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Pansoft CO LTD 10-Q 2010

Documents found in this filing:

  1. 10-Q
  2. Ex-31.1
  3. Ex-31.2
  4. Ex-32.1
  5. Ex-32.2
  6. Ex-32.2
dti03311010q.htm

 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X]
QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2010
OR
[   ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-53183

DIAMOND TECHNOLOGIES INC.
 (Exact name of registrant as specified in its charter)

NEVADA
(State or other jurisdiction of incorporation or organization)

2795 Barton Street, East
Unit 5
Hamilton, Ontario
Canada L8E 2J8
 (Address of principal executive offices, including zip code.)

(905) 578-3232
 (telephone number, including area code)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 last 90 days.   YES [X]     NO [   ]>


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 
Large Accelerated Filer
[   ]
 
Accelerated Filer
[  ]
 
Non-accelerated Filer
[   ]
 
Smaller Reporting Company
[X]
 
(Do not check if smaller reporting company)
     


APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicated the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  24,005,166 as of May 14, 2010.
 



 
 

 

PART I – FINANCIAL INFORMATION

 ITEM 1.                      FINANCIAL STATEMENTS (UNAUDITED)

 



DIAMOND TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
 
INDEX



 
PAGE
   
BALANCE SHEETS
F-2
   
STATEMENTS OF OPERATIONS
F-3
   
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
F-4
   
NOTES TO FINANCIAL STATEMENTS
F-5 – F-8






 








F-1

 
-2-

 


DIAMOND TECHNOLOGIES, INC.
(A Development Stage Company)
 
Consolidated Balance Sheets (Unaudited)
 
 
 
             
   
March 31,
2010
   
December 31, 2009
 
ASSETS
       
Current asset:
           
Cash and cash equivalents
  $ 4,566     $ 2,969  
Total Current Asset
    4,566       2,969  
                 
Copyrights
    865,000       865,000  
Fixed assets, net
    5,744       6,531  
                 
TOTAL ASSETS
  $ 875,310     $ 874,500  
                 
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
         
Current liabilities:
               
Accrued liabilities - other
  $ 25,561     $ 23,217  
Due to officers and directors
    240,000       240,000  
Acquisition cost payable
    66,502       100,000  
Due to shareholder
    267,742       308,054  
                 
Total Current liabilities
    599,805       671,271  
                 
                 
Shareholders' Equity
               
Preferred Stock, $0.00001 par value,
               
 none issued and outstanding
    -       -  
Common Stock, $0.00001 par value, 100,000,000 shares authorized
               
24,005,166 and 22,871,502 and  shares issued and outstanding at
               
March 31, 2010 and  December 31, 2009
    241       229  
Paid-In-Capital
    1,130,284       960,246  
Deficit Accumulated during the Development Stage
    (855,020 )     (757,246 )
                 
Total Shareholders' Equity
    275,505       203,229  
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  $ 875,310     $ 874,500  
 
F-2

The accompanying notes are an integral part of these financial statements.

 
-3-

 

 
DIAMOND TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Statements of Operations (Unaudited)

               
December 12
 
               
2006
 
   
Three Month
   
Three Month
   
(inception) to
 
   
Ended
   
Ended
       
   
March 31, 2010
   
March 31, 2009
   
March 31,2010
 
                   
Revenue:
  $ -     $ -     $ 15,887  
                         
Cost of Sales:
                       
Inventory - beginning of period
    -       -       5,245  
Purchases
    -       -       12,840  
Inventory - end of period
    -       -       (5,245 )
      -       -       12,840  
Gross Profit
    -       -       3,047  
                         
                         
Expenses:
                       
Compensation office and directors
    -       -       330,000  
Stock Compensation
                    7,500  
Consulting fees
    27,360       -       27,360  
Professional Fees
    65,111       -       398,513  
Travel
    -       13,760       22,850  
Rent
    -       1,590       17,607  
Meals and entertainment
    -       -       11,506  
Bad debts
    -       -       8,555  
Office
    1,416       97       9,304  
Misc Expenses
    300               300  
Depreciation
    786       786       6,386  
Web page design
    1,420       -       9,912  
Registration fees
    -       -       4,298  
Bank charges
    364       151       2,020  
Exchange
    1,016       66       1,956  
      97,773       16,450       858,067  
                         
Net Loss
  $ (97,773 )   $ (16,450 )   $ (855,020 )
                         
Basic and diluted net income per share
  $ -     $ -          
                         
Weighted average shares used in calculating
 
Basic and diluted net loss per share
    24,005,166       16,721,502          
 
F-3

The accompanying notes are an integral part of these financial statements.
 
 
 
-4-

 



DIAMOND TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows (Unaudited)


   
Three Month
   
Three Month
   
December 12, 2006
 
   
Ended
   
Ended
   
(inception) to
 
   
March 31, 2010
   
March 31, 2009
   
March 31, 2010
 
                   
CASH FLOWS FROM OPERATING ACTIVITIES:
                 
Net loss
  $ (97,773 )   $ (16,450 )   $ (855,020 )
Adjustments to reconcile net income to cash used
                       
By operating activities
                       
Depreciation
    786       786       8,674  
Stock Compensation
    -               7,500  
Changes in operating assets and liabilities
                       
Decrease in accounts receivable
    -       -       -  
Increase/(decrease) in accrued liabilities - other
    2,345       8,711       277,849  
Decrease/(increase) in acquisition costs payable
    (33,499 )     -       (33,499 )
NET CASH USED BY OPERATING ACTIVITIES
    (128,141 )     (6,951 )     (594,496 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
Asset acquisition
                    300  
Purchase of fixed assets
    -       -       (14,418 )
CASH USED BY INVESTING ACTIVITIES
    -       -       (14,118 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Shareholders advances (repayments)
    (40,312 )     10,799       255,454  
Proceeds from sale of common stock
    170,050       -       357,726  
CASH PROVIDED BY FINANCING ACTIVITIES
    129,738       10,799       613,180  
                         
NET INCREASE (DECREASE) IN CASH
    1,597       3,848       4,566  
                         
CASH
                       
Cash - Beginning of period
    2,969       629       -  
Cash - End of period
  $ 4,566     $ 4,477     $ 4,566  
                         
Supplemental Disclosure of Cash Flow Information
                       
Taxes paid
  $ -     $ -     $ -  
Interest paid
  $ -     $ -     $ -  
                         
Non-cash Investing and Financing Activities:
                       
Accounts payable as partial consideration for asset acquisition
  $ -     $ -     $ 100,000  
Common stock issued as partial consideration for asset acquisition
  $ -     $ -     $ 765,300  


 

F-4

The accompanying notes are an integral part of these financial statements.

 
-5-

 

DIAMOND TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements (Unaudited)
March 31, 2010


NOTE 1 - BASIS OF PRESENTATION

Basis of Presentation

The accompanying unaudited financial statements of Diamond Technologies, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X related to smaller reporting companies. These consolidated financial statements should be read in conjunction with the audited financial statements and notes, which are included as part of the Company's Form 10-K filed with the SEC on March 31, 2010.  In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included in the accompanying unaudited consolidated financial statements.  Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year.  Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal year ended December 31, 2009 as reported in the 10-K have been omitted.

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The amounts of assets and liabilities in the financial statements do not purport to represent realizable or settlement values. However, the Company has incurred an operating loss. Such loss may impair its ability to obtain additional financing.

This factor raises substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company has met its historical working capital requirements from the sale of common shares and loans from an officer/shareholder. In order not to burden the Company, the officer/shareholder has agreed to provide funding to the Company to pay its annual audit fees, filing costs and legal fees as long as the board of directors deems it necessary. However, there can be no assurance that such financial support shall be ongoing or available on terms or conditions acceptable to the Company.

NOTE 3 – STOCKHOLDERS’ EQUITY

Common Stock

Between Jan 23, 2010 and March 4, 2010 we sold 1,133,664 restricted shares of the Company’s common stock at an offering price of $0.15 per share for gross proceeds of $170,050.



 
-6-

 

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
 
This section of the report includes a number of forward-looking statements that reflect out current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
 
Our auditors have issued a going concern opinion. This means that our auditors believe there is substance doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay out bills. This is because we have not generated substantial revenues and do not anticipate generating on-going revenue until we complete the development of our website and engage suppliers and customers to buy our products.

Plan of Operation
 
      The following Plan of Operation contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth elsewhere in this document.

We are a medical information company that uses technology to assist physicians and nurses to streamline patient information in a coherent and usable manner. Our software is designed to take patient medical information from many sources and deposit it into a single source as electronic medical records(EMR) for each patient.  In addition to our EMR product, we have three early stage products for which we plan to evaluate partnership opportunities in order to further develop and commercialize them.
 
      Our plan and focus during the next twelve months includes  selling our existing product as well as developing and possibly selling new products.

Our Sales and Marketing Strategy for existing developed products
 
      As of the date of this report, we have not sold any products, nor do we have any customers.  We hope to initiate operations within the next 90 days.   Our milestones during the next twelve months are:
1 - Developing our sales organization and marketing the third party products along with our software that bring the data from these products into an EMR system in the major metropolitan areas of Canada

2 – Simultaneously with the build-up of our sales organization, we will build a product support team that will provide installation, training and customer support.

3 – Expanding our market from the larger metropolitan areas to the smaller rural and more distant medical facilities.
 


 
-7-

 

Within Canada, we will focus on having a direct sales force to market and sell EMR to walk-in clinics/doctor’s offices, Independent Diagnostic Centers /Independent Health Facilities and hospitals.

Outside Canada, we may establish commercial partnerships for all of our product candidates in order to accelerate development and marketing in those countries and further broaden our products’ commercial potential.

Our Development and Commercialization Strategy for new products

We intend to initiate sales of our products in our target commercial areas. Our target commercial areas are hospitals, clinics and doctor’s offices.  We expect to focus on marketing our current offering as well as completing product development for our product candidates in order to increase our possibilities for current and future revenue generation.

Our forward-looking plan envisions applying our copyrighted design and technology to develop three additional products, to bring to market integrated computer systems that address today’s critical health management needs in epidemic control, medical information flow across borders and provision of heath care in rural and remote areas.

In addition to our EMR which is ready for production, we have prioritized the following products for completion of development and are listing them in order of priority.

C&ID-IMS - our Communicable and Infectious Diseases Information Management System technology.

CCG - our Clinical-Care Globalization technology.

MC-Telehealth - our Mobile Clinic or tele-health technology.

We do not at this time have a definitive timetable as to when we will complete these intense development efforts.

We are considered to be in the development stage, as defined in Statement of Financial Accounting Standards No. 7. We have been in the development stage since our inception. We have had no substantial recurring source of revenue; we have incurred operating losses since inception and at March 31, 2010 had a working capital deficiency of $595,239.

The development and marketing of new medical software technology is capital intensive. We have funded operations to date either through the sale of our common stock or through advances made by our key shareholders.

We have utilized funds obtained to date for organizational purposes and to commence
certain financial transactions. We require additional funding to complete these transactions (including the purchase of Rophe and related expenses), expand our marketing and sales efforts   and increasing Diamond’s revenue base.


 
-8-

 
Limited operating history; need for additional capital

            There is no historical financial information about us upon which to base an evaluation of our performance. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price increases in services and products.

To become profitable and competitive, we have to locate and negotiate agreements with manufacturers to offer their products for sale to us at pricing that will enable us to establish and sell the products to our clientele.

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop, or expand out operations. Equity financing could result in additional dilution to existing shareholders.

Results of operations
From Inception on December 12, 2006 to March 31, 2010.>
 
During the year 2007, we incorporated the company, hired the attorney and the auditor and began to negotiate contracts and sell printing related products.
 
During the year 2008 we continued sourcing products. We did not sell any products or services.

During the year 2009, we did not sell any products or services. Our loss since inception is $757,246. We acquired all of the issued and outstanding shares of common stock of Rophe Medical Technologies, Inc.
 
Since inception, we sold 5,000,000 pre-dividend shares of common stock to our officers and directors for $50; issued 490,500 pre-dividend shares of common stock at $0.25 per share for a total of $122,625; and issued 83,334 pre-dividend shares of common stock at $0.60 per share for a total of $50,000. We sold 150,000 shares of common stock to our President for $15,000. We exchanged 3,000,000 shares of common stock to Rophe Medical Technologies Inc. for 300 common shares of Rophe. We issued 3,000,000 shares of common stock to Rophe in exchange for $200,000 payable to Rophe on March 31, 2010 and $200,000 of the $250,000 payable to Rophe on April 30, 2010. We sold 1,133,664 shares of common stock at $0.15 per share for a total of $170,050.

 
As of the date of this report, we have not generated any revenues from our business operations.
 
In December 2006, we issued 5,000,000 pre-dividend shares of common stock pursuant to the exemption contained in Reg. S of the Securities Act of 1933. This was accounted for as a sale of common stock.

On June 25, 2007, we completed our public offering of 490,500 shares of pre-dividend common stock at an offering price of $0.25 per share. We raised $122,625.

 
-9-

 
On December 28, 2007, we sold 83,334 restricted pre-dividend shares of the Company common stock pursuant to the exemption contained in Reg. S of the Securities Act of 1933, as amended at an offering price of $0.60 per share we raised $50,000.

A stock dividend was declared on February 11, 2008, wherein two additional common shares were issued for each one common share issued and outstanding as at February 25, 2008.

On December 30, 2009 we sold 150,000 restricted shares of common stock at $0.10 per share to our President for proceeds of $15,000.

On December 31, 2009, we acquired 300 shares of common stock of Rophe Medical Technologies Inc. (Rophe”) which constitute all of the issued and outstanding shares of Rophe common stock in exchange for 3,000,000 restricted shares of our common stock.  Rophe thereby became our wholly owned subsidiary corporation.  On March 16, 2010, the Rophe Acquisition payment terms were amended, the company issued additional 3,000,000 of the Company’s common shares in exchange for $200,000 payable on March 31, 2010 and $200,000 of the $250,000 payable on April 30, 2010. 

Between Jan 23, 2010 and March 4, 2010 we sold 1,133,664 restricted shares of the Company common stock pursuant to the exemption contained in Reg. S of the Securities Act of 1933, as amended at an offering price of $0.15 per share we raised $170,050.

As of March 31, 2010, our total assets were $875,310 in cash, fixed assets and copyrights and our total liabilities were $599,805 comprised of $25,561 in accounts payable, $507,741 in accrued officer salaries and other amounts due to officer and shareholders, and $66,502 in acquisition cost payable.

ITEM 3.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.          CONTROLS AND PROCEDURES.

      We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our Disclosure Controls were not effective as of the end of the period covered by this report due to lack of segregation of duties in financial reporting and presence of adjusting journal entries during the audit.

 
-10-

 
Changes in Internal Controls

We have also evaluated our internal controls for financial reporting, and there have been no changes in our internal controls or in other factors that could affect those controls subsequent to the date of their last evaluation.

ITEM 5.          OTHER INFORMATION

Between Jan 23, 2010 and March 4, 2010 we sold 1,133,664 restricted shares of the Company common stock pursuant to the exemption contained in Reg. S of the Securities Act of 1933, as amended, at an offering price of $0.15 per share and we raised $170,050.  We failed to report the foregoing sale of unregistered equity securities on Form 8-K within four business days of March 4, 2010 and are disclosing the same herein.


PART II. OTHER INFORMATION

ITEM 6.          EXHIBITS.
 
The following documents are included herein:
 
Exhibit No.
Document Description
31.1
Certification of Principal Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.
   
31.2
Certification of Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.
   
32.1
Certification of Chief Executive Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.
   
32.2
Certification of Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.











 





 
-11-

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on this 17th day of May, 2010.
 
DIAMOND TECHNOLOGIES INC.
     
 
BY:
VINCE LEITAO
   
Vince Leitao
President, Principal Executive Officer, and a member of
the Board of Directors.
     
 
BY:
LEONARD STEINMETZ
   
Leonard Steinmetz
Treasurer, Principal Financial Officer, Principal
Accounting Officer and a member of the Board of
Directors.









 
 
 






 
-12-

 
 
EXHIBIT INDEX

Exhibit No.
Document Description
31.1
Certification of Principal Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.
   
31.2
Certification of Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.
   
32.1
Certification of Chief Executive Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.
   
32.2
Certification of Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.

 
 
 
 
 
 
 
 
 
 
 
 

 
 
-13-

 

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