UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-QSB
(Mark one)
[X] Quarterly Report Under Section 13 or 15(d) of The Securities Exchange Act
of 1934
For the quarterly period ended September 30, 2005
[_] Transition Report Under Section 13 or 15(d) of The Securities Exchange Act
of 1934
For the transition period from ______________ to _____________
Commission file number 000-32563
UNION DENTAL HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
Florida 000-26703 65-0710392
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) file number) Identification No.)
1700 University Drive, Suite 200
Coral Springs, FL 33071
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (954) 575-2252
N/A
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(Former name or former address, if changes since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 90 days. Yes |X| No |_|.
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X|.
Indicate by a check mark whether the registrant is a shell Company (as defined
by Rule 12b-2 of the Act). Yes |_| No |X|
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
As of September 30, 2005 there were 30,432,657 shares of the Issuer's common
stock, par value $0.0001 per share outstanding.
Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this quarterly report on Form 10-QSB contain or may
contain forward-looking statements that are subject to known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. These
forward-looking statements were based on various factors and were derived
utilizing numerous assumptions and other factors that could cause our actual
results to differ materially from those in the forward-looking statements. These
factors include, but are not limited to, economic, political and market
conditions and fluctuations, government and industry regulation, interest rate
risk, U.S. and global competition, and other factors including the risk factors
set forth in our Form 10-KSB and Form SB-2 which have been filed with the
Securities and Exchange Commission. Most of these factors are difficult to
predict accurately and are generally beyond our control. You should consider the
areas of risk described in connection with any forward-looking statements that
may be made herein. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report.
Readers should carefully review this quarterly report in its entirety, including
but not limited to our financial statements and the notes thereto. Except for
our ongoing obligations to disclose material information under the Federal
securities laws, we undertake no obligation to release publicly any revisions to
any forward-looking statements, to report events or to report the occurrence of
unanticipated events. For any forward-looking statements contained in any
document, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995.
INDEX
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2005 (unaudited) and
December 31, 2004
Consolidated and Combined Statement of Operations for the three and nine
months ended September 30, 2005 and September 30, 2004 (unaudited)
Consolidated and Combined Statement of Stockholders' Equity (Deficit)
Consolidated and Combined Statement of Cash Flows for the Nine Months Ended
September 30, 2005 and September 30, 2004(unaudited)
Notes to Interim Financial Statements
Item 2 Management's Discussion and Analysis or Plan of Operations
Item 3 Controls and Procedures
PART II. - OTHER INFORMATION
Item 1 Legal Proceedings
Item 2 Changes in securities, use of proceeds and small business issuer of
equity securities
Item 3 Defaults upon senior securities
Item 4 Submission of matters to a vote of security holders
Item 5 Other information
Item 6 Exhibits and reports on Form 8-K
PART I. FINANCIAL INFORMATION
INDEX TO FINANCIAL STATEMENTS
Consolidated Balance Sheets..................................................F-2
Consolidated/Combined Statements of Operations...............................F-3
Consolidated Statement of Stockholders' Equity (Deficit).....................F-4
Consolidated/Combined Statements of Cash Flows...............................F-5
Notes to Financial Statement.................................................F-6
INDEX TO FINANCIAL STATEMENTS
Consolidated Balance Sheets..................................................F-2
Consolidated/Combined Statements of Operations...............................F-3
Consolidated Statement of Stockholders' Equity (Deficit).....................F-4
Consolidated/Combined Statements of Cash Flows...............................F-5
Notes to Consolidated/Combined Financial Statements..........................F-6
UNION DENTAL HOLDINGS INC.
Consolidated Balance Sheets
September 30, December 31,
ASSETS 2005 2004
----------------------- ------------------------
CURRENT ASSETS (unaudited)
Cash $ 227,284 $ 42,294
Accounts receivable, net of allowance of $7,200 and $7,200 422,068 317,077
Inventory 23,411 24,055
Prepaid expenses 4,646 3,509
----------------------- ------------------------
Total current assets 677,409 386,935
----------------------- ------------------------
PROPERTY AND EQUIPMENT
Furniture, fixtures and equipment 521,647 237,730
Accumulated depreciation (196,662) (188,254)
----------------------- ------------------------
Total property and equipment 324,985 49,476
----------------------- ------------------------
OTHER ASSETS
Other assets 9,013 10,513
----------------------- ------------------------
Total other assets 9,013 10,513
----------------------- ------------------------
Total Assets $ 1,011,407 $ 446,924
======================= ========================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 15,070 $ 56,744
Accounts payable - related party 0 110,839
Accrued expenses 4,091 0
Income taxes payable 0 0
Notes payable - current portion 833,160 299,435
Line of credit 29,872 47,813
Customer deposits 31,409 30,802
Unearned memberships 352,371 326,326
----------------------- ------------------------
Total current liabilities 1,265,973 871,959
----------------------- ------------------------
LONG-TERM LIABILITIES
Note payable -bank 1,048,733 972,000
----------------------- ------------------------
Total long-term liabilities 1,048,733 972,000
----------------------- ------------------------
Total Liabilities 2,314,706 1,843,959
----------------------- ------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.0001 par value, authorized 25,000,000 shares; 1,000,000
issued and outstanding, respectively 100 100
Common stock, $0.0001 and $1 par value, authorized 300,000,000 shares;
30,432,657 and 28,519,939 issued and outstanding, respectively 3,043 2,852
Additional paid-in capital 824,208 519,067
Accumulated (deficit) earnings (652,641) (379,925)
----------------------- ------------------------
Subtotal stockholders' equity before shareholder transactions 174,710 142,094
Shareholder transactions (1,478,009) (1,539,129)
----------------------- ------------------------
Total stockholders' equity (deficit) (1,303,299) (1,397,035)
----------------------- ------------------------
Total Liabilities and Stockholders' Equity $ 1,011,407 $ 446,924
======================= ========================
The accompanying notes are an integral part of the financial statements
F-2
UNION DENTAL HOLDINGS INC.
(UNION DENTAL CORP. and DIRECT DENTAL SERVICES, INC.)
Consolidated and Combined Statements of Operations
Three and Nine Months Ended September 30,
(UNAUDITED)
Consolidated Combined Consolidated Combined
Three months Three months Nine months Nine months
2005 2004 2005 2004
--------------------- ----------------- ------------------ --------------------
REVENUES $ 499,035 $ 397,803 $ 1,623,596 $ 1,489,664
OPERATING EXPENSES
Salaries 226,368 171,525 555,423 403,293
General and administrative expenses 614,015 250,298 1,233,730 735,456
Advertising 11,233 10,002 33,003 16,277
Depreciation 2,803 6,660 8,408 7,408
--------------------- ----------------- ------------------ --------------------
Total expenses 854,419 438,485 1,830,564 1,162,434
--------------------- ----------------- ------------------ --------------------
Income(loss) from operations (355,384) (40,682) (206,968) 327,230
OTHER INCOME (EXPENSE)
Interest income 0 0 0 13
Interest expense (28,119) (18,532) (65,747) (44,354)
Reserve for bad debt 0 0 0 0
--------------------- ----------------- ------------------ --------------------
Total other income (expense) (28,119) (18,532) (65,747) (44,341)
--------------------- ----------------- ------------------ --------------------
Income tax expense 36,450 0 0 0
--------------------- ----------------- ------------------ --------------------
Net income (loss) $ (347,053) $ (59,214) $ (272,715) $ 282,889
===================== ================= ================== ====================
Income(loss) per weighted average common
shares - basic $ (0.00) $ (59.21) $ (0.00) $ 282.89
===================== ================= ================== ====================
Income (loss) per weighted average common
shares - fully diluted $ (0.00) $ (59.21) $ (0.00) $ 282.89
===================== ================= ================== ====================
Number of weighted average common shares
outstanding - basic 30,263,388 1,000 29,852,499 1,000
===================== ================= ================== ====================
Number of weighted average common shares
outstanding -fully diluted 31,013,388 1,000 30,602,499 1,000
===================== ================= ================== ====================
The accompanying notes are an integral part of the financial statements
F-3
UNION DENTAL HOLDINGS INC.
(UNION DENTAL CORP. and DIRECT DENTAL SERVICES, INC.)
Consolidated and Combined Statement of Stockholders' Equity (Deficit)
Number Common Total
Number of of Stock Preferred Additional Retained tockholders
Shares Shares Par Stock Paid-In Earnings Shareholder Equity
Common Preferred Value Par Value Capital (Deficit) Transactions (Deficit)
---------- ----------- ---------- ------------ ------------ ------------ ------------ ------------
BEGINNING BALANCE,
December 31, 2002 1,000 0 $ 1,000 $ 0 $ 0 $ 237,935 $ 0 $ 238,935
Net income 0 0 0 0 0 762,168 0 762,168
Net income distributed 0 0 0 0 0 (764,053) 0 (764,053)
---------- ----------- ---------- ------------ ------------ ------------ ------------ ------------
BALANCE, December 31, 2003 1,000 0 1,000 0 0 236,050 0 237,050
Net income distributed 0 0 0 0 0 (384,914) 0 (384,914)
Reorganization 27,499,000 1,000,000 1,750 100 9,295 (236,050) (1,539,129) (1,764,034)
Conversion of notes - $0.50/sh. 913,939 0 91 0 456,783 0 0 456,874
Stock issued for services -
$0.50/sh 106,000 0 11 0 52,989 0 0 53,000
Net income 0 0 0 0 0 4,989 0 4,989
---------- ----------- ---------- ------------ ------------ ------------ ------------ ------------
BALANCE, December 31,2004 28,519,939 1,000,000 2,852 100 519,067 (379,925) (1,539,129) (1,397,035)
Stock issued for cash 298,817 0 30 0 76,422 0 0 76,452
Stock issued for assets 733,901 0 73 0 113,682 0 0 113,755
Stock issued for services 880,000 0 88 0 115,037 0 0 115,125
Stockholder loan to Company 0 0 0 0 0 0 61,120 61,120
Net income 0 0 0 0 0 (272,716) 0 (272,716)
---------- ----------- ---------- ------------ ------------ ------------ ------------ ------------
Ending Balance, September 30,
2005 (unaudited) 30,432,657 1,000,000 $ 3,043 100 $ 824,208 $ (652,641)$ (1,478,009)$(1,303,299)
========== =========== ========== ============ ============ ============ ============ ============
The accompanying notes are an integral part of the financial statements
F-4
UNION DENTAL HOLDINGS INC.
(UNION DENTAL CORP. and DIRECT DENTAL SERVICES, INC.)
Consolidated and Combined Statements of Cash Flows
Nine Months Ended September 30,
(unaudited)
Consolidated Combined
2005 2004
--------------------- ---------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (272,716) $ 282,889
Adjustments to reconcile net income (loss) to net
cash used by operating activities:
Depreciation 8,408 7,408
Stock issued for services 115,125 0
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (104,991) (40,472)
(Increase) decrease in inventory 644 0
(Increase) decrease in prepaid expenses (1,137) (816)
(Increase) decrease in other assets 1,500 (1,680)
Increase (decrease) in accounts payable (152,513) 24,003
Increase (decrease) in accrued expenses 4,091 0
Increase (decrease) in income tax payable 0 0
Increase (decrease) in customer deposits 607 (274)
Increase (decrease) in unearned memberships 26,045 28,870
--------------------- ---------------------
Net cash provided (used) by operating activities (374,937) 299,928
--------------------- ---------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (170,161) (12,606)
--------------------- ---------------------
Net cash used by investment activities (170,161) (12,606)
--------------------- ---------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term debt 606,611 235,000
Proceeds from long-term debt 250,000 0
Payments on line of credit (17,941) 0
Net income distributed 0 (438,876)
Payments on notes payable (229,702) (94,492)
Common stock sold for cash 60,000 0
Proceeds from loan from officer/shareholder 95,820 0
Payments on loan from officer/shareholder (34,700) 0
--------------------- ---------------------
Net cash provided (used) by financing activities 730,088 (298,368)
--------------------- ---------------------
Net increase (decrease) in cash 184,990 (11,046)
--------------------- ---------------------
CASH, beginning of period 42,294 16,656
--------------------- ---------------------
CASH, end of period $ 227,284 $ 5,610
===================== =====================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash $ 65,747 $ 44,354
===================== =====================
Non-Cash Financing Activities:
Issuance of common stock to acquire assets $ 113,755 $ 0
===================== =====================
Issuance of common stock to settle short-term debt $ 16,451 $ 0
===================== =====================
Stockholder loan offset in stockholder transactions $ 61,120 $ 0
===================== =====================
The accompanying notes are an integral part of the financial statements
F-5
UNION DENTAL HOLDINGS INC.
(UNION DENTAL CORP. and DIRECT DENTAL SERVICES, INC.)
Notes to Consolidated and
Combined Financial Statements (Information
with regard to the nine months ended September
30, 2005 and 2004 is unaudited)
(1) Summary of Significant Accounting Principles
The Company Union Dental Holdings, Inc., (f/k/a National Business Holdings,
Inc.), (the Company) is a Florida chartered corporation which conducts business
from its headquarters in Ft. Lauderdale, Florida. The Company was incorporated
on November 26, 1996 and has elected December 31as its fiscal year end. The
Company has two distinct lines of business. Union Dental Corp., (UDC), acquired
the assets of G.D. Green, DDS, P.A. and manages the operation of that general
dental practice. Direct Dental Services, Inc., (DDS), negotiates contracts with
labor union locals for the provision of dental services to union members in
seventeen states, through network member dentists.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
a) Use of estimates The financial statements have been prepared in
conformity with generally accepted accounting principles. In preparing the
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the date of the
statements of financial condition and revenues and expenses for the period then
ended. Actual results may differ significantly from those estimates.
b) Net income per share Basic income per weighted average common share is
computed by dividing the net income by the weighted average number of common
shares outstanding during the period. Diluted per weighted average common share
is computed by dividing the net income by the weighted average number of common
shares outstanding during the period had the outstanding options been exercised
at the beginning of the period.
c) Stock compensation for services rendered The Company occasionally issues
shares of common stock in exchange for services rendered. The costs of the
services are valued according to generally accepted accounting principles and
are charged to operations.
d) Significant acquisition In December 2004, the Company entered into an
agreement to acquire Union Dental Corp. and Direct Dental Services, Inc., both
Florida corporations, in a reverse merger, which was accounted for as a
reorganization of UDC and DDS, in exchange for 17,500,000 restricted common
shares and 1,000,000 restricted preferred shares. In May 2005, the Company
acquired certain assets of Dental Visions, Inc., (DVI), in exchange for 733,901
shares of common stock valued at $113,755 and payment of DVI debt in the amount
of $169,486, for a total valuation of $283,241.
e) Principles of consolidation and combination The consolidated financial
statements include the accounts of Union Dental Holdings, Inc. and its wholly
owned subsidiaries. Inter-company balances and transactions have been
eliminated. The financial statements of UDC and DDS for 2004 are presented as
combined pursuant to Accounting Research Bulletin, (ARB), No. 51, since they
were separate entities under common control.
f) Revenue recognition The Company's revenues are generated through
provision of dental services and the sale of the right to provide dental
services to labor union members in an exclusive geographic area through various
contracts with the labor unions. The Company records revenue when dental
services are provided and the dentist member fees are amortized over the term of
the contract.
g) Cash and equivalents The company considers investments with an initial
maturity of three months or less as cash equivalents.
h) Property and equipment All property and equipment are recorded at cost
and depreciated over their estimated useful lives, using the straight-line
method. Upon sale or retirement, the costs and related accumulated depreciation
are eliminated from their respective accounts, and the resulting gain or loss is
included in the results
UNION DENTAL HOLDINGS INC.
(UNION DENTAL CORP. and DIRECT DENTAL SERVICES, INC.)
Notes to Consolidated and Combined Financial Statements
(1) Summary of Significant Accounting Principles
h) Property and equipment, continued of operations. Repairs and maintenance
charges which do not increase the useful lives of the assets are charged to
operations as incurred. Depreciation expense was $2,803, $6,660, $8,408 and
$7,408 for the three and nine months ended September 30, 2005 and 2004,
respectively.
i) Inventory The Company values inventory of dental supplies at the lower
of cost or market, using the specific unit cost method.
j) Segment information The Company has two distinct related lines of
operations, the management of a general dental practice through UDC and
maintaining a network of dental practices providing services through provider
contracts with labor union locals negotiated by DDS. At September 30, 2005, DDS
represents approximately 36% of total assets, 27% of revenues and 88% of net
income. UDC represents approximately 64% of total assets, 73% of revenues and
17% of net income.
k) Bad debt reserve The Company reviews its accounts receivable regularly,
(at least quarterly), to evaluate the need to modify its reserve for
uncollectible accounts receivable. At December 31, 2004, the Company has
established a reserve for bad debt in the amount of $7,200, and remains
unchanged at September 30, 2005. The Company does not believe that this amount
will become a significant amount, as its receivables are from numerous
individual patients, several insurance companies and numerous dentists in its
network, each of which is relatively small in individual amount.
l) Unearned memberships Dentists enroll and renew their contracts for one
or one and one-half year terms at various times throughout the year. Most of the
membership fees are paid at the signing of the contract and renewal. The fees
are amortized over the term of the related contract.
m) Advertising Advertising costs are expensed when incurred.
n) Interim financial information The financial statements for the three and
nine months ended September 30, 2005 and 2004, are unaudited and include all
adjustments which in the opinion of management are necessary for fair
presentation, and such adjustments are of a normal and recurring nature. The
results for the nine months are not indicative of a full year results.
(2) Stockholders' Equity The Company has authorized 300,000,000 shares of
$0.0001 par value common stock, and 25,000,000 shares of $0.0001 par value
preferred stock. Rights and privileges of the preferred stock are to be
determined by the Board of Directors prior to issuance. The Company had
30,432,657 shares of common stock issued and outstanding at September 30,
2005. The Company had issued 1,000,000 of its shares of preferred stock at
June 30, 2005. These preferred shares carry super voting rights equal to
15,000,000 common shares.
In November 1996, the Company issued 1,000,000 shares of common stock to
its founders for services rendered in connection with the organization of the
Company, valued at $0.001 or $900. In May 1997, the Company issued 8,900,000
shares of common stock for $89,000 in cash, or $0.01 per share. In January 1998,
the Company issued 275,000 shares of common stock for $400,000 in cash, or $1.45
per share. In February 1998, the Company issued 50,000 shares of common stock
for $72,727 in cash, or $1.45 per share. In September 1998, 3,900,000 shares
that had been purchased for $39,000 were contributed back to the Company. In
October 1998 the Company retired 6,938,796 shares as a result of a 1 for 20
reverse split of the stock. In December 1998, the Company issued 5,000,000
shares of common stock for $1,000,000 in cash, or $0.20 per share.
In February 2004, the Company issued 10,000,000 shares of common stock for
$25,000 in cash, or $0.0025 per share. In May 2004, the Company retired
15,001,373 shares as a result of a 1 for 40 reverse split of the stock. In May
2004, the Company issued 3,100,000 shares to acquire 100% of the issued and
outstanding shares of Shava, Inc. This transaction was valued at $7,750, or
$0.0025 per share. In October 2004, the Company issued 18,800,000 shares to its
then sole officer and director in exchange for services valued at $18,800. In
October
UNION DENTAL HOLDINGS INC.
(UNION DENTAL CORP. and DIRECT DENTAL SERVICES, INC.)
Notes to Consolidated and Combined Financial Statements
(2) Stockholders' Equity, continued 2004, the Company issued 10,000,000 shares
for the conversion of convertible notes payable in the amount of $27,500.
At the time of the reverse merger the Company had 32,284,831 shares issued
and outstanding. In December 2004, the Company issued 17,500,000 shares of
restricted common stock and 1,000,000 restricted preferred stock to acquire
Union Dental Corp. and Direct Dental Services, Inc. At the same time, as
part of the merger agreement, a stockholder contributed 22,284,831 shares
to the Company. In December 2004, the Company issued 783,140 restricted
common shares in exchange for $417,006 in convertible short-term debt and
accrued interest and 106,000 shares in exchange for services valued at
$53,000, or $0.50 per share.
In the nine months ended September 30, 2005, the Company issued 298,817
shares of restricted common stock in exchange for $76,451 in cash, or an average
of $0.26 per share. In the second quarter the Company issued 733,901 shares of
restricted common stock in exchange for assets valued at $113,755, or $0.155 per
share, (see note 1d). In the third quarter the Company issued 880,000 shares of
common stock in exchange for services valued at $115,125, or $0.13 per share.
(3) Income Taxes Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax and
financial reporting purposes. The operating entities had elected
Sub-chapter S status under the IRC Code and therefore were not subject to
taxation at the corporate level. Distributions were made each year to the
stockholder/s of the companies to allow for the payment of income taxes on
a personal level. Sub-chapter S status is revoked automatically under the
IRS Code as of the day the companies became wholly-owned subsidiaries of a
publicly traded entity.
At December 31, 2004, the Company has a book-tax timing difference. This is
the result of accounting for customer deposits, ($30,802), and unearned
memberships, ($326,326), as deferred revenue for book purposes and as income on
the cash basis income tax returns. As such, this $357,128, will not be taxed on
the Company's 2005 income tax return and will reduce the Company's 2005 tax
liability in an amount ranging from approximately $53,500 (15% rate) to $135,700
(38%) on the Company's federal return and approximately $19,600 on the Company's
Florida return. These savings are entirely dependent on the Company's tax rate
inclusive of this income for 2005. The Company has established a deferred tax
asset in the amount of $74,000, utilizing the lowest possible income tax rates.
However, the Company has established a 100% valuation allowance against this
asset as there is no assurance that the Company will be able to utilize this
benefit in 2005., which is the only year it is available. This is due to
multiple factors: 1 - this is a newly reorganized company and is publicly traded
for the first time, as such there are significant additional expenditures
expected related to this status and 2 - the Company is expecting to expand its
business and expects significant expenditures related to this expansion. The
Company has established a deferred income tax liability for the change in
unearned membership fee income. This change was $200 for the first half-year
2005. The tax liability was calculated at 15%, or $30.
The Company reverted to a loss in the third quarter 2005, from a profit in
the first two quarters. The Company had established a provision for current
income taxes payable in the first two quarters, but elected to reverse this
provision in the third quarter. The Company has no history as consolidated
public company therefore any potential tax benefit from the loss is reserved for
at the rate of 100%.
(4) Long-term debt In December 2004, DDS agreed to assume the debt obligation
of the principal stockholder for the bank loan utilized to purchase 50% of
DDS from its founder and former owner and the remaining balance owed on the
original 50% acquisition. The interest rate of this debt is LIBOR plus
2.55% and requires payments of $20,250 plus accrued interest monthly, or
$243,000 plus accrued interest annually. This loan was to mature on
December 31, 2009, but was extended to May 17, 2010, upon renewal. The loan
is collateralized with 100% of the assets of DDS, UDC and the principal
stockholder , tangible and intangible. The principal stockholder and UDC
are also guarantors of this loan. In addition, the Company, on a
consolidated basis, must maintain a minimum Global Debt Service Ratio, as
defined by the bank, which is calculated annually, based on the Company's
year end financial statements. The Company must also maintain property and
casualty insurance on the business as well as a minimum of $700,000 of life
insurance on the principal stockholder , assigned to the
UNION DENTAL HOLDINGS INC.
(UNION DENTAL CORP. and DIRECT DENTAL SERVICES, INC.)
Notes to Consolidated and Combined Financial Statements
(4) Long-term debt, continued bank. In the second quarter of 2005, this loan
was increased $250,000 as part of the acquisition of $283,241 of fixed
assets.
In the third quarter of 2005 the Company issued a five year 10% debenture
to a registered broker/dealer in the amount of $606,611. $16,451 was
subsequently converted into 178,817 shares of common stock.
(5) Long-term debt to stockholder A portion of the purchase price of the assets
of G.D. Green, DDS, PA is a note payable to the principal stockholder in
the amount of $1,000,000. This note carries a 5% interest rate and is
payable $100,000 plus accrued interest annually for ten years. At the
closing of the reverse merger the principal stockholder agreed to a set-off
between this payable to him and the then existing balance he owed the
combined companies of approximately $560,000.
(6) Commitments and contingencies The Company leases its office facility under
a five year lease that expires May 2007. The monthly lease payments are
$2,300 per month or $27,600 per year. In May 2005, the Company assumed a
lease for additional space as part of the DVI asset acquisition. This lease
also has five years remaining, expiring May 2010, and the monthly payment
is $2,175, or $26,100 per year, for a total of $53,700 per year.
(7) Related party transactions On March 20, 2004, UDC, a wholly owned
subsidiary of the Company, entered into an employment agreement with the
principal stockholder , the sole officer of UDC, with a term of 7 years.
This contract provides for a base salary to the principal stockholder of
$225,000 in year 1, $125,000 in year 2, $185,500 in year 3, $196,630 in
year 4, $208,427 in year 5, $220,932 in year 6 and $234,187 in year 7. This
contract also provides for the issuance of options to the principal
stockholder upon signing , 750,000 options, (1 share per option), with an
exercise price of $0.60 per share, half vested immediately and half vesting
after two years , having an exercise life of five years. This contract also
provides for the issuance of options to the principal stockholder as well,
if certain revenue milestones are reached: at $3,000,000 in gross revenue
for any calendar year he receives 332,500 options, (1 share per option),
with an exercise price at the market price of the underlying common stock
at issue date and the same again at $4,000,000 and $5,000,000 in gross
revenue for a calendar year.
As a private company, DDS and UDC have, at various times loaned the sole
stockholder money, which has been repaid in part. These advances and repayments
have the characteristics of a line of credit. At December 31, 2004 and 2003, the
now principal stockholder of the consolidated company owed DDS and UDC combined
$0 and $280,654, respectively. Shareholder transactions in the net amount of
$1,539,129 are the result of the following: a) UDHI acquiring UDC for a note
payable to the principal stockholder in the amount of $1,000,000; b) DDS entered
into a note payable in the amount of $1,215,000 to the bank replacing an
existing note payable from the principal stockholder and c) these items are
reduced by a note receivable from the same principal stockholder in the amount
of $675,871. In the first half-year 2005, this net amount is further reduced by
a loan from the stockholder balance in the amount of $61,100.
(8) Short-term debt From April through December 2004, the Company raised
$417,006 in short-term debt, via a Regulation D Rule 506 offering. At the
closing of the reorganization on December 27, 2004, this short-term debt
was converted at $0.50 per share into 913,939 shares of restricted under
Rule 144 common stock
(9) Stock option plan In October 2004, UDC adopted a Stock Option Plan that
allows for both incentive based options as well as non-qualified options.
As part and parcel to the reorganization on December 27, 2004, UDHI adopted
this Plan. Under the terms of the Plan, the Plan Committee will set the
option term and the exercise price. The Plan limits the ability to exercise
incentive options for a first time holder in any one calendar year to
$100,000 aggregate fair market value, based on grant date. The Plan also
allows for the issuance of Stock Appreciation
UNION DENTAL HOLDINGS INC.
(UNION DENTAL CORP. and DIRECT DENTAL SERVICES, INC.)
Notes to Consolidated and Combined Financial Statements
(9) Stock option plan, continued Rights to allow for cash-less exercise of
underlying issued options. The Company issued 793,000 options, with an
exercise price of $0.50 per share, under this plan as of December 31, 2004,
in addition to those discussed in Note 7 above.
The Company accounts for outstanding options in accordance with Accounting
Principles Board, (APB), Opinion 25. Financial Accounting Standards Board,
(FASB), SFAS No. 148 requires footnote disclosure of the effects on the
financial statements if the Company had accounted for the options under the fair
value method , (Black- Scholes), in accordance with SFAS No. 123. Using the
Black-Scholes model, the Company would have recorded $0 expense for these
options, therefore there would have been no effects on the financial statements
as published.
(10) Form SB-2 registration statement On September 10, 2005, the Company filed a
Form SB-2 to register 49,123,282 shares to be issued for cash. 178,817
shares have been issued pursuant to this registration.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and analysis should be read in conjunction with our
Financial Statements and Notes thereto appearing elsewhere in this Report on
Form 10-QSB as well as our other SEC filings.
Plan of Operations
We operate our business through our two wholly owned subsidiaries, Direct Dental
Services, Inc. ("DDS") and Union Dental Corp. ("UDC"). DDS operates a network of
duly licensed dental providers. Members of the dental network pay an annual
management service fee for the right to be a member of the dental network. UDC
operates a dental practice in Coral Springs, Florida. The Company plans to
expand its line of business by acquiring dental practices and recruiting new
dental practitioners to join its dental network servicing the union contracts.
The Company may also expand and offer participating unions other professional
services such as chiropractic and eye glass providers.
Management's current focus is the expansion of its network of dental providers,
who will provide their services to the union members. We intend to expand in
existing markets primarily by enhancing the operating performance of our
existing office, by acquiring dental practices, by adding union contracts in
states where we currently do not have union contracts and by developing dental
network union contracts with other unions. During the quarter ended September
30, 2005, we did not acquire any new dental practices nor did any dental
practitioners join our network of dental providers.
In order to finance our operations and expand our business on September 9, 2005
we filed an SB-2 registration statement which was declared effective on
September 14, 2005 whereby we registered a total of 49,123,282 shares of our
common stock owned by or issuable to Dutchess Private Equities Fund II, LP,
("Dutchess") which include (i) up to 8,857,396 shares issuable upon conversion
of $600,000 in convertible debentures, (ii) 1,304,348 shares issuable upon
exercise of warrants, and (ii) up to 38,461,538 shares of common stock issuable
pursuant to a "put right" under the Investment Agreement, also referred to as an
Equity Line of Credit with Dutchess LP whereby we may receive up to $5 million.
We are not selling any shares of common stock in this offering and therefore
will not receive any proceeds from this offering. We will, however, receive
proceeds from the sale of the 38,461,538 shares of common stock under the
Investment Agreement with Dutchess and the exercise of warrants issued to
Dutchess and Hawk Associates.
As of September 30, 2005 we received a total of $16,451 and issued 178,817
shares of our common stock pursuant to the Registration Statement.
Comparison of Operating Results for the Quarter Ended September 30, 2005 to the
Quarter Ended September 30, 2004
Revenues
Revenues for the three months ended September 30, 2005 as compared to September
30, 2004 were $499,035 as compared to $397,803, an increase of approximately
25%. Revenues for the nine months ended September 30, 2005 were $1,623,596 as
compared to $1,489,664 for the nine months ended September 30, 2004, an increase
of approximately 9%. The increase in revenues, especially during the third
quarter of 2005 is attributable to two factors: Increased revenues as a result
of the acquisition and integration of the assets of Dental Visions into UDC and
management's ability to focus on expanding business operations.
Operating Expenses
Operating expenses for the three months ended September 30, 2005 as compared to
the three months ended September 30, 2004 increased from $438,485 to $854,419,
an increase of approximately 95%. General and administrative expenses increased
from $250,298 to $614,015. Of this total, approximately $170,000 represents
costs associated with the filing of our registration statement including legal
fees and costs associated with the issuance of our common stock. Salaries
increased from $171,525 to $226,368. The increase in salaries relates to adding
additional personnel and normal wage increases.
Operating expenses for the nine months ended September 30, 2005 as compared to
the nine months ended September 30, 2004 increased from $1,162,434 to
$1,830,564, an increase of approximately 57%. This increase is attributable to
increased general and administrative expenses of which approximately $170,000
represents costs incurred with the filing of its registration statement and
increased salaries which the Company has incurred as it expands its operations.
Interest expense for the three and nine months ended September 30, 2005, was
$28,119 and $65,747 as compared to $18,532 and $44,354 for the three and nine
months ended September 30, 2004. The increase is primarily attributable to
increased borrowing costs associated with an increase in our bank loan.
Net Income/Loss
We had a net loss for the three months ended September 30, 2005 of $347,0533 as
compared to a net loss of $59,214 for the three months ended September 30, 2004.
The significant increase in our net loss is primarily attributable to the
significant increase in our general and administrative expenses.
Our net loss for the nine months ended September 30, 2005 was $272,715 as
compared to net income of $282,889 for the nine months ended September 30, 2004,
a decline of $555,604. The overall decline in our net income over this period is
primarily attributable to an increase in general and administrative expenses and
an increase in salaries.
We recorded $0.00 in income per share for both the three and nine months ended
September 30, 2005 as compared to a loss per share of $(59.21) for the three
months ended September 30, 2004 and net income per share of $282.89 for the nine
months ended September 30, 2004. (This figure was computed based on 1,000 shares
of our common stock being issued and outstanding and represents the number of
issued and outstanding shares of common stock prior to our reverse merger with
Union Dental Corp and G.D. Green, DDS, P.A.).
Income Tax Consequences
Prior to their acquisition by Union Dental Holdings, both Union Dental Corp. and
G.D. Green, DDS, P.A. were operated as S corporations and any income taxes
payable were paid by their shareholders. With the subsequent acquisition by
Union Dental Holdings, we are required to pay income tax on the net income we
generate.
Liquidity and Capital Resources
We use available finances to fund ongoing operations. For the nine months ended
September 30, 2005 the net cash received from financing activities was $730,088
as compared to $(298,368) for the nine months ended September 30, 2004. These
funds together with the revenues we generate from are normal business operations
are used for general and administrative expenses, website maintenance and
development, marketing and expenses related to the filing and preparation of our
SEC filings.
Working Capital Deficit
We have a working capital deficit as of September 30, 2005 of $(588,564) as
compared to a working capital deficit of $(425,0354) as of September 30, 2004.
Our total current assets as of September 30, 2005 were $677,409 as compared to
$386,935 as of December 31, 2005. The significant increase in cash, from $42,294
to $227,284 is primarily attributable to the funds received pursuant to our
financing with Dutchess Private Equities Fund, II, LP (a total of $600,00 in
gross proceeds). The increase in accounts receivable from $317,077 to $422,068
is primarily attributable to the growth of both our dental practice and network
of dentists.
Total Current Liabilities as of September 30, 2005 were $1,265,973 consisting
primarily of $352,371 in unearned membership interests, $833,160 representing
the current portion of a note payable, $29,872 representing our bank line of
credit and $31,409 in customer deposits. Total current liabilities as of
December 31, 2004 were $871,959 consisting primarily of $326,326 in unearned
memberships, $299,435 representing the current portion of a note payable,
$110,839 due to a related party and $47,813 from our line of credit.
On August 17, 2005, we sold $600,000 in principal amount of our five year
convertible debentures to Dutchess Private Equities Fund, II, L.P. ("Dutchess").
These debentures bear interest at the rate of 10% per annum payable in cash or
our common stock at the option of Dutchess.
Also on August 17, 2005, we entered into an Investment Agreement with Dutchess.
Pursuant to this Agreement, Dutchess has committed to purchase up to $5,000,000
of the Company's Common Stock over the course of 36 months ("Line Period") The
amount that the Company shall be entitled to request from each of the purchase
"Puts", shall be equal to either 1) $100,000 or 2) 200% of the averaged daily
volume (U.S market only) ("ADV") multiplied by the average of the 3 daily
closing prices immediately preceding the Put Date. The ADV shall be computed
using the three (3) trading days prior to the Put Date. The Pricing Period shall
be the five (5) consecutive trading days immediately after the Put Date. The
Market Price shall be the lowest closing bid price of the Common Stock during
the Pricing Period. The Purchase Price shall be set at 95% of the Market Price.
The Put Date shall be the date that the Investor receives Put Notice of draw
down by Company of a portion of the Line. There are put restrictions applied on
days between the Put Date and the Closing Date with respect to that Put. During
this time, the Company shall not be entitled to deliver another Put Notice. To
date we have not received any funds as a result of this Investment Agrement.
We believe that the convertible debentures and the Equity Line of Credit
available to us under the Investment Agreement with Dutchess, will be sufficient
for us to fully implement our business plan of expanding our dental network and
acquiring additional dental practices. We also believe that a niche market
exists in both the chiropractic and optometry fields. If we determine that we
can successfully market these services to unions together with our dental
program, we will attempt to secure a network of chiropractors and optometrists.
Assets and Liabilities
Our total assets were $1,011,407 as of September 30, 2005 as compared to
$446,924 as of December 31, 2004. Our assets as of September 30, 2005 consisted
primarily of cash in the amount of $227,284 and accounts receivable, net of
allowance of $ 422,068. This compares with cash and accounts receivable of
$42,294 and $317,077 as of December 31, 2004.
Our long-term liabilities increased from $972,000 as of December 31, 2004 to
$1,048,733, an increase of approximately 8%. This increase was primarily
attributable to increasing our outstanding bank line to enable us to finance
additional acquisitions.
Despite an increase in our accumulated deficit from $379,925 to $652,641, our
stockholders deficit as of September 30, 2005 declined from $(1,397,035) as of
December 31, 2004 to $(1,303,299) This is due primarily to an increase in our
paid in capital from $519,067 to $824,208.
The only significant cash transactions other than that generated and used in
operations has been that during the quarter ended September 30, 2005, the
Company issued a $600,000 convertible debenture to Dutchess and received $16,451
from the conversion of a portion of the debt obligation (inclusive of interest)
into shares of our common stock at a cost per share of $.092.
You are urged to review the accompanying financial statements and financial
footnotes in order to fully understand our financial condition.
Item 3 - Controls and Procedures
Our management, which includes our Chief Executive Officer who also serves as
our principal financial officer, have conducted an evaluation of the
effectiveness of our disclosure controls and procedures (as defined in Rule
13a-14(c) promulgated under the Securities and Exchange Act of 1934, as amended)
as of a date (the "Evaluation Date") as of the end of the period covered by this
report. Based upon that evaluation, our management has concluded that our
disclosure controls and procedures are effective for timely gathering, analyzing
and disclosing the information we are required to disclose in our reports filed
under the Securities Exchange Act of 1934, as amended. There have been no
significant changes made in our internal controls or in other factors that could
significantly affect our internal controls subsequent to the end of the period
covered by this report based on such evaluation.
PART II
OTHER INFORMATION
Item 1 Legal Proceedings
During the second quarter of 2005, DDS was sued by a former member of our DDS
network. The suit alleges that the company breached the exclusivity provisions
of its agreement with DDS by selling the territory to another dentist The
lawsuit was filed in Dade County, Florida (Case No. 05-08811 CA 2). Management
believes that it has a meritorious defense to this action in that the territory
was only sold after the plaintiff failed to make the required payments due under
the management agreement to remain part of the DDS network.
During the second quarter of 2005 we were sued by another dentist who was
previously a DDS member, The suit was filed in Dade County, Florida (Case No.
05-0077-99) and alleges tortuous interference with a business relationship and
liable. Management believes that it has meritorious defenses in that this action
was brought in response to a lawsuit filed by the company against the same
dentist for breach of contract, slander, tortuous interference with a business
relationship and injunctive relief (Case No. 04-12109 CA 10). The Company filed
this action when the dentist failed to pay the required fee to remain a member
of the DDS network and attempted to create his own network of service providers.
Item 2 Changes in securities, use of proceeds and small business issuer of
equity securities
Debenture Agreement
On August 17, 2005, we sold $600,000 in principal amount of our five year
convertible debentures to Dutchess Private Equities Fund II, L.P. These
debentures bear interest at 10% per annum (payable in cash or stock at Dutchess'
option). Our obligation to repay Dutchess is secured pursuant to the terms of a
security agreement, which we have entered into with Dutchess. We have pledged
all of our assets to insure repayment of the Debenture. Dutchess' security
interest in our assets will be subject to any claims by our bank, which provides
us with a line of credit. The conversion price of the debenture will be $.092
per share. We also issued Dutchess a warrant to purchase 1,304,348 shares of
common stock with a strike price of $.092 per share. The warrant may be
exercised for a period of five years.
Also, on August 17, 2005, we entered into an Investment Agreement with Dutchess.
Pursuant to this Agreement, Dutchess will commit to purchase up to $5,000,000
(the "Line") of our Common Stock over the course of 36 months ("Line Period"),
(beginning September 14, 2005, the effective date of our Registration Statement.
The amount that we shall be entitled to request from each of the purchase
"Puts", shall be equal to either (1) $100,000 or (2) 200% of the averaged daily
volume (U.S market only) ("ADV") of our Common Stock for the 20 Trading days
prior to the "Put" notice, multiplied by the average of the 3 daily closing
prices immediately preceding the Put Date. The Pricing Period shall be the five
(5) consecutive trading days immediately after the Put Date. The Market Price
shall be the lowest closing bid price of the Common Stock during the Pricing
Period. The Purchase Price shall be set at 95% of the Market Price. The Put Date
shall be the date that the Investor receives a Put Notice of draw down by us of
a portion of the Line. There are put restrictions applied on days between the
Put Date and the Closing Date with respect to that Put. During this time, we
shall not be entitled to deliver another Put Notice. We shall automatically
withdraw that portion of the put notice amount, if the Market Price with respect
to that Put does not meet the Minimum Acceptable Price. The Minimum Acceptable
Price is defined as 75% of the lowest closing bid price of the common stock for
the ten (10) trading day period prior to the Put Date.
For a complete description of the terms and conditions of the financing,
investors are urged to review our SB-2 Registration statement filed with the
Securities and Exchange Commission on September 9, 2005 and our Form 8-k filed
August 17, 2005.
During the quarter ended September 30, 2005 we issued a total of 178,817 shares
of our common stock and received $16,451 pursuant to the issuance of our common
stock under this Registration Statement.
Also during the quarter ended September 30, 2005 we issued 825,000 shares of our
common stock for legal services rendered and an additional 50,000 shares of our
common stock for consulting services. The shares were issued pursuant to our S-8
registration statement which was filed with the Commission on July 1, 2005. An
additional 5,000 shares of our restricted common stock were issued for services
rendered.
Item 3 Defaults upon senior securities
None
Item 4 Submission of matters to a vote of security holders
None
Item 5 Other information
None
Item 6 Exhibits and reports on Form 8-K
(a) The following sets forth those exhibits filed pursuant to Item 601 of
Regulation S-K:
Exhibit
number Descriptions
-------- -----------------------
31.1 * Certification of the Chief Executive Officer, dated November 14, 2005,
pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
31.2 * Certification of the Acting Chief Financial Officer, dated November 14,
2005, pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32.1 * Certification Chief Executive Officer, dated November 14, 2005, pursuant
to Section 906 of Sarbanes-Oxley Act of 2002.
32.1 * Certification Acting Chief Financial Officer, dated November 14, 2005 ,
pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
------------
* Filed herewith.
(b) The following sets forth the Company's reports on Form 8-K that have
been filed during the quarter for which this report is filed:
1. Form 8-K filed August 22, 2005
2. Form 8-k filed August 24, 2005
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Union Dental Holdings, Inc.
By: s/ George D. Green
---------------------------
George D. Green
Chief Executive Officer,
President and Chairman of the Board*
Date: November 21, 2005
* George D. Green has signed both on behalf of the registrant as a duly
authorized officer and as the Registrant's principal accounting officer.
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, George D. Green, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Union Dental
Holdings, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under my supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.
c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting. Date: November 21, 2005
/s/ George D. Green
---------------------
George D. Green
Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, George D. Green, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Union Dental
Holdings, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under my supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.
c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: November 21, 2005
/s/ George D. Green
---------------------
George D. Green
Chief Accounting Officer
EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, George D. Green, Chief Executive Officer of Union Dental Holdings, Inc. (the
"Company"), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my
knowledge:
(1) The Company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 2005, as filed with the Securities and Exchange Commission on the
date hereof (the "Report"), fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
Date: November 21, 2005
/s/ George D. Green
---------------------
George D. Green
Chief Executive Officer
November 21, 2005
--------------------------
This certification accompanies the Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the electronic version of this written statement
required by Section 906, has been provided to the Company and will be retained
by the Company and furnished to the Securities and Exchange Commission or its
staff upon request.
EXHIBIT 32.2
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, George D. Green, Chief Executive Officer of Union Dental Holdings, Inc. (the
"Company"), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my
knowledge:
(1) The Company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 2005, as filed with the Securities and Exchange Commission on the
date hereof (the "Report"), fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
Date: November 21, 2005
/s/ George D. Green
---------------------
George D. Green
Chief Accounting Officer
November 21, 2005
--------------------------
This certification accompanies the Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the electronic version of this written statement
required by Section 906, has been provided to the Company and will be retained
by the Company and furnished to the Securities and Exchange Commission or its
staff upon request.