SEC Company Response from China Health Holding, Inc. (CIK 0001302331) — Feb 9, 2005
China Health Holding, Inc. (CIK 0001302331)
Date: Feb. 9, 2005 · CIK: 0001302331 · Accession: 0001013762-05-000161
AI Filing Summary & Sentiment
Letter
Suite 1700 - 1140 West Pender Street Dale Matheson Carr- Vancouver, BC Hilton LaBonte V6E 4G1 Chartered Phone: 604-687-4747 Accountants Fax: 604-687-4216
FAX --------------------------------------------------------------------------------
To: From: Dana Hartz, Peter J Donaldson, CA US Securities and Exchange Commission -------------------------------------------------------------------------------- Fax: 202 942 9533 Date: February 8, 2005 -------------------------------------------------------------------------------- Phone: 202 942 2976 Pages: -------------------------------------------------------------------------------- Re: China Health Holdings Inc. CC: --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- Fax
Urgent For Review Please Comment Please Reply Please Recycle
-------------------------------------------------------------------------------- oComments:
Ms Hartz:
At the request of our client, China Health Holdings Inc., and further to our conversation this morning, we confirm the following:
The Company has marked each page of the financial statements "Restated - See Note 13".
The Company has included Loss on Settlement of Debts and Issuance of Shares under operating expenses.
The Company has reallocated in the nine month period ended September 30, 2004 $20,000 from Loss on Settlement of Debt and Issuance of Shares to Consulting Fees in the Statement of Operations
The Company has added additional disclosure to Note 13 reflecting and explaining changes to the Statement of Stockholders' Equity resulting from the fair value restatement matter.
We will issue and updated consent letter in connection with the filing the next amended SB2
We attach the revised financial statements reflecting the changes described above.
Please do not hesitate to contact me should you have any questions concerning the attached.
Thank you
"Peter J Donaldson, CA"
Dale Matheson Carr-Hilton labonte
Chartered Accountants
Per: Peter J Donaldson, CA
cc China Health Holdings Inc.
<PAGE> CHINA HEALTH HOLDING INC. (formerly A E&E Pharma Corporation)
(a development stage company)
FINANCIAL STATEMENTS (AS RESTATED - SEE NOTE 13)
SEPTEMBER 30, 2004 (UNAUDITED)
DECEMBER 31, 2003 AND 2002
AUDITORS' REPORT
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENT OF STOCKHOLDERS' EQUITY
STATEMENTS OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
<PAGE> INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors of China Health Holding Inc. (formerly A E & E Pharma Corporation):
We have audited the balance sheets of China Health Holding Inc. (a development stage company) as at December 31, 2003 and December 31, 2002, and the statements of operations, stockholders' equity and cash flows for the year ended December 31, 2003 and for the period from April 3, 2002 (inception) to December 31, 2002. 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 audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As described in Note 13 to the aforementioned financial statements, the accompanying financial statements as at December 31, 2003 and for the year then ended have been restated to reflect (i) an adjustment of the estimated fair value at which certain common stock transactions have been recorded and (ii) an adjustment to the date at which certain common stock transactions were recognized. These restatements resulted in a decrease in stockholders' equity of $8,381, an increase in current liabilities of $8,381, an increase in net loss of $47,733 and an increase in the net loss per share of $.01.
In our opinion, these financial statements, revised as described in Note 13, present fairly, in all material respects, the financial position of the Company as at December 31, 2003 and December 31, 2002 and the results of its operations and its cash flows and the changes in stockholders' equity for the year ended December 31, 2003, and for the period from April 3, 2002 (inception) to December 31, 2002 in accordance with United States generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2(a) to the financial statements, the Company has a working capital deficiency, a capital deficiency, has incurred significant losses since inception and further losses are anticipated in the development of its products raising substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2(a). The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
DALE MATHESON CARR-HILTON LABONTE CHARTERED ACCOUNTANTS Vancouver, B.C. November 10, 2004, except as to Note 13 which is as of January 31, 2005
F-2 <PAGE>
CHINA HEALTH HOLDING INC. (formerly A E&E Pharma Corporation) (a development stage company)
BALANCE SHEETS (AS RESTATED - SEE NOTE 13) <TABLE> <CAPTION>
Sept 30, Dec. 31, Dec. 31, 2004 2003 2002 $ $ $ (unaudited) -------------- -------------- -------------- ASSETS
<S> <C> <C> <C> CURRENT ASSETS Cash 21,623 282 141 Prepaid expenses (Note 6 and 7) 426,585 772 634 --------------- -------------- ------------- 448,208 1,054 775
FIXED ASSETS (Note 4), net of amortization 5,268 2,294 -
INTANGIBLES ASSETS (Note 3) 1 - -
--------------- -------------- ------------- 453,477 3,348 775 =============== ============== =============
LIABILITIES
CURRENT LIABILITIES Accounts payable and accrued liabilities 3,160 14,677 2,210 Due to shareholders (Note 5) 327,127 85,725 11,006 --------------- -------------- ------------- 330,287 100,402 13,216 --------------- -------------- -------------
STOCKHOLDERS' DEFICIENCY
STOCKHOLDERS' EQUITY (Note 6) Common stock, $0.001 par value, 55,000,000 shares authorized 35,452,700 (2003 - 29,165,000; 2002 - 22,895,000) shares issued and outstanding 35,453 29,165 22,895 Preferred stock, $0.001 par value, 20,000,000 shares authorized, Nil shares issued and outstanding - - - Additional paid-in capital 1,977,140 105,185 35,805 Deficit accumulated during the development stage (1,875,363) (221,346) (71,673) Accumulated other comprehensive (loss) income (14,040) (10,058) 532 --------------- -------------- ------------- 123,190 (97,054) (12,441) --------------- -------------- -------------
453,477 3,348 775 =============== ============== ============= </TABLE>
GOING CONCERN (Note 2(a)) COMMITMENTS (Note 9)
The accompanying notes are an integral part of these financial statements
F-3 <PAGE>
CHINA HEALTH HOLDING INC. (formerly A E&E Pharma Corporation) (a development stage company)
STATEMENTS OF OPERATIONS (AS RESTATED - SEE NOTE 13)
<TABLE> <CAPTION>
Nine months April 3, 2002 April 3, 2002 ended ear ended (inception) to (inception) to Sept 30, 2004 Dec. 31, 2003 Dec. 31, 2002 Sept 30, 2004 $ $ $ $ (unaudited) unaudited -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> PRODUCT SALES 6,495 - - 6,495 -------------- -------------- -------------- --------------
EXPENSES Advertising and promotion 13,559 17,126 11,916 42,601 Amortization 652 129 - 781 Consulting fees (Note 6 and 7) 332,265 6,836 - 339,101 Interest and bank charges (Note 8) 12,891 5,840 303 19,034 Loss on settlement of debts and issuance of shares 29,297 41,108 - 70,405 (Notes 7 and 12) Management fees (Note 6) 647,500 60,000 45,000 752,500 Office 6,960 2,156 2,817 11,933 Professional fees (Note 6) 232,234 1,428 5,410 239,072 Rent 12,172 12,359 4,727 29,258 Research and development (Note 3) 366,306 - - 366,306 Travel 5,315 161 200 5,676 Vehicle 1,361 2,530 1,300 5,191 -------------- -------------- -------------- -------------- 1,660,512 149,673 71,673 1,881,858 -------------- -------------- -------------- --------------
NET LOSS FOR THE PERIOD 1,654,017 149,673 71,673 1,875,363 ============== ============== ============== ==============
BASIC NET LOSS PER SHARE $ 0.05 $ 0.01 $ 0.06 ============== ============== ============== ==============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 32,169,841 23,621,384 1,293,890 ============== ============== ============== ============== </TABLE>
The accompanying notes are an integral part of these financial statements
F-4 <PAGE>
CHINA H
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<DOCUMENT>
<TYPE>CORRESP
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<TEXT>
Suite 1700 - 1140 West Pender Street Dale Matheson Carr-
Vancouver, BC Hilton LaBonte
V6E 4G1 Chartered
Phone: 604-687-4747 Accountants
Fax: 604-687-4216
FAX
--------------------------------------------------------------------------------
To: From:
Dana Hartz, Peter J Donaldson, CA
US Securities and Exchange Commission
--------------------------------------------------------------------------------
Fax: 202 942 9533 Date: February 8, 2005
--------------------------------------------------------------------------------
Phone: 202 942 2976 Pages:
--------------------------------------------------------------------------------
Re: China Health Holdings Inc. CC:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Fax
Urgent For Review Please Comment Please Reply Please Recycle
--------------------------------------------------------------------------------
oComments:
Ms Hartz:
At the request of our client, China Health Holdings Inc., and further to our
conversation this morning, we confirm the following:
The Company has marked each page of the financial statements "Restated - See
Note 13".
The Company has included Loss on Settlement of Debts and Issuance of Shares
under operating expenses.
The Company has reallocated in the nine month period ended September 30, 2004
$20,000 from Loss on Settlement of Debt and Issuance of Shares to Consulting
Fees in the Statement of Operations
The Company has added additional disclosure to Note 13 reflecting and explaining
changes to the Statement of Stockholders' Equity resulting from the fair value
restatement matter.
We will issue and updated consent letter in connection with the filing the next
amended SB2
We attach the revised financial statements reflecting the changes described
above.
Please do not hesitate to contact me should you have any questions concerning
the attached.
Thank you
"Peter J Donaldson, CA"
Dale Matheson Carr-Hilton labonte
Chartered Accountants
Per: Peter J Donaldson, CA
cc China Health Holdings Inc.
<PAGE>
CHINA HEALTH HOLDING INC.
(formerly A E&E Pharma Corporation)
(a development stage company)
FINANCIAL STATEMENTS
(AS RESTATED - SEE NOTE 13)
SEPTEMBER 30, 2004 (UNAUDITED)
DECEMBER 31, 2003 AND 2002
AUDITORS' REPORT
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENT OF STOCKHOLDERS' EQUITY
STATEMENTS OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors of China Health Holding Inc.
(formerly A E & E Pharma Corporation):
We have audited the balance sheets of China Health Holding Inc. (a development
stage company) as at December 31, 2003 and December 31, 2002, and the statements
of operations, stockholders' equity and cash flows for the year ended December
31, 2003 and for the period from April 3, 2002 (inception) to December 31, 2002.
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 audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As described in Note 13 to the aforementioned financial statements, the
accompanying financial statements as at December 31, 2003 and for the year then
ended have been restated to reflect (i) an adjustment of the estimated fair
value at which certain common stock transactions have been recorded and (ii) an
adjustment to the date at which certain common stock transactions were
recognized. These restatements resulted in a decrease in stockholders' equity of
$8,381, an increase in current liabilities of $8,381, an increase in net loss of
$47,733 and an increase in the net loss per share of $.01.
In our opinion, these financial statements, revised as described in Note 13,
present fairly, in all material respects, the financial position of the Company
as at December 31, 2003 and December 31, 2002 and the results of its operations
and its cash flows and the changes in stockholders' equity for the year ended
December 31, 2003, and for the period from April 3, 2002 (inception) to December
31, 2002 in accordance with United States generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2(a) to the
financial statements, the Company has a working capital deficiency, a capital
deficiency, has incurred significant losses since inception and further losses
are anticipated in the development of its products raising substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 2(a). The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
DALE MATHESON CARR-HILTON LABONTE
CHARTERED ACCOUNTANTS
Vancouver, B.C.
November 10, 2004, except as to Note 13 which is as of January 31, 2005
F-2
<PAGE>
CHINA HEALTH HOLDING INC.
(formerly A E&E Pharma Corporation)
(a development stage company)
BALANCE SHEETS
(AS RESTATED - SEE NOTE 13)
<TABLE>
<CAPTION>
Sept 30, Dec. 31, Dec. 31,
2004 2003 2002
$ $ $
(unaudited)
-------------- -------------- --------------
ASSETS
<S> <C> <C> <C>
CURRENT ASSETS
Cash 21,623 282 141
Prepaid expenses (Note 6 and 7) 426,585 772 634
--------------- -------------- -------------
448,208 1,054 775
FIXED ASSETS (Note 4), net of amortization 5,268 2,294 -
INTANGIBLES ASSETS (Note 3) 1 - -
--------------- -------------- -------------
453,477 3,348 775
=============== ============== =============
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 3,160 14,677 2,210
Due to shareholders (Note 5) 327,127 85,725 11,006
--------------- -------------- -------------
330,287 100,402 13,216
--------------- -------------- -------------
STOCKHOLDERS' DEFICIENCY
STOCKHOLDERS' EQUITY (Note 6)
Common stock, $0.001 par value, 55,000,000 shares authorized 35,452,700
(2003 - 29,165,000; 2002 - 22,895,000) shares
issued and outstanding 35,453 29,165 22,895
Preferred stock, $0.001 par value, 20,000,000 shares authorized,
Nil shares issued and outstanding - - -
Additional paid-in capital 1,977,140 105,185 35,805
Deficit accumulated during the development stage (1,875,363) (221,346) (71,673)
Accumulated other comprehensive (loss) income (14,040) (10,058) 532
--------------- -------------- -------------
123,190 (97,054) (12,441)
--------------- -------------- -------------
453,477 3,348 775
=============== ============== =============
</TABLE>
GOING CONCERN (Note 2(a))
COMMITMENTS (Note 9)
The accompanying notes are an integral part of these financial statements
F-3
<PAGE>
CHINA HEALTH HOLDING INC.
(formerly A E&E Pharma Corporation)
(a development stage company)
STATEMENTS OF OPERATIONS
(AS RESTATED - SEE NOTE 13)
<TABLE>
<CAPTION>
Nine months April 3, 2002 April 3, 2002
ended ear ended (inception) to (inception) to
Sept 30, 2004 Dec. 31, 2003 Dec. 31, 2002 Sept 30, 2004
$ $ $ $
(unaudited) unaudited
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
PRODUCT SALES 6,495 - - 6,495
-------------- -------------- -------------- --------------
EXPENSES
Advertising and promotion 13,559 17,126 11,916 42,601
Amortization 652 129 - 781
Consulting fees (Note 6 and 7) 332,265 6,836 - 339,101
Interest and bank charges (Note 8) 12,891 5,840 303 19,034
Loss on settlement of debts and issuance of
shares 29,297 41,108 - 70,405
(Notes 7 and 12)
Management fees (Note 6) 647,500 60,000 45,000 752,500
Office 6,960 2,156 2,817 11,933
Professional fees (Note 6) 232,234 1,428 5,410 239,072
Rent 12,172 12,359 4,727 29,258
Research and development (Note 3) 366,306 - - 366,306
Travel 5,315 161 200 5,676
Vehicle 1,361 2,530 1,300 5,191
-------------- -------------- -------------- --------------
1,660,512 149,673 71,673 1,881,858
-------------- -------------- -------------- --------------
NET LOSS FOR THE PERIOD 1,654,017 149,673 71,673 1,875,363
============== ============== ============== ==============
BASIC NET LOSS PER SHARE $ 0.05 $ 0.01 $ 0.06
============== ============== ============== ==============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 32,169,841 23,621,384 1,293,890
============== ============== ============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE>
CHINA H