UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
|
þ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended January
31, 2015
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.) |
3651 Lindell Rd. Suite D155
Las Vegas, NV, 89103
(Address of Principal Executive Offices)(Zip
Code)
702-943-0309
(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 þ
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 þ
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 |
þ |
Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes ¨
No þ
Indicate the number of shares
outstanding of each of the issuer’s classes of common stock. As of March 23, 2015, there were 24,520,000 shares of the
issuer’s common stock issued and outstanding.
HEALTH ADVANCE INC.
FORM 10-Q
January 31, 2015
INDEX
PART I – FINANCIAL INFORMATION
Item 1. |
Condensed Financial Statements |
HEALTH ADVANCE INC.
CONDENSED FINANCIAL STATEMENTS
January 31, 2015
CONTENTS
PAGE-4 |
CONDENSED BALANCE SHEETS AS AT JANUARY 31, 2015 (UNAUDITED) AND AS AT JULY 31, 2014 (AUDITED) |
|
|
PAGE-5 & 6 |
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2015 AND 2014 (UNAUDITED) |
|
|
PAGE-7 |
CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JANUARY 31, 2015 AND 2014 (UNAUDITED) |
|
|
PAGE-8 |
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) |
HEALTH ADVANCE INC.
CONDENSED BALANCE SHEETS
AS AT JANUARY 31, 2015 (UNAUDITED) AND JULY 31, 2014 (AUDITED)
(Expressed in United States Dollars)
| |
January 31, | |
July 31, |
| |
2015 | |
2014 |
| |
$ | |
$ |
ASSET | |
| |
|
CURRENT ASSET | |
| |
|
Cash | |
| — | | |
| — | |
TOTAL ASSET | |
| — | | |
| — | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | | |
| | |
CURRENT LIABILITIES | |
| | | |
| | |
Bank indebtedness | |
| — | | |
| 28 | |
Accounts payable and accrued liabilities | |
| 47,246 | | |
| 46,178 | |
Advances from a shareholder (Note 4) | |
| 66,090 | | |
| 59,135 | |
TOTAL LIABILITIES | |
| 113,336 | | |
| 105,341 | |
| |
| | | |
| | |
STOCKHOLDERS' DEFICIT | |
| | | |
| | |
Authorized: | |
| | | |
| | |
500,000,000 common stock, par value $0.001 | |
| | | |
| | |
Issued and outstanding: (Note 7) | |
| | | |
| | |
24,520,000 common stock as at January 31, 2015 (July 31, 2014: 24,520,000 common stock) | |
| 24,520 | | |
| 24,520 | |
Additional paid-in capital | |
| 180,080 | | |
| 168,080 | |
Common stocks to be issued (Note 7) | |
| 67,500 | | |
| 42,500 | |
Deficit accumulated during the exploration stage | |
| (385,436 | ) | |
| (340,441 | ) |
TOTAL STOCKHOLDERS' DEFICIT | |
| (113,336 | ) | |
| (105,341 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| — | | |
| — | |
See accompanying notes
HEALTH ADVANCE INC.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED JANUARY 31, 2015 AND 2014 (UNAUDITED)
(Expressed in United States Dollars)
| |
Three | |
Three |
| |
months ended | |
months ended |
| |
January 31, | |
January 31, |
| |
2015 | |
2014 |
| |
$ | |
$ |
| |
| | | |
| | |
SALES | |
| — | | |
| — | |
| |
| | | |
| | |
COST OF SALES | |
| — | | |
| — | |
| |
| | | |
| | |
GROSS PROFIT | |
| — | | |
| — | |
| |
| | | |
| | |
EXPENSES | |
| | | |
| | |
Professional fees | |
| 9,977 | | |
| 5,755 | |
Office and general | |
| 1,369 | | |
| 1,222 | |
Rent and occupancy | |
| 3,600 | | |
| 3,600 | |
Consulting and management fees | |
| 6,000 | | |
| 6,000 | |
Total expenses | |
| 20,946 | | |
| 16,577 | |
| |
| | | |
| | |
Foreign exchange loss | |
| — | | |
| 44 | |
| |
| | | |
| | |
Loss before income taxes | |
| (20,946 | ) | |
| (16,621 | ) |
| |
| | | |
| | |
Income taxes | |
| — | | |
| — | |
| |
| | | |
| | |
NET AND COMPREHENSIVE LOSS FOR THE PERIOD | |
| (20,946 | ) | |
| (16,621 | ) |
| |
| | | |
| | |
Loss per common share, basic and diluted | |
| (0.0009 | ) | |
| (0.0007 | ) |
| |
| | | |
| | |
Weighted average number of | |
| | | |
| | |
common stock outstanding, basic and diluted | |
| 24,520,000 | | |
| 24,520,000 | |
See accompanying notes
HEALTH ADVANCE INC.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE SIX MONTHS ENDED JANUARY 31, 2015 AND 2014 (UNAUDITED)
(Expressed in United States Dollars)
| |
Six | |
Six |
| |
months ended | |
months ended |
| |
January 31, | |
January 31, |
| |
2015 | |
2014 |
| |
$ | |
$ |
| |
| | | |
| | |
SALES | |
| — | | |
| — | |
| |
| | | |
| | |
COST OF SALES | |
| — | | |
| — | |
| |
| | | |
| | |
GROSS PROFIT | |
| — | | |
| — | |
| |
| | | |
| | |
EXPENSES | |
| | | |
| | |
Professional fees | |
| 22,366 | | |
| 11,585 | |
Office and general | |
| 3,178 | | |
| 4,968 | |
Rent and occupancy | |
| 7,200 | | |
| 7,200 | |
Consulting and management fees | |
| 12,000 | | |
| 12,000 | |
Total expenses | |
| 44,744 | | |
| 35,753 | |
| |
| | | |
| | |
Foreign exchange loss | |
| 251 | | |
| 209 | |
| |
| | | |
| | |
Loss before income taxes | |
| (44,995 | ) | |
| (35,962 | ) |
| |
| | | |
| | |
Income taxes | |
| — | | |
| — | |
| |
| | | |
| | |
NET AND COMPREHENSIVE LOSS
FOR THE PERIOD | |
| (44,995 | ) | |
| (35,962 | ) |
| |
| | | |
| | |
Loss per common share, basic and diluted | |
| (0.0018 | ) | |
| (0.0015 | ) |
| |
| | | |
| | |
Weighted average number of | |
| | | |
| | |
common stock outstanding, basic
and diluted | |
| 24,520,000 | | |
| 24,520,000 | |
See accompanying notes
HEALTH ADVANCE INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JANUARY 31, 2015 AND 2014 (UNAUDITED)
(Expressed in United States Dollars)
| |
Six | |
Six |
| |
months ended | |
months ended |
| |
January 31, | |
January 31, |
| |
2015 | |
2014 |
| |
$ | |
$ |
OPERATING ACTIVITIES | |
| | | |
| | |
Net loss for the period | |
| (44,995 | ) | |
| (35,962 | ) |
Adjustments for non-cash
items | |
| | | |
| | |
In-kind contribution of services | |
| 12,000 | | |
| 12,000 | |
| |
| | | |
| | |
Net change in non-cash working
capital balances: | |
| | | |
| | |
Accounts payable and accrued liabilities | |
| 1,068 | | |
| 5,361 | |
Net cash used in operating
activities | |
| (31,927 | ) | |
| (18,601 | ) |
| |
| | | |
| | |
FINANCING ACTIVITIES | |
| | | |
| | |
Bank indebtedness | |
| (28 | ) | |
| | |
Proceeds from issuance of common stock | |
| 25,000 | | |
| 4,000 | |
Advances from a shareholder | |
| 6,955 | | |
| 14,286 | |
Net cash provided by financing
activities | |
| 31,927 | | |
| 18,286 | |
| |
| | | |
| | |
Net decrease in cash during the period | |
| — | | |
| (315 | ) |
Cash, beginning of period | |
| — | | |
| 526 | |
Cash, end of period | |
| — | | |
| 211 | |
See accompanying
notes
HEALTH ADVANCE INC.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JANUARY 31, 2015 (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 a development stage company
and is an online retailer of home medical products with operations in Canada and the United States of America (“USA”).
The condensed financial statements have
been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim
financial information and the SEC instructions to Form 10Q. Accordingly, they do not include all of the information and footnotes
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 to the financial statements
and footnotes thereto included in the Company’s annual report on Form 10K for the year ended July 31, 2014.
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. |
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 $3,600 and $7,200 ($1,200 per month) each for the three and six months ended January 31, 2015 and 2014 to a shareholder and director in respect of rent and occupancy. The Company also paid $600 and $1,200 ($200 per month) each for the three months and six months ended January 31, 2015 and 2014 in respect of certain administrative services included in office and general. In addition, the Company has charged $6,000 and $12,000 ($2,000 per month) each for the three and six months ended January 31, 2015 and 2014 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 January 31, 2015 were $66,090 (July 31, 2014 - $59,135). These advances are non-interest bearing, unsecured and with no specific terms of repayment. |
5. |
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.
In June 2014, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-10, “Development Stage Entities”.
The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC 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 in this update are applied retrospectively. The early adoption of ASU 2014-10 is permitted which removed the development
stage entity financial reporting requirements from the Company.
The Company has adopted the Financial
Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 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 stockholders by the weighted average 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. Basic and diluted losses per share were the same at the reporting dates as there were no common stock equivalents outstanding
at January 31, 2015 and 2014.
COMMON STOCK - AUTHORIZED
As at January 31, 2015, the Company
has 500,000,000 authorized shares of common stock with a par value of $0.001.
COMMON STOCK - ISSUED AND OUTSTANDING
Company’s outstanding 24,520,000
shares of common stock ($24,520) as at January 31, 2015 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.
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.
7. |
STOCKHOLDERS’ DEFICIT (continued) |
COMMON STOCK – TO BE ISSUED
Company’s common stock to be issued
amounting to $67,500 as at January 31, 2015 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 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 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 at an issue price of $0.0025 per share.
In April 2014, the Company received
$2,000 in exchange of 40,000 shares at an issue price of $0.05 per share.
In August 2014, the Company agreed to
issue 500,000 shares at an issue price of $0.05 per share for a total of $25,000.
OTHER INFORMATION
On February 14, 2013, the Company effected
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.
8. |
SUPPLEMENTAL CASH FLOW INFORMATION |
During the three months ended January 31, 2015, and 2014,
there were no interest or taxes paid by the Company.
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.
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.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.
From inception to January 31, 2015 we
have incurred a net loss of $385,436. 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.
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
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 customers’ 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 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 generate operating revenues during fiscal years 2015-2016.
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) |
We plan to complete a financing in the
fiscal years 2015-2016. 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 fiscal years 2015-2016. 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 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 e-commerce 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 2015 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 2015.
In addition to attempting to achieve
supply chain optimization by the beginning of fiscal year 2016, 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 2016, 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.
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) |
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 |
|
Legal/Accounting |
|
$ |
15,000 |
|
Computer hardware and software systems |
|
$ |
10,000 |
|
Advertising and Marketing |
|
$ |
130,000 |
|
General and administrative |
|
$ |
10,000 |
|
Salaries and Customer Service |
|
$ |
25,000 |
|
Telephone |
|
$ |
1,000 |
|
Travel |
|
$ |
4,000 |
|
Total Expenses |
|
$ |
200,000 |
|
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, 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 three and six
months ended January 31, 2015 and 2014
For the three and six months ended January
31, 2015 and 2014 we did not have any sales. The Company’s on-line web site www.healthadvancemd.com encountered a virus/worm
and subsequently underwent extensive repairs that accounted for the Company’s lack of sales. In addition, the Company has
not been successful in completing the required financing to begin its advertising campaign. We expect to generate increased sales
once our advertising campaign begins.
Operating expenses for the three and
six months ended January 31, 2015 were $20,946 and $44,744 and $16,577 and $35,753 for the three and six months ended January 31,
2014, respectively. The operating expenses were primarily attributed to professional fees, consulting fees, web design fees, rent
and other general overhead. The increase in overall expenses for the three and six months ended January 31, 2015 compared to January
31, 2014, are mainly due to increase in professional fees attributable to services from a consultant amounting to $8,900 recognized
during the six months ended January 31, 2015. During the three and six months ended January 31, 2015 the director’s contributed
services totalled $6,000 and $12,000. These services were included in the additional paid-in capital. During the three and six
months ended January 31, 2015 we operated from a premises leased by a shareholder. The costs of this premises and other general
and administrative expenses paid on our behalf during the three and six months ended January 31, 2015 totalled $4,200 and $8,400,
respectively. These expenses are payable to the shareholder and included in current liabilities.
Net loss for the three and six months
ended January 31, 2015 were $20,946 and $44,995 and $16,621 and $35,962 for the three and six months ended January 31, 2014, respectively.
The increase in loss is attributable to the increase in professional fees as explained in the above paragraph.
During the three and six months ended
January 31, 2015 and 2014, we had no provision for income taxes due to the net operating losses incurred.
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) |
Liquidity and Capital Resources
As of January 31, 2015, we had nil cash balance and a working
capital deficit of $113,336.
In August 2014, the Company agreed to
issue 500,000 common stock valued at $0.05 per share against cash proceeds of $25,000.
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 are planning 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 may 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 and accounting and general and 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.
Recent Accounting Pronouncements
The Company’s management has evaluated
all the recently issued accounting pronouncements through the filing date of these financial statements and does not believe that
they will have a material effect on the Company’s financial position and results of operations except the one stated below.
In June 2014, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-10, “Development Stage Entities”.
The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC 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 in this update are applied retrospectively. The early adoption of ASU 2014-10 is permitted which removed the development
stage entity financial reporting requirements from the Company.
Off-Balance Sheet Arrangements
We do 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 |
Disclosure of 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.
In the course of management's assessment,
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. |
Item 4. |
Controls and Procedures (continued) |
Because of these material weaknesses,
management has concluded that we did not maintain effective internal control over financial reporting as of January 31, 2015. 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 quarterly 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 Securities and Exchange Commission that permit the Company to provide only management's report in this quarterly report.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal
control over financial reporting that occurred during the quarter covered by this quarterly report on Form 10-Q that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. |
Legal Proceedings |
We are currently not involved in any
litigation that we believe 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.
Not required for Smaller Reporting Companies.
PART II - OTHER INFORMATION
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
In August 2014, the Company agreed to issue 500,000 common
stock valued at $0.05 per share against cash proceeds of $25,000.
The above proceeds will be used to fund operations as discussed
in our Plan of Operations.
Item 3. |
Defaults Upon Senior Securities |
None
Item 4. |
Mine Safety Disclosures |
Not Applicable
Item 5. |
Other Information |
None
SIGNATURES
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. |
|
|
|
By: |
/s/ Jordan Starkman |
|
|
Jordan Starkman |
|
|
President, Chief Executive Officer,
Chief Financial Officer
(Duly Authorized Officer,
Principal Executive Officer and
Principal Financial Officer) |
|
|
|
|
Dated: March
23, 2015 |
Health Advance, Inc. 10-Q
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Jordan Starkman, certify that:
1. |
I have reviewed this Form 10-Q of Health Advance Inc.; |
|
|
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
|
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have: |
|
|
|
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
|
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|
|
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|
|
|
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
|
|
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|
|
|
Date: March 23, 2015 |
By: |
/s/ Jordan
Starkman |
|
|
|
Jordan Starkman |
|
|
President and Chief Executive Officer, Chief |
|
|
Financial Officer |
|
|
Health Advance, Inc. 10-K
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with this Quarterly Report of
Health Advance Inc. (the “Company”), on Form 10-Q for the period ended January 31, 2015, as filed with the U.S.
Securities and Exchange Commission on the date hereof, I, Jordan Starkman, President and Chief Excecutive Office and Chief Financial
Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of
the Sarbanes-Oxley Act of 2002, that:
| (1) | Such Quarterly Report on Form 10-Q for the
period ended January 31, 2015, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of
1934; and |
| (2) | The information contained in such Quarterly
Report on Form 10-Q for the period ended January 31, 2015, fairly presents, in all material respects, the financial condition and
results of operations of the Company. |
Date: March 23, 2015 |
By: |
/s/ Jordan
Starkman |
|
|
|
Jordan Starkman |
|
|
President and Chief Executive Officer, Chief |
|
|
Financial Officer |
|
|
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