forma Consolidated Statement of Operations for the year ended December 31, 2003.................................................F-17 Notes to Consolidated Financial Statements.........................F-18 To the Board of Directors Let's Talk Health, Inc. INDEPENDENT AUDITORS' REPORT We have audited the accompanying balance sheets of Let's Talk Health, Inc. as of December 31, 2003 and 2002 and the related statements of operations, changes in stockholders' equity and cash flows for the years 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 Let's Talk Health, Inc. as of December 31, 2003 and 2002, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. ---------------------------------- ARMANDO C. IBARRA, CPA February 20, 2004 Chula Vista, Ca. 91910 F-1 LET'S TALK HEALTH, INC. Balance Sheets -------------------------------------------------------------------------------- ASSETS As of As of December 31, December 31, 2003 2002 ------------ ------------ CURRENT ASSETS Cash $ 53,441 $ 49,440 Accounts receivable 141,008 150,630 Note receivable (a related party) 82,710 81,895 Inventory 218,353 246,415 Income tax benefit - 12,365 --------------- -------------- Total Current Assets 495,512 540,745 NET PROPERTY & EQUIPMENT 22,426 25,137 --------------- -------------- TOTAL ASSETS $ 517,938 $ 565,882 =============== ============== See Notes to Financial Statements F-2 LET'S TALK HEALTH, INC. Balance Sheets -------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) As of As of December 31, December 31, 2003 2002 ------------ ----------- CURRENT LIABILITIES Accounts payable $ 291,595 $ 505,782 Sales tax payable 9,650 5,220 Income taxes payable 44,233 960 Other taxes payable - 1,865 Insurance payable 360 - ------------- -------------- Total Current Liabilities 345,838 513,827 LONG-TERM LIABILITIES Stockholders' loans 111,197 76,075 Note payable - (a related party) 30,000 64,000 ------------- -------------- Total Long-Term Liabilities 141,197 140,075 ------------- -------------- TOTAL LIABILITIES 487,035 653,902 STOCKHOLDERS' EQUITY (DEFICIT) Common stock (no par value, 10,000 shares authorized 10,000 shares issued and outstanding as of December 31, 2003 and 2002, respectively) 10,000 10,000 Retained earnings (deficit) 20,903 (98,020) ------------- -------------- Total Stockholders' Equity (Deficit) 30,903 (88,020) TOTAL LIABILITIES ------------- ------------- & STOCKHOLDERS' EQUITY (DEFICIT) $ 517,938 $ 565,882 ============= ============= See Notes to Financial Statements F-3 LET'S TALK HEALTH, INC. Statements of Operations -------------------------------------------------------------------------------- Year Ended Year Ended December 31, December 31, 2003 2002 REVENUES Sales - supplements $ 2,695,603 $ 2,279,322 Returns and allowances (22,881) (6,678) ----------------- ---------------- Total Revenues 2,672,722 2,272,644 COST OF REVENUES (1,460,833) (1,464,030) ----------------- ---------------- GROSS PROFIT 1,211,889 808,614 OPERATING COSTS Depreciation expense 10,041 10,670 Administrative expenses 1,026,327 867,402 ----------------- ---------------- Total Operating Costs 1,036,368 878,072 ----------------- ---------------- OPERATING INCOME (LOSS) 175,521 (69,458) ----------------- ---------------- INCOME (LOSS) BEFORE INCOME TAXES $ 175,521 $ (69,458) INCOME TAX (PROVISION) BENEFIT (56,598) 12,365 ----------------- ---------------- NET INCOME (LOSS) $ 118,923 $ (57,093) ================= ================ BASIC EARNINGS (LOSS) PER SHARE $ 11.89 $ (5.71) ================= ================ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 10,000 10,000 ================= ================ See Notes to Financial Statements F-4
LET'S TALK HEALTH, INC. Statements of Cash Flows Year Ended Year Ended December 31, ecember 31, 2003 2002 CASH FLOWS FROM OPERATING ACTIVITIES ------------------------------------ Net income (loss) $ 118,923 $ (57,093) Depreciation expense 10,041 10,670 (Increase) decrease in accounts receivable 9,622 (41,468) (Increase) decrease in inventory 28,062 (100,000) (Increase) decrease in income tax benefit 12,365 (12,365) Increase (decrease) in accounts payable (214,187) 298,247 Increase (decrease) in sales tax payable 4,430 2,025 Increase (decrease) in income taxes payable 43,273 - Increase (decrease) in other taxes payable (1,865) - Increase (decrease) in insurance payable 360 - ------------ ------------ Net Cash Provided by (Used in) Operating Activities 11,024 100,016 CASH FLOWS FROM INVESTING ACTIVITIES ------------------------------------ Net sale (purchase) of fixed assets (7,330) (423) ------------ ------------ Net Cash Provided by (Used in) Investing Activities (7,330) (423) CASH FLOWS FROM FINANCING ACTIVITIES ------------------------------------ Change in note receivable (815) (81,895) Change in loan payable 35,122 (62,927) Change in notes payable (34,000) 64,000 ------------ ------------ Net Cash Provided by (Used in) Financing Activities 307 (80,822) ------------ ------------ Net Increase (Decrease) in Cash 4,001 18,771 Cash at Beginning of Year 49,440 30,669 ------------ ------------ Cash at End of Year $ 53,441 $ 49,440 ============ ============ Supplemental Cash Flow Disclosures: Cash paid during year for interest $ - $ - ============ ============ Cash paid during year for taxes $ - $ - ============ ============
F-5 LET'S TALK HEALTH, INC. Statement of Stockholders' Equity From December 31, 2001 to December 31, 2003
Additional Common Common Paid-in Retained Total Shares Stock Capital Earnings Balance, December 31, 2001 10,000 $ 10,000 $ - $ (40,927) $ (30,927) Net loss for the year ended December 31, 2002 (57,093) (57,093) ------------------------------------------------------------------------------------------------------------------------------------ Balance, December 31, 2002 10,000 10,000 - (98,020) (88,020) ==================================================================================================================================== Net lncome for the year ended December 31, 2003 118,923 118,923 ------------------------------------------------------------------------------------------------------------------------------------ Balance, December 31, 2003 10,000 $ 10,000 $ - $ 20,903 $ 30,903 ====================================================================================================================================
See Notes to Financial Statements F-6 LET'S TALK HEALTH, INC. Notes to Financial Statements As of December 31, 2003 NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS General Let's Talk Health, Inc. (the Company) was incorporated under the laws of the State of California on September 22, 1999. The Company's offices are located at 1229-C Third Ave. in Chula Vista, California (San Diego County). Nature of Operations The Company is in the business of retailing vitamins and nutritional supplements via internet and telephone orders. 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 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 Let's Talk Health, Inc. revenue consists of the sale of nutritional supplements via internet and telephone orders. Revenue is recognized when a sale is made. h. Related Party Transactions The majority of the Company's accounts receivable are from Hospital Santa Monica, a related and controlled US corporation. The Company's note receivable is also from Hospital Santa Monica. Long-term note payable represents a note to a related party. This note was established on September 2002 with a related party. As of December 31, 2003 the note was classified as a non-interest bearing note. 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 December 31, 2003 the note was classified as a non-interest bearing note. The Company paid a salary to a shareholder of the Company in the amount of $5,000. The Company rents office space from a shareholder under a month-to-month verbal agreement. Rent expense for 2003 and 2002 was $53,825 and $48,525, respectively. F-8 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 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. F-10 NOTE 3. INVENTORY Inventory at December 31, 2003 and 2002 is summarized as follows: December 31, December 31, 2003 2002 -------------------- -------------------- Vitamins & nutritional supplements $ 218,353 $ 246,415 -------------------- -------------------- Total inventory $ 218,353 $ 246,415 ==================== ==================== 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.
December 31, December 31, 2003 2002 -------------------- -------------------- Equipment $ 38,830 $ 31,500 Furniture 2,100 2,100 Leasehold Improvements 10,662 10,662 -------------------- -------------------- $ $ 44,262 51,592 Less Accumulated Depreciation (29,166) (19,125) -------------------- -------------------- Net Property and Equipment $ 22,426 $ 25,137 ==================== ====================
Depreciation expense for the years ended December 31, 2003 and 2002 was $10,041 and $10,670, respectively. F-11 NOTE 5. INCOME TAXES Income taxes are provided in accordance with Statement of Financial Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryfowards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. There were no deferred income tax assets (liabilities) for the two years ending December 31, 2003 and 2002. There was a loss carryforward of $12,365 for the year ending December 31, 2002. Income tax assets (liabilities) included in the Balance Sheets at December 31, 2003 and 2002.
2003 2002 ------------------ ------------------- Tax benefit carryforwards $ - $ 12,365 Federal income tax (28,717) - State income tax (15,516) - ------------------ ------------------- United State deferred tax asset (liability) $ (44,233) $ 12,365 ================== ===================
A reconciliation of the income tax expense (benefit) on income before change in accounting principle and the amount that would be computed using statutory federal income tax rates for the years ended December 31 is as follows:
2003 2002 ------------------ ------------------- Compute income taxes at statutory rates Federal income tax rate of 35% $ 61,432 - State income tax rate of 8.84% 15,516 - ------------------ ------------------- Provision for income taxes income before the effect of loss carryforward 76,948 - Tax loss benefit (32,715) (12,365) ------------------ ------------------- Income tax liability (benefit) $ 44,233 (12,365) ================== ===================
Difference between effective income tax rates and the statutory U.S. federal and state income tax rates is as follows: 2003 ---------------------- Statutory U.S. federal income tax rate 35.00% Statutory state income tax rate 8.84 Tax benefit (7.90) ---------------------- Effective income tax rate 35.94% ====================== F-12 NOTE 6. LONG-TERM DEBT Interest Balance as of Maturity Rate December 31, 2003 Date -------------- ------------------- --------------- Loan payable - D Whitney 0 $ 30,000 8/2005 Outstanding loan payable is to a related party and is a non-interest bearing note. NOTE 7. SUBSEQUENT EVENT On January 1, 2004, the Company entered into an asset purchase agreement. This agreement was entered into as part of a Plan of Reorganization proposed by the Buyer to the United States Bankruptcy Court. In consideration of the transfer to Buyer of the Assets and the Intellectual Property, Buyer agrees to deliver to the Company or its designees 3,000,000 shares of the Buyer's Common Stock. Subsequent to the purchase agreement the Company will retain control. F-13 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 American Institute of Certified Public Accountants Members of the Better Business Bureau since 1997 To the Board of Directors Alpha Nutraceuticals, Inc. (Formerly Sierra-Rockies Corp.) INDEPENDENT ACCOUNTANTS' REVIEW REPORT -------------------------------------- We have examined the pro forma adjustments reflecting the acquisition described in note 1 and the application of those adjustments to the historical amounts in the accompanying pro forma condensed balance sheet of Alpha Nutraceuticals, Inc. (Formerly Sierra-Rockies, Corp.) as of December 31, 2003, and the pro forma condensed statement of income for the year then ended. The historical condensed financial statements are derived from the historical financial statements of Alpha Nutraceuticals, Inc. (not audited) and of Let's Talk Health, Inc., which were audited by us, appearing elsewhere herein. Our examination was made in accordance with standards established by the American Institute of Certified Public Accountants and, accordingly, included such procedure as we considered necessary in the circumstances. The objective of the pro forma financial information is to show what the significant effects on the historical financial information might have been if the acquisition had occurred at an earlier date. However, the pro forma condensed financial statements are not necessarily indicative of the results of operations or related effects on financial position that would have been attained if the above-mentioned acquisition had actually occurred earlier. In our opinion, management's assumption provide a reasonable basis for presenting the significant effects directly attributable to the acquisition described in Note 1, the related pro forma adjustment give appropriate effect to those assumptions, and the pro forma column reflects the proper application of those adjustments to --------------------------------- ARMANDO C. IBARRA, C.P.A. - APC February 27, 2004 Chula Vista, California 371 "E" Street, Chula Vista, CA 91910 Tel: (619) 422-1348 Fax: (619) 422-1465 F-14 ALPHA NUTRACEUTICALS, INC. (Formerly Sierra-Rockies, Corp.) Pro Forma Balance Sheets As of December 31, 2003 --------------------------------------------------------------------------------
ASSETS Let's Talk Alpha Health, Inc. Total Nutraceutical, Inc. (Acquisition) Pro Forma -------------------- --------------------- --------------------- CURRENT ASSETS Cash $ - $ 53,441 $ 53,441 Accounts receivable - 141,008 141,008 Note receivable (a related party) - 82,710 82,710 Inventory - 218,353 218,353 -------------------- --------------------- --------------------- Total Current Assets - 495,512 495,512 NET PROPERTY & EQUIPMENT - 22,426 22,426 -------------------- --------------------- --------------------- TOTAL ASSETS $ - $ 517,938 $ 517,938 ==================== ===================== =====================
See Notes to Financial Statements F-15 ALPHA NUTRACEUTICALS, INC. (Formerly Sierra-Rockies, Corp.) Pro Forma Balance Sheets As of December 31, 2003 -------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ----------------------------------------------
Let's Talk Alpha Health, Inc. Total Nutraceutical, Inc. (Acquisition) Pro Forma CURRENT LIABILITIES Accounts payable $ - $ 291,595 $ 291,595 Sales tax payable - 9,650 9,650 Income taxes payable - 44,233 44,233 Other taxes payable - - - Insurance payable - 360 360 -------------------- --------------------- --------------------- Total Current Liabilities - 345,838 345,838 LONG-TERM LIABILITIES - 141,197 141,197 -------------------- --------------------- --------------------- TOTAL LIABILITIES - 487,035 487,035 STOCKHOLDERS' EQUITY (DEFICIT) Common stock 1,037,049 10,000 1,047,049 Retained earnings (deficit) (1,037,049) 20,903 (1,016,146) -------------------- --------------------- --------------------- Total Stockholders' Equity (Deficit) - 30,903 30,903 TOTAL LIABILITIES -------------------- --------------------- --------------------- & STOCKHOLDERS' EQUITY (DEFICIT) $ - $ 517,938 $ 517,938 ==================== ===================== =====================
See Notes to Financial Statements F-16 ALPHA NUTRACEUTICALS, INC. (Formerly Sierra-Rockies, Corp.) Pro Forma Statements of Operations For the Year Ended December 31, 2003 --------------------------------------------------------------------------------
Let's Talk Alpha Health, Inc. Total Nutraceutical, Inc. (Acquisition) Pro Forma -------------------- --------------------- --------------------- REVENUES $ - $ 2,672,722 $ 2,672,722 COST OF REVENUES - (1,460,833) (1,460,833) -------------------- --------------------- --------------------- GROSS PROFIT - 1,211,889 1,211,889 OPERATING COSTS - 1,036,368 1,036,368 -------------------- --------------------- --------------------- OPERATING INCOME (LOSS) - 175,521 175,521 INCOME (LOSS) $ - $ 175,521 $ 175,521 ==================== ===================== =====================
See Notes to Financial Statements F-17 NOTE 1 CONDENSED FINANCIAL STATEMENTS On January 1, 2004, the Company entered into an asset purchase agreement. This agreement was entered into as part of a Plan of Reorganization proposed by the Company to the United States Bankruptcy Court. In consideration of the transfer to Alpha Nutraceuticals, Inc. of the Assets and the Intellectual Property of Let's Talk Health, Inc., the Company agreed to deliver to Let's Talk Health, Inc. or its designees 3,000,000 shares of the Company's Common Stock. F-18