UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDED FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
March 1, 2002
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Commission file number 0-17268
PanaMed Corporation
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(Exact name of registrant as specified in its charter)
Nevada 86-0577075
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(State of other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
537 Constitution Avenue, Suite A, Camarillo, CA 93012
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: (480) 607-7243
Micron Solution, Inc.
8361 E. Evans Road, Suite 105, Scottsdale, AZ 85260
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(Former name or former address, if changed since last report)
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Item No. 2. Acquisition or Disposition of Assets
Effective March 1, 2002, Micron Solutions, Inc. (the "Company") entered
into an exchange agreement with PanaMed, Inc., California corporation. Under the
terms of the exchange agreement, PanaMed obtained equity and management control
of the Company by exchanging all the issued and outstanding shares of PanaMed
for 21 million shares of the Company's common stock. The exchange agreement
represent not only a change and control of the company, but a change in the
Company's principal line of business.
PanaMed has obtained exclusive licensing rights to distribute a
proprietary line of immuno-modulating therapeutic compounds for the treatment of
HIV/AIDS. Anecdotal human case study trials have shown the therapeutics to be
effective in reversing the viral load to a non- detect level and maintaining the
non-detect level over a 5-year period of time. In addition, the therapeutics are
expected to provide a number of advantages over conventional AIDS medication,
including; simple to administer (no shots), minimal side effects, effective
against different HIV viral derivatives, cost effective, and non-patient
specific. The therapeutics are particularly suitable for large scale patient
treatment programs.
PanaMed plans to launch formal clinical trials, in April 2002, within
the continent of Africa. Africa was chosen as the starting point for PanaMed's
clinical trials and treatments due to its sizable base of AIDS patients which
have not been exposed to conventional AIDS medication. Although the therapeutics
are expected to be effective when used in conjunction with or after conventional
treatments, PanaMed prefers to work with patients which have not been previously
so treated as to clearly show the effects of the therapeutics. After successful
completion of these trials, PanaMed plans to launch a distribution program to
provide low cost treatment to those infected with this disease.
PanaMed was founded as a private company in August 2001 for the primary
purpose of testing and distributing a proprietary line of therapeutics used for
reversing HIV/AIDS. Quintek Technologies, Inc., (OTCBB:OTEK) assisted in
launching PanaMed and later acquired a 10% equity position in the Company
through a stock swap transaction. In February 2002, PanaMed entered into a
reorganization agreement with Micron Solution, Inc. to combine the assets,
liabilities and operations of the two companies, with PanaMed management
assuming control of the combined equity.
Additional details of PanaMed's business are detailed in the Form
10-KSB filed by the Company on or about April 16, 2002, the content of which is
incorporated herein by this reference.
This document contains forward looking statements. There are certain
important factors that could cause results to differ materially from those
anticipated by the statements made above.
2
Item No. 7. Financial Statements and Exhibits
(a) Financial Statements
The financial statements for Micron Solution, Inc. for the period
December 31, 2001 are contained in the Form 10-KSB filed by the Company on or
about April 16, 2002, and are incorporated herein by this reference.
3
PANAMED, INC.
(A development stage company)
FINANCIAL STATEMENTS
FOR THE PERIOD FROM
AUGUST 21, 2001 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2001
TOGETHER WITH INDEPENDENT AUDITOR'S REPORT
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SPRAYBERRY, BARNES, MARIETTA & LUTTRELL
Certified Public Accountants
Daniel Sprayberry, C.P.A. Members: Martin J. Marietta, C.P.A.
Mark Luttrell, C.P.A. American Institute of Certified Public Accountants Dana Boutain, C.P.A.
Gregory G. Braun, C.P.A. SEC Practice Section Ann M. Braun, C.P.A.
Jennifer Haney, C.P.A. California Society of Certified Public Accountants Jeffrey Freeman, C.P.A.
Laima Swanson, C.P.A. William Duerksen, C.P.A.
Michael Luxton, C.P.A. Audrey Tamekazu, C.P.A.
Veronica Quintana, C.P.A. Matthew Davis, C.P.A.
Deborah Blann, C.P.A. Kimberly Alvarado, C.P.A.
David Beall, C.P.A. Stephanie Peters, C.P.A.
Andrew Kiefer, C.P.A. William Sablan, C.P.A.
Katherine Leman, C.P.A.
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
PanaMed, Inc.
Camarillo, California
We have audited the accompanying balance sheet of PanaMed, Inc. (a development
stage company), as of December 31, 2001, and the related statements of
operations, stockholders' equity, and cash flows for the period from August 21,
2001(date of inception) to December 31, 2001. 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 generally accepted auditing standards
of 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.
In our opinion, based on our audit, the financial statements referred to above
present fairly, in all material respects, the financial position of PanaMed,
Inc., as of December 31, 2001, in conformity with generally accepted accounting
principles of the United States of America.
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern; however, the Company has experienced losses from
operations and substantial doubt exists as to its ability to continue as a going
concern. Continuation is dependent upon the success of future operations.
Management's plans in regard to those matters are described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ SPRAYBERRY, BARNES, MARIETTA & LUTTRELL
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SPRAYBERRY, BARNES, MARIETTA & LUTTRELL
Oxnard, California
April 24, 2002
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PANAMED, INC.
(A development stage company)
BALANCE SHEET - DECEMBER 31, 2001
ASSETS
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CURRENT ASSETS:
Cash -- $ 106
Prepaid expenses -- 21,000
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Total current assets -- 21,106
OTHER ASSETS:
Investment $ 176,783 --
Notes receivable-related parties 29,593 206,376
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-- $ 227,482
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable -- $ 5,887
Note payable - related party -- 7,400
Other current liabilities -- 20,000
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Total current liabilities -- 33,287
STOCKHOLDERS' EQUITY:
Common stock - $0.0001 par value
Authorized - 100,000,000 shares
Issued and outstanding - 19,750,000 shares $ 1,975 --
Additional paid-in capital 255,987 --
Deficit accumulated during the development stage (63,767) --
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Total stockholders' equity -- 194,195
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-- $ 227,482
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The accompanying notes are an integral part of the financial statements.
6
PANAMED, INC.
(A development stage company)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM AUGUST 21, 2001 (DATE OF INCEPTION) TO DECEMBER 31, 2001
SALES $ --
COST OF SALES --
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Gross margin --
OPERATING EXPENSES 54,349
Loss from operations (54,349)
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LOSS ON INVESTMENT (9,418)
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Net loss before income taxes (63,767)
PROVISION FOR INCOME TAXES --
Net loss $(63,767)
=========
NET LOSS PER SHARE
Basic and diluted $ (0.01)
=========
The accompanying notes are an integral part of the financial statements.
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PANAMED, INC.
(A development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM AUGUST 21, 2001 (DATE OF INCEPTION) TO DECEMBER 31, 2001
Deficit
Accumulated
Additional During The Total
Common Stock Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
----------- ----------- ----------- ----------- -----------
Balance, August 21, 2001 $ -- $ -- $ -- $ -- $ --
Issuance of stock for cash
September 4, 2001
($0.0001 per share) 17,610,000 1,761 -- -- 1,761
Issuance of stock for cash
September 19, 2001
($0.5 per share) 60,000 6 29,994 -- 30,000
Issuance of stock for stock
October 15, 2001
($0.931 per share) 2,000,000 200 186,001 -- 186,201
Issuance of stock for cash
October 24, 2001
($0.5 per share) 20,000 2 9,998 -- 10,000
Issuance of stock for cash
October 30, 2001
($0.5 per share) 60,000 6 29,994 -- 30,000
Net loss -- -- -- (63,767) (63,767)
----------- ----------- ----------- ----------- -----------
Balance, Dec. 31, 2001 $19,750,000 $ 1,975 $ 255,987 $ (63,767) $ 194,195
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
8
PANAMED, INC.
(A development stage company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM AUGUST 21, 20001 (DATE OF INCEPTION) TO DECEMBER 31, 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(63,767)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on investment 9,418
Net change in operating assets and liabilities (15,113)
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Net cash used in operating activities (69,462)
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CASH FLOWS FROM INVESTING ACTIVITIES --
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 71,761
Proceeds from common stock issued subsequent to year-end 20,000
Increase in notes receivable - related parties
(29,593)
Increase in note payable - related party 7,400
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Net cash provided by financing activities 69,568
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NET INCREASE IN CASH 106
CASH, BEGINNING OF PERIOD --
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CASH, END OF PERIOD $ 106
========
The accompanying notes are an integral part of the financial statements.
9
PANAMED, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of PanaMed, Inc. (the
"Company") is presented to assist in understanding the Company's
financial statements. The financial statements and notes have been
prepared by the Company's management and represent an objective
overview of the Company's financial position. The financial statements
have been prepared in conformity with generally accepted accounting
principals applied on a consistent basis.
(a) Nature of Business - Development Stage Company
The Company is an enterprise in the development stage as defined by
Statement No. 7 of the Financial Accounting Standards Board and has not
engaged in any significant business other than organizational efforts.
The Company was established on August 21, 2001, as a California
corporation for the purpose of testing and distributing a unique line
of therapeutic products supplied by Havel Investment, LTD ("Havel").
The therapeutics are used for treating serious illness such as
HIV/AIDS, herpes, shingles, cancer, ALS, lupus, Parkinson's Disease,
rheumatoid arthritis, and multiple sclerosis. To date, the therapeutics
have been used only in confidential, offshore clinical trials and
private treatments.
The Company is currently operating under an exclusive license to
distribute the Havel products for HIV/AIDS, herpes and shingles within
the continent of Africa. The Company does not currently have an
agreement to market the therapeutics outside of Africa.
(b) Basis of Accounting
The Company reports on the accrual basis for both financial statement
and income tax purposes. Revenue from product sales is recognized as
products are shipped.
(c) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure 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.
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PANAMED, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Concentration of Credit Risk - Cash
The Company maintains its cash balances in various financial
institutions. The balances are insured by the Federal Deposit Insurance
Corporation up to $100,000. Periodically throughout the period the
Company has maintained cash balances in excess of federally insured
limits. The Company's uninsured balances totaled $-0- at December 31,
2001.
(e) Equity Method of Accounting for Investments
Investment in Quintek Technologies, Inc. in which the Company has a
5.5% interest, is carried at cost, adjusted for the Company's
proportionate share of undistributed earnings or losses.
(2) GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern; however, the Company
has sustained substantial operating losses. In view of this matter,
realization of a major portion of the assets in the accompanying
balance sheet is dependent upon continued operations of the Company,
which in turn is dependent upon the Company's ability to meet its
financing requirements, and the success of its future operations.
Management believes the Company's current cash and cash generated from
operations may not be sufficient to meet its anticipated cash needs for
the year ended December 2002. Accordingly, the Company will require an
additional capital infusion or revenues from sales to continue
operations. Management is not certain if additional capital or sales
proceeds will become available. If unsuccessful in obtaining an
additional capital infusion, the Company may be required to cease
operations.
(3) NOTES RECEIVABLE - RELATED PARTIES
Note receivable from Thomas Sims, President and Chairman of the Board,
due on demand, interest at the applicable federal rates ("AFR"). $ 5,536
Note receivable from Phillip Butler, CEO, due on demand, interest at
the applicable federal rates ("AFR"). 24,057
$ 29,593
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PANAMED, INC.
(A development stage company)
Notes to Financial Statements
December 31, 2001
(4) NOTE PAYABLE - RELATED PARTY
Note payable to Quintek Technologies, Inc., related by common
management, payable on demand, with interest at the applicable federal
rates ("AFR"). $ 7,400
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(5) INVESTMENT
The investment held by the Company consists of a 5.5% ownership
interest in Quintek Technologies, inc., a California corporation
related by common management. The investment is accounted for on the
equity method.
Pertinent financial information for the Company as of December 31,
2001, is as follows:
Balance sheet:
Assets $ 527,560
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Liabilities $ 1,300,565
Equity (773,005)
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Income statement:
Revenues $ 145,629
Expenses (316,860)
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Net loss (171,231)
x 5.5%
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Company's share of net loss $ (9,418)
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(6) COMMITMENTS AND CONTINGENCIES
Effective September 1, 2001, the Company entered into an agreement to
lease its operating facilities under an operating lease from Quintek
Technologies, Inc., related by common management. The lease expires
August 31, 2002. Rent expense for the period ended December 31, 2001
was $8,000.
Minimum future rental commitments under this non-cancelable operating
lease are as follows:
Year ended December 31, 2002 $ 16,000
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PANAMED, INC.
(A development stage company)
Notes to Financial Statements
December 31, 2001
(7) LOSS PER SHARE
Basic net loss per share is based on the weighted average number of
common shares outstanding of 16,866,466 at December 31, 2001. The basic
and diluted earnings per share calculations are the same because the
Company has no dilutive securities outstanding.
(8) LICENSING AGREEMENT
Effective October 23, 2001, the Company entered into a licensing
agreement with Havel Investments, Ltd. ("Havel") whereby the Company
has the exclusive right to market Havel's therapeutic product for
treatment of HIV/AIDS throughout continental Africa. In consideration
for this license, the Company must remit to Havel 50-80% of all
proceeds from the sale of the Company's stock up to a maximum of $23
million. Under the agreement, Havel reserves the right to reduce the
territory within which the Company may market Havel's therapeutic if
not funded by February 1, 2002. The Company did not meet its obligation
under this agreement; however, Havel has agreed to extend the agreement
for an undisclosed period of time.
(9) INCOME TAXES
The Company accounts for income taxes using the liability approach to
financial accounting and reporting. Current income taxes are based on
the year's income taxable for federal and state reporting purposes.
The Company has a deferred tax asset due to net operating loss
carryforwards of $80,381. Due to the ongoing nature of the losses and
the potential inability of the Company to ever realize the benefit, a
valuation allowance has been established for 100% of the deferred tax
asset. Net operating loss carryforwards expire at various times through
the year 2021.
The effects of temporary differences that give rise to significant
portions of the deferred tax benefit are presented below:
Net operating loss carryforward $ 18,097
Less valuation allowance (18,097)
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Total $ --
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PANAMED, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
(10) STATEMENTS OF CASH FLOWS - SUPPLEMENTAL DISCLOSURES
The net changes in operating assets and liabilities shown on the
statement of cash flows consist of the following:
Prepaid expenses $ (21,000)
Accounts payable 5,887
$ (15,113)
-------------
Operating activities reflect:
Interest paid $ --
Income tax paid $ --
For the four months ended December 31, 2001, the Company had non-cash
financing transactions related to a stock swap transaction for
$186,201.
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(11) SUBSEQUENT EVENTS
Effective March 1, 2002, the Company entered into an exchange agreement
with Micron Solutions, Inc. ("Micron"), a Nevada corporation. Under the
terms of the exchange agreement, the Company obtained equity and
management control of Micron by exchanging all the issued and
outstanding shares of the Company for 21 million shares of Micron. For
accounting purposes the acquisition has been treated as a
recapitalization of the Company with the Company as the acquirer
(reverse acquisition). Under the terms of the agreement, the Company is
obligated to pay $225,000 and issue 210,000 common shares to former
management of Micron.
Subsequent to December 31, 2001, the Company sold 597,000 common shares
for cash and issued 2.5 million common shares in exchange for services.
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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.
Date: May 3, 2002
PANAMED CORPORATION
By /s/Thomas W. Sims
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Thomas W. Sims, President
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