UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

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

 

For the Quarterly Period Ended April 30, 2017

 

or

 

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

 

For the transition period from ______to______.

 

Commission File Number: 333-177122

 

HEALTH ADVANCE INC.

(Exact name of registrant as specified in its Charter)

 

WYOMING		46-0525223
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

685 Citadel Drive East, Suite 290

Colorado Springs, CO 80909

(Address of Principal Executive Offices)(Zip Code)

 

719-466-6699

(Registrants telephone number, including area code)

N/A

(Former name, or former address and former fiscal year if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒   No ☐

 

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  ☒   No  ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer	☐			Accelerated Filer	☐
Non-Accelerated Filer	☐	(Do not check if a smaller reporting company)		Smaller Reporting Company	☒

  

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes  ☐  No   ☒

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock. As of March 16, 2016, there were 90,320,000 shares of the issuer’s common stock issued and outstanding.

 

 

 

 

 

HEALTH ADVANCE INC.

 

FORM 10-Q

 

April 30, 2017

 

INDEX

 

PART I — FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements - Unaudited	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	17
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mine Safety Disclosures	17
Item 5.	Other Information	17
Item 6.	Exhibits	18
SIGNATURE		18

 

 

 

 

 

 

PART I –   FINANCIAL INFORMATION

 

Item 1.

Condensed Financial Statements

 

HEALTH ADVANCE INC.

 

CONDENSED FINANCIAL STATEMENTS

 

April 30, 2017

 

CONTENTS

 

PAGE - 4	CONDENSED BALANCE SHEETS AS AT April 30, 2017 (UNAUDITED) AND AS AT JULY 31, 2016 (AUDITED)
PAGE - 5	CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE MONTHS ENDED April 30, 2017 AND 2016 (UNAUDITED)
PAGE - 6	CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED April 30, 2017 AND 2016 (UNAUDITED)
PAGE - 7	NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

 

 

3

 

 

 

 

HEALTH ADVANCE INC.

CONDENSED BALANCE SHEETS

AS AT April 30, 2017 (UNAUDITED) AND JULY 31, 2016 (AUDITED)

(Expressed in United States Dollars)

 

		April 30,				July 31,
		2017				2016
			$				$
ASSET
License agreement costs, net of accumulated amortization of $10,000 (Note 9)			2,990,000				—
CURRENT ASSET			2,990,000				—
Cash			—				—
TOTAL ASSET			2,990,000				—
CURRENT LIABILITIES
Accounts payable			12,291				57,062
Accrued liabilities			185,080				2,575
Advances from a shareholder (Note 6)			259				94,879
TOTAL LIABILITIES			185,339				154,516

 

 

 

 

HEALTH ADVANCE INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE MONTHS ENDED April 30, 2017 AND 2016 (UNAUDITED)

(Expressed in United States Dollars)  

 

		Three months				Three months
		ended				ended
		April 30,				April 30,
		2017				2016
			$				$
SALES			—				—
COST OF SALES			—				—
GROSS PROFIT			—				—
EXPENSES
Media Services			3430
Professional fees			5,600				5,399
Office and general			430				677
Total expenses			9,460				6,076
Foreign exchange loss			—				—
Loss before income taxes			(9,460	)			(6,076	)
Income taxes			—				—
NET AND COMPREHENSIVE LOSS FOR THE PERIOD			(9,460	)			(6,076	)
Loss per common share, basic and diluted			(0.0006	)			(0.0005	)
Weighted average number of
common stock outstanding, basic and diluted			64,520,000				24,520,000
See accompanying notes

 

 

 

 

5

 

 

 

HEALTH ADVANCE INC.

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED April 30, 2017 AND 2016 (UNAUDITED)

(Expressed in United States Dollars)

 

 

		Three months				Three months
		ended				ended
		April 30,				April 30,
		2017				2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period			(9,460	)			(24,624
Adjustments for non-cash items
Common stock issued for services			—				—
Advancess from a stockholder			259				22,105
Net change in non-cash working capital balances:			—
Accounts payable and Accrued liabilities			—				2,519
Net cash used in operating activities			(9,201	)			—
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock			—				—
Advances from a shareholder			259				15,892
Net cash provided by financing activities			259				15,892
Net decrease in cash during the period			—				—
Cash, beginning of period			—				—
Cash, end of period			—				—
See accompanying notes

 

Supplemental cash flow information [Note 8]

 

  

6

 

 

 

 

HEALTH ADVANCE INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED April 30, 2017 (UNAUDITED)

(Expressed in United States Dollars)

 

1.	NATURE OF OPERATIONS AND ORGANIZATION

 

Health Advance Inc. (the “Company” or “Health Advance”) was incorporated on April 14, 2010 in the State of Wyoming. The Company is an online retailer of home medical products with operations in Canada and the United States of America (“USA”).

  

2.	BASIS OF PRESENTATION

 

The condensed financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the USA for interim financial information and the SEC instructions to Form 10Q. Accordingly, they do not include all of the information and notes to the financial statements required by generally accepted accounting principles for complete financial statements. All adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. For further information, refer the financial statements and notes thereto included in the Company’s annual report on Form 10K for the year ended July 31, 2016.

 

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 come 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.	LOSS PER SHARE

 

The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 260-10 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. There were no potentially dilutive shares outstanding as at April 30, 2017 and July 31, 2016.

 

5.	RECENT ACCOUNTING PRONOUNCEMENTS

 

Recently Issued Accounting Standards

 

In March 2016, the Company adopted the accounting pronouncement issued by the Financial Accounting Standards Board ("FASB") to update guidance on how companies account for certain aspects of share-based payments to employees. This pronouncement is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. This guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled and changes the presentation of excess tax benefits on the statement of cash flows.

The Company adopted these provisions on a prospective basis. In addition, this pronouncement changes guidance on: (a) accounting for forfeitures of share-based awards and (b) employers’ accounting for an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation. The adoption of this pronouncement did not have a material impact on Company’s financial position and/or results of operations.

 

 

7

 

 

 

 

HEALTH ADVANCE INC.

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED April 30, 2017 (UNAUDITED)

(Expressed in United States Dollars)

 

5.	RECENT ACCOUNTING PRONOUNCEMENTS (continued)

 

In February 2016, an accounting pronouncement was issued by the FASB to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to current accounting guidance. This pronouncement is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The adoption is required to be applied on a modified retrospective basis for each prior reporting period presented. The Company has not yet determined the effect that the adoption of this pronouncement may have on its financial position and/or results of operations.

 

On January 1, 2016, the Company adopted the accounting pronouncement issued by the FASB to update the guidance related to the presentation of debt issuance costs. This guidance requires debt issuance costs, related to a recognized debt liability, be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability rather than being presented as an asset. The Company adopted this pronouncement on a retrospective basis, and the adoption did not have a material impact on its financial position and/or results of operations.

 

In November 2015, an accounting pronouncement was issued by the FASB to simplify the presentation of deferred income taxes within the balance sheet. This pronouncement eliminates the requirement that deferred tax assets and liabilities are presented as current or non-current based on the nature of the underlying assets and liabilities. Instead, the pronouncement requires all deferred tax assets and liabilities, including valuation allowances, be classified as non current. This pronouncement is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company intend to adopt this pronouncement on January 1, 2017, and the adoption will not have a material impact on its financial position and/or results of operations.

 

6.	RELATED PARTY TRANSACTIONS AND BALANCES

 

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 or balances not disclosed elsewhere in these financial statements are as follows:

 

Advances from a shareholder of the Company as at April 30, 2017 were $259 and July 31, 2016 were $102,211 and $98,542, respectively. These advances are non-interest bearing, unsecured and have no specific terms of repayment.

 

7.	SHAREHOLDERS’ DEFICIENCY

COMMON STOCK - AUTHORIZED

 

As at April 30, 2017, 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

 

As of April 30, 2017 the Company has 64,520,000 shares of common stock issued and outstanding

and July 31, 2016, the Company had 24,520,000 shares of common stock issued and outstanding.

 

 

8

 

 

 

 

HEALTH ADVANCE INC.

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED April 30, 2017 (UNAUDITED)

(Expressed in United States Dollars)

 

7.	SHAREHOLDERS’ DEFICIENCY (continued)

 

COMMON STOCK – TO BE ISSUED

 

The Company’s 6,790,000 common stock ($67,500) to be issued amounting to $67,500 as at April 30, 2017 and July 31, 2016 consist of the following:

 

In November 2012, the Company agreed to issue 2,000,000 shares of common stock at an issue price of $0.005 per share for a total cash proceeds of $10,000. These shares were issued in December 2016.

 

In December 2012, the Company agreed to issue 1,000,000 shares of common stock valued at $0.01 per share for a total value 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 value 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 cash proceeds 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 cash proceeds of $3,500.

 

In October 2013, the Company agreed to issue 1,600,000 shares of common stock at an issue price of $0.0025 per share for a total cash proceeds of $4,000.

 

In April 2014, the Company agreed to issue 40,000 shares of common stock at an issue price of $0.05 per share for a total cash proceeds of $2,000.

 

In August 2014, the Company agreed to issue 500,000 shares of common stock at an issue price of $0.05 per share for a total cash proceeds of $25,000.

In March 2017, the Company agreed to issue 40,000,000 shares of common stock valued at $0.075 per share for a total value of $3,000,000 for a license agreement with Micro Medtech Limited..  

8.	SUPPLEMENTAL CASH FLOW INFORMATION

 

During the three months ended April 30, 2017, and 2016, there were no interest or taxes paid by the Company.

 

9.	SUBSEQUENT EVENTS

 

The Company’s management has evaluated subsequent events up to June 31, 2017, the date the financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following subsequent events to report.

 

In March 2017, the Company issued 40,000,000 shares of common stock from the Company at an issue price of $0.075 per share, in addition to 40,000,000 warrant options for 40,000,000 shares of common stock from the Company at an issue price of $0.075 per share for a total cash payment of $3,000,000.00 for License Agreement between Company and Micro Medtech Ltd. for product formulations for medical foods known as polyoxyfen and cebidiofen (derived from botanical extract blends containing kava, mitragyna speciosa, and cannabidiol) in patent pending status, which were received on March 7, 2017.

April 30, 2017

(Unaudited)

 

Note 3.            License Agreement Costs, Net

 

License agreement costs, net, consists of:

 

		April 30, 2017				January 31, 2017
40 Million Shares of Company Stock due to Licensor		$	3,000,000				—
Less accumulated amortization			(10,000	)			—
License agreement costs, net		$	2,990,000				—

  

The Company recorded amortization expense of $10,000 for the two months ended April 30 2017 compared to $0 in the three months ended January 31, 2017 (using the straight line method over the remaining term, including option terms, of the Material Agreement (approximately 50 years).

 

 

 

9

 

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

 

Overview

 

Health Advance Inc. (the “Company”) was incorporated on April 14, 2010 in Wyoming. The Company is 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.leadingmedicalproducts.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.

 

From inception to April 30, 2017 the Company incurred a net loss of $185,339.  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. In addition, the Company is also seeking acquisitions within the health space as a means to grow the Company.

 

On February 14, 2014, the Company affected a 10-for-1 forward split of the Company’s issued and outstanding common shares. The Company’s issued and outstanding common shares were therefore increased from 2,452,000 to 24,520,000.  All per share amounts have been restated to reflect this stock split.

 

Plan of Operation

 

The Company was incorporated on April 14, 2010 in Wyoming. The former business office (virtual office) located at 3651 Lindell Road, Suite D#155, Las Vegas, NV, 89103, which has changed to a physical office location 685 Citadel Drive East - Suite 290, Colorado Springs, CO 80909 as result to resolution(s) entered at the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017 (Exhibit 98.1: Section 9).

The Company’s primary telephone number 702-943-0309 has been changed to 719-466-6699 as result to resolution(s) entered by a majority vote from the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017.

The Company’s primary website and email domain name ‘healthadvanceinc.com’ has been changed to ‘hadvinc.com’ as result to resolution(s) entered at the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017 (Exhibit 98.1: Section 17).

The Company’s founder Jordan Starkman, who served the Company as President, Chairman of the Board of Directors, and Director, has be removed and has been replaced by Dr. Muhammad Mukhtar, Ph.D. who will serve the Company as the (Interim) Secretary, (Non-Voting, Interim) Director, Chief Advisor for Control Stock Committee, and (Acting) Chief Executive Officer until July 31, 2017, or until a permanent replacement for Secretary and President of Company is hired, collectively are results to resolution(s) entered at the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017 (Exhibit 98.1: Section 4,5, 6 and Exhibit 99.1). In addition, Mr. Starkman has been removed as Chairman and replaced by Gregory Shusterman, who was appointed as Vice Chairman in April 2017 and has served as ‘Acting Chairman’ since April 19, 2017 as a result to reason specified in Exhibit Y.

Christian Diesveld, who served the Company as a Director, has be removed and has been replaced by Dr. Hauke Kolster, Ph.D.. who will serve the Company as the (Interim) Vice President (Non-Voting, Interim) Director, collectively are results to resolution(s) entered at the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017 (Exhibit 98.1: Section 8).

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.

 

The Company formerly operated as an on-line retailer of home medical products with operations in Canada and the United States, and with administration and infrastructure supported globally. In September 2015, the Company launched a new e-commerce platform, leadingmedicalproducts.com. The site features a new vibrant design with a fresh look, and offers quick and easy access to essential product information that provides a more comprehensive understanding of the Company’s product lines. Our strategy is to attract opportunities in the health care industry through the development and growth of our existing web site. 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.

 

On June 6, 2017 it has been resolved by a majority vote from the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017 that the Company will change its Industry Classification to Research and Development in Biotechnology (541714 ) in efforts to prepare for new business ventures, partnerships, business development as a developer and manufacturer of cost-effective dietary supplements and medical foods from organic sources that contain botanical extract blends as an alternative to synthetic drugs and herbal supplements, in efforts to treat pain, cancer, opiates/alcohol withdrawal, epilepsy, PTSD, and other severe illnesses.

 

 

10

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

 

In the fiscal year of 2017, the Company plans to build an experienced and highly credentialed executive management and advisory team to support successful results for market research, clinical and regulatory studies, and business development to manufacturer, license, and distribute cost effective, organic solutions for pain, nutrition, and severe illness through the use of uniquely developed medical foods and dietary supplements. In addition, the Company’s growth plan for fiscal year includes partnerships with universities, hospitals, research organizations, and media relations specialists to raise awareness on the Health Advance products currently in development, which the Company anticipates to introduce to the general marketplace shortly after end of the current fiscal year. A market research study and survey to 3,700 pain medicine specialists in North America was conducted between March and May 2017 by Green Health Advocates, a media relations consultant hired by a stockholder of the Company in effects to raise awareness for Health Advance’s potential product formulations that were acquired by the Company in March 2017.

On October 13, 2016, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Hantian Labs Limited., a corporation existing under the laws of the United Kingdom (“Hantian Labs”), to acquire all of the issued and outstanding shares of Hantian Labs. Pursuant to the Share Exchange Agreement, the Company will acquire from Hantian Labs one hundred percent (100%) interest in Hantian Labs and its controlling subsidiaries. In consideration for the Share Exchange Agreement, the Company shall issue to Hantian Labs 1.5 common shares of the Company for each share of Hantian Labs issued and outstanding at the time of closing. As a closing condition to the Share Exchange Agreement, Hantian Labs is required to complete a financing of a minimum of $250,000 for the marketing of Hantian Labs’ product line. This closing condition has not been met and it was resolved by majority vote at the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017 to terminate the Share Exchange Agreement (Exhibit X: Section 15).On April 30, 2017, the Company entered into a nonbinding letter of intent to acquire certain proprietary product formulations for the manufacture of generic drugs. The Company expects to enter into a definitive agreement by the end of 2016.

Before close of the fiscal year of 2017 the Company plans to file SEC Forms S-3 and S-6 registration statements to secure payments for related investments to the company and inform investors about major changes in the company. In addition, it was resolved by majority vote at the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017 that the Company would submit application to trade on OTQCB exchange.

  

The Company expects to start preparing for an online and retail marketing campaigns in the Americas and Europe with sales and marketing affiliates for organic dietary supplements, and herbal foods and beverages derived from non-medicinal botanical extract blends, while awaiting the completed Product Development Report and results from FDA regulatory and clinical testing (e.g.; meeting Generally Recognized As Safe federal regulations) on the two patent-pending product formulations for medical foods acquired in March 2017.

 

The Company expects that these new medicinal and non-medicinal product launches will be outlined and planned within the 2017 fiscal year and the beginning of fiscal year 2018, once our short-term financing is completed.  During the next 24 months following our 2017 year-end, the Company plans to work with our manufacturing and distribution partners to increase sales revenue from approved pharmaceutical and nutritional products and raise awareness of ‘Stay Klean’ brand and slogan. Together with our domestic and foreign government affiliates, sales affiliates, and marketing partners the Company intends to position itself for a merger or acquisition with a mid-cap or large-cap company end of fiscal year of 2020. 

 

11

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

 Between February and June 6, 2017 the Company has received $23,390 in form of a loan for operating expenses (e.g.; professional services, website development, communications, office space and equipment; etc.) from a stockholder who hired Green Health Advocates in 2017 for an additional $35,835 for market research studies, digital media service, video production, and related media services to raise awareness for the Company. and the year following our July 31, 2017 year-end in order to maintain our business operations. The Company will attempt to complete a financing for a minimum of $3,961,680 within the 12-month period following the Company’s 2017 year-end.  Any capital raised will be through either a product sales, product licensing, private placement, or a convertible debenture and will result in the issuance of common shares from the Company’s authorized capital.

 

 

12

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

 

Marketing & Business Development		$	221,000
Professional Services		$	560,000
Salaries and Independent Contractor Fees		$	1,154,000
Advertising and Marketing		$	325,000
Research & Development		$	872,000
Logistics & Inventory		$	871,000
Office Space Related Facilities		$	33,600
Working Capital (e.g.; Business Travel, Events, Cash On-hand; etc.)		$	250,000
Total Expenses		$	3,961,680

 

The above represents 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, 2017 year-end.

  

If we are able to complete a financing through a private offering for a minimum of $3,961,680 within the 12 month period following our July 31, 2017 year-end, we expect to broaden our market research, clinical, and regulatory studies and business development with the healthcare marketplace and resellers of nutritional products, in addition to increasing the investment into agricultural material needed to manufacturer goods more cost effectively, which would allow the Company to remain competitive among its relevant industries.

  

 

 

13

 

 

 

 

Results of Operations

 

For the three months ended April 30, 2017 and 2016

 

For the three months ended April 30, 2017 and 2016 did not have any sales. The Company is currently working with Micro Medtech Ltd.; who has been conducting market research studies and surveys on and offline with pain medicine specialist in North America and is working with research organizations to development medical foods, nutritional beverages, and dietary supplements that are derived from botanical extract blends containing kava, mitragyna speciosa, or cannabidiol that will meet local and/or federal regulations to sufficiently generate sales revenue from product sales and licensing.
 

Operating expenses for the three months ended April 30, 2017 were $14,117, as compared to $6,796 the three months ended October 30, 2016.

 

During the three months ended April 30, 2017, we recorded $12,300, as professional fees following written notification of past and present fees due to auditor (three months ended April 30, 2016, $3,835) and $167 for office and general according to billing statement from virtual office provider in Las Vegas (three months ended April 30, 2016, $2,934).

 

During the three months ended April 30, 2017 and 2016, we had no provision for income taxes due to the net operating losses incurred.

The Company has hired two welly-credentialed independent contractors as (non-voting) Directors and (Acting) Officers of the Company on an interim basis in hopes to turnaround less-than marginal productivity of the Company’s goals and establish more lucrative business relationships.

Dr. Muhammad Mukhtar Ph.D., the newly appointed Secretary and Chief Board Adviser of the Company has an employment history and biography as follows:

Mukhtar has served as a professor at the American University of Ras Al Khaimah (AURAK), United Arab Emirates. Before his arrival at AURAK, he served as Vice Chancellor/Professor of three Universities in Pakistan concomitantly – a unique honor for any academic leader. Through his wise academic leadership and innovative governance, he converted a regional higher education institution in Pakistan to one of the top-ranked in the country. Mukhtar received his Master and MPhil in the field of Biochemistry from Pakistan and his Ph.D. in biosciences from the Drexel University of Philadelphia, USA, and also completed a Graduate Certificate in Research Management from Thomas Jefferson University in Philadelphia, USA. He served in various academic/administrative positions in the USA on an outstanding scientist (O-1) visa.

 

Mukhtar is an avid researcher also. His laboratory developed an in-vitro model of the human blood-brain barrier to study viral neuropathogenesis. Dr. Mukhtar as Principal or Co-Investigator has received several awards from organizations including American Diabetes Association, American Society for Microbiology, Diabetes Trust Foundation, US National Institutes of Health, Pfizer Pharmaceuticals (NYSE: PFE), and the Higher Education Commission of Pakistan. Human blood-brain barrier model developed in his laboratory is extensively used to understand ferrying of viruses into the brain and finding cures for neurological ailments.

 

Dr. Mukhtar holds specialized Certificates in Public Health and Bioinformatics. Committed to the role of technology in biomedical research, he serves as managing editor of Frontiers in Bioscience and is on the editorial board of several research journals. He feels pride in mentoring researchers, scientists, teachers and administrators and committed professionals aspiring to excel in their practical life. He has several research publications, including peer-reviewed research, review articles, invited articles, book chapters, commissioned articles and critiques to his credit. A book describing accomplishments of Dr. Mukhtar’s educational leadership has been published in Urdu language entitled “Hayat Zauq e Safar Kay Siwa Kuch Aur Naheen” and it’s English Version “The Making of a Best National University” is in progress.

Dr. Hauke Kolster Ph.D., the newly appointed Vice President of the Company has an employment history and biography as follows:

Kolster is an innovative scientist and engineer with outstanding quantitative and analytical skills. Technically versed professional with progressive experience in coordinating projects as well as working in cross-functional teams in multiple disciplines. Goal oriented individual who excels in problem-solving and managing complex projects with strict timelines and multiple stakeholders.

 

Since 2012 Kolster has owned and operated Windmiller Kolster Scientific in California offering scientific and research consulting, technology and software for the neuroimaging sector. Supported leading neuroscientific research groups at top domestic and international universities. Previously Kolster served as a Research Assistant Professor at KU Leuven Medical School (Leuven) and Research Assistant Professor at Department of Neuroscience since 2007.

 

Dr. Kolster's professional training includes research fellowship program at Harvard Medical School, in addition to working as a senior post-doctoral associate at Massachusetts Institute of Technology at Cambridge.

 

Kolster studied and graduated at LMU Munich, Munich for his Ph.D. and Bonn University (Bonn, Germany) for a master’s degree. in physics.

 

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

 

Liquidity and Capital Resources

 

As of April 30, 2017, the Company had a cash balance and a working capital deficiency of $172,789.

 

The Company is currently seeking funding for our continued operations.  The Company intends to raise a minimum of $3,961,680 and a maximum of $10,000,000 in order to continue the awareness and branding campaign for ‘Stay Klean’ (staycleanmed.org). 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 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 shareholders. There are no agreements with any parties at this point in time for additional funding; however, we are in discussions with potential accredited investors, private financiers, government funding sources in the United States, Canada, Australia, Europe, and United Arab Emirates.

 

The Company cannot assure investors that adequate revenues will be generated and there are no formal commitments with the Company, its shareholders, or Board of Directors to finance the Company in the state of an emergency or financial crisis. However, the success of the Company’s operations is dependent on attaining adequate revenue. In the absence of our projected revenues, the Company may be unable to proceed with our plan of operations or we may require financing to achieve our profit, revenue, and growth goals.

 

 

 

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

 

Recently Issued Accounting Standards

 

As explained in note 5 to the condensed financial statements, the Company evaluated all recent accounting pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company.

 

Off-Balance Sheet Arrangements

 

The Company does not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts.

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

Not required for Smaller Reporting Companies.

 

Item 4.

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 principal executive officer and principal financial officer of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were not effective as of April 30, 2017 to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

Changes in internal controls

 

No change in our system of internal control over financial reporting occurred during the nine months ended April 30, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

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PART II - OTHER INFORMATION

 

Item 1.

Legal Proceedings

 

The Company currently not involved in any litigation that is believed could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

The Company has received a default judgment order against the Company in favor of Anslow & Jaclin in the amount of $8,737.00 plus interest for previous legal fees. The Company is will hire legal counsel to prepare and file an Interpleader Action with Wyoming Superior Court by or before end of current fiscal year for common stock shares of the Company and resolution to cure court judgment in favor of the dissolved entity due to the fact that Anslow and Jaclin LLP was dissolved before June 13, 2017 and is not longer active.

The Company filed a civil lawsuit against former CEO/Chairman Jordan Starkman et al, CV-132-S on August 4, 2017 at U.S. District Court of Wyoming and was granted a court order for a Temporary Restraining Order and Declaratory Relief on August 7, 2017.

 

Item 1A.

Risk Factors

 

Not required for Smaller Reporting Companies.

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

No recent sales of equity securities.

 

Item 3.

Defaults Upon Senior Securities

 

None

 

Item 4.

Mine Safety Disclosures

 

Not Applicable

 

Item 5.

Other Information

 

None

 

Item 6.

Exhibits

 

31.1	Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1	Board of Directors and Shareholder - Control Stock Committee Minutes of Meeting, June 6, 2017
99.2	Leave of Absence Notice, April 19, 2017

 

FORWARD-LOOKING STATEMENTS : 

Pursuant with the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995, this Current Report on Form 10-Q contains forward-looking statements about the Company's business affairs affiliate partners for research and development, marketing, production, and sale of medical equipment and nutritional and pharmaceutics products, in additional to pertinent intellectual properties. These statements involve risks and uncertainties, and actual results may differ materially from the Company's expectations. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, whether the Company will be able to complete and fulfill actions specified within agreements with affiliated parties. Other risks and uncertainties that can affect the Company's performance are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report on Form 10-K for the year ended July 31, 2016 which is on file with the Securities and Exchange Commission (SEC) and are available on the SEC’s website at www.sec.gov and on the Company websites (www.hadvinc.com). All information provided in this Current Report on Form 10-q is as of June 13, 2017, and the Company undertakes no duty to update this information unless required by law.

 

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S IGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

	Health Advance, Inc.
Dated: August 10, 2017	By:	/s/  Gregory Shusterman
		Gregory Shusterman
		Chairman, Board of Directors

 

 

 

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