Annual Statements Open main menu
  1. Annual Statements
  2. » Companies
  3. » Bitech Technologies Corp
  4. » Quarter Report: 2008 June (Form 10-Q)

Bitech Technologies Corp - Quarter Report: 2008 June (Form 10-Q)

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

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended June 30, 2008
Commission File No. 000-27407
 
Versa Card Inc.
(Formerly “Intrepid Global Imaging 3D, Inc.”)
(Exact name of small business issuer as specified in its charter)
 
DELAWARE
 
98-0187705
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)
 
1615 Walnut Street, 3rd Floor. Philadelphia, PA 19103 
(Address of principal executive office) (Postal Code)
 
(215) 972-1717
(Registrant’s telephone number)

Check whether the Issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 30 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 definition of accelerated filer and large accelerated filer in Rule 12b-12 of the Exchange Act (Check one):

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 Rule 12b-2 of the Exchange Act.
Yes ¨ No x
 
The number of issued and outstanding of the registrant's common stock, $0.001 par value (the only class of voting stock), as of June 30, 2008 was 50,009,682.
 

 
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS    

   
June 30,
  
December 31,
  
 
  
2008 
  
2007 
  
   
(Unaudited)
  
(Audited)
  
ASSETS              
CURRENT ASSETS:
              
Cash and cash equivalents
  
$
-
  
$
10,198
  
Receivable from former related party
    
17,169
   
17,169
 
Prepaid expenses
    
3,122
   
3,122
 
Total current assets
    
20,291
   
30,489
 
               
Investment in subsidiary - A
   
18,000
   
-
 
Investment in subsidiary - B
   
20,000
   
-
 
Total Investment in subsidiaries
    
38,000
   
-
 
               
TOTAL ASSETS
  
$
58,291
  
$
30,489
  
               
               
LIABILITIES AND STOCKHOLDERS' DEFICIT
              
               
CURRENT LIABILITIES
              
Accounts payable and accrued liabilities
  
$
892,214
  
$
742,077
  
Notes payable
    
28,607
   
10,155
 
Due to former related parties
    
56,016
   
56,016
 
Total current liabilities
    
976,837
   
808,248
 
               
COMMITMENTS AND CONTINGENCIES
              
               
STOCKHOLDERS' DEFICIT
              
Common stock, $0.001 par value, 100,000,000 shares authorized, 50,009,682 and 6,906,579 issued and outstanding at June 30, 2008 and December 31, 2007 respectively
    
50,010
   
6,907
 
Common stock issuable: 0 and 18,750 shares at June 30, 2008 and December 31, 2007, respectively
    
-
   
19
 
Subscription
    
50,000
   
-
 
Additional paid-in capital
    
13,326,202
   
13,326,202
 
Accumulated deficit
    
(8,143,573
)
  
(8,143,573
)
Accumulated deficit during development stage
    
(6,201,185
)
  
(5,967,314
)
Total stockholders’ deficit
    
(918,546
)
  
(777,759
)
               
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  
$
58,291
  
$
30,489
  

See notes to consolidated financial statements.


(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)            

                   
Period January 1,
  
                   
2005 (Date of 
  
   
Three Months Ended
  
Six Months Ended
  
Inception) Through
  
   
June 30,
  
June 30,
  
June 30, 2008
  
   
2008 
  
2007
 
2008
 
2007
     
                       
REVENUE
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
                                 
EXPENSES:
                                
Website planning costs
    
-
   
-
   
-
   
-
   
144,406
 
Impairment of website development costs
    
-
   
-
   
-
   
-
   
477,275
 
General and administrative expenses (including stock based compensation
    
140,659
   
966,948
   
233,871
   
1,009,446
   
5,554,504
 
Total costs and expenses
    
140,659
   
966,948
   
233,871
   
1,009,446
   
6,176,185
 
                                 
NET LOSS FROM CONTINUED OPERATIONS
    
(140,659
)
  
(966,948
)
  
(233,871
)
  
(1,009,446
)
  
(6,176,185
)
                                 
LOSS FROM DISCONTINUED OPERATIONS
    
-
   
-
   
-
   
-
   
(25,000
)
     
  
    
  
    
  
    
  
    
  
  
NET LOSS
  
$
(140,659
)
$
(966,948
)
$
(233,871
)
$
(1,009,446
)
$
(6,201,185
)
                                 
NET LOSS PER SHARE:
                                
Basic and Diluted
  
$
-
  
$
(0.16
)
$
-
  
$
(0.17
)
      
                                 
WEIGHTED-AVERAGE SHARES
                                
Basic and Diluted
    
50,009,682
   
6,209,504
   
49,774,146
   
6,077,042
     

See notes to consolidated financial statements.


(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)          

           
Period January 1,
  
           
2005 (Date of 
  
   
Six Months Ended
  
Inception) Through
  
   
June 30,
  
June 30,
  
   
2008
  
2007
  
2008
  
CASH FLOWS FROM OPERATING ACTIVITIES:
                    
Net loss
  
$
(233,871
)
$
(1,009,446
)
$
(6,201,185
)
Adjustments to reconcile net loss to net cash used in operating activities:
                    
Accrued interest
    
305
   
290
   
894
 
Impairment of license agreement
    
-
   
-
   
25,000
 
Impairment of website development cost
    
-
   
-
   
477,275
 
Issuance of common stock for services
    
43,084
   
145,500
   
956,198
 
Issuance of common stock for bonuses
    
-
   
805,875
   
4,045,124
 
Changes in assets and liabilities:
                    
Receivable from related party
    
-
   
(16,269
)
  
(17,169
)
Prepaids expenses
    
-
   
-
   
(3,122
)
Accounts payable and accrued liabilities
    
150,137
   
(1,563
)
  
380,382
 
Due to former related parties
    
-
   
-
   
(10,851
)
Net cash used in operating activities
    
(40,345
)
  
(75,613
)
  
(347,454
)
CASH FLOWS FROM INVESTING ACTIVITIES:
                    
Website development cost
    
-
   
-
   
(11,801
)
Investment in subsidiaries
    
(38,000
)
  
-
   
(38,000
)
Net cash used in investing activities
    
(38,000
)
  
-
   
(49,801
)
CASH FLOWS FROM FINANCING ACTIVITIES:
                    
Payment on notes payable
    
-
   
-
   
(52,362
)
Proceeds from notes payable
    
-
   
-
   
19,067
 
Payment on loans payable
    
-
   
-
   
(28,387
)
Proceeds from subscription payable
    
50,000
   
-
   
50,000
 
Proceeds from advances payable
    
18,147
   
-
   
46,002
 
Proceeds from sales of common stock and warrants
    
-
   
80,015
   
356,515
 
Net cash provided by financing activities
    
68,147
   
80,015
   
390,835
 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
(10,198
)
  
4,402
   
(6,420
)
BEGINNING OF PERIOD
    
10,198
   
1,828
   
6,420
 
END OF PERIOD
  
$
-
  
$
6,230
  
$
-
  
                     
Supplementary disclosure of cash flow information:
                    
Cash paid for interest
  
$
-
  
$
-
  
$
-
  
Cash paid for taxes
  
$
-
  
$
-
  
$
-
  

See notes to consolidated financial statements.


VERSA CARD, INC. (f / k/ a Intrepid Global Imaging 3D, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
(Unaudited)
 
NOTE 1 - DESCRIPTION OF BUSINESS
 
Versa Card, Inc. (formerly known as Intrepid Global Imaging 3D, Inc., MangaPets, Inc. and Newmark Ventures, Inc.) (the “Company”) is a development stage company which was incorporated in Delaware on March 4, 1998 to acquire interests in various business operations and assist in their development.
 
Since inception, the Company had engaged in and contemplated several ventures and acquisitions, many of which were not consummated, including, but not limited to, developing a web portal, identifying acquisition ventures in the technology sector and satisfying continuous public disclosure requirements. During the fourth quarter of 2007 and thereafter, the Company has focused on consummating the transaction with a smartcard/ e-purse company, First Versatile Smartcard Solutions Corporation (FVS), while also continuing to explore the development of its web portal. On April 28, 2008, the Company entered into an agreement to acquire all outstanding equity securities of First Versatile Smartcard Solutions Corporation (“FVS”), which will become a wholly-owned subsidiary of the Company. FVS now provides a transnational electronic payment or e-purse system using a third generation smart card technology and central clearing house (“Versa Card”) that can be used, inter alia, to pay for purchases, bills, and other transactions related to mass transit systems, convenience stores, fast-food outlets, telecommunications, gas, electricity, water and other utilities, healthcare institutions, gas stations, drugstores, supermarkets, ATMs, banks, credit cards, cell phones, vending machines, toll roads, parking, and other commercial establishments. Versa Card can also store and secure important data, including, but not limited to, medical, identification, corporate payroll and disbursement, and other information, and can be used as a national identification card, a national school identification card, a national voting card, a medical insurance card, and a corporate payroll card which can track disbursements. The Company spent the quarter ended June 30, 2008 effectuating the items to close the transaction between FVS and the Company and did not conduct any other business during the quarter. While FVS has definitely agreed that all of its outstanding equity securities are to be acquired by the Company, some technical closing matters remained outstanding as of June 30, 2008 and were effectuated after June 30, 2008.

The financial statements are presented on the basis that the Company is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Company has incurred operating losses since its inception. This condition raises substantial doubt as to the Company’s ability to continue as a going concern as such continuance is dependent upon the Company’s ability to raise sufficient capital.

The accompanying interim unaudited financial information has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of the Company as of June 30, 2008 and the related operating results and cash flows for the interim period presented have been made. The results of operations of such interim periods are not necessarily indicative of the results of the full year. This financial information should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2007. There have been no changes in significant accounting policies since December 31, 2007.

NOTE 2 - CHANGE IN BUSINESS 

On April 28, 2008, the Company entered into a stock purchase agreement with MacKay Group Limited (“MKG”), the sole shareholder of FVS, to acquire all outstanding equity securities of FVS (the “FVS Transaction”). As a result of the FVS Transaction:
 
 
 
·
The Company issued, under Section 4(2) of the Securities Act, 18,000,000 shares of common stock to MKG in exchange for all outstanding equity securities of FVS (such shares were issued in November 2007 pending consumation of the FVS Transaction).
 
·
FVS will be a wholly owned subsidiary of the Company;
 
·
MKG holds approximately 60% of the Company’s common stock; and
 
·
The Company has entered the smartcard business by providing a transnational electronic payment or e-purse system using a third generation smart card technology and central clearing house that can be used, inter alia, to pay for purchases, bills, and other transactions related to mass transit systems, retail, utilities, banking and other commercial establishments.

As a result of the FVS Transaction, the Board of Directors: (a) increased the number of Directors from 1 member to 3 members; (b) accepted the resignation of Richard Specht as a Director and Officer; (c) appointed James R. MacKay, Zacarias Rivera, and Dr. Donovan as Directors; and (d) elected James R. MacKay, Chief Executive Officer and Dr. Donovan, Secretary.
 
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
Principals of Consolidation
 
The consolidated financial statements include the accounts of the Company and any wholly owned subsidiaries. All material inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Estimates that are critical to the accompanying financial statements arise from the determination of the fair value of the Company’s investment. Because such determination involves subjective judgment, it is at least reasonably possible that the Company’s estimates could change in the near term with respect to this matter.

Fair Value of Financial Instruments

Cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses, as reflected in the consolidated financial statements, approximate fair value because of the short-term maturity of these instruments. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Revenue Recognition

The Company has adopted and follows the guidance provided in the SEC’s Staff Accounting Bulletin (“SAB”) No. 104, which provides guidance on the recognition, presentation and disclosure of revenue in the financial statements.

Warrants

The Company issues warrants and subscriptions to purchase the Company’s common stock in conjunction with debt and certain preferred stock issues. Warrants are accounted for in accordance with the provisions of Accounting Principles Bulletin (“APB”) No. 14, Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants (“APB No.14”) and Emerging Issues Task Force (“EITF”) No. 00-19, Accounting for Derivative Financial Instruments Accounting for Derivative Financial Instruments Indexed to or Potentially Settled in Indexed to or Potentially Settled in a Company’s Own Stock (“EITF 00-19”). The fair value of warrants granted in conjunction with debt and equity issuances is estimated on the grant date using the Black-Scholes option pricing model. The value of warrants is separated from the total consideration of each issue and included as an element of additional paid-in capital.

 
Net Loss Per Share

Basic and diluted net losses per common share are presented in accordance with SFAS No.128, Earning per Share, for all periods presented. Stock subscriptions, options and warrants have been excluded from the calculation of the diluted loss per share for the periods presented in the statements of operations, because all such securities were anti-dilutive. The net loss per share is calculated by dividing the net loss by the weighted average number of shares outstanding during the periods.  

Reclassification

Certain amounts in the prior year consolidated financial statements have been reclassified for comparative purposes to conform to the presentation in the current year consolidated financial statements.

NOTE 4 – RECENT ACCOUNTING PRONOUNCEMENTS

Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities

In June 2008, the Financial Accounting Standards Board (“FASB”) issued FSP Emerging Issues Task Force (“EITF”) Issue No. 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities.” The FSP addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method. The FSP affects entities that accrue dividends on share-based payment awards during the awards’ service period when the dividends do not need to be returned if the employees forfeit the award. This FSP is effective for fiscal years beginning after December 15, 2008. The Company is currently assessing the impact of FSP EITF No. 03-6-1 on its consolidated financial position and results of operations.

Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an entity's Own Stock

In June 2008, the FASB ratified EITF Issue No. 07-5, "Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entity's Own Stock" (EITF No. 07-5). EITF No. 07-5 provides that an entity should use a two step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions. It also clarifies on the impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation. EITF No. 07-5 is effective for fiscal years beginning after December 15, 2008. The Company is currently assessing the impact of EITF No. 07-5 on its consolidated financial position and results of operations.

Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)

In May 2008, the FASB issued FSP Accounting Principles Board (“APB”) Opinion No. 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement).” The FSP clarifies the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The FSP requires issuers to account separately for the liability and equity components of certain convertible debt instruments in a manner that reflects the issuer's nonconvertible debt (unsecured debt) borrowing rate when interest cost is recognized. The FSP requires bifurcation of a component of the debt, classification of that component in equity and the accretion of the resulting discount on the debt to be recognized as part of interest expense in our consolidated statement of operations. The FSP requires retrospective application to the terms of instruments as they existed for all periods presented. The FSP is effective for us as of January 1, 2009 and early adoption is not permitted. The Company is currently evaluating the potential impact of FSP APB No. 14-1 upon its consolidated financial statements.
 
 
The Hierarchy of Generally Accepted Accounting Principles
 
In May 2008, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 162, "The Hierarchy of Generally Accepted Accounting Principles" (FAS No.162). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements. SFAS No. 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles". The implementation of this standard will not have a material impact on the Company's consolidated financial position and results of operations.
 
Determination of the Useful Life of Intangible Assets
 
In April 2008, the FASB issued FASB Staff Position on Financial Accounting Standard (“FSP FAS”) No. 142-3, “Determination of the Useful Life of Intangible Assets”, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of intangible assets under SFAS No. 142 “Goodwill and Other Intangible Assets”.  The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of the expected cash flows used to measure the fair value of the asset under SFAS No. 141 (revised 2007) “Business Combinations” and other U.S. generally accepted accounting principles.    The Company is currently evaluating the potential impact of FSP FAS No. 142-3 on its consolidated financial statements.
 
Disclosure about Derivative Instruments and Hedging Activities
 
In March 2008, the FASB issued SFAS No. 161, “Disclosure about Derivative Instruments and Hedging Activities, an amendment of SFAS No. 133”, (SFAS 161). This statement requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. The Company is required to adopt SFAS No. 161 on January 1, 2009. The Company is currently evaluating the potential impact of SFAS No. 161 on the Company’s consolidated financial statements.
 
Business Combinations
 
In December 2007, the FASB issued SFAS No. 141(R) “Business Combinations” (SFAS 141(R)). This Statement replaces the original SFAS No. 141. This Statement retains the fundamental requirements in SFAS No. 141 that the acquisition method of accounting (which SFAS No. 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. The objective of SFAS No. 141(R) is to improve the relevance, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To accomplish that, SFAS No. 141(R) establishes principles and requirements for how the acquirer:
 
 
a.
Recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree.
 
b.
Recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase.
 
c.
Determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.
 
This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 and may not be applied before that date. The Company is unable at this time to determine the effect that its adoption of SFAS No. 141(R) will have on its consolidated results of operations and financial condition.
 
Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51
 
In December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51” (SFAS No. 160). This Statement amends the original Accounting Review Board (ARB) No. 51 “Consolidated Financial Statements” to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This Statement is effective for fiscal years and interim periods within those fiscal years, beginning on or after December 15, 2008 and may not be applied before that date. The Company is unable at this time to determine the effect that its adoption of SFAS No. 160 will have on its consolidated results of operations and financial condition.
 
 
Fair Value Measurements
 
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS No. 157). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. SFAS No. 157 addresses the requests from investors for expanded disclosure about the extent to which companies’ measure assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. In February 2008, the FASB issued FSP FAS No. 157-2, “Effective Date of FASB Statement No. 157”. This FSP delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The Company is unable at this time to determine the effect that its adoption of SFAS No. 157 will have on its consolidated results of operations and financial condition.

NOTE 5 – LEGAL MATTERS

In March 2008, Kent Caraquero, Leslie Lounsbury, Riverside Manitoba, Inc. and Tyeee Capital Consultants, Inc. filed suit against the Company, Richard Specht, Rene Hamouth, Hamouth Family Trust, William R. Dunavant, and William R. Dunavant Family Holdings, Inc. The suit was filed in The United States District Court, Middle District of Florida and requests damages in an unspecified amount and injunctive relief for various breaches of contract and securities violations. The Company has contacted the Plaintiffs’s attorney and is in the process of attempting to the settle the claims as they pertain to the Company. There is however, no assurance that the Company will be able to settle the matter.

On January 29, 2007, the Company entered into an agreement with Intrepid World Communications Corp. (“IWC”) which provided that the Company would merge with IWC. At the time that the agreement was executed, the Company issued 20,000,000 shares of our restricted common stock to James Fischback. These shares were issued and delivered to him on condition that the merger would be consummated. However, the merger was never consummated.  When IWC failed to return the shares, the Company filed suit in Delaware for cancellation of such shares.
 
NOTE 6 - SUBSEQUENT EVENTS
 
In July 2008, the Company was appointed the exclusive provider of health insurance medical smartcards for a Chinese national healthcare joint venture arranged by James MacKay and the MacKay Group called Worldwide Lifecare Limited (the “Carelife JV”). The Carelife JV will provide comprehensive medical technology and services throughout China.
 
The Carelife JV will open a network across China of medical clinic centers, call centers and data centers for R&D. The first medical clinic center will open in October 2008 at Carelife’s China Headquarters in Shanghai. In partnership with China’s National Labor Union and funded with an investment by Chinese Government and others of approximately US$363 million, the Carelife JV will open more than 500 medical clinic centers across China before 2012 at different Labor Union centers covering 60% of China’s urban population. This national network will be part of China’s national healthcare program to instill best healthcare management practices and to address critical problems related to its aging population. China’s top insurance companies (China Life Insurance and Ping An Insurance) and top bank, China Industrial Commercial Bank, have agreed to refer subscribers, employees, and clients to join the Carelife network.
 
The Carelife JV will provide leading medical technology and services through this national 500+ medical clinic center network. The medical clinic centers will also introduce medical technology and services to hospitals and government-owned medical care units for China’s general population.
 
The Company will provide a healthcare medical smartcard for the Carelife JV. The medical smartcard will allow Carelife members to make membership, healthcare-related and other payments, including from funds deposited by China’s leading healthcare insurers and Chinese Government. The medical smartcard will provide an electronic data base for members’ medical records and history and allow remote access to this information for members’ healthcare providers. The medical smartcard will be co-branded with China’s leading banks and will be used by China’s top two insurance companies (Ping An and China Life).
 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis should be read in conjunction with our Financial Statements and Notes thereto appearing elsewhere in this document.

Certain statements contained in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this report are forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, forward-looking statements can be identified by terminology such as "may," "will", "should", "expect", "anticipate", "intend", "plan", "believe", "estimate", "potential", or "continue", the negative of these terms or other comparable terminology. These statements involve a number of risks and uncertainties. Actual events or results may differ materially from any forward-looking statement as a result of various factors, including those described above and in the Company’s last Form 10-KSB for 2006 and 2005 under "Risk Factors". We have no obligation to release publicly the result of any revisions to any of our "forward-looking statements" to reflect events or circumstances that occur after the date of this Report or to reflect the occurrence of other unanticipated events.

AS A RESULT OF THE FVS TRANSACTION, THE COMPANY ENTERS THE SMARTCARD/ E-PURSE BUSINESS
 
As a result of the FVS Transaction, the Company, through its wholly owned subsidiary, FVS, changed its business to provide a transnational electronic payment or e-purse system using a third generation smart card technology and central clearing house (“Versa Card”) that can be used, inter alia, to pay for purchases, bills, and other transactions related to mass transit systems, convenience stores, fast-food outlets, telecommunications, gas, electricity, water and other utilities, healthcare institutions, gas stations, drugstores, supermarkets, ATMs, banks, credit cards, cell phones, vending machines, toll roads, parking, and other commercial establishments. Versa Card can also store and secure important data, including, but not limited to, medical, identification, corporate payroll and disbursement, and other information, and can be used as a national identification card, a national school identification card, a national voting card, a medical insurance card, and a corporate payroll card which can track disbursements.
 
The Company believes that FVS is strategically placed to be a leader in the “Smartcard/Cashless Revolution” and a leading provider of integrated smartcard technology in Asia. FVS has established strategic alliances with prominent government, industry, and banking leaders, in the Philippines, China, India, Japan, Hong Kong, Macau, Singapore, and the Middle East. FVS has relationships with various industry partners in transit operations, telecommunications, banking, smart card technology, loyalty, system integration, and merchants to make FVS’s smart card systems available in as many places as possible. FVS’ initial operations are in the Philippines with a roll out year one of several millions of cards, focusing around mass transit systems, convenience stores, fast-food outlets, telecommunications, and other commercial establishments in the Greater Metro Manila Region. Discussions are also taking place to use millions of Versa Cards in, inter alia, China and India, in connection with, inter alia, medical and other equipment as part of certain government initiatives.
 
The Company spent the quarter ended June 30, 2008 closing the transaction between FVS and the Company.
 
The Company’s history of operations have been limited to developing a web portal, identifying acquisition ventures in the technology sector and satisfying continuous public disclosure requirements.
 
 
Results of Operations
 
The unaudited financial statements as of June 30, 2008 and for the three and six months ended June 30, 2008 and 2007 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2008 and the results of operations and cash flows for the periods ended June 30, 2008 and 2007. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three and six months ended June 30, 2008 are not necessarily indicative of the results to be expected for any subsequent quarter of the entire year ending December 31, 2008.
 
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These Unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2007 as included in our report on Form 10-KSB-A.
 
Comparison of the three month period ended June 30, 2008 with the three month period ended June 30, 2007.

There were no sales and we did not incur any cost of sales in the three months ended June 30, 2008 and 2007.

The total operating expenses for the three months ended June 30, 2008 and June 30, 2007 were $140,659 and $966,948, respectively, representing a decrease of $826,289 or 85.5%. This decrease is due primarily to stock based compensation expenses in 2007. Total operating expenses for the three months ended June 30, 2008 were related to selling, general and administrative expenses.

As a result of the foregoing, we incurred a net loss of $140,659 for the three months ended June 30, 2008, compared to $966,948 for the three months ended June 30, 2007, a decrease in net loss of $826,289, or 85.5%.

Comparison of the six month period ended June 30, 2008 with the six month period ended June 30, 2007.

There were no sales and we did not incur any cost of sales in the six months ended June 30, 2008 and 2007.

The total operating expenses for the six months ended June 30, 2008 and June 30, 2007 were $233,871 and $1,009,446, respectively, representing a decrease of $775,575 or 76.9%. This decrease is due primarily to stock based compensation expenses in 2007. Total operating expenses for these six months were related to selling, general and administrative expenses.

As a result of the foregoing, we incurred a net loss of $233,871 for the six months ended June 30, 2008, compared to $1,009,446 for the six months ended June 30, 2007, a decrease in net loss of $775,575, or 76.9%.
 
Losses
 
For the period from January 1, 2005 (date upon which the Company re-entered the development stage) to June 30, 2008, the Company recorded cumulative operating losses of $6,201,185. The majority of the Company’s operating losses are attributable to general and administrative expenses of $5,554,504 and costs in connection with the planning and impairment of the web portal of $477,275. The Company did not generate any revenues during this period. The Company expects to continue to incur net losses in future periods until such time as it can generate revenue. For fiscal year 2008, the Company anticipates incurring losses as a result of web portal development, acquisition expenses, administration expenses, accounting costs, and expenses associated with maintaining its disclosure obligations under the Exchange Act of 1934, as amended (“Exchange Act”). However, there is no assurance that the Company will ever generate sufficient revenues to fund operations.
 
 
Liquidity and Capital Resources
 
The Company is in the development stage and, since inception, has experienced significant changes in liquidity, capital resources and shareholders’ equity. The Company had current assets of $20,291 and other assets of $38,000 for total assets of $58,291 as of June 30, 2008. These assets consist $17,169 receivable from a related party, $3,122 in prepaid expenses and investment in subsidiaries of $38,000. Total stockholders deficiency in the Company was $918,546 at June 30, 2008.
 
Cash flow used in operating activities was $40,345 for the six month period ended June 30, 2008 as compared to cash used in operating activities of $75,613 for the six month period ended June 30, 2007. The decrease of cash flow utilized in operating activities was due in large part to a decrease in issuance of common stock for bonus of approximately $806,000 and issuance of common stock for services of approximately $102,000, offset by an increase in accounts payable and accrued liabilities of approximately $152,000 and a decrease in losses for the period of approximately $776,000.
 
Cash flow used in investing activities was $38,000 for the six month period ended June 30, 2008, as compared to $nil for the six month period ended June 30, 2007. The 2008 activity was related to investments in subsidiaries.
 
Cash flow provided from financing activities was $68,417 for the six month period ended June 30, 2008, as compared to cash flow provided from financing activities of $80,015 for the six month period ended June 30, 2007. The increase is primarily due to proceeds from subscription for common stock of $50,000, as well as an increase of approximately $18,000 from advances payable offset by proceeds from sales of common stock and warrants of approximately $80,000 in 2007.
 
The Company’s current assets are not sufficient to conduct its plan of operation over the next twelve months. Website development costs associated with the completion of the web portal alone exceed current assets. The Company will have to seek debt or equity financing to fund costs attendant to the “Manga” themed project, in addition to obtaining sufficient capital to meet operating expenses. However, the Company has no current commitments or arrangements with respect to funding or immediate sources of funding. Further, no assurances can be given that funding would be available or available to the Company on acceptable terms. Although, the Company’s major shareholders would be the most likely source of new funding in the form of debt or equity placements none have made any commitment for future investment and the Company has no agreement formal or otherwise.
 
Should the Company be unsuccessful in completing debt or equity placements in connection with the obligations created by its Agreement with the developer, and the anticipated development of the “Manga” inspired online virtual pet portal/website. Accordingly, the Company’s inability to obtain funding would have a material adverse effect on its plan of operation.
 
The Company has no current plans for the purchase or sale of any plant or equipment. The Company has no current plans to make any changes in the number of employees. The Company has no defined benefit plan with any of its officers or directors.
 
Critical Accounting Policies
 
In the notes to the audited consolidated financial statements for the year ended December 31, 2007 and in our Annual Report on Form 10-KSB filed with the Securities and Exchange Commission, the Company discusses those accounting policies that are considered to be critical in determining the results of operations and its financial position. We believe that the accounting principles it uses conform to accounting principles generally accepted in the United States of America.
 
Forward Looking Statements and Factors That May Affect Future Results and Financial Condition
 
The statements contained in sections titled “Plan of Operation”, with the exception of historical facts, are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which reflect our current expectations and beliefs regarding our future results of operations, performance, and achievements. These statements are subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not materialize. These forward looking statements include, but are not limited to, statements concerning:

 
1
Our ability to successfully implement our business strategies;
 
 
 
2
The success or failure of our the business opportunities that we are pursuing;
 
3
Our anticipated financial performance;
 
4
The sufficiency of existing capital resources;
 
5
Our ability to raise additional capital to fund cash requirements for future operations;
 
6
Uncertainties related to the Company’s future business prospects;
 
7
The ability of the Company to generate revenues to fund future operations;
 
8
Changes in the laws and government regulations applicable to us;
 
9
The volatility of the stock market; and
 
10
General economic conditions.
 
We wish to caution readers that the Company’s operating results are subject to various risks and uncertainties that could cause our actual results to differ materially from those discussed or anticipated, including the factors set forth in the section entitled “Risk Factors.” We also wish to advise readers not to place any undue reliance on the forward looking statements contained in this report, which reflect our beliefs and expectations only as of the date of this report. We assume no obligation to update or revise these forward looking statements to reflect new events or circumstances or any changes in our beliefs or expectations, other that is required by law.
 
RISK FACTORS
 
Our future operating results are highly uncertain. Before deciding to invest in us or to maintain or increase your investment, you should carefully consider the risks described below, in addition to the other information contained in this annual report. If any of these risks actually occur, our business, financial condition or results of operations could be seriously harmed. In that event, the market price for our common stock could decline and you may lose all or part of your investment. The following risks were as of June 30, 2008 – prior to the April 28, 2008 closing of the FVS Transaction and the Company’s resulting change of business to the smartcard/ e-purse business.
 
Risks Related to our Developing Operations
 
Our business model is unproven.
 
Our business model depends upon our ability to implement and successfully execute our business and marketing strategy, which includes the following: develop, deploy, and enhance the technology and systems which will underlie the interactive web portal; attract users of the web portal at a reasonable cost; reliably process transactions through the web portal; locate, develop and maintain strategic relationships with advertisers who wish to target the demographic groups which use the Company’s web portal.
 
As our business model is unproven, we cannot be certain that our business strategy will be successful or that we will ever be profitable.
 
We might not be able to establish and strengthen a brand identity.
 
We believe that establishing a strong brand loyalty is critical to achieving acceptance of the web portal. Promoting and positioning our brand will depend largely on the success of our marketing efforts and our ability to provide consistent, high-quality experiences on the web portal. Our brand promotion activities might not be successful or, even if successful, result in enough revenues to offset the expenses incurred.
 
We might not be able to determine or design features and functionality that Web Portal users and advertisers require or prefer.
 
We are designing and developing the web portal based upon existing web sites and the experience and insights of our management. Our success will depend in part upon our ability to accurately determine the features and functionality that the web portal users and advertisers require or prefer, and our ability to successfully design and implement solutions that include these features and functionality. We cannot be certain that the features and functionality that we plan to offer in the web portal will satisfy the requirements or preferences of our current or potential customers.
 
 
We will depend on third parties to provide reliable software, systems, and services.
 
We currently have no technology assets or resources to build the web portal. We plan to rely substantially upon third-party service providers to help us build, maintain, and house key components of our web portal. These services might not be available in a timely manner or on commercially reasonable terms. Failure to obtain the necessary services to enable us to build, maintain, and house our web portal could have a materially adverse effect on our business, financial condition, results of operations, and prospects.
 
In addition, several of the third-parties upon whom we plan to depend upon have a limited operating history, have relatively immature technology, and are themselves dependent on reliable delivery of services from others. As a result, our ability to deliver various services to our users might be adversely affected by the failure of these third parties to provide reliable software, systems, and related services to us.
 
The online web services markets are intensely competitive.
 
Many different companies are positioned to emerge as competitors in this marketplace. Many of our potential competitors have longer operating histories, significantly greater financial, technical, marketing, and other resources than we have, a significantly greater name recognition, a larger installed base of potential customers, and more extensive knowledge of our industry. Such competitors might be able to spend more aggressively on marketing and advertising for their brands, products, and services. They also might adopt more aggressive pricing policies and make more attractive offers to employees.
 
There are minimal barriers to entry in our market, and competitors can launch web-enabled products and service at relatively low cost. Other companies may develop products and services that are less expensive and more useful to the hard goods industry. These companies might be more successful in their marketing efforts and thereby limit our ability to gain market share.
 
Our ability to protect the intellectual property to be developed is uncertain.
 
We believe that intellectual property will be critical to our success. We will rely on trademark, copyright, and trade secret protection to protect our intellectual property. The measures we take to protect our intellectual property might not be successful, which could have a materially adverse effect on our business. The United States or foreign jurisdictions might not grant us any copyrights, trademarks, or other protection for our intellectual property. There also can be no assurance that our intellectual property rights will not be challenged, invalidated, or circumvented, by others or that our intellectual property rights will provide us with a competitive advantage.
 
If other parties assert infringement claims against us, the defense of any such claim, whether with or without merit, could be time-consuming, result in substantial litigation expenses, and diversion of technical management personnel. If any such claims are adversely determined, we might be required to develop non-infringing technology or enter into licensing agreements. These licensing agreements, if required, might not be available on terms acceptable to us, or at all. In the event a claim of infringement is successfully asserted against us and our failure or inability to develop non-infringing technology or license the infringed or similar technology on a timely basis, would be likely to materially and adversely affect our business, financial condition, results of operations, and prospects.
 
General Risks
 
We have a history of significant operating losses and such losses may continue in the future.
 
Since our inception in 1998, our expenses have substantially exceeded our revenue, resulting in continuing losses and an accumulated deficit of $8,143,573, and accumulated deficit during development stage of $6,201,185 at June 30, 2008. We will continue to incur operating losses as we maintain our search for a suitable business opportunity and satisfy our ongoing disclosure requirements with the Securities and Exchange Commission ("Commission"). Our only expectation of future profitability is dependent upon our ability to fully develop our anticipated web portal, which can in no way be assured. Therefore, we may never be able to achieve profitability.
 
 
We anticipate that we will incur operating losses for the foreseeable future.
 
We expect to incur substantial operating losses for the foreseeable future. We intend to increase our operating expenses substantially as we increase our product development, marketing, and brand building activities. We will increase our general and administrative functions to support our growing operations. We will need to generate significant revenues to achieve profitability, and we might not be able to sustain or increase profitability in the future. We will be dependent upon our ability to obtain additional capital form borrowing and the sale of securities to fund our operations. There is no assurance that additional capital can be obtained or that it can be obtained on terms that are favorable to the Company and its existing stockholders.
 
The market for our stock is limited and our stock price may be volatile.
 
The market for our common stock has been limited due to low trading volume and the small number of brokerage firms acting as market makers. Because of the limitations of our market and volatility of the market price of our stock, investors may face difficulties in selling shares at attractive prices when they want to. The average daily trading volume for our stock has varied significantly from week to week and from month to month, and the trading volume often varies widely from day to day.
 
We may incur significant expenses as a result of being quoted on the Over the Counter Bulletin Board, which may negatively impact our financial performance.
 
We may incur significant legal, accounting and other expenses as a result of being listed on the Over the Counter Bulletin Board. The Sarbanes-Oxley Act of 2002, as well as related rules implemented by the Commission, have required changes in corporate governance practices of public companies. We expect that compliance with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 as discussed in the following risk factor, may substantially increase our expenses, including our legal and accounting costs, and make some activities more time-consuming and costly. As a result, there may be a substantial increase in legal, accounting and certain other expenses in the future, which would negatively impact our financial performance and could have a material adverse effect on our results of operations and financial condition.
 
Our internal controls over financial reporting may not be considered effective, which could result in a loss of investor confidence in our financial reports and in turn have an adverse effect on our stock price.
 
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, beginning with our annual report for the year ending March 31, 2008, we may be required to furnish a report by our management on our internal controls over financial reporting. Such report will contain, among other matters, an assessment of the effectiveness of our internal controls over financial reporting as of the end of the year, including a statement as to whether or not our internal controls over financial reporting are effective. This assessment must include disclosure of any material weaknesses in our internal controls over financial reporting identified by management. The report will also contain a statement that our independent registered public accounting firm has issued an attestation report on management's assessment of internal controls. If we are unable to assert that our internal controls are effective as of December 31, 2007 or if our independent registered public accounting firm is unable to attest that our management's report is fairly stated or they are unable to express an opinion on our management's evaluation or on the effectiveness of our internal controls, investors could lose.
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not Applicable.
 
 
ITEM 4T. CONTROLS AND PROCEDURES

Our chief executive officer and chief accounting officer (the “Certifying Officers”) are responsible for establishing and maintaining disclosure controls and procedures for our company and our subsidiary. Such officers have concluded (based upon his evaluation of these controls and procedures as of the end of the period covered by this report) that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in this report is accumulated and communicated to management, including our principal executive officers as appropriate, to allow timely decisions regarding required disclosure.

The Certifying Officers have also indicated that there were no significant changes in our internal controls or other factors that could significantly affect such controls subsequent to the date of his evaluation, and there were no corrective actions with regard to significant deficiencies and material weaknesses.
 
Our management, including the Certifying Officers, do not expect that our disclosure controls or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 
PART II OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
In March 2008, Kent Caraquero, Leslie Lounsbury, Riverside Manitoba, Inc. and Tyeee Capital Consultants, Inc. filed suit against the Company, Richard Specht, Rene Hamouth, Hamouth Family Trust, William R. Dunavant, and William R. Dunavant Family Holdings, Inc. The suit was filed in The United States District Court, Middle District of Florida and requests damages in an unspecified amount and injunctive relief for various breaches of contract and securities violations. The Company has contacted the Plaintiffs’s attorney and is in the process of attempting to the settle the claims as they pertain to the Company. There is however, no assurance that we will be able to settle the matter.
 
On January 29, 2007, we entered into an agreement with Intrepid World Communications Corp. (“IWC”) which provided that we would merge with IWC. At the time that Agreement was executed, we issued 20,000,000 shares of our restricted common stock to James Fischback. These shares were issued and delivered to him on condition that the merger would be consummated. However, the merger was never consummated.  When IWC failed to return the shares, the Company filed suit in Delaware for cancellation of such shares.
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
 
There were no unregistered sales of equity securities during the six months ended June 30, 2008.
 
The Company issued 18 million shares of the Company’s common stock to MacKay Group Limited in return for all the outstanding equity securities of FVS, (such shares were issued in November 2007 pending consumation of the FVS Transaction).
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
None. 
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
None.
 
ITEM 5. EXHIBITS
 
Exhibits required to be attached by Item 601 of Regulation S-B are listed in the Index to Exhibits of this Form 10-QSB, and are incorporated herein by this reference.
 
 
SIGNATURES
 
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, and this 19th day of August 2008.

Date: August 19, 2008
By:
/s/ James MacKay
   
Chief Executive Officer and
   
Principal Accounting Officer