We plan to rely on a combination of copyright, trade secret and trademark laws, and non-disclosure and other contractual arrangements to protect our proprietary rights moving forward. There can be no assurance that the steps we plan to take in the future to protect our future proprietary rights, however, will be adequate to deter misappropriation of proprietary information, and we may not be able to detect unauthorized use and take appropriate steps to enforce our intellectual property rights. Although we believe that our websites and services will not infringe upon the intellectual property rights of others and that we have all rights necessary to utilize our intellectual property, we are subject to the risk of claims alleging infringement of third-party intellectual property rights. Any such claims could require us to spend significant sums on litigation, pay damages, delay our products and software, develop non-infringing intellectual property or acquire licenses to intellectual property that are the subject of any such infringement. Therefore, such claims could have a material adverse effect on our planned business, operating results and financial condition.
From Nurses Lounge business viewpoint, the nursing profession is broken down into the individual registered nurses (RNs) and the professions stake holder organizations consisting of nursing schools, associations and employers.
Throughout their career, nurses need to be connected with numerous organizations in order to simply stay up to date with basic continuing education requirements which they need to meet state guidelines and/or employers qualification to maintain employment.
As such, we believe that there is an opportunity to unite the industry on one simple to use communication platform that can upgrade, simplify and reduce the cost of communications used by stakeholder organizations while providing nurses quick access to the information important to their careers. The market for nurses is growing in the United States and we believe that our website has a significant number of potential users based on the following:
Due to the above factors, the Company’s Nurses Lounge professional Network has a significant market for their services and that even with significant competition for recruitment and job placement services as described below in the risk factor entitled “
WE WILL FACE SIGNIFICANT COMPETITION FROM MONSTER.COM and CAREERBUILDER, NICHE HEALTHCARE SITES SUCH AS NURSE.COM AND HEALTHECAREERS AS WELL AS JOB AGGREGATOR SITES SUCH AS INDEED.COM AND OTHER INTERNET JOB POSTING WEBSITES”.
“, there will be room in the global marketplace for website posting, recruiting and job placement services for the Company’s niche healthcare related websites.
Revenue for the three months ended July 31, 2016 and 2015 was $6,023 and $15,115, respectively. The lower revenue for the first quarter in 2016 was primarily due to not having the cash on hand to hire salespeople. As a result the total number of sales in 1
st
fiscal quarter of 2015 was greater than in same period this year.
Revenue for the six months ended July 31, 2016 and 2015 was $19,468 and $37,550, respectively. The lower revenue for the first half of 2016 was primarily due to not having the cash on hand to hire salespeople. As a result the total number of sales in the first half of 2015 was greater than in same period this year.
Cost of revenues were $500 and $5,088 for the three months ended July 31, 2016 and 2015, respectively. The changes reflect the swings in costs as the Company promotes its nurse portal and the variation in those costs as the Company has yet to enter a period where the operations in sales and cost of sales are relatively constant. Until the Company enters a reasonably constant operating period, the costs will vary widely.
Cost of revenues were $1,500 and $7,433 for the six months ended July 31, 2016 and 2015, respectfully. The changes reflect the swings in costs as the Company promotes its nurse portal and the variation in those costs as the Company has yet to enter a period where the operations in sales and cost of sales are relatively constant. Until the Company enters a reasonably constant operating period, the costs will vary widely.
Selling expenses were $1,225 and $1,704 for the three months ended July 31, 2016 and 2015. This decrease was due to the President doing more of the sales presentations rather than paying rather than paying others to do this work.
Selling expenses were $25,422 and $39,026 for the three months ended July 31, 2016 and 2015. This decrease was due to the President doing more of the sales presentations rather than paying rather than paying others to do this work.
Operating expenses for the three months ended July 31, 2016 and 2015 were $44,203 and $70,069 respectively.
Operating expenses for the six months ended July 31, 2016 and 2015 were $122,385 and $142,105 respectively.
Other expense reflects interest on loans which was $26,560 and $129,535for the three months ended July 31, 2016 and 2015, respectively. Also, there were other expenses relating to the cost of our convertible debt being a loss on derivatives of $0 and $59,015 for the three months ended July 31, 2016 and 2015 respectively.
Other expense reflects interest on loans which was $91,127 and $220,261 for the six months ended July 31, 2016 and 2015, respectively. Also, there were other expenses relating to the cost of our convertible debt being a loss on derivatives of $220,460 and $178,190 for the six months ended July 31, 2016 and 2015 respectively.
Liquidity and Capital Resources
As of July 31, 2016, the Company had negative working capital of $1,727,362, comprised of current assets of $2,446 and current liabilities of $1,729,808.
Net cash used in operations for the three months ended July 31, 2016 was $103,567 compared to $137,907 for the six months ended July 31, 2015.
Cash used for purchase of fixed assets was $0 for the six months ended July 31, 2016 and 2015.
Cash provided by financing activities for the three months ended July 31, 2016 was $104,958 compared to $99,721 for the same period in 2015.
The Company has borrowed funds and/or sold stock for working capital. These transactions are detailed in the section “Recent Sales of Unregistered Securities”.
Currently the Company does not have sufficient cash reserves or revenues to meet its contractual obligations under its outstanding notes payable and to pay its ongoing monthly expenses, which the Company anticipates totals approximately $300,000 over the next 12 months. The Company has been able to continue operating to date largely from loans made by its shareholders and other debt financings to date. The Company is currently looking at both short-term and more permanent financing opportunities, including debt or equity funding, bridge or short term loans, and/or traditional bank funding, but we have not decided on any specific path moving forward. Unless we have raised sufficient funding to pay our ongoing expenses associated with being a public company, and we have sufficient funds to support our planned operations, the Company can provide no assurances that it will be able to meet its short and long term liquidity needs. The Company continues to generate revenue from the Nurses Lounge business, which the Company believes will increase to the point where the Company can cover its basis monthly obligations, of which there can be no assurance.
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Our financial statements contain information expressing substantial doubt about our ability to continue as a going concern. The consolidated financial statements have been prepared “
assuming that we will continue as a going concern,
” which contemplates that we satisfy our liabilities and commitments in the ordinary course of business.
We do not currently have any additional formal commitments or identified sources of additional capital from third parties or from our officers, director or significant shareholders. We can provide no assurance that additional financing will be available on favorable terms, if at all. If we are not able to raise the capital necessary to continue our business operations, we may be forced to abandon or curtail our business plan.
In the future, we may be required to seek additional capital by selling additional debt or equity securities, selling assets, if any, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then shareholders. We provide no assurance that financing will be available in amounts or on terms acceptable to us, or at all.