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EXCEL - IDEA: XBRL DOCUMENT - Puramed Bioscience Inc.Financial_Report.xls
EX-31.1 - CERTIFICATION - Puramed Bioscience Inc.pmbs_ex311.htm
EX-32.2 - CERTIFICATION - Puramed Bioscience Inc.pmbs_ex321.htm

Washington, D.C. 20549

FOR THE QUARTER ENDED September 30, 2014

Commission File No. 000-52771
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of Incorporation or organization)
(IRS Employer ID Number)
1326 Schofield Avenue Schofield, WI
(Address of principal executive offices)
(Zip Code)
(715) 359-6373
(Registrant’s telephone number)
Check whether the Issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES þ 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 þ     NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule12b-2 of the Exchange Act. (Check one):

Large accelerated filer  o Accelerated filer  o Non-accelerated filer  o Smaller reporting company   þ
Indicate by checkmark whether registrant is a shell company.  o

There were 199,821,079 shares of Common Stock outstanding as of November 17, 2014.

Item 1.
Unaudited Condensed Balance Sheets
Unaudited Condensed Statements of Operations
Unaudited Condensed Statements of Cash Flows
Notes to Condensed Unaudited Financial Statements
Item 2.
Item 3.
Item 4.
Item 1.
Item 1a.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

Unaudited Condensed Balance Sheets
September 30,
June 30,
Current Assets:
  $ 28,120     $ 48,576  
Accounts Receivable
    600       -  
    8,467       1,000  
Prepaid Expenses
    -       21,500  
Total Current Assets
    37,187       71,076  
Property and Equipment:
Computer Software
    2,638       2,638  
Computer Hardware
    9,070       9,070  
    2,136       2,136  
Accumulated Depreciation
    (8,335 )     (7,472 )
Net Property and Equipment
    5,509       6,372  
Other Assets:
Trademarks, net of amortization of $10,260 and $10,010, respectively
    8,741       8,991  
Patents, net of amortization of $11,184 and $8,784, respectively
    95,315       91,683  
Deferred Financing Fees
    3,924       8,216  
Total Other Assets
    107,980       108,890  
Total Assets
  $ 150,676     $ 186,338  
Current Liabilities:
Accounts Payable
  $ 850,954     $ 791,915  
Accrued Wages - Officers
    469,125       440,401  
Accrued Expenses
    309,043       301,675  
Short-term Term Note
    525,000       525,000  
Short-term Convertible Notes, net of discount
    532,715       320,574  
Convertible Bond Payable
    598,733       598,733  
Derivative Liability - Warrants
    355       355  
Derivative Liability - Convertible Debt
    2,380,028       2,345,961  
Total Current Liabilities
    5,665,953       5,324,614  
Commitments and Contingencies
Stockholders' Deficit:
Series A Preferred Stock, $.000001 par value, 51 shares
   authorized, issued and outstanding
    -       -  
Series B Preferred Stock, $.000001 par value, 5,000,000 and 0 shares
   authorized, 4,500,000 issued and outstanding, respectively
    5       5  
Common Stock, $.000001 par value, 4,000,000,000 shares
   authorized,  70,662,185 and 27,105,175 shares issued
   and outstanding, respectively
    71       27  
Additional Paid in Capital
    8,882,451       8,436,847  
Accumulated Deficit
    (14,397,804 )     (13,575,155 )
Total Stockholders' Deficit
    (5,515,277 )     (5,138,276 )
Total Liabilities and Stockholders' Deficit
  $ 150,676     $ 186,338  
See accompanying notes to financial statements.


Unaudited Condensed Statements of Operations
Three Months Ended
September 30,
September 30,
Net Revenues
  $ 3,636     $ -  
Cost of Sales
    4,932       26,603  
Gross Loss
    (1,296 )     (26,603 )
Operating Expenses
Selling, General and Administrative Expenses
    23,774       43,226  
Amortization and Depreciation Expense
    3,513       14,440  
Professional Fees
    48,897       107,930  
Marketing and Advertising Expense
    9,770       22,990  
    5,874       7,436  
Officer's Salaries
    42,314       60,923  
Total Operating Expenses
    134,142       256,945  
Loss from Operations
    (135,438 )     (283,548 )
Other Expense
Interest Expense
    (431,930 )     (125,999 )
Loss on Derivative Liability
    (255,281 )     (293,171 )
Other Expense
    (687,211 )     (419,170 )
Net Loss
  $ (822,649 )   $ (702,718 )
Loss per Common Share - Basic
   and Diluted
  $ (0.02 )   $ (0.51 )
Weighted Average Common Shares
   Outstanding - Basic and Diluted
    51,974,227       1,374,750  
See accompanying notes to financial statements.


Unaudited Condensed Statements of Cash Flows
Three Months Ended
September 30,
September 30,
Cash flows from operating activities:
Net loss
  $ (822,649 )   $ (702,718 )
Changes in non cash working capital items:
    863       572  
    2,650       13,868  
Amortization of deferred financing fees
    7,292       3,581  
Accretion on discount on convertible notes
    374,767       76,701  
Loss on derivative liability
    255,281       293,171  
Changes in operating assets and liabilities:
Accounts receivable
    (600 )     (15,638 )
    (7,467 )     4,443  
Prepaid expenses
    21,500       32,006  
Accounts payable
    59,039       77,377  
Accrued wages - officers
    28,724       52,661  
Accrued expenses
    37,176       33,748  
Net cash used for operating activities
    (43,424 )     (130,228 )
Cash flows from investing activities:
Patent acquisition costs
    (6,032 )     (2,779 )
Property and equipment acquisition costs
    -       (232 )
Net cash used for investing activities
    (6,032 )     (3,011 )
Cash flows from financing activities:
Proceeds from notes
    29,000       92,830  
Net cash provided by financing activities
    29,000       92,830  
Net decrease in cash
    (20,456 )     (40,409 )
Cash at beginning of the period
    48,576       41,180  
Cash at end of the period
  $ 28,120     $ 771  
Supplemental disclosures of noncash investing and financing activities and other cash flow information:
Short-term convertible notes and accrued liabilities converted to common stock
  $ 192,060     $ 50,730  
Retirement of derivative liability - convertible debt
    253,588       17,357  
Issuance of derivative liability - convertible debt
    50,594       151,592  
Interest paid with cash
    -       14,263  
See accompanying notes to financial statements.

Notes to Condensed Unaudited Financial Statements

A. Basis of Presentation
The condensed balance sheet as of September 30, 2014, the condensed statements of operations for the three month periods ended September 30, 2014 and 2013 and the condensed statements of cash flows for the three month periods ended September 30, 2014 and 2013 have been prepared by PuraMed BioScience, Inc. (the "Company") without audit. In the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position as of September 30, 2014 and the results of operations and cash flows for the three month periods ended September 30, 2014 and 2013 presented herein have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with the United States generally accepted accounting principles have been condensed or omitted. These financial statements should be read in conjunction with the Company's financial statements and notes thereto for the fiscal year ended June 30, 2014 included in the Annual Report on Form 10-K of the Company filed with the SEC on October 14, 2014.
B. Going Concern
As of September 30, 2014, the Company had negative working capital and minimal funds needed to accomplish its planned business strategy or support its projected expenses. The Company plans to obtain the needed working capital primarily through debt issuances and sales of its common stock, which there is no assurance it will be able to accomplish. If the Company cannot obtain substantial working capital through debt issuances, common stock sales or other sources (if any), it most likely will be forced to curtail its planned business operations. If the Company is unable to obtain additional financing, its ability to continue as a going concern is doubtful.
C. Accounting Policies
Loss per common share – Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted loss per common share assumes the exercise of stock options and warrants using the treasury stock method, if dilutive. Potentially dilutive shares of 622,191,101 and 2,157,821, for the three months ended September 30, 2014, and 2013, respectively were not included in the calculation of diluted shares, as the effect would have been antidilutive.
Trademark AmortizationPuraMed® BioScience trademarks consist of the legal costs associated with registering its LipiGesic®, MigraPure, and PuraMed® BioScience trademarks. As these trademarks have been approved, they are being amortized on a straight-line basis over an estimated useful life of ten years.
Fair Value Measurements
Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Notes to Condensed Unaudited Financial Statements
C. Accounting Policies (continued)
Level 1 Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.
Level 2 Other inputs that are observable directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs.
Level 3 Unobservable inputs that are used when little or no market data is available, which require the Company to develop its own assumptions about how market participants would value the assets or liabilities.
Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosure each quarter. Assets and liabilities measured at fair value on a recurring basis as of September 30, 2014 and June 30, 2014 are summarized as follows:

Fair Value as of September 30, 2014
Level 1
Level 2
Level 3
Derivative Liability - Warrants
Derivative Liability – Convertible Debt

Fair Value as of June 30, 2014
Level 1
Level 2
Level 3
Derivative Liability - Warrants
Derivative Liability – Convertible Debt


The following table presents the fair value reconciliation of Level 3 liabilities measured at fair value on a recurring basis during the three months ended  September 30, 2014:
Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)
Liability -
Liability -
Beginning balance, July 1, 2014
Loss on derivative liability
Ending balance, September 30, 2014


Notes to Condensed Unaudited Financial Statements

A binomial option-pricing model was used to value the derivative liability with the following inputs:
Stock Price – The Stock Price was based on the closing price of the Company’s common stock on the valuation date. The valuation date can either be the date of issuance of the convertible debt note or the last day of a reporting period (the Valuation Date). Stock prices on the Valuation Dates ranged from $0.004 to $11.80.
Exercise Price – The exercise price, or conversion price was based on the terms of the associated agreement, which for the convertible notes is usually based on a percentage of the average of the three lowest stock bid prices out of the last 10 trading days prior to the Valuation Date.

Time to Maturity – The time to maturity was determined based on the length of time between the Valuation Date and the maturity of the associated instruments.
Risk Free Rate – The risk free rate was based on the US treasury note rate as of the Valuation Dates with term commensurate with the remaining term of the debt. The risk free rate ranged between .09% and 1.60 %.

Volatility – The volatility was based on the historical volatility of the Company, using a time period to calculate volatility commensurate with the Time to Maturity.  Volatilities used ranged between 278% and 369%.
Recently Enacted Accounting Standards
On May 28, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, and early adoption is not permitted. Management is currently evaluating the impact, if any, on adopting ASU 2014-09 on our results of operations or financial condition.  The Company has considered this and other recent accounting pronouncements of which the Company is aware, and the Company believes their adoption has not had, and will not have, any material impact on our financial position or results of operations.


Notes to Condensed Unaudited Financial Statements

D. Inventory
Inventory consists of raw materials and finished goods. Raw materials are the components, including boxes, inserts, liquid medicine and packaging materials that have not been combined into the final product, ready for sale. Finished goods are the final product, available for sale. The raw materials inventory is expected to be assembled and placed in finished goods inventory when that amount is significantly reduced. Due to the lack of degradation of the material, no adjustment for obsolescence is necessary. Inventory consisted of the following as of September 30, 2014 and June 30, 2014:

September 20,
June 30,
Raw Materials
  $ 7,467     $ -  
Finished Goods
    1,000       1,000  
Total Inventory
  $ 8,467     $ 1,000  
E. Notes Payable Transactions
The Company has issued various 8% to 12% secured convertible notes (the Convertible Notes). The Company has bifurcated the convertible debt agreements according to the guidance provided by ASC 815-15-25.  The principal and accrued interest for these notes is payable nine to twelve months after issuance, or such earlier date as defined in the agreement.  The notes are convertible by the holder at any time after the issue date and by the Company at any time after issue with conversion periods as defined in the agreement.  The notes are convertible into shares of the Company’s common stock at a price of 50% to 60% of the average of the three lowest closing bid prices of the stock during the defined trading day period ending one day prior to the date of conversion.  The holders are not entitled to convert any portion of the Convertible Notes to the extent that the shares to be issued in connection therewith would cause the holder’s beneficial ownership of the Company’s common stock to exceed 4.99% of the outstanding shares of the Company’s common stock.  Because of the operation of the floating conversion price and the holder’s ability to convert as described above, the Company is unable to determine at any time that number of shares into which the Convertible Notes may be convertible.

The Convertible Notes contain customary representations and warranties, customary affirmative and negative covenants, customary anti-dilution provisions, and customary events of default that accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, the Convertible Notes.  A default on the Convertible Notes could lead to certain penalties, including an obligation to (a) pay all of the following, plus an additional 50% of (i) default interest, (ii) other monetary penalties, and (iii) the outstanding balance on the Convertible Notes.  As of September 30, 2014, the balance of the Convertible Notes is $532,715, net of discount of $463,253.

The holders are entitled to have all shares issued upon conversion listed upon each national securities exchange or other automated quotation system, if any, upon which shares of the Company’s common stock are then listed.

The Company is required to carry the embedded derivatives on its balance sheet at fair value and account for any unrealized change in fair value as a component in its results of operations.  The Company valued the embedded derivatives using a binomial option-pricing model.  

Notes to Condensed Unaudited Financial Statements
E. Notes Payable Transactions (continued)
The Company entered into a convertible note in the amount of $500,000 with an individual who is now a Director of the Company on November 13, 2009.  The note expired on November 12, 2012, and a new note in the amount of $598,733 was entered into on January 31, 2013, with an interest rate of 8% and the right to pay off the note in whole or in part at any time.  The new note is the balance of the former note plus expenses of $98,233, paid by the Board Member on behalf of the Company.  The Company has not begun servicing this note.

During 2013, the Company entered into a material definitive agreement with TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership (TCA), with a promissory note in the amount of $350,000.  Interest was is and payable each month at a rate of 12%.  The note has a cross default clause and has a continuing, first priority security until such time as the note is repaid.  This note is convertible only upon default.  No derivative has been recorded because the value is nominal.  As further consideration for TCA entering into and structuring the promissory note, the Company paid TCA a fee of $115,000, with consideration of 479,167 shares of common shares of the Company, which is recorded as a debt discount, and amortized over the initial term of the debt of one year.

In June 2013, TCA restructured its debt agreement with the Company, which constituted a troubled debt restructuring, with the term of the debt extended through January 1, 2014.  The principal balance of the note was increased to $368,757 (which included $14,000 of interest due to TCA) as a result of this debt restructuring.  This balance was included with short-term convertible notes.  Losses incurred as a result of this restructuring totaled $94,132, which consisted of the payment of $75,000 of common stock to TCA, the write-off of a remaining debt discount of $14,375 and an increase in the balance due to TCA of $4,757.  The common stock issued to TCA is redeemable by the Company if TCA does not realize net proceeds of at least $75,000 from the shares within a twelve month period following receipt of the shares; accordingly, it has been classified outside of permanent equity.  The conditionally redeemable common stock totaling $190,000 was reclassified to convertible notes during 2014.

On April 24, 2014, the Company entered into a Master Exchange Agreement (the “Exchange Agreement”), with an Institutional Investor (the “Institutional Investor”) for the note initially issued by the Company to TCA, under which obligations of $579,109 were owed as of such date.  Pursuant to the Exchange Agreement and subject to its terms and conditions, the Institutional Investor may, from time to time, at the Institutional Investor’s sole option, exchange obligations under the note, in whole or in part, for shares of the Company’s common stock.  The number of common stock shares issuable to the Institutional Investor upon exchange of the obligation shall be determined by dividing the applicable “Exchange Amount” (as defined in the Agreement) by the “Exchange Price” (as defined in the Agreement).  Since the closing date, the Institutional Investor has exchanged approximately $329,000 of the outstanding obligations under the note for common stock.

In April 2013, two notes were signed with an individual for a total of $525,000, which were due on April 1, 2014, with 8% interest compounded annually.  These notes are secured by a second position in all the Company’s assets.  The Company has not begun servicing these notes.
F. Stockholders’ Equity (Deficit)
On October 7, 2014, the Company effected a 1-for-40 reverse split of its common stock.  The number of authorized shares of common stock was also increased to 4,000,000,000.  The Company also amended its articles of incorporation, changing the par value of its common stock from $0.001 to $0.000001.


Notes to Condensed Unaudited Financial Statements

F. Stockholders’ Equity (Deficit) (continued)

All share and per share information in the accompanying financial statements have been restated retroactively to reflect the reverse stock split and change in par value.

During the three months ended September 30, 2014, the Company issued a total of 31,968,565 common shares in payment of accrued expenses, and of principal and interest due on convertible notes totaling $192,060.
During the three months ended September 30, 2014, 11,588,445 common shares were issued in connection with the cashless exercise of warrants.

G. Subsequent Events
Subsequent to September 30, 2014, the Company issued convertible notes payable totaling $75,500 due with interest ranging from 8% to 10% with maturity dates ranging from being due on demand to October, 7, 2015.

Subsequent to September 30, 2014, notes payable and accrued interest of $69,094 were converted into 96,718,720 shares of common stock.  Also, 32,439,735 shares of common stock were issued pursuant to the exercise of warrants.

The following discussion and analysis of the Company’s financial condition and plan of operations should be read and considered along with its condensed financial statements and related notes included in this Quarterly Report on Form 10-Q. Various statements have been made in this Quarterly Report on Form 10-Q that may constitute “forward-looking statements.” Forward-looking statements may also be made in the Company’s other reports filed with or furnished to the SEC and in other documents. In addition, from time to time, the Company, through its management, may make oral forward-looking statements. Forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from such statements. The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely” and similar expressions are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements, except as required by law.

PuraMed BioScience®, Inc. (“PuraMed”, “PMBS” or the “Company”) was incorporated in Minnesota on May 9, 2006, as a wholly-owned subsidiary of Wind Energy America, Inc. (formerly “Dotronix, Inc.”) for the purpose of engaging in the business of developing and marketing non-prescription over-the-counter healthcare products to remedy various ailments.

In late 2006, PuraMed’s former parent company decided to spin off its PuraMed subsidiary and related healthcare products business.  Accordingly, on April 12, 2007, Wind Energy America, Inc. affected a spin-off of PuraMed to shareholders of Wind Energy America, Inc. on a pro rata dividend basis of one common share of PuraMed for each five common shares of Wind Energy America, Inc.  Since  April 12, 2007, the effective date of the spin-off, PuraMed and Wind Energy America, Inc. have operated separately, with the respective managements, businesses, assets and capital structures being completely independent from each other.


Detailed information regarding this spin-off of PuraMed from Wind Energy America, Inc. (formerly Dotronix, Inc.) is contained in a Current Report on Form 8-K and exhibit thereto which were filed with the US Securities and Exchange Commission (the “SEC”) on April 10, 2007, and can be readily accessed at the SEC website or the Company’s corporate website at

On October 7, 2014, the Financial Industry Regulatory Authority (FINRA) effected in the marketplace (i) the change in the Company’s domicile from Minnesota to Nevada and (ii) a 1-for-40 reverse stock split. 

 Overview of Business

The Company is engaged in the business of developing and marketing a line of non-prescription medicinal or healthcare products to be marketed through various independent and retail channels. The Company plans on re-launching its flagship product, LipiGesic ® under the MigraPure ® brand and trademark. The Company has recently completed the product development and design packaging for the product and has created other intellectual assets to promote a successful re-launch.

In addition to MigraPure, PuraMed BioScience has created an enhanced formulation for the relief of seizure-related headaches, which could become part of the PuraMed product line.

The Company entered the Over-The-Counter (OTC) healthcare products marketplace in December 2009, by employing “direct to consumer” marketing for the Company’s migraine remedy. The Company is currently undergoing concerted efforts to re-enter the food and drug mass marketplace.

The Company is also investigating several strategic alliances that could enable the Company to co-market and build market share of complementary products.

MigraPure® Advanced Migraine Relief (Clinically tested as LipiGesic® M)

MigraPure’s patented feverfew and ginger gel provides relief for acute migraine and migraine-like headaches including sinus and hangover headaches. PuraMed believes that the specific formulation of these active ingredients is unique and proprietary. Clinical trial data and anecdotal evidence shows the sublingual formulation provides relief from these severe migraine headaches within minutes.

The Company hopes to capture a material segment of the migraine headache remedy market as a natural alternative to prescription and OTC migraine medications that may be less effective and induce severe and unpleasant side effects. The Company believes that Americans spend in excess of $6 billion annually on headache pain relievers, and that over half of sufferers of migraine headaches rely exclusively on non-prescription medications.

The Company believes that at least 50 million Americans suffer from chronic migraine headaches with over 20 million of them having “severe” migraine conditions.  Therefore migraine headaches constitute a severe and disabling condition for millions of people.  The Company further believes that the economic burden alone to the US economy is in excess of $50 billion annually.

MigraPureis is available as a non-prescription remedy, provides a side effect profile similar to placebo, and has a significantly lower cost compared to more expensive prescription migraine drugs.

Future PuraMed BioScience® Products

The Company intends to complete development of additional non-prescription hemp-based products. The Company intends to launch these commercially over the next couple years after establishing a solid market for MigraPure, the Company’s flagship migraine formulation. Areas to be addressed include general pain, anxiety / depression (post-traumatic stress disorder) and other inflammatory disease states.

Sublingual Delivery System

MigraPure Advanced Migraine Relief is a non-prescription, liquid-gel medication that absorbs under-the tongue. This method of delivery is known as “sublingual.” This form of delivery allows the active ingredients to reach the bloodstream without a substantial degradation of efficacy. Unlike the majority of pills and other oral medications which must be absorbed through the digestive track after being processed through the liver, PuraMed products are placed and absorbed directly under the tongue. Advantages of sublingual dispensing of drugs and medications include faster acting absorption for quick relief, improved efficacy, less stomach upset, and fewer side effects.

PuraMed has secured reliable contract manufacturers to produce and package PuraMed products in easy-to-use, sublingual dispensers. These selected contractors are experienced in the production and packaging of this type of dispenser. PuraMed believes that its benchmark use of sublingual dispensers should distinguish its products favorably in comparison to most competing OTC products now in the marketplace.

Regulation of PuraMed Products

Unlike prescription drugs or medications, non-prescription healthcare remedies such as PuraMed products do not require FDA approval prior to entering the market.  They are nonetheless subject to substantial FDA and other federal regulations governing their use, labeling, advertising, manufacturing and ingredients.  PuraMed believes that its current and proposed development, formulation, marketing and other practices and procedures will comply fully with all governmental regulations applicable to PuraMed products.

Business Structure

PuraMed intends to function primarily as a research and development, marketing and sales organization.  Product manufacturing, packaging, product fulfillment and other operations intend to be outsourced to experienced and reliable third parties through contracts monitored and controlled by PuraMed.  PuraMed believes this structure hopefully reduces significantly the production costs and manufacturing time related to making the product commercially available.

Product Manufacturing

Production and packaging of PuraMed products intends to be outsourced to various contract manufacturers known by PuraMed’s management from prior substantial business and contract dealings.  Due to the business and contacts developed by PuraMed management over the past years with leading contract manufacturers, PuraMed is convinced it can obtain professional and timely production, packaging and delivery of all PuraMed products.

The Company outsources four main components of the Company’s production process to third-party vendors.  The process begins with the sourcing of raw materials, manufacturing of the liquid-gel medicine, testing and quality assurance of the product itself by Hillestad Pharmaceuticals ( in Woodruff, WI.  Hillestad Pharmaceuticals is an FDA licensed prescription drug manufacturer.

The Company sources all of its packaging needs including the box, box inserts, and 6-pack retail display trays to Proteus Packaging ( in Franklin, WI.

The final packaging process is completed by the Unette Corporation ( in Randolph, NJ.  This includes the filling of the 3-ml applicator with the liquid-gel medication, the packing of the retail boxes, and the packaging of the master cases.

The Company uses Great Lakes Fulfillment ( in Lewiston, ME for all of its e-commerce and retail distribution needs.


Clinical Trials

Conducting clinical trials is a very important component the Company’s marketing plan. With the Company’s goal to get medical professionals to review, endorse, and recommend its product, clinical evidence to support the products’ claims is a prerequisite.  The Company has and intends to continue to attend medical trade shows that attract medical professions such as doctors, nurses, and pharmacists to present the Company’s clinical research regarding the Company’s MigraPure Advanced Migraine Relief formula, which was clinically tested as LipiGesic® M.

The outcome of the Company’s first clinical study was extremely favorable. After 2 hours post-dose (the clinical trial standard), 64% of migraines treated with the MigraPure formula were reduced to mild or no pain.  The study concludes that, “sublingual (under-the-tongue) delivery of feverfew/ginger appears safe and effective as a first-line abortive treatment for a population of migraineurs who frequently experience mild headache prior to the onset of moderate to severe headache. It appears to be well tolerated and has no known contraindications with other acute migraine treatments for migraine.”

As a result of the success and the statistical significance of the Company’s first clinical study, the manuscript was accepted for publication in the July/August 2011 edition of the top-ranked, peer-reviewed, medical journal Headache, The Journal of Head and Face Pain.

The results of these finding were also reanalyzed. The consensus was that given a larger study, the results could have produced even greater success. The authors of the reanalysis stated that MigraPure (f/k/a LipiGesic M) has a robust efficacy.

The clinical trial also spawned a third article published in Drugs, a medical journal. It was the only OTC medication that was listed as an “Advancement” in the treatment of migraine.

The Company expects the results of the clinical trial to provide it with numerous marketing and promotional opportunities that positively impact the re-launch of MigraPure, Advanced Migraine Relief.

The Company’s second clinical study focused specifically on children and adolescents. The preliminary data from that study Suggests that MigraPure could provide an excellent treatment option for many young sufferers.

There are an estimated 10 million migraine sufferers that find themselves in this demographic in the United States. Children and adolescents that suffer with migraines have limited treatment options as many of the traditional prescription remedies have adverse side effects and are not recommended for use with children and adolescents.

Sales and Marketing

PuraMed intends to concentrate its efforts on the Company’s initial product re-launch of MigraPure product. After the Company has reached a level of sales that will sustain the product, an additional product offerings the launch of a second product will result. All of the Company’s additional product offerings will follow the same three-phase process to market as MigraPure:

Phase One Rollout: Direct Response and Sampling. The re-entry of MigraPure Advanced Migraine Relief into the marketplace will commence with direct-response campaigns to targeted medical populations; distribution through selected retail outlets, natural products stores and independent pharmacies; a military sampling program  and an internet marketing campaign that includes organic as well as PPC efforts. In addition to the proposed marketing strategies to build awareness and product purchase, PuraMed is expected to implement a strong customer service program to retain loyal customers.

MigraPure’s re-entry will include a re-packaging effort that should enhance the brand’s appeal to the public. Other products in the MigraPure product line are planned and underway.


When the MigraPure Advanced Migraine Relief shows sustained growth, we plan to develop additional marketing assets promotion of the product in other targeted medical markets and selected retail venues.

Phase Two Rollout: Retail Drugstores. Upon the successful completion of the Phase One Rollout, PuraMed plans to begin the process of working closely with major drug chains to sell MigraPure Advance Migraine Relief in stores across the nation with the goal of self-sustainability and revenue generation.

Phase Three Rollout: Further Retail Outlets. A few months after completing the phase two rollout for its migraine remedy, PuraMed plans to launch phase three which will consist of working to expand the retail placement of its migraine product in approximately an additional 21,000 targeted retail outlets including mass merchandisers such as Wal-Mart and Target, food store chains such as SuperValu, Kroger and Safeway, and additional well-known regional drugstores.

PuraMed has selected these targeted retailers according to various material criteria, including cost of entry, geography, demographics and consumer preference.

After achieving material initial distribution for PuraMed products, PuraMed plans to initiate a comprehensive and ongoing promotional campaign directed toward consumer groups it has identified from its product rollouts. The objective of its promotional campaign is to build consumer awareness and develop a consumer-based demand for MigraPure throughout the United States. The scope of the Company’s brand building effort is expected to span all of the following major advertising venues:

Trade Advertising – Consisting of retail POS (point-of-sale) materials, coupon redemption programs, in-store promotional video, pharmaceutical trade magazines like Pharmacy Times, and Mass Market Retailer, key primary care and medical journals,  articles in consumer-focused magazines like Headwise a publication of the National Headache Foundation, 2015 attendance at the NACDS (National Association of Chain Drug Stores) Trade Show and other industry events. In addition, MigraPure, is expected to be featured in several key primary care and medical journals.

Medical Conferences and Meetings – A key component of the marketing effort will be directed at educating medical professionals including physicians, pharmacists, clinicians, practitioners, nurse practitioners and physician assistants.

Medical Spokespersons – The Company is working to identify and utilize medical spokespersons to promote MigraPure Advanced Migraine Relief. They will include board certified specialists with a special interest in the diagnosis, treatment, prevention and cure of headache.

Consumer Advertising – PMBS plans to allocate monies to create media assets that can be leveraged on several media venues and used in several markets. This may include video, print and electronic advertising that will be scheduled based on selected marketing criteria, goals and funding.

Product Sampling – The Company has developed a retail box and a two-count, fold-over, sample pack sufficient to treat one migraine headache. These items are used to provide samples to headache specialists, primary care practitioners, veterans, and interested consumers from its social marketing and eCommerce efforts.

Special Programs – The Company has implemented a special program for active-duty servicemen and women and returning Veterans. The Company is currently working with Honoring Our Troops, Operation Gratitude, and Operation Troop Aid to distribute its current product, MigraPure.

Studies show that veterans returning from active duty combat zones experience  migraines more often than civilians. One study indicates that soldiers have two to four times the incidence of migraine than the general population. Returning veterans are also at greater risk of suffering from post-traumatic stress disorder (PTSD). Since commonly prescribed medications for PTSD are not compatible with the prescription medications normally used for migraine, these veterans are forced to choose to treat one condition or the other.

MigraPure has no known or reported drug interactions of this type, making it a safer choice for veterans suffering with migraine and PTSD.


In response to this, the Company has been and plans to continue providing veterans and members of the armed forces with a free sample of MigraPure.  MigraPure is among the top four items requested in the America Cares Project care packages that were delivered by Honoring Our Troops to US military personnel serving in Afghanistan.

Web Presence and Social Marketing – The Company currently maintains a corporate website at and a product website at, which will transition to at the time of the re-launch.  The Company plans to maintain the and other URLs, but redirect visitors to a landing page declaring the change and funnel them to the informational pages and ecommerce site.

E-mail campaigns to targeted audience to promote MigraPure are planned for implementation during the second quarter of 2015.

The Company plans to hire a dedicated social media content manager to direct and implement an active social marketing campaign utilizing Facebook and Twitter and eventually other social media platforms. In addition to providing product information, this program is designed as a tool to direct consumers to retail locations and special promotions.


The non-prescription healthcare market in which PuraMed is engaged is intensely competitive and PuraMed will face the same challenges as other start-up and established OTC drug companies within their respective product classes. Virtually all direct competitors to the PuraMed product line have substantially greater financial, personnel, development, marketing and other resources than those possessed by PuraMed, which places PuraMed at a definite competitive disadvantage.  Main competitors of PuraMed will have substantially larger sales volumes than PuraMed expects to realize, and also greater business diversification in most cases.

PuraMed also must compete with numerous small companies selling products into the same mainstream marketing channels targeted by PuraMed.  PuraMed also expects to encounter additional competitors emerging from time to time.

PuraMed believes that the principal competitive factors in its industry include quality and pricing of products, product effectiveness, customer preferences, brand awareness, and marketing and distribution networks.  There is no assurance PuraMed will be able to compete successfully against current or future competitors or that the competitive pressures faced by PuraMed will not harm its business materially.

Intellectual Property

PuraMed owns and asserts proprietary intellectual property rights regarding its various products, including a patent, trademarks, formulation technology, ingredients and product delivery procedures or methods.  The future growth and success of the Company will depend in large part upon its ability to protect its trademarks, trade names and trade secrets.  In addition to applying for certain product patents, PuraMed will rely upon trade secrets, proprietary know-how, and continuing development and innovation to compete in its OTC marketplace.  Although no claims or threats of product or patent infringement have arisen regarding PuraMed or its products, there is no assurance PuraMed will be able to protect its intellectual property effectively and any failure to do so would be harmful to PuraMed.


 Employees and Facilities

As of November 4, 2014, PuraMed has three employees including its two executive officers, and an office manager.  PuraMed anticipates hiring one or more experienced sales and marketing personnel to support the upcoming commercial launch of MigraPure within the next 12 months.

Corporate Contact Data

The address of the Company in suburban Wausau, Wisconsin, is 1326 Schofield Avenue, P.O. Box 677, Schofield, WI 54476; the Companys’ telephone number is (715) 359-6373 and the Company’s corporate and product website addresses are and, respectively.

Results of Operations
Revenues consist of wholesale and website sales of the MigraPure migraine product. The wholesale revenue is reduced by coop advertising costs incurred to obtain product placement at large retail drugstores.
Cost of Sales
Cost of sales consists of merchant fees, material, packaging, freight costs and product placement expenses that exceed revenue for the units sold.
Operating Expenses
Selling, general and administrative expenses consist primarily of payroll taxes, health insurance, facility rent and administrative overhead costs.
Amortization and depreciation expenses consist primarily of depreciation of assets and amortization of the Company’s LipiGesic® trademark and intellectual property received during its spin-off from the parent company in April 2007.
Marketing and advertising expense include payments for public relations, stock promotion and advertising consistent with the commercialization of products.
Professional fees consist of audit, legal, transfer agent, consulting, commission and directors fees.
Salaries include payments to the office manager.
Officers’ salaries include payroll to the Chief Executive Officer and Chief Operating Officer.
Other Income Expense
Other Income Expense consists of interest expense and gain/loss on derivative liability.
Comparison of Operations for Three Months Ended September 30, 2014 and 2013
Net revenue for the three months ended September 30, 2014 was $3,636 compared to $0 for the three months ended September 30, 2013.  The revenue increased due to internet sales.

Cost of Sales
Cost of sales for the three months ended September 3, 2014 was $4,932, compared to $26,603 for the three months ended September 30, 2013. Cost of sales decreased due to the absence of obsolete inventory write offs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $23,774 and $43,226 for the three months ended September 30, 2014 and 2013, respectively. The decrease is primarily attributed to the decrease in cost of our product liability insurance policy.
Amortization and Depreciation
Amortization and depreciation expenses for the three months ended September 30, 2014 and 2013 were  $3,513 compared to $14,440, respectively. The decrease was due to certain intangible assets becoming fully amortized in 2014.
Professional Fees
Professional fees for the three months ended September 30, 2014 were $48,897 compared to $107,930 for the three months ended September 30, 2013. The decrease was attributed to the reduction in legal fees incurred.

Marketing and Advertising Expense
Marketing and advertising expense for the three months ended September 30, 2014 was $9,770 compared to $22,900 for the three months ended September 30, 2013. The decrease in the expenses was due to a reduction in the marketing and advertising expenditures.
Salaries for the three months ended September 30, 2014 were $5,874, compared to $7,436 for the three months ended September 30, 2013. The decrease was due to the decrease in hours worked by the Office Manager during this time period.
Officers’ Salaries
Officers’ salaries for the three months ended September 30, 2014 and 2013 were $42,314 and $60,923, respectively. The decrease in salaries is attributed to the resignation of the Company’s Chief Operating Officer in May of 2014, and a decrease in hours worked by the new Chief Operating Officer.
Interest Expense
Interest expense for the three months ended September 30, 2014 and 2013 was $431,930 and $125,999, respectively. The increase in the expense is attributed to an increase in the number of notes outstanding. 
Loss on Derivative Liability
The loss on derivative liability for the three months ended September 30, 2014 and 2013 was $255,281 and $293,171, respectively. The loss on derivative liability is the difference in value using the lattice model for the warrants between the date issued and the quarter ended September 30, 2014 and 2013.
Net Loss
Net loss for the three months ended September 30, 2014 was $822,649 compared to $702,718 for the three months ended September 30, 2013. The increase in the loss for 2014 was due primarily to higher interest costs associated with convertible debt.


Financial Condition, Liquidity and Capital Resources
As of September 30, 2014, the Company had cash of $28,120 and negative working capital of $5,628,766.
PuraMed intends to raise the funds needed to implement the Company’s plan of operation through both private sales of debt and equity securities. There is no assurance, however, that the Company will be successful in raising the necessary capital to implement the Company’s business plan, either through debt or equity sources.

Business Strategy
PuraMed’s business strategy going forward is to re-launch its flagship migraine product LipiGesic M using the name and branded image MigraPure®. The Company plans to begin the promotion of MigraPure with a strong online presence and sampling program that will build awareness and acceptance of the general population and in selected markets. The goal of the re-launch is to drive sales in both the online marketplace and in selected markets and to generate revenue. PuraMed’s primary goal is to achieve continual material growth of MigraPure® migraine product sales through online and brick-and-mortar natural drug distribution channels, while at the same time promoting MigraPure® brand awareness to realize substantial profitability as soon as possible. To implement this strategy, PuraMed intends to execute the following activities during the next twelve months:

The Publication of the Clinical Trial Data – We believe the outcome of the Company’s 2011 clinical study coupled with the publication of the manuscript in the peer reviewed-medical journal “Headache, The Journal of Head and Face Pain” has proved to be very successful. It has and is expected to continue to provide it with numerous marketing and promotion opportunities that could significantly help with the re-launch of its MigraPure migraine product.

PuraMed is in the process of creating a detailed marketing strategy that focuses on the sampling and engagement of segments of the medical community. The successful outcome and subsequent re-analysis of MigraPures clinical trial data is expected to be an instrumental component of those actions.  Medical marketing efforts targeting specific segments of the medical community are expected to yield positive returns.

The data that the Company has received regarding its clinical trial focusing on the adolescent population is expected to further underscore the validity of feverfew and ginger as an safe and effective formulation for the treatment of migraine in the youth and adolescents. Treatment options for this demographic, conservatively estimated at 10 million are limited. The traditional prescription migraine remedies have adverse side effects and are not recommended for use by children and adolescents.

Commercialization PuraMed Products – In addition to raising the necessary funds to continue operations, PuraMed’s primary focus for the remainder of calendar year 2014 and beginning of 2015 is expected to be to continue the re-branding process and gain distribution with one or more retail channels.  The Company will work to use its clinical data, anecdotal information and an aggressive sampling campaign to overcome consumer and retailer skepticism,  provide third-party validation of its migraine products efficacy and achieve retail and online placement.

The Company’s also plans to implement a strong online marketing campaign that expects to drive organic traffic to either The Company’s online store or retail venues after the re-branding of MigraPure is complete. A three-pronged marketing strategy expects to be implemented that targets, consumers, the medication community and retailers. Each target should have marketing plans designed specifically for them to maximize awareness, encourage engagement and prompt purchase. As part of the re-launch efforts an enhanced website, electronic media campaigns and eCommerce portal is expected to optimize its internet sales.


Expansion of Sales and Marketing Activities – PuraMed plans to continue working to expand and develop marketing strategies focused on gaining a network of retail outlets; implementing direct-to-consumer marketing messages; exhibiting and attending tradeshows of targeted industries, and maintaining a sampling program to build awareness and secure consumers of MigraPure.

Continuation of Product Development – Besides its MigraPure product, PuraMed will work to complete development and testing of its hemp-based product line of non-prescription drugs and nutritional supplements to be commercially launched in the future as additional PuraMed products.

Assuming the Company raises the necessary capital, it anticipates spending approximately $3.0 million over the next twelve months on the marketing of its migraine headache remedy along with the introduction of its hemp-based cannabinoid product offerings regardless of any amounts of revenues the Company generates from product sales during this period.  If raised, these funds will be spent as follows:

Sales and marketing expenses
Purchase of product inventory, packaging and raw materials
Research and development activities
General and administrative expenses including rent, fixed overhead and management compensation

Critical Accounting Policies
The discussion in this Plan of Operation should be considered in conjunction with the Company’s audited financial statements and related notes included in its Annual Report on Form 10-K for the year ended June 30, 2014, filed with the SEC on October 14, 2014. These financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP).
The preparation of the Company’s financial statements requires us to make estimates and judgments affecting its reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an ongoing basis, PuraMed is expecting to evaluate these estimates which are based on historical experience and certain assumptions the Company believes to be reasonable under the circumstances. Actual results may differ materially from the Company’s estimates under different assumptions or conditions.
Impairment – Whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable, The Company conducts an impairment analysis of any material intangible assets owned by the Company. If the results of any such impairment analysis indicate the Company’s recorded values for any such assets have declined materially, PuraMed plans to adjust its recorded asset valuations in all of its financial statements to reflect any such decline in value. The Company believes that no impairment existed as of September 30, 2014.
Stock-Based Compensation – PuraMed has issued stock-based compensation to the Company’s employees, contractors, consultants or others providing goods and services to PuraMed. The fair market value of any stock-based compensation issued for goods or services is expected to be expensed over the period in which the Company receives them. Most likely any equity securities issued by it for goods and services should consist of common shares or common stock purchase warrants, which should be fully vested, non-forfeitable, and fully paid or exercisable at the date of grant. Regarding any future stock option or warrant grants, the Company intends to determine the fair value by using the Black-Scholes option-pricing model.

Derivative financial instruments – warrants – In accordance with guidance in Accounting Standards Codification (ASC) 815-40-25-1 and ASC 815-40-25-8, the Company has determined the warrants issued during 2011 have net cash settlement provisions that require classification as derivative liabilities rather than permanent equity. In accordance with such accounting rules, derivative instruments are recorded at fair value and marked-to-market each period until they are exercised or expire, with any change in the fair value charged or credited to income each period. Because these warrants do not trade in an active securities market, the fair value was estimated using a binomial option-pricing model.
Derivative financial instruments – conversion options – In accordance with guidance in ASC 815-15, the Company has determined the conversion options of certain short-term convertible notes require classification as derivative liabilities. In accordance with such accounting rules, derivative instruments are recorded at fair value and marked-to-market each period until they are exercised or expire, with any change in the fair value charged or credited to income each period. The fair value was estimated using a binomial option-pricing model.

As described in the notes to condensed financial statements included in this filing (see Note C), the Company accounts for certain warrants and convertible debt instruments as derivative liabilities.  However, PuraMed does not engage in any hedging activities.
The Company’s disclosure controls and procedures are designed to ensure (i) that information required to be disclosed by the Company in the reports in the Company files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (ii) that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer, or persons performing similar functions, as appropriate to allow timely decision regarding required disclosure.
Pursuant to rules adopted by the SEC as directed by Section 302 of the Sarbanes-Oxley Act of 2002, the Company’s management, with the participation of the CEO and CFO, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) ) as of September 30, 2014. Based on that evaluation, the Company’s CEO concluded that, as of that date, the Company’s disclosure controls and procedures required by paragraph (b) of the Exchange Act Rules 13a-15d-15, were not effective. Management’s assessment identified the following material weaknesses:
There is a lack of accounting personnel with the requisite knowledge of US GAAP and the financial reporting requirements of the Securities and Exchange Commission.
There are insufficient written policies and procedures to insure the correct application of accounting and financial reporting with respect to the current requirements of US GAAP and SEC disclosure requirements.
There is a lack of segregation of duties, in that PuraMed only had one person performing all accounting-related duties.
Notwithstanding the existence of these material weaknesses in the Company’s internal control over financial reporting, management believes that the financial statements included in its report fairly present in all material respects the Company’s financial condition, results of operations and cash flows for the periods presented.
The Company also disclosed these weaknesses in its Annual Report on Form 10-K for the year ended June 30, 2014, filed with the SEC on October 14, 2014. PuraMed recently added external accountants to assist in the Company’s accounting processes.

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 the Company or any of its subsidiaries, threatened against or affecting the Company, its common stock, any of its subsidiaries or of the Company’s or its subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
PuraMed believes there are no changes that constitute material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended June 30, 2014, filed with the SEC on October 14, 2014.

There were no unregistered sales of equity securities during the quarter ended September 30, 2014.  
There were no defaults upon senior securities during the quarter ended September 30, 2014. $652,723 of notes payable are past-due as of September 30, 2014.
Not applicable.
There is no other information required to be disclosed under this item which was not previously disclosed.

See Exhibit Index below
Exhibit Index
Quarterly report on Form 10-Q
For the quarter ended September 30, 2014
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
XBRL Instance Document
Taxonomy Extension Schema Document
Taxonomy Extension Calculation Linkbase Document
Taxonomy Extension Definition Linkbase Document
Taxonomy Extension Label Linkbase Document
Taxonomy Extension Presentation Linkbase Document
*Filed herewith

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.
November 19, 2014
/s/ Russell W. Mitchell  
Russell W. Mitchell
Chief Executive Officer
(Principal Executive Officer)
(Principal Financial Officer)
(Principal Accounting Officer)
Pursuant to requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Russell W. Mitchell
Chief Executive Officer
November 19, 2014
Russell W. Mitchell
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer), Director
/s/ Patricia McMurtrie
Chief Operating Officer, Director
November 19, 2014
Patricia McMurtrie
/s/ Charles Phillips
November 19, 2014
Charles Phillips