Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing 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. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
RESULTS OF OPERATIONS
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
YEAR ENDED MARCH 31, 2013 COMPARED TO PERIOD FROM INCEPTION (JANUARY 30, 2012) ENDED MARCH 31, 2012.
Our net loss for the year ended March 31, 2013 was $12,292 compared to a net loss of $4,657 during the period from inception (January 30, 2012) ended March 31, 2012. During the period from inception ended March 31, 2013, the Company has not generated any revenue and we have incurred net losses totaling $16,949.
During the year ended March 31, 2013, we incurred professional fees of $10,941, website expenses of $500, bank fees of $310 and business license and permit expenses of $541 compared to $4,500 professional fees, and bank fees expense of $157 incurred during the period from inception ended March 31, 2012.
LIQUIDITY AND CAPITAL RESOURCES
FISCAL YEAR ENDED MARCH 31, 2013 AND 2012
As of March 31, 2013, our total assets were $29,175 comprised of cash and cash equivalents and our total liabilities were $14,124 comprised of notes payable to related parties and accrued expenses.
As of March 31, 2012, our total assets were $8,443 comprised of cash and cash equivalents and out total liabilities were $8,100 comprised of notes payable to related parties and accrued expenses. Stockholders
equity increased from $343 as of March 31, 2012 to $15,051 as of March 31, 2013.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the year ended March 31, 2013, net cash flows used in operating activities was $11,992 consisting of a net loss of $12,292 and increase in accrued expenses of $300. For the period from inception (January 30, 2012) ended March 31, 2012, net cash flows used in operating activities were $157 consisting of a net loss of $4,657 and increase in accrued expenses of $ 4,500.
Cash Flows from Financing Activities
We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the fiscal year ended March 31, 2013, net cash from financing activities was $32,724 consisting of $27,000 proceeds received from issuances of common stock and $5,724 in loan from a director. For the period from inception (January 30, 2012) ended March 31, 2012, net cash from financing activities was $8,600 consisting of $5,000 of proceeds received from issuances of common stock and $3,600 in loan from a director.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of software; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
6
MATERIAL COMMITMENTS
As of the date of this Annual Report, we do not have any material commitments.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Annual Report, we do not have any offbalance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
GOING CONCERN
The independent auditors' report accompanying our March 31, 2013 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Item 8. Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS
PN MED GROUP INC.
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
MARCH 31, 2013
*
Report of Independent Registered Public Accounting Firm
11
*
Balance Sheets as of March 31, 2013 and 2012
12
*
*
Statement of Operations for the periods ended
*
March 31, 2013 and 2012 and for the period from
*
January 30, 2012 (Date of Inception) to March 31, 2013
13
*
*
Statement of Stockholders
Equity as of March 31, 2013
14
*
*
Statements of Cash Flows for the periods ended
*
March 31, 2013 and 2012 and the period from
*
January 30, 2012 (Date of Inception) to March 31, 2013
15
*
*
Notes to the Financial Statements
16 - 19
Silberstein
Ungar
, PLLC
CPAs and Business Advisors
Phone (248) 203-0080
Fax (248) 281-0940
30600 Telegraph Road, Suite 2175
Bingham Farms, MI 48025-4586
www.sucpas.com
Report of Independent Registered Public Accounting Firm
To the Board of Directors of
PN Med Group Inc.
Santiago, Chile
We have audited the accompanying balance sheets of PN Med Group Inc. (the
Company
) as of March 31, 2013 and 2013, and the related statements of operations, stockholders
equity, and cash flows for the year then ended and the periods from January 30, 2012 (Date of Inception) through March 31, 2012 and 2013. 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 included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company
s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 PN Med Group Inc. as of March 31, 2013 and 2012 and the results of its operations and its cash flows for the year then ended and the periods from January 30, 2012 (Date of Inception) through March 31, 2012 and 2013 in conformity with accounting principles generally accepted in the United States of America.
7
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the financial statements, the Company has limited working capital, has not yet received revenue from sales of products or services, and has incurred losses from operations. These factors raise substantial doubt about the Company
s ability to continue as a going concern. Management
s plans with regard to these matters are described in Note 8. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Silberstein
Ungar
, PLLC
Bingham Farms, Michigan
June 14, 2013
PN MED GROUP INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
AS OF MARCH 31, 2013 AND 2012
|
| |
ASSETS
|
2013
|
2012
|
Current Assets
|
|
|
Cash and cash equivalents
|
$
29,175
|
$
8,443
|
|
|
|
Total Assets
|
$
29,175
|
$
8,443
|
|
|
|
LIABILITIES AND STOCKHOLDERS
EQUITY
|
|
|
Liabilities
|
|
|
Current Liabilities
|
|
|
Accrued expenses
|
$
4,800
|
$
4,500
|
Loans from shareholder
|
9,324
|
3,600
|
|
|
|
Total Liabilities
|
14,124
|
8,100
|
|
|
|
Stockholders
Equity
|
|
|
Common stock, par value $0.001; 75,000,000 shares authorized, 6,350,000 and 5,000,000 shares issued and outstanding, respectively
|
6,350
|
5,000
|
Additional paid in capital
|
25,650
|
0
|
Deficit accumulated during the development stage
|
(16,949)
|
(4,657)
|
Total Stockholders
Equity
|
15,051
|
343
|
|
|
|
Total Liabilities and Stockholders
Equity
|
$
29,175
|
$
8,443
|
See accompanying notes to financial statements.
PN MED GROUP INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2013
FOR THE PERIOD FROM JANUARY 30, 2012 (INCEPTION) TO MARCH 31, 2012
FOR THE PERIOD FROM JANUARY 30, 2012 (INCEPTION) TO MARCH 31, 2013
|
|
| |
|
Year ended March 31, 2013
|
Period from January 30, 2012 (Inception) to March 31, 2012
|
Period from January 30, 2012 (Inception) to March 31, 2013
|
|
|
|
|
REVENUES
|
$
0
|
$
0
|
$
0
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
Professional fees
|
10,941
|
4,500
|
15,441
|
Website expenses
|
500
|
0
|
500
|
Bank fees
|
310
|
157
|
467
|
Business License and permits
|
541
|
0
|
541
|
TOTAL OPERATING EXPENSES
|
12,292
|
4,657
|
16,949
|
|
|
|
|
LOSS FROM OPERATIONS
|
(12,292)
|
(4,657)
|
(16,949)
|
|
|
|
|
PROVISION FOR INCOME TAXES
|
0
|
0
|
0
|
|
|
|
|
NET LOSS
|
$
(12,292)
|
$
(4,657)
|
$
(16,949)
|
|
|
|
|
NET LOSS PER SHARE: BASIC AND DILUTED
|
$
(0.00)
|
$
(0.02)
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED
|
5,602,055
|
241,935
|
|
See accompanying notes to financial statements.
PN MED GROUP INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS
EQUITY
FOR THE PERIOD FROM JANUARY 30, 2012 (INCEPTION) TO MARCH 31, 2013
|
|
|
|
| |
|
Common Stock
|
Additional Paid-in
|
Deficit Accumulated during the Development
|
Total Stockholders
|
|
Shares
|
Amount
|
Capital
|
Stage
|
Equity
|
|
|
|
|
|
|
Inception, January 30, 2012
|
-
|
$
-
|
$
-
|
$
-
|
$
-
|
|
|
|
|
|
|
Shares issued for cash at $0.001 per share
|
5,000,000
|
5,000
|
-
|
-
|
5,000
|
|
|
|
|
|
|
Net loss for the period ended March 31, 2012
|
-
|
-
|
-
|
(4,657)
|
(4,657)
|
|
|
|
|
|
|
Balance, March 31, 2012
|
5,000,000
|
5,000
|
0
|
(4,657)
|
343
|
|
|
|
|
|
|
Shares issued for cash at $0.02 per share
|
1,350,000
|
1,350
|
25,650
|
-
|
27,000
|
|
|
|
|
|
|
Net loss for the year ended March 31, 2013
|
-
|
-
|
-
|
(12,292)
|
(12,292)
|
|
|
|
|
|
|
Balance, March 31, 2013
|
6,350,000
|
$
6,350
|
$
25,650
|
$
(16,949)
|
$
15,051
|
See accompanying notes to financial statements.
PN MED GROUP INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2013
FOR THE PERIOD FROM JANUARY 30, 2012 (INCEPTION) TO MARCH 31, 2012
FOR THE PERIOD FROM JANUARY 30, 2012 (INCEPTION) TO MARCH 31, 2013
|
|
| |
|
Year ended March 31, 2013
|
Period from January 30, 2012 (Inception) to March 31, 2012
|
Period from January 30, 2012 (Inception) to March 31, 2013
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
Net loss for the period
|
$
(12,292)
|
$
(4,657)
|
$
(16,949)
|
Adjustments to reconcile net loss to net cash (used in) operating activities:
|
|
|
|
Changes in assets and liabilities:
|
|
|
|
Increase in accrued expenses
|
300
|
4,500
|
4,800
|
Net Cash Used in Operating Activities
|
(11,992)
|
(157)
|
(12,149)
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
Proceeds from sale of common stock
|
27,000
|
5,000
|
32,000
|
Loans from shareholder
|
5,724
|
3,600
|
9,324
|
Net Cash Provided by Financing Activities
|
32,724
|
8,600
|
41,324
|
|
|
|
|
Net Increase in Cash
|
20,732
|
8,443
|
29,175
|
Cash, beginning of period
|
8,443
|
0
|
0
|
Cash, end of period
|
$
29,175
|
$
8,443
|
$
29,175
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
Interest paid
|
$
0
|
$
0
|
$
0
|
Income taxes paid
|
$
0
|
$
0
|
$
0
|
See accompanying notes to financial statements.
PN MED GROUP INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2013
NOTE 1
ORGANIZATION AND NATURE OF BUSINESS
PN Med Group
Inc. (the "Company" or
PN Med
) was incorporated under the laws of the State of Nevada on
January 30,
2012.
The Company
plans to distribute
medical supplies and equipment to municipalities, hospitals, pharmacies, care centers, and clinics throughout the country of Chile.
NOTE 2
SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Development Stage Company
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development stage companies. A development-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
Accounting Basis
The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (
GAAP
accounting). The Company has adopted a March 31 fiscal year end.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $29,175 and $8,443 of cash as of March 31, 2013 and 2012, respectively.
Fair Value of Financial Instruments
The Company
s financial instruments consist of cash and cash equivalents, accrued expenses and amounts due to a shareholder. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company
s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company
s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of March 31, 2013.
Comprehensive Income
10
The Company has which established standards for reporting and display of comprehensive income, its components and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholders
Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant transactions that are required to be reported in other comprehensive income.
Recent Accounting Pronouncements
PN Med does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company
s results of operations, financial position or cash flow.
NOTE 3
ACCRUED EXPENSES
Accrued expenses at March 31, 2013 and 2012 consisted of amounts owed to the Company
s outside independent auditors for services rendered for period reported on in these financial statements.
NOTE 4
LOAN FROM SHAREHOLDER
A shareholder and officer loaned $3,600 to the Company to open the bank account and help fund operations during the period ended March 31, 2012.
The shareholder loaned an additional $5,724 during the year ended March 31, 2013.
The loans are unsecured, non-interest bearing and due on demand. The balance due to the shareholder and officer was $9,324 and $3,600 as of March 31, 2013 and 2012, respectively.
NOTE 5
CAPITAL STOCK
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
On March 29, 2012, the Company issued 5,000,000 shares of common stock for cash proceeds of $5,000 at $0.001 per share.
The Company sold 1,350,000 shares of common stock during the year ended March 31, 2013 at $0.02 per share for total cash proceeds of $27,000.
There were 6,350,000 and 5,000,000 shares of common stock issued and outstanding as of March 31, 2013 and 2012, respectively.
NOTE 6
COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or personal property. An officer has provided office services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.
NOTE 7
INCOME TAXES
As of March 31, 2013, the Company had net operating loss carry forwards of approximately $16,949 that may be available to reduce future years
taxable income in varying amounts through 2033. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
The provision for Federal income tax consists of the following for the periods ended March 31:
|
| |
|
2013
|
2012
|
Federal income tax benefit attributable to:
|
|
|
Current Operations
|
$ 4,179
|
$ 1,583
|
Less: valuation allowance
|
(4,179)
|
(1,583)
|
Net provision for Federal income taxes
|
$ 0
|
$ 0
|
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of March 31:
|
| |
|
2013
|
2012
|
Deferred tax asset attributable to:
|
|
|
Net operating loss carryover
|
$ 5,762
|
$ 1,583
|
Less: valuation allowance
|
(5,762)
|
(1,583)
|
Net deferred tax asset
|
$ 0
|
$ 0
|
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $16,949 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.
NOTE 8
GOING CONCERN
The accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. However, the Company had no revenues as of March 31, 2013. The Company currently has limited working capital, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.
Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management
s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
NOTE 9
SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company
has analyzed its operations subsequent to March 31, 2013 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.
Item 9A(T). Controls and Procedures
Management
s Report on Disclosure Controls and Procedures
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company
s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. 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. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company
s internal control over financial reporting as of March 31, 2013 using the criteria established in
Internal Control - Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company
s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of March 31, 2013, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
1.
We do not have an Audit Committee
While not being legally obligated to have an audit committee, it is the management
s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company
s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management
s activities.
2.
We did not maintain appropriate cash controls
As of March 31, 2013, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company
s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts.
3.
We did not implement appropriate information technology controls
As at March 31, 2013, the Company retains copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company
s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.
Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company
s internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of March 31, 2013 based on criteria established in Internal Control
Integrated Framework issued by COSO.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of March 31, 2013, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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.