Medical Care Technologies Inc.

What they do

The company plans to open and operate children's integrated health and wellness centers in China, with a focus on pediatric care for children aged 3-16. It also plans to sell and distribute pharmaceutical and nutraceutical products through its centers, website, and retail pharmacies. To date, it has not realized any revenues from these activities.

Revenue drivers

• Pediatric Health Centers — Planned revenue from operating private children's health and wellness centers in Chinese cities, starting with Dongguan; no centers are yet operational, so no revenue has been generated.
• Pharmaceutical and Nutraceutical Products — Planned sales of SFDA-approved products, including over-the-counter medicines and herbal products, through company centers and distribution channels; no revenue to date.
• Joint Venture (ReachOut Holdings) — Through a 65%-owned Hong Kong joint venture with Ocean Wise, the company intends to establish Chinese subsidiaries to operate pediatric centers; this entity has not yet contributed revenue.

Recent performance

As of September 30, 2012, the company reported total assets of $1.2 million and total liabilities of $1.4 million, resulting in a shareholder equity deficit of $228,469. Cash and equivalents stood at just $742. The company has incurred annual net losses each year from 2007 through 2011, with the most recent annual net loss of $1.9 million in 2011. Operating cash flow was negative $371,920 in 2011. No revenues have been realized to date.

Strategy

The company aims to open private pediatric health centers in economically developing and developed provinces in China, with a first flagship facility named Teddyberry and Company in Dongguan. In May 2012, it received approval to open a health center in Shenzhen and has paid required licenses, bonds, and zoning fees. It also plans to expand into other Tier-1 and Tier-2 cities such as Beijing, Shanghai, Guangzhou, and Tianjin. Additionally, it plans to sell pharmaceutical and nutraceutical products through its centers and distribution channels. The company authorized an increase in authorized shares and a potential reverse stock split in early 2012.

Risks

• No Revenue History — The company has not generated any revenues from its planned operations and may never achieve profitability.
• Going Concern / Liquidity — With only $742 in cash as of September 30, 2012, and negative operating cash flow, the company may be unable to fund its planned operations.
• Execution Risk in China — The company may face challenges in obtaining further licenses, securing locations, and operating healthcare centers in China as planned.
• Dependence on Joint Venture Partner — Under the joint venture, Ocean Wise is responsible for providing funding and management for the pediatric centers, creating reliance on a third party.

Outlook

Management intends to open its first children's health center in Dongguan, named Teddyberry and Company, and has received approval for a Shenzhen location. It hopes to sign Memorandums of Understanding with various Chinese provinces after the first quarter of 2012 and to expand into additional cities. However, no timeline for revenue generation is provided, and the company remains in the development stage.