SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K/A

(Amendment No. 1)

 

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended July 31, 2014

 

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to __________

 

Commission File No. 333-177122

 

HEALTH ADVANCE INC.

(Exact name of registrant as specified in its charter)

 

WYOMING

(State or other jurisdiction of

incorporation or organization)

 

46-0525223

(IRS Employer Identification No.)

 

3651 Lindell Rd. Suite #D155

Las Vegas, NV,

89103

(Address of principal executive offices)

(Zip Code)

 

1-702-943-0309

(Registrant’s telephone number, including area code)

 

Securities registered under Section 12(b) of the Exchange Act: 

 

Title of each class registered: None

Name of each exchange on which registered: None

 

Securities registered under Section 12(g) of the Exchange Act:

 

None (Title of class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.        Yes  x     No  o

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  x      No  o

 

Indicate by check mark whether the registrant (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  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 x  No o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference Part III of this Form 10-K or any amendment to this Form 10-K. 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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o  No x

 

As of March 20, 2015, the registrant had 24,520,000 shares issued and outstanding.

 

Documents Incorporated by Reference:

 

None.

 

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

 

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

 

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

 

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K.

 

 

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise. 

 

USE OF CERTAIN DEFINED TERMS

 

Except as otherwise indicated by the context, references in this report to “we,” “us,” “our,” “our Company,” “the Company” or “Health Advance” are to the combined business of Health Advance Inc. and its consolidated subsidiaries.

 

In addition, unless the context otherwise requires and for the purposes of this report only

 

●	“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;
●	“SEC” refers to the United States Securities and Exchange Commission;
●	“Securities Act” refers to the Securities Act of 1933, as amended;

 

  

HEALTH ADVANCE, INC.

FORM 10-K/A

 

TABLE OF CONTENTS

 

		Page
PART II
ITEM 5.	MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	2
ITEM 6.	SELECTED FINANCIAL DATA	3
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	7
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	7
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES	8
ITEM 9A.	CONTROLS AND PROCEDURES	8
ITEM 9B.	OTHER INFORMATION	9
PART IV
ITEM 15.	EXHIBITS AND SIGNATURES	9

 

EXPLANATORY NOTE

Health Advance Inc. (the “Company”) filed its Annual Report on Form 10-K for the fiscal year ended July 31, 2014 (the “Original Form 10-K”), with the U.S. Securities and Exchange Commission (the “SEC”) on November 7, 2014. The Company is filing this Amendment No. 1 to the Original Form 10-K (this “Form 10-K/A”) solely for the purpose of amending the disclosure in Item 9A of Part II. This Form 10-K/A hereby amends and restates in their entirety Items 5 through 9B of Part II of the Original Form 10-K.

Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Form 10-K/A also contains new certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Accordingly, Item 15 of Part IV has also been amended and restated in its entirety to include the currently dated certifications as exhibits.

No attempt has been made in this Form 10-K/A to modify or update the other disclosures presented in the Original Form 10-K, including, without limitation, the financial statements. This Form 10-K/A does not reflect events occurring after the filing of the Original Form 10-K or modify or update the disclosures in the Original Form 10-K, except as set forth in this Form 10-K/A, and should be read in conjunction with the Original Form 10-K and the Company’s other filings with the SEC.

 

Item 5.         Market for The Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases Of Equity Securities

 

No Public Market for Common Stock

 

There is no established current public market for the shares of our common stock.  Our common stock is quoted on the OTC Bulletin Board under symbol HADV.  Minimal trading has occurred through the date of this filing. There can be no assurance that a liquid market for our securities will ever develop. Transfer of our common stock may also be restricted under the securities or blue sky laws of various states and foreign jurisdictions. Consequently, investors may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time. 

 

Holders

 

As of the July 31, 2014, we had 39 stockholders of our common stock.

 

Dividends

 

Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.

 

 

Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

As of the end of the fiscal year ended July 31, 2014, we do not have any compensation plan under which equity securities of the Company are authorized for issuance.

 

Item 6.         Selected Financial Data.

 

Smaller reporting companies are not required to provide the information required by this item.

 

Item 7.         Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion should be read in conjunction with our consolidated audited financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below.

 

During the year ended July 31, 2014 we have incurred a net loss of $72,080 and have an accumulated deficit of $340,441 as of July 31, 2014. The ability of the Company to continue as a going-concern depends upon its ability to raise adequate financing and develop profitable operations. If we cannot generate sufficient revenues from our services, we may have to delay the implementation of our business plan. 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.

 

The Company is actively seeking financing for its current business operation.  The Company is optimistic that the financing will be secured and the going concern risk will be removed.  We are in discussions with various parties and believe a successful financing is likely. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of shares of common stock from the Company’s authorized capital. 

 

Our consolidated audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

  

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 2015, 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, 2014 year-end.

 

We plan to complete a financing in the fiscal year of 2015.  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, 2014 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.

 

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 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 2015 fiscal year and the beginning of fiscal year 2016, once our financing is completed.  During the next 24 months following our 2014 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 2016.

 

 

In addition to attempting to achieve supply chain optimization by the beginning of January 2015, 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 2015, 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, 2014 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 2014 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.

 

Web Development and Maintenance		$	5,000.00
Legal/Accounting		$	15,000.00
Computer hardware and software systems		$	10,000.00
Advertising  and Marketing		$	130,000.00
General and administrative		$	10,000.00
Salaries and Customer Service		$	25,000.00
Telephone		$	1,000.00
Travel		$	4,000.00
Total Expenses		$	200,000.00

 

The above represents our Managements best estimate of our cash requirements based on our business plans and current market conditions. The above is based on our ability to raise sufficient financing and generate adequate revenues to meet our cash flow requirements.  The actual allocation between expenses may vary depending on the actual funds raised and the industry and market conditions over the next 12 months following our July 31, 2014 year-end.

 

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.

 

If we are able to complete a financing through a private offering for a minimum of $200,000 within the 12 month period following our July 31, 2014 year-end, 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, 2014 year-end. Further, during this expected time frame, we plan to establish direct-from-manufacturer programs for our four key growth markets in order to achieve improved margin of between 25-35%.  We will continue, however, 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.

 

Results of Operations for the years ended July 31, 2014 and 2013

 

For the years ended July 31, 2014 and July 31, 2013, we had no sales.  

 

Net loss was $72,080 for year ended July 31, 2014 and $91,028 for year ended July 31, 2013. The decrease in operating expenses was the sole contributing factor for the decreased loss during the year.

 

Operating expenses for the years ended July 31, 2014 and July 31, 2013 were $71,871 and $90,665 respectively. The operating expenses were primarily attributed to professional fees, rent and occupancy and consulting and management fees.

 

 

Professional fees

 

Professional fees for the year ended July 31, 2014 was $25,013 compared to $20,715 for the year ended July 31, 2013. The increase mainly represents legal charges.

  

Consulting and management fees

 

Consulting and management fees for the year ended July 31, 2014 was $24,000 compared to $41,000 for the year ended July 31, 2013. This includes $24,000 per annum charge for the estimated shareholder services with a corresponding credit to additional paid-in capital. Further, during the year ended July 31, 2013, management incurred approximately $15,000 in connection with web designing and related services for optimization of the Company’s on-line platform, and no such expenses were incurred during the year ended July 31, 2014.

 

Rent and occupancy

 

During the years ended July 31, 2014 and 2013, the Company carried out its operations from a premises leased by a director.  The costs of this premises and other general and administrative expenses incurred during the year ended July 31, 2014 and 2013 were $16,800 each. These expenses are payable to the shareholder and included in current liabilities.

 

During the years ended July 31, 2014 and 2013, we had no provision for income taxes due to the net operating losses incurred.

 

Liquidity and Capital Resources

 

As of July 31, 2014, we had bank indebtedness of $28 and a working capital deficit of $105,341.

 

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.  

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements.

 

Item 7A.      Quantitative and Qualitative Disclosures About Market Risk.

 

Smaller reporting companies are not required to provide the information required by this item. 

  

Item 8.         Financial Statements and Supplementary Data.

 

HEALTH ADVANCE INC.

(A Development Stage Company)

FINANCIAL STATEMENTS

JULY 31, 2014

 

CONTENTS

 

	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-1
FINANCIAL STATEMENTS
Balance Sheets	F-2
Statements of Operations and Comprehensive Loss	F-3
Statements of Stockholders' Deficit	F-4
Statements of Cash Flows	F-5
Notes to the Financial Statements	F-6 - F-11

 

 

	Sohail Raza, CPA, CA, CPA (Colorado, USA) Chartered Accountant, Licensed Public Accountant Park Place Corporate Centre 15 Wertheim Court, Suite 409 Richmond Hill, ON L4B 3H7 Tel: 416 671 7292 / 905 882 9500 Fax: 905 882 9580 Email: sohail.raza@srco.ca www.srco.ca

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of

Health Advance Inc.

 

We have audited the accompanying balance sheets of Health Advance Inc. (a Development Stage Company) as of July 31, 2014 and 2013 and the related statements of operations and comprehensive loss, stockholders' deficiency and cash flows for the years then ended.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.  Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstance, but not for expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Health Advance Inc. (A Development Stage Company) as of July 31, 2014 and 2013 and the related statements of operations and comprehensive loss, stockholders' deficiency and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company has significant operating losses, is in the development stage with no established source of revenue and is dependent on its ability to raise capital from shareholders or other sources to sustain operations, which raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

	SRCO Professional Corporation   CHARTERED ACCOUNTANT
Richmond Hill, Ontario, Canada November 7, 2014	Authorized to practise public accounting by the Chartered Professional Accountants of Ontario

  

 

HEALTH ADVANCE INC.

(A Development Stage Company)

BALANCE SHEETS

AS AT JULY 31,

(Expressed in United States Dollars)

 

		2014				2013
		$				$
ASSET
CURRENT ASSET
Cash			—				526
TOTAL ASSET			—				526
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Bank indebtedness			28				—
Accounts payable and accrued liabilities			46,178				29,389
Advances from a shareholder (Note 5)			59,135				34,398
TOTAL LIABILITIES			105,341				63,787
STOCKHOLDERS' DEFICIT
Authorized:
500,000,000 common stock, par value $0.001
Issued and outstanding: (Note 6)
24,520,000 common stock as at July 31, 2014 (July 31, 2013: 24,520,000 common stock)			24,520				24,520
Additional paid-in capital			168,080				144,080
Common stock to be issued (Note 6)			42,500				36,500
Deficit accumulated during the exploration stage			(340,441	)			(268,361	)
TOTAL STOCKHOLDERS' DEFICIT			(105,341	)			(63,261	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT			—				526

 

See accompanying notes

 

 

HEALTH ADVANCE INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE YEARS ENDED JULY 31, 2014 AND 2013 AND FOR THE PERIOD FROM THE DATE OF INCEPTION (APRIL 14, 2010) TO JULY 31, 2014

(Expressed in United States Dollars)

 

										Cumulative from
										April 14, 2010
										(inception) to
										July 31,
										2014
		Year ended July 31, 2014				Year ended July 31, 2013				(Unaudited - Refer Note 11)
		$				$				$
SALES			—				—				100
COST OF SALES			—				—				69
GROSS PROFIT			—				—				31
EXPENSES
Professional fees			25,013				20,715				94,590
Office and general			8,458				14,550				30,491
Rent and occupancy			14,400				14,400				51,600
Consulting and management fees			24,000				41,000				163,000
Total expenses			71,871				90,665				339,681
Foreign exchange loss			(209	)			(363	)			(791	)
Loss before income taxes			(72,080	)			(91,028	)			(340,441	)
Income taxes			—				—				—
NET AND COMPREHENSIVE LOSS FOR THE PERIOD			(72,080	)			(91,028	)			(340,441	)
Loss per common share, basic and diluted			(0.0029	)			(0.0037	)
Weighted average number of
common stock outstanding, basic and diluted			24,520,000				24,520,000

 

See accompanying notes

 

 

HEALTH ADVANCE INC.

(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS' DEFICIT

FOR THE PERIOD FROM THE DATE OF INCEPTION (APRIL 14, 2010) TO JULY 31, 2014

(Expressed in United States Dollars)

 

																Deficit
																Accumulated
										Shares				Additional		During The
		Common stock								to be issued				paid-in		Development
		Shares				Amount				Amount				capital		Stage				Total
							$				$			$			$				$
UNAUDITED
Issuance of common stock at inception			14,000,000				14,000				—			(12,600)			—				1,400
As at July 31, 2010			14,000,000				14,000				—			(12,600)			—				1,400
Issuance of common stock for cash			920,000				920				—			8,280			—				9,200
Issuance of common stock for services			6,500,000				6,500				—			58,500			—				65,000
In-kind contribution of services			—				—				—			14,000			—				14,000
Net loss for the year			—				—				—			-			(68,177	)			(68,177	)
As at July 31, 2011			21,420,000				21,420				—			68,180			(68,177	)			21,423
Issuance of common stock for cash			1,600,000				1,600				—			14,400			—				16,000
Issuance of common stock for services			1,500,000				1,500				—			13,500			—				15,000
In-kind contribution of services			—				—				—			24,000			—				24,000
Net loss for the year			—				—				—			-			(109,156	)			(109,156	)
As at July 31, 2012			24,520,000				24,520				—			120,080			(177,333	)			(32,733	)
AUDITED
Common stock to be issued			—				—				36,500			-			—				36,500
In-kind contribution of services			—				—				—			24,000			—				24,000
Net loss for the year			—				—				—			-			(91,028	)			(91,028	)
As at July 31, 2013			24,520,000				24,520				36,500			144,080			(268,361	)			(63,261	)
Issuance of common stock for cash			—				—				—			-			—				—
Issuance of common stock for services			—				—				6,000			-			—				6,000
In-kind contribution of services			—				—				—			24,000			—				24,000
Net loss for the year			—				—				—			-			(72,080	)			(72,080	)
As at July 31, 2014			24,520,000				24,520				42,500			168,080			(340,441	)			(105,341	)

 

See accompanying notes

 

 

HEALTH ADVANCE INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JULY 31, 2014 AND 2013 AND FOR THE PERIOD FROM THE DATE OF INCEPTION (APRIL 14, 2010) TO JULY 31, 2014

(Expressed in United States Dollars)

 

										Cumulative from
										April 14, 2010
										(inception) to
										July 31,
										2014
		Year ended July 31, 2014				Year ended July 31, 2013				(Unaudited - Refer Note 11)
			$				$				$
OPERATING ACTIVITIES
Net loss for the period			(72,080	)			(91,028	)			(340,441	)
Adjustments for non-cash items
Common stock issued for services			—				15,000				95,000
In-kind contribution of services			24,000				24,000				86,000
							—				—
Net change in non-cash working capital balances:
Prepaid expenses			—				1,164				—
Accounts payable and accrued liabilities			16,789				19,756				46,178
Net cash used in operating activities			(31,291	)			(31,108	)			(113,263	)
FINANCING ACTIVITIES
Bank indebtedness			28				—				28
Proceeds from issuance of common stock			6,000				21,500				54,100
Advances from a shareholder			24,737				8,932				59,135
Net cash provided by financing activities			30,765				30,432				113,263
Net decrease in cash during the period			(526	)			(676	)			—
Cash, beginning of period			526				1,202				—
Cash, end of period			—				526				—

 

See accompanying notes 

 

 

HEALTH ADVANCE INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

AS AT JULY 31, 2014

 

1.     NATURE OF OPERATIONS AND ORGANIZATION

 

Nature of Operations

 

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.  

 

2.     BASIS OF PRESENTATION

 

The Company has earned minimal revenues from limited principal operations and accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth in Accounting Standards Codification 915,   Accounting and Reporting by Development Stage Enterprises ("ASC 915") .   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, stockholders' equity and cash flows disclose activity since the date of the Company's inception.

 

3.     GOING CONCERN

 

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 become due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.

 

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.

 

These 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. 

   

4.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accounting policies of the Company are in accordance with accounting principles generally accepted in the United States of America.  Presented below are those policies considered particularly significant:

 

Revenue Recognition

 

The Company's revenue recognition policies are in compliance with ASC 605, Revenue Recognition.  Revenue from sales to customers are recognized at the date a formal arrangement exists, the price is fixed and determinable, the goods are shipped to the customer and no other significant obligation of the Company exists and collectability is reasonably assured.

 

Advertising and Marketing Costs

 

Advertising and marketing costs are expensed as incurred.

 

Cost of Goods Sold

 

Costs of goods sold are recognized at the date the goods are shipped to the customer and are matched with revenues.

 

Cash and Cash Equivalents

 

Cash and cash equivalents consist of commercial accounts and interest-bearing bank deposits and are carried at cost, which approximates current value. Items are considered to be cash equivalents if the original maturity is three months or less.

 

 

HEALTH ADVANCE INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

AS AT JULY 31, 2014

 

Stock-Based Compensation

 

The Company accounts for Stock-Based Compensation in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services.  It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity ’ s equity instruments or that may be settled by the issuance of those equity instruments.  ASC 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements.  That cost is measured based on the fair value of the equity or liability instruments issued.

 

Comprehensive Income

 

The Company follows the guidance in ASC 220, Comprehensive Income. ASC 220 establishes standards for the reporting and presentation of comprehensive income and its components in a full set of consolidated financial statements.  Comprehensive income is presented in the statements of changes in stockholders' equity (deficit), and consists of unrealized gains (losses) on available for sale marketable securities and foreign currency translation adjustments.  ASC 220 requires only additional disclosures in the financial statements and does not affect the Company's financial position or results of operations.

 

Fair Value of Financial Instruments

 

The Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 157 Fair Value Measurements (“SFAS 157”), superseded by ASC 820-10, which defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. The impact of adopting ASC 820-10 was not significant to the Company’s financial statements. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

 

●		Level 1 - Valuation based on quoted market prices in active markets for identical assets or liabilities.
●		Level 2 - Valuation based on quoted market prices for similar assets and liabilities in active markets.
●		Level 3 - Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value.

 

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

 

Income Taxes

 

The Company accounts for income taxes pursuant to ASC 740-10, (formerly SFAS No. 109), Accounting for Income Taxes. Deferred tax assets and liabilities are recorded for differences between the financial statements and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.  

 

 

HEALTH ADVANCE INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

AS AT JULY 31, 2014

 

Foreign Currency Translation

 

The functional currency of the Company is USD. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net income (loss) for the year.

 

Use of Estimates

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known.

 

Earnings or Loss Per Share

 

The Company accounts for earnings per share pursuant to ASC 260-10-02 (formerly SFAS No. 128), Earnings per Share, which requires disclosure on the consolidated financial statements of "basic" and "diluted" earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding for the year.  Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year.

 

There were no dilutive financial instruments for the period from inception (April 14, 2010) to July 31, 2014.

 

Concentration of Credit Risk

 

ASC 815-10 (formerly SFAS No. 105) Disclosure of Information About Financial Instruments with Off-Balance-Sheet Risk and Financial Instruments with Concentration of Credit Risk , requires disclosure of any significant off-balance-sheet risk and credit risk concentration.  The Company does not have significant off-balance-sheet risk or credit concentration.  

 

Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by the Company as of the specified effective date.

 

Effective October 1, 2013, the Company adopted the amended guidance in ASC Topic 210, Balance Sheet. The amended guidance addresses disclosure of offsetting financial assets and liabilities. It requires entities to add disclosures showing both gross and net information about instruments and transactions eligible for offset in the balance sheet and instruments and transactions subject to an agreement similar to a master netting arrangement. The updated disclosures have been implemented retrospectively and do not impact our financial position or results of operations.

 

Effective October 1, 2013, the Company adopted the amended guidance in ASC Topic 220, Comprehensive Income. The amended guidance requires entities to disclose additional information about reclassification adjustments, including (1) changes in accumulated other comprehensive income by component and (2) significant items reclassified out of accumulated other comprehensive income by presenting the amount reclassified and the individual income statement line items affected. The updated disclosures have been implemented prospectively and do not impact our financial position or results of operations.

 

On May 28, 2014, the FASB issued a new financial accounting standard on revenue from contracts with customers, Update No. 2014-09-Revenue from Contracts with Customers (Topic 606). The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is not permitted. The Company is currently evaluating the impact of this accounting standard” 

 

 

HEALTH ADVANCE INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

AS AT JULY 31, 2014

 

Recent Accounting Pronouncements (continued)

 

Effective June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915). Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The objective of the amendments is to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements for development stage entities. As a result, the amendments in this Update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities.

 

The amendments also eliminate an exception previously provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity at risk. The amendments in this Update remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to:

 

1) present inception-to-date information in the statements of income, cash flows, and shareholder equity;

2) label the financial statements as those of a development stage entity;

3) disclose a description of the development stage activities in which the entity is engaged; and

4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

 

The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein.

 

5.     RELATED PARTY TRANSACTIONS

 

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 financial statements are as follows:

 

a.

The Company paid $14,400 ($1,200 per month) each for the years ended July 31, 2014 and 2013 to a shareholder and director in respect of rent and occupancy.  The Company also paid $2,400 ($200 per month) each for the years ended July 31, 2014 and 2013 in respect of certain administrative services included in office and general.  In addition, the Company has charged $24,000 ($2,000 per month) each for the years ended July 31, 2014 and 2013 representing the costs of estimated services from a shareholder.  These amounts have been debited to consulting and management fees with corresponding credit to additional paid in capital.

 

b.	Advances from a shareholder of the Company as at July 31, 2014 were $59,135 (2013 - $34,398).  These advances are non interest bearing, unsecured and with no specific terms of repayment.

 

6.     CAPITAL STOCK

 

COMMON STOCK - AUTHORIZED

 

As at July 31, 2014, the Company has 500,000,000 authorized shares of common stock with a par value of $0.001 per share.

 

COMMON STOCK - ISSUED AND OUTSTANDING

 

Company’s outstanding 24,520,000 shares of common stock ($24,520) as at July 31, 2014 consisted of the following:

 

On April 14, 2010 the Company issued 14,000,000 shares of common stock at $0.0001 per share to the founding shareholder for proceeds of $1,400. 

 

 

HEALTH ADVANCE INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

AS AT JULY 31, 2014

 

COMMON STOCK - ISSUED AND OUTSTANDING (continued)

 

During fiscal 2011, the Company completed non-brokered private placements of 920,000 shares of common stock at $0.01 per share for proceeds of $9,200.

 

During fiscal 2011, the Company issued 6,500,000 common stock for legal, consulting and web design services and directors fees.  These services were valued at $0.01 per share.  

 

On November 1, 2011 the Company issued 1,500,000 shares of common stock for professional services rendered.  These services were valued at $15,000.

 

On July 18, 2012 the Company issued 1,600,000 shares at $0.01 per share for a total of $16,000.

 

COMMON STOCK - TO BE ISSUED

 

The Company’s 6,290,000 common stock to be issued amounting to $42,500 as at July 31, 2014 consist of the following:

 

On November 14, 2012, the Company received $10,000 in exchange for 2,000,000 shares of common stock at $0.005 per share.

 

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.  

 

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.

 

In March 2013, the Company agreed to issue 800,000 shares of common stock at an issue price of $0.01 per share for a total of $8,000.

 

In June 2013, the Company agreed to issue 350,000 shares of common stock at an issue price of $0.01 per share for a total of $3,500.

 

In October 2013, the Company received $4,000 in exchange of 1,600,000 shares of common stock at an issue price of $0.0025 per share.

 

In April 2014, the Company received $2,000 in exchange of 40,000 shares of common stock at an issue price of $0.05 per share.

 

7.     SUPPLEMENTAL CASH FLOW INFORMATION

 

During the period from inception to July 31, 2014, there were no interests or taxes paid by the Company.

 

During the year ended July 31, 2014 the controlling shareholder contributed management services of $2,000 per month totaling $24,000. (2013 - $24,000).

 

8.     INCOME TAXES

 

The Company accounts for income taxes in accordance with ASC 740-20. ASC 740-20 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates. The effects of future changes in tax laws or rates are not anticipated.

 

Under ASC 740-20 income taxes are recognized for the following: a) amount of tax payable for the current year, and b) deferred tax liabilities and assets for future tax consequences of events that have been recognized differently in the financial statements than for tax purposes.

 

The Company has income tax losses available to be applied against future years income as a result of the losses incurred since inception.  However, due to the losses incurred in the period and expected future operating results, management determined that it is more likely than not that the deferred tax asset resulting from the tax losses available for carry forward will not be realized through the reduction of future income tax payments.  Accordingly a 100% valuation allowance has been recorded for income tax losses available for carry forward. 

 

 

HEALTH ADVANCE INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

AS AT JULY 31, 2014

 

8.     INCOME TAXES (continued)

 

The provision for income taxes reconciles to the amount obtained by applying the statutory income tax rates of 38% (2013: 38%) to income before provision for taxes as follows:

 

		2014				2013
Computed expected tax		$	(27,390	)		$	(34,591	)
Expenses not deductible for tax purposes			9,120				9,120
Tax losses available for carry forward			18,270				25,471
Provision for income taxes		$	—			$	—

 

The components of deferred income taxes, have been determined at the US federal statutory rate of 38% (2013: 38%) and are as follows:

 

		2014				2013
Deferred income tax assets:
Income tax losses available for carry forward		$	71,608			$	49,157
Valuation allowance			(71,608	)			(49,157	)
Deferred income taxes		$	—			$	—

 

9.     FINANCIAL INSTRUMENTS

 

Credit Risk

 

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company is not significantly exposed to this risk as generally it does not have any significant amount of cash.

 

Currency Risk

 

The Company is exposed to financial risk related to the fluctuation of foreign exchange rates.   The Company's functional currency is U.S. dollars.  A significant change in the currency exchange rates between the U.S. dollar relative to the Canadian dollar could have an effect on the Company's results of operations, financial position and cash flows.  The Company has not entered into any derivative financial instruments to manage exposures to currency fluctuations.

 

Liquidity Risk

 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.  The Company has a planning and budgeting process in place to help determine the funds required to support the Company's normal operating requirements on an ongoing basis and its expansionary plans.  The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash.

 

Fair Values

 

The Company's financial instruments consist of cash, bank indebtedness and accounts payable and accrued liabilities and advances from stockholder and advances from related party.  Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.  The fair values of these financial instruments approximate their carrying values due to the short-term maturity of these instruments.

 

10.     SUBSEQUENT EVENTS

 

The Company’s management has evaluated subsequent events through the filing date of these financial statements and has determined that there are no material subsequent events to report. 

 

11.    UNAUDITED INFORMATION

 

Effective March 6, 2014 our predecessor auditor, DNTW Toronto LLP, formerly known as DNTW Chartered Accountants, LLP (“DNTW”), is no longer registered with the PCAOB and on May 20, 2014 the Securities and Exchange Commission ("SEC”) denied the two partners of DNTW, the privilege of appearing or practicing before the SEC as accountants. Therefore, the Company is no longer allowed to include any audit report issued by DNTW in any filing with the SEC on or after May 20, 2014. SRCO Professional Corporation, Chartered Accountant, has audited the financial statements for the fiscal years ended July 31, 2014 and 2013. Our statement of operations for the cumulative period from April 14, 2010 (Inception) to July 31, 2014 is therefore deemed to be unaudited.

 

 

Item 9.         Changes in and Disagreements With Accountants on Accounting And Financial Disclosure.

 

None.

 

Item 9A.      Controls and Procedures

 

Evaluation of disclosure controls and procedures

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting 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 CEO and CFO concluded that the Company’s disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure, due to the material weaknesses identified below.

 

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.

 

Report of Management on Internal Control over Financial Reporting

 

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.  Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in  Internal Control - Integrated Framework  issued by the Committee of Sponsoring Organizations of the Treadway Commission. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement to the Company's annual or interim financial statements will not be prevented or detected.

 

We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our internal controls over financial reporting as of July 31, 2014. Based on this assessment, management concludes that, as of July 31, 2014, we did not maintain effective controls over the financial reporting control environment. we have identified the following material weaknesses in internal control over financial reporting:

 

●

Segregation of Duties - As a result of limited resources, we did not maintain proper segregation of incompatible duties, namely the lack of an audit committee, an understaffed financial and accounting function, and the need for additional personnel to prepare and analyze financial information in a timely manner and to allow review and on-going monitoring and enhancement of our controls. The effect of the lack of segregation of duties potentially affects multiple processes and procedures.

 

●

Maintenance of Current Accounting Records -We may from time to time fail to maintain our records that in reasonable detail accurately and fairly reflect the transactions of the Company. This weakness specifically affects the payments and purchase cycle and therefore we failed to maintain effective internal controls over the completeness and cut off of accounts payable, expenses and other capital transactions.

 

●	Application of GAAP - We did not maintain effective internal controls relating to the application of generally accepted accounting principles in accounting for transactions in a foreign currency.

 

Because of these material weaknesses, management has concluded that we did not maintain effective internal control over financial reporting as of July 31, 2014. We are in the continuous process of improving our internal control over financial reporting in an effort to eliminate these material weaknesses through improved supervision and training of our staff, but additional effort is needed to fully remedy these deficiencies. Management has engaged a Certified Public Accountant as a consultant to assist with the financial reporting process in an effort to mitigate some of the identified weaknesses. The Company is still in its development stage and intends on hiring the necessary staff to address the weaknesses once revenue has been realized.

  

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.

 

 

Changes in Internal Controls

 

No change in our system of internal control over financial reporting occurred during the fourth quarter of the fiscal year ended July 31, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B.    Other Information

 

None.

 

PART IV

 

Item 15.       Exhibits and Signatures

 

EXHIBITS

 

a) Documents filed as part of this Annual Report

 

1. Consolidated Financial Statements

 

2. Financial Statement Schedules

 

3. Exhibits

 

31.1		Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer
32.1		Section 1350 Certification of Chief Executive Officer and Chief Financial Officer

  

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the city of Las Vegas of Nevada on March 20, 2015.

 

 

	HEALTH ADVANCE INC.
	By:	/s/ Jordan Starkman
		Jordan Starkman
		President and Chief Financial Officer
		(Duly Authorized Officer, Principal Executive
		Officer and Principal Financial Officer)

 

Pursuant to the 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 in the capacity and on the dates indicated.

 

Name		Position		Date
/s/ Jordan Starkman		President, Chief Financial Officer and Director		March 20, 2015
Jordan Starkman		(Principal Executive Officer and Principal Financial Officer)