Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 10-Q
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(Mark One)
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x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended January 31, 2013
or
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o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ______to______.
Commission File Number: 333-177122
HEALTH ADVANCE INC.
(Exact name of registrant as specified in its Charter)
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WYOMING
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46-0525223
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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3651 Lindell Rd. Suite D155
Las Vegas, NV, 89103
(Address of Principal Executive Offices)(Zip Code)
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702-943-0309
(Registrants telephone number, including area code)
_______________
N/A
(Former name, or former address and former fiscal year if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See the definitions of “large accelerated filer,” “accelerated filer” and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
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Large Accelerated Filer
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o
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Accelerated Filer
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o
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Non-Accelerated Filer
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o
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(Do not check if a smaller reporting company)
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Smaller Reporting Company
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x
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Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes o No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock. As of March 18, 2013, there were 24,520,000 shares of the issuer’s common stock issued and outstanding.
HEALTH ADVANCE INC.
FORM 10-Q
January 31, 2013
INDEX
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PART I-- FINANCIAL INFORMATION
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Item 1.
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Consolidated Financial Statements
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1
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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2
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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5
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Item 4.
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Control and Procedures
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6
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PART II-- OTHER INFORMATION
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Item 1
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Legal Proceedings
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6
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Item 1A.
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Risk Factors
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6
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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6
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Item 3.
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Defaults Upon Senior Securities
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7
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Item 4.
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Mine Safety Disclosures
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7
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Item 5.
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Other Information
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7
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Item 6.
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Exhibits
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7
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SIGNATURE
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8
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| PART I – FINANCIAL INFORMATION |
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Item 1.
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Financial Statements
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HEALTH ADVANCE INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
JANUARY 31, 2013
CONTENTS
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PAGE
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F-1
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CONSOLIDATED BALANCE SHEET AS OF JANUARY 31, 2013 (UNAUDITED) AND AS OF JULY 31, 2012 (AUDITED).
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PAGE
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F-2
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CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED JANUARY 31, 2013 AND 2012 (UNAUDITED)
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PAGE
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F-3
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CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY 31, 2013 AND 2012 AND FOR THE PERIOD APRIL 14, 2010 (INCEPTION) TO JANUARY 31, 2013 (UNAUDITED).
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PAGE
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F-4
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CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JANUARY 31, 2013 AND 2012 AND FOR THE PERIOD APRIL 14, 2010 (INCEPTION) TO JANUARY 31, 2013 (UNAUDITED).
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PAGE
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F-5 -6
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NOTES TO FINANCIAL STATEMENTS. (UNAUDITED)
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1
HEALTH ADVANCE INC.
(A Development Stage Company)
BALANCE SHEETS
AS AT
(Expressed in United States Dollars)
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January 31,
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July 31, | |||||||
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2013
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2012
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(Unaudited)
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(Audited)
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ASSETS
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Current Assets
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Cash
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$ | 281 | $ | 1,202 | ||||
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Prepaid expenses
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166 | 1,164 | ||||||
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Total Assets
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$ | 447 | $ | 2,366 | ||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current Liabilities
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Accounts payable and accrued liabilities
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$ | 11,854 | $ | 9,633 | ||||
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Advances from shareholder
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30,866 | 25,466 | ||||||
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Total Liabilities
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42,720 | 35,099 | ||||||
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Stockholders' Deficit
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Capital stock, $0.001 par value; Authorized 100,000,000; Issued and outstanding 24,520,000 (July 31, 2012 - 24,520,000)
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24,520 | 24,520 | ||||||
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Additional paid in capital
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132,080 | 120,080 | ||||||
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Common stock issuable
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25,000 | — | ||||||
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Deficit accumulated during the development stage
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(223,873 | ) | (177,333 | ) | ||||
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Total Stockholders' Deficit
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(42,273 | ) | (32,733 | ) | ||||
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Total Liabilities and Stockholders' Deficit
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$ | 447 | $ | 2,366 | ||||
The accompanying notes are an integral part of these financial statements.
F-1
HEALTH ADVANCE INC.
(A Development Stage Company)
(Expressed in United States Dollars)
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For the six Months Ended January 31, 2013
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For the six Months Ended January 31,
2012
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For the Period from Inception (April 14, 2010) to January 31,
2013
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SALES
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- | 100 | 100 | |||||||||
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COST OF GOODS SOLD
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- | 69 | 69 | |||||||||
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GROSS PROFIT
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- | 31 | 31 | |||||||||
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EXPENSES
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Professional fees
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5,362 | 23,075 | 54,226 | |||||||||
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Office and general
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6,849 | 3,444 | 14,333 | |||||||||
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Rent and occupancy costs
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7,200 | 7,200 | 30,000 | |||||||||
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Consulting and management fees
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27,000 | 27,000 | 125,000 | |||||||||
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TOTAL OPERATING EXPENSES
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46,411 | 60,719 | 223,559 | |||||||||
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LOSS FROM OPERATIONS
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(46,411 | ) | (60,688 | ) | (223,528 | ) | ||||||
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Foreign exchange gain (loss)
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(129 | ) | 171 | (345 | ) | |||||||
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NET LOSS AND COMPREHENSIVE LOSS
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$ | (46,540 | ) | $ | (60,517 | ) | $ | (223,873 | ) | |||
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LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
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$ | 0.00 | $ | 0.00 | ||||||||
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WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
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24,520,000 | 22,920,000 | ||||||||||
The accompanying notes are an integral part of these financial statements.
F-2
HEALTH ADVANCE INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(A Development Stage Company)
(Expressed in United States Dollars)
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For the Three Months Ended January 31,
2013 |
For the Three Months Ended January 31,
2012 |
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SALES
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- | 100 | ||||||
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COST OF GOODS SOLD
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- | 69 | ||||||
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GROSS PROFIT
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- | 31 | ||||||
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EXPENSES
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Professional fees
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5,000 | 15,075 | ||||||
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Office and general
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5,707 | 2,071 | ||||||
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Rent and occupancy costs
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3,600 | 3,600 | ||||||
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Consulting and management fees
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21,000 | 13,500 | ||||||
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TOTAL OPERATING EXPENSES
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35,307 | 34,246 | ||||||
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LOSS FROM OPERATIONS
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(35,307 | ) | (34,215 | ) | ||||
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Foreign exchange gain (loss)
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(129 | ) | - | |||||
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NET LOSS AND COMPREHENSIVE LOSS
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$ | (35,436 | ) | $ | (34,215 | ) | ||
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LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
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$ | 0.00 | $ | 0.00 | ||||
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WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
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24,520,000 | 22,920,000 | ||||||
The accompanying notes are an integral part of these financial statements.
F-3
HEALTH ADVANCE INC.
(A Development Stage Company)
(Expressed in United States Dollars)
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For the Six Months Ended January 31,
2013
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For the Six Months Ended January 31,
2012
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For the Period from Inception (April 14, 2010) to January 31,
2013
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net loss
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$ | (46,540 | ) | $ | (60,517 | ) | $ | (223,873 | ) | |||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Common stock issued for services
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- | 15,000 | 80,000 | |||||||||
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In-kind contribution of services
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12,000 | 12,000 | 50,000 | |||||||||
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Issuance of common stock for services
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15,000 | - | 15,000 | |||||||||
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Changes in operating assets and liabilities:
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Prepaid expenses
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998 | 20,000 | (166 | ) | ||||||||
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Accounts payable and accrued liabilities
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2,221 | (1,492 | ) | 11,854 | ||||||||
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Net cash used in by operating activities
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(16,321 | ) | (15,009 | ) | (67,185 | ) | ||||||
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Net cash provided by investing activities
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- | - | - | |||||||||
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from issuance of common stock
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10,000 | - | 36,600 | |||||||||
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Advances from stockholder
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5,400 | 8,469 | 30,866 | |||||||||
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Net cash provided by financing activities
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15,400 | 8,469 | 67,466 | |||||||||
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NET INCREASE (DECREASE) IN CASH
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(921 | ) | (6,540 | ) | 281 | |||||||
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CASH, BEGINNING OF PERIOD
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1,202 | 8,843 | - | |||||||||
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CASH, END OF PERIOD
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$ | 281 | $ | 2,303 | $ | 281 | ||||||
The accompanying notes are an integral part of these financial statements.
F-4
HEALTH ADVANCE INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 2013
(Expressed in United States Dollars)
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1.
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NATURE OF OPERATIONS AND ORGANIZATION
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Health Advance Inc. (the "Company" or "Health Advance") was incorporated in the State of Wyoming on April 14, 2010. The Company is a development stage company and is an online retailer of home medical products with operations in Canada and the US. On February 14, 2013, the Company effected a 10-for-1 forward split of the Company’s issued and outstanding common shares. The Company’s issued and outstanding common shares were therefore increased from 2,452,000 to 24,520,000. All per share amounts have been restated to reflect this stock split.
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2.
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BASIS OF PRESENTATION
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The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the financial statements and footnotes thereto included in the Company’s annual report on Form 10K for the year ended July 31, 2012.
The Company is considered to be in the development stage as defined in Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The Company has devoted substantially all of its efforts to business planning and development by means of raising capital for operations. The Company has also not realized any significant revenues. Among the disclosures required by ASC 915 are that the Company's financial statements be identified as those of a development stage company, and that the statements of operations and comprehensive loss, stockholders' equity (deficit) and cash flows disclose activity since the date of the Company's inception.
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3.
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GOING CONCERN
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These financial statements have been prepared assuming the Company will continue on a going concern basis. The Company has incurred losses since inception and the ability of the Company to continue as a going concern depends upon its ability to develop profitable operations and to continue to raise adequate financing. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.
F-5
HEALTH ADVANCE INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 2013
(Expressed in United States Dollars)
There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in these financial statements.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
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4.
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RELATED PARTY TRANSACTIONS
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The transactions with related parties were in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the parties. Related party transactions not disclosed elsewhere in these consolidated financial statements are as follows:
The Company paid rent and other overhead costs to a shareholder and director of the Company in the amount of $1,400 per month, totaling $8,400 for the six months ended January 31, 2013 (six months ended January 31, 2012 - $8,400). This monthly charge includes the head office rent, phone, internet and other administrative services.
Advances from a shareholder of the Company as at January 31, 2013 were $30,866 (July 31, 2012 - $25,466). These advances are non-interest bearing, unsecured and with no specific terms of repayment.
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5.
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SUPPLEMENTAL CASH FLOW INFORMATION
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During the periods ended January 31, 2013 and 2012 and for the period from inception to, January 31, 2013, there were no interest or taxes paid by the Company.
The significant non cash transactions for the six months ended January 31, 2013 consisted of the following:
a)For the six months ended January 31, 2013 the controlling shareholder contributed management services of $2,000 per month totaling $12,000 (six months ended January 31, 2012 - $12,000);
b)On November 14, 2012, the Company received $10,000 in exchange for 2,000,000 shares of common stock at $0.005 per share. These shares will be issued in the next quarter;
c)In December 2012, the Company agreed to issue 1,000,000 shares of common stock valued at $0.01 per share for a total of $10,000 for web design services and repairs. These shares will be issued in the next quarter; and
d)In January 2013, the Company agreed to issue 500,000 shares of common stock valued at $0.01 per share for a total of $5,000 for consulting services. These shares will be issued in the next quarter.
F-6
HEALTH ADVANCE INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 2013
(Expressed in United States Dollars)
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6.
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CAPITAL STOCK
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On November 14, 2012, the Company received $10,000 in exchange for 2,000,000 shares of common stock at $0.005 per share. These shares will be issued in the next quarter.
In December 2012, the Company agreed to issue 1,000,000 shares of common stock valued at $0.01 per share for a total of $10,000 for web design services and repairs. These shares will be issued in the next quarter.
In January 2013, the Company agreed to issue 500,000 shares of common stock valued at $0.01 per share for a total of $5,000 for consulting services. These shares will be issued in the next quarter.
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7.
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SUBSEQUENT EVENT
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On February 12, 2013, Domenic Pascazi notified Health Advance, Inc. that he would resign from his position as a member of the board of directors of the Company, effective immediately.
On February 14, 2013, the Company received approval from the Financial Industry Regulatory Authority (“FINRA”) for a 10-for-1 forward stock split of the issued and outstanding shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) (the “Forward Split”), to be effective as of February 15, 2013. The Forward Split had been previously approved and authorized by the board of directors and majority holders of the Company and, as a result, the issued and outstanding Common Stock increased from 2,452,000 to 24,520,000.
F-7
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Overview
The Company has incurred losses since inception and the ability of the Company to continue as a going-concern depends upon its ability to raise adequate financing and develop profitable operations. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.
On February 14, 2013, the Company effected a 10-for-1 forward split of the Company’s issued and outstanding common shares. The Company’s issued and outstanding common shares were therefore increased from 2,452,000 to 24,520,000. All per share amounts have been restated to reflect this stock split.
Plan of Operation
We were incorporated on April 14, 2010 in Wyoming. Our business office is located at 3651 Lindell Road, Suite D#155, Las Vegas, NV, 89103. Our telephone number is 702-943-0309. We were founded by Jordan Starkman, who serves as our President and Director. In addition, Domenico Pascazi was appointed as a director in March 2011. On February 12, 2013, Mr. Pascazi resigned from his position as a member of the board of directors. Mr. Pascazi’s resignation was not a result of any disagreement with the Company or its executive officers, or any matter relating to the Company’s operations, policies or practices.
We are an on-line retailer of home medical products with operations in Canada and the United States, and with administration and infrastructure supported globally. Our strategy is to attract opportunities in the health care industry through the development and growth of our existing web site www.healthadvancemd.com. We believe we can operate more cost efficiently and compete as a discounter that delivers value and low cost branded lines of home medical care products together with valuable customer care that is currently missing in the marketplace. Our goal is to become our customers’ single source for low cost health care supplies, by meeting all of our customer’s needs.
We strive to offer health care professionals, medical distributors and consumers the highest quality brands and products at the most affordable prices. We expect to achieve this by forming relationships with suppliers that will be able to provide us with preferred prices once we are able to make bulk purchases.
In the fiscal year of 2013, we plan to build our business across four key product categories including: (1) respiratory, (2) diabetes, (3) ostomy, and (4) mastectomy supplies. Our growth plan is to achieve net revenues within the first 12 months following our July 31, 2012 year–end.
We plan to complete a financing through a private offering for a minimum of $200,000 in the fiscal year of 2013. We have not yet entered into any agreements with any parties with respect to obtaining financing for the Company.
If we are unable to obtain financing on reasonable terms, we could be forced to delay or scale back our plans for expansion. In addition, such inability to obtain financing on reasonable terms could have a material adverse effect on our business, operating results, or financial condition.
If we are able to obtain financing, we plan to implement both online and offline marketing and customer engagement campaigns for both our traditional durable medical products and our four key product areas mentioned above. We intend to target consumers with on-line marketing, and businesses, including various senior care facilities, with direct mail, telemarketing and flyer campaigns. Initially, we will target small to medium size facilities. We also intend to launch our direct mail onsite flyer campaigns and outbound calling campaigns in unison to increase the frequency and awareness of HealthAdvanceMD. We expect to replace and expand any existing major wholesaler relationships we currently work with by the beginning of year two following our July 31, 2012 year-end. Further, during this expected time frame, we plan to establish direct-from-manufacturer programs for our four key growth markets. We intend to continue to run our durable medical products business through the existing wholesaler relationships given the large range of product SKUs in the durable medical product category where we carry no less than a selection of nearly 2,000 products. No steps have been taken thus far to secure customers for our products.
The Company has recently started the process of preparing for an online marketing campaign. The Company has a relationship with AGS Cybertech located in India who will manage and coordinate all of our online marketing efforts. The campaign will include internet banner ads, search engine optimization, and social media optimization. All banner advertising will be strategically placed with various click per view programs as part of our overall sales and marketing plan.
2
In our key growth areas we plan to focus on reducing and concentrating the number of product SKUs in each growth category in order to create leverage with our supply chain across selected relationships with respiratory, diabetes, ostomy and mastectomy suppliers. These new direct-from-manufacturer programs will primarily be drop ship programs and will essentially result in no new product inventory risks. They will be predominantly product substitution strategies where direct manufacturers carry the inventory risk in order to get shelf space within our business to consumer ecommerce property www.healthadvancemd.com and other sales channels. These programs will be based on committed but non-binding contracted volume from us with each manufacturer, but where the manufacturer still carries the inventory, marketing investment, and the majority of the time continues to handle drop shipments direct to our customers and sales channels.
The first tranche of these direct from manufacturer programs is expected to be with North America based manufacturers given a tendency for higher quality product, margins and their ability to handle inventory and direct shipments to our customers. We also plan to evaluate a select number of overseas supplier relationships if we identify that a select overseas direct supplier can and will meet our delivery, financing and quality and return warranty terms. As a result of these supply chain improvements we expect to increase our net revenues by over an additional $50,000 based on margin improvements of an average of 20-25% and this does not include factoring in even higher margins if we choose to source from overseas markets.
We expect that these new product launches will be outlined and planned within the 2013 fiscal year, once our financing is completed. During the next 24 months following our 2012 year-end, we plan to work with our manufacturing partners to develop and finalize no less than two new product lines within each core product group for respiratory, diabetes, ostomy and mastectomy supplies and launch them by the second half of year 2. Together with our manufacturer partners we intend to develop and test market and then finalize our packaging and product features and licensing requirements by the end of July 2014.
In addition to attempting to achieve supply chain optimization by the beginning of January 2014, which we intend to result in reduced overall cost of goods, we also plan to drive top line growth with a major marketing initiative for new products. No formal products have been discussed as of yet. By the end of July 2014, we intend to achieve the 3 key milestones outlined above including: (1) entering into new growth markets, (2) optimizing our supply chain, and (3) launching new product lines in our new growth. from existing product line sales in growth markets for respiratory, diabetes, ostomy and mastectomy supplies through a margin optimized supply chain; a contribution from our traditional durable medical products businesses through existing wholesaler channels and from new products launched.
We have estimated that we will incur minimum expenses equal to $15,000 in the year following our July 31, 2012 year-end in order to maintain our business operations. However, if we conduct a financing, we will devote the capital raised to operational expenses as indicated below. The Company will attempt to complete a financing for a minimum of $200,000 within the 12-month period following the Company’s 2012 year-end. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of common shares from the Company’s authorized capital.
3
The Company is currently negotiating financing in the amount of $200,000 to further the Company’s business operations. Any capital raised will likely be through either a private placement or a convertible debenture and will likely result in the issuance of common shares from the Company’s authorized capital.
Results of Operations
For the Three and Six Months ended January 31, 2013
For the three months ended January 31, 2013 and 2012 we had sales of $0 and $100 respectively. For the three months ended January 31, 2013 and 2012 we had sales of $0 and $100 respectively. Cost of goods sold for the three months period ended January 31, 2013 and January 31, 2012 were $0 and $69, respectively and for the six months period ended January 31, 2013 and January 31, 2012 were $0 and $69, respectively. Operating expenses for the three months ended January 31, 2013 and January 31, 2012 were $35,307 and $34,246, respectively, and for the six months ended January 31, 2013 and January 31, 2013 were $46,411 and $60,719 respectively. The Company’s on-line web site www.healthadvancemd.com encountered a virus/worm and subsequently underwent extensive repairs that accounted for the Company’s lack of revenue.
Net loss for the three months ended January 31, 2013 and 2012 were $35,307 and $34,246 and for the six months ended January 31, 2013 and January 31, 2012 were $46,540 and $60,517 respectively. The operating expenses were primarily attributed to professional fees, consulting fees, web design fees, rent and other general overhead. The decreased loss from January 31, 2013 compared to January 31, 2012 is attributed to the decrease in professional fees. Professional fees for the three months ended January 31, 2013 was $5,362 compared to $23,075 for the six months ended January 31, 2012. Professional fees for the three months ended January 31, 2013 and 2012 were $5,000 and $15,075, respectively and for six months ended January 31, 2013 was $5,362 compared to $23,075 for the six months ended January 31, 2012.
During the period from inception (April 14, 2010) to January 31, 2013 the total operating expenses were $223,559 and the net loss was $223,873.
During the six months ended January 31, 2013 the director’s contributed services totaled $12,000. These services were included in the calculation of additional paid in capital.
During the six months ended January 31, 2013 we operated from a premises leased by a director. The costs of this premises and other general and administrative expenses paid on our behalf during the six months ended January 31, 2013 totaled $8,400. These expenses are payable to the shareholder and included in current liabilities.
During the period from inception (April 14, 2010) to January 31, 2013, we had no provision for income taxes due to the net operating losses incurred.
Any sales generated consist of the sale of medical supplies from our wholesalers and any profit generated is derived from the margins on the products sold. We expect to generate increased sales once our advertising campaign begins.
Liquidity and Capital Resources
As of January 31, 2013 we had a cash balance of $281, prepaid expenses of $166, and a working capital deficit of $42,273.
The initial use of the consideration received from the Company’s unregistered common share sales that occurred in the amount of $89,200 was allocated to offering expenses, professional fees, advertising/marketing, website and ecommerce platform development and working capital. The breakdown of the $89,200 received by the Company consists of $9,200 in cash received from sales of unregistered common stock and $80,000 of unregistered common stock issued in exchange for services. In July 2012, the Company raised $16,000 for professional and consulting fees. In November 2012, the Company raised an additional $10,000 for professional fees related to the Company’s legal and accounting commitments. In December 2012, the Company agreed to issue 1,000,000 common shares valued at $0.01 per share for the upgrade and repair work of the healthadvancemd e-commerce platform, web design and consulting services. In January 2013, the Company agreed to issue an additional 500,000 common shares valued at $0.01 per share for consulting services.
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The Company is currently seeking funding for our continued operations. The Company intends to raise a minimum of $200,000 and a maximum of $500,000 in order to continue the introduction of the www.healthadvancemd.com e-commerce site to the retail community and health care community. To achieve our goals the Company expects to commit the majority of its funding to the advertising of the Company’s web site. There is no assurance that the Company will be able to raise the capital required to complete its goal and objectives and the Company is currently seeking capital to further its business plan. We will likely to raise funds through either debt or issuing shares of our common stock in order to achieve our business goals. The issuance of additional shares or securities convertible into any such shares by us, any shares issued would dilute the percentage ownership of our current stockholders. There are no agreements with any parties at this point in time for additional funding; however, we are in discussions with various funders in the United States.
We believe we can satisfy our cash requirements for the next twelve months with our expected revenues and if needed an additional loan from our director, Jordan Starkman. We cannot assure investors that adequate revenues will be generated and there is no current loan commitment in place between the Company and Jordan Starkman. However, the success of our operations is dependent on attaining adequate revenue. In the absence of our projected revenues, we may be unable to proceed with our plan of operations or we may require financing to achieve our profit, revenue, and growth goals.
We anticipate that our fixed costs made up of legal & accounting and general & administrative expenses for the next 12 months will total approximately $25,000. Legal and accounting expenses of $15,000 represents the minimum funds needed to sustain operations. The $25,000 will be financed through the Company’s cash on hand, additional financing, net sales and if needed, an advance from our officer and director, Jordan Starkman. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees, until financing is raised. The foregoing represents our best estimate of our cash needs based on our current business condition. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and our progress with the execution of our business plan. It is currently expected that the Company will spend an additional $175,000 in variable costs relating to marketing and business development that will be funded from future financings.
In the event we are not successful in reaching our initial revenue targets, we will need additional funds to proceed with our business plan for the development and marketing of our core services. Should this occur, we would likely seek additional financing to support the continued operation of our business. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.
Recent Accounting Pronouncements
The management did not believe that recent accounting pronouncements issued by the FASB have a material impact on the Company’s present or future consolidated financial statements.
Off-Balance Sheet Arrangements
We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts.
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Not required for Smaller Reporting Companies.
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Item 4.
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Controls and Procedures
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Disclosure of controls and procedures.
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were not effective as of January 31, 2013 for the material weakness identified below:
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●
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Due to limited resources available, the Company currently does not have any employees except Jordan Starkman our Chief Executive Officer, Chief Financial Officer and director. As such, there is no segregation of duties within the Company.
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It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in internal control over financial reporting.
There have been no changes in our internal control over financial reporting that occurred during the quarter covered by this quarterly report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
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Item 1.
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Legal Proceedings.
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We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
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Item 1A.
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Risk Factor
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Not required for Smaller Reporting Companies.
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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On November 14, 2012 the Company received $10,000 in exchange for 2,000,000 shares of common stock at $0.005 per share. These shares will be issued in the next quarter. These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act since the issuance shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors.
In December 2012, the Company agreed to issue 1,000,000 common shares at $0.01 per share in exchange for the upgrade and repair work of the healthadvancemd e-commerce platform, web design and consulting services. These shares will be issued in the next quarter. These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act since the issuance shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors.
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In January 2013, the Company agreed to issue 500,000 common shares at $0.01 per share in exchange for consulting services. These shares will be issued in the next quarter. These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act since the issuance shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors.
The above proceeds will be used to fund operations as discussed in our Plan of Operations.
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Item 3.
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Defaults Upon Senior Securities.
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None
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Item 4.
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Mine Safety Disclosures.
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Not Applicable
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Item 5.
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Other Information.
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None
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Item 6.
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Exhibits
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31.1
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Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1+
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Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS *
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XBRL Instance Document
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101.SCH *
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XBRL Taxonomy Schema
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101.CAL *
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XBRL Taxonomy Calculation Linkbase
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101.DEF *
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XBRL Taxonomy Definition Linkbase
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101.LAB *
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XBRL Taxonomy Label Linkbase
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101.PRE *
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XBRL Taxonomy Presentation Linkbase
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+In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.
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*Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.
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SIGNATURES
Pursuant to the requirements 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.
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Health Advance, Inc.
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By:
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/s/ Jordan Starkman
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Jordan Starkman
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President, Chief Executive Officer, Chief Financial Officer
(Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer)
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| Dated: March 25, 2013 | ||
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