ITEM
1. BUSINESS
General
Health
Advance Inc. (the “Company”) was 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 President and sole director.
On
February 14, 2013, the Company effected a 10-for-1 forward split of
the Company’s issued and outstanding shares of common stock,
par value $0.001 (the “Common Stock”). The
Company’s issued and outstanding shares of Common Stock were
therefore increased from 2,452,000 to 24,520,000. All
per share amounts have been restated to reflect this stock
split.
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.
The
Company has recognized the sales and profit potential of
medical/surgical supplies as a necessity item primarily due to the
aging population. 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.
We do
not consider ourselves a blank check company, as we have a specific
business plan and have moved forward with our business operations.
Specifically we, while in the development stage, are proceeding
with our business plan by constructing and implementing an
automated website. We have taken certain steps in furtherance of
this business plan including establishing the website and the
establishment of accounts with wholesale distributors of medical
supplies. We do not have any plan, arrangement, or understanding to
engage in a merger or acquisition with any other
entity.
The
Company operates under the corporate website at
www.healthadvanceinc.com and its on-line retailer website at
www.leadingmedicalproducts.com.
The
Company believes the outlook for the health care industry in
general is positive. Over the next several years, we believe we
will benefit significantly from certain favorable demographic and
industry trends, including:
●
the
rising healthcare and prescription drug needs of the ageing
Canadian and US population;
●
a
heightened focus on health and wellness by the baby boomer
generation and the increasing demand for lifestyle
drugs;
●
increased
investment in research and development by pharmaceutical and
medical supply companies resulting in new and more effective
products; and
●
the
fragmented nature of the Canadian and US health care retailing
marketplace providing tremendous consolidation
opportunities.
Demographic
trends indicate that our markets are growing as an aging U.S.
population is increasingly using healthcare
services. Between 2000 and 2010 the population aged
45-64 grew at a rate of 31.55. The large growth in this
age group is primarily due to the aging of the Baby Boom
population. In 2011, the first members of the Baby Boom generation
will reach age 65, and the Baby Boom will represent 25 percent of
the total population (in the middle series). The last of the
Baby-Boom population will reach age 65 in the year 2029. By that
time, the Baby-Boom population is projected to represent about 16
percent of the total population. Between 2009 and 2019, the 45 and
older population is expected to grow by approximately
15%. Between 2009 and 2029, this age group is expected
to grow by approximately 30%.
This
compares with expected U.S. population growth rates of
approximately 10% between 2009 and 2019 and approximately 20%
between 2009 and 2029. Furthermore, it is estimated that
70 million people will be 65 or older by 2030 – nearly
doubling the 34 million today. (The foregoing statistics are
extracted from the 2011 U, S. Census.)
The
growing senior population demands more medical attention and ten
out of the twenty most rapidly growing industries in the U.S. are
in the health care sector. As the population ages an
increased number of seniors are taking a more active role in
managing their health care and as they age in to their golden
years, their adult children and family member often become key
healthcare support systems. There is a growing trend
toward care at home and empowering seniors to be more
independent. Today the market for senior care is highly
fragmented between online and offline delivery. Nursing
home operators, insurance companies and doctors are trying to
reduce the visits of elder patients to high cost
facilities.
Strategy
Our
business strategy is designed to drive sales growth, maximize gross
margin dollars and operating cash flow, capitalize on cost
reduction opportunities and build customer loyalty, which we
believe will result in the Company being a leading home healthcare
provider. The company will rely on the dedication of its
knowledgeable staff for the successful implementation of its
business strategy. Key elements of this strategy
include:
Diverse Product Selection
We
carry a vast number of brand named products that are well
recognized by our customers. These products will be well
priced value products which are used on a regular basis by our
customers.
Strong Customer Service
We
believe the best customer is a happy customer and through third
parties and directly, we provide a range of services to educate and
tailor support to each senior customer.
Health Advance’s Position in the Health Care
Industry
Favorable
industry trends, such as those described above, provide the Company
with continued opportunities to capitalize on its strengths in
providing high quality health care services and building trust with
its customers while at the same time educating the customer. The
Company intends to strengthen its leadership position in this high
growth category by improving operations, enhancing the quality of
healthcare services provided to its customers and cultivating a
professional environment which the Company believes attracts
superior health care staff. A key element of this strategy is
increased investment in technology to support the growing demand
for health care services and reduce the administrative burden on
staff, enabling them to dedicate more time to customer care. These
initiatives will best position the Company to maximize profits and
customer retention. The Company also intends to build market share
in the health care category by continuing to offer the added
convenience of expedited home delivery.
Driving Sales and Profitability
The
Company intends to improve profitability by refining its
merchandising mix through the introduction of new product
categories and the tactical use of private label products. The
focus on an improved product offering is intended to increase
customer satisfaction, enhancing the attractiveness of Health
Advance web experience as a destination for purchases of all health
care needs. Simplifying e-store activities are also key
elements of driving retail sales and profitability.
Marketplace
The US Industry
Market
National healthcare spending will reach over $4.3 trillion by 2018,
up from $1.42 trillion in 2001 and accounting for 20.3% of GDP
according to the Centers for Medicare and Medicaid Services
(CMS).
Currently,
more than 130 million Americans live with a chronic condition,
including Alzheimer’s disease, arthritis, cancer,
cardiovascular disease, chronic obstructive lung disease, and
diabetes. By 2020, about 157 million Americans will be affected by
chronic illness, according to the US Department of Health and Human
Services.
First
Research estimates the number of Americans over 65 will double from
34 million to 62 million between 2000 and 2025.
Currently, 90 million Americans live with chronic diseases.
The research firm Rand estimates the number of Americans with two
or more chronic conditions will increase from 60 to 81 million
between the years 2000 and 2020.
Health
Advance expects to see continued growth in the health care market
driven by advances in medical technology, the growing trend toward
shorter hospital stays and an ageing population. The Company
believes as the baby boomer population ages, the already
flourishing medical supply industry will experience a 20-year
explosion in growth. The Company believes that it will be well
positioned to participate in the future growth opportunities
available in the home health care market.
Industry Trends
Over
the next several years, Health Advance expects to benefit
significantly from certain favorable demographic and industry
trends, including:
●
The
rising healthcare and prescription drug needs of the ageing
population
●
A
heightened focus on health and wellness by the baby boomers
generation and the increasing demand for lifestyle drugs:
This
segment of U.S. and Canadian society is also placing a greater
emphasis on prevention and early diagnosis of medical conditions
and on the purchase of self-care products.
Governmental Regulations
We are
not subject to any local, state, federal and foreign governmental
laws and regulations applicable to the distribution and resale of
products. All the products marketed through Health Advance are
developed and meet US specifications and stringent criteria by the
US Federal Drug and Administration bodies, as well as Medicare and
Medicaid US government social security operations.
Canadian Competition
We face
competition from many retailers in the home healthcare and
prescription drug business as the sale of these products is not
restricted to pharmacy outlets. While the Canadian drug-retailing
sector continues to be dominated by groups or chains and
independents, the competitive environment has changed significantly
in recent years with many new entrants targeting price sensitive
consumers. The percentage of pharmacy outlets operated by
non-traditional competitors, such as mass merchandisers and
supermarkets, has increased over the past three years as they added
pharmacy departments to their stores.
The
Company’s competitors in the industry include independent
operators, buying/banner groups such as Shoppers Drug Mart Home
Health Care, IDA, Guardian, Pharma Plus, mass merchandisers such as
Wal-Mart and Zellers, and large supermarket chains with
prescription dispensing such as Loblaws, Sobey’s and Real
Canadian Superstore.
We
believe we will be well positioned to compete against many drug
store chains, as well as supermarkets, mass merchandisers and
independent drug stores by concentrating on providing high levels
of professional service and a diverse product
selection. The Company believes that consumers will pay
for its value-added services and will be attracted to its large
selection of home health care products and home delivery
infrastructure.
US Competition
The
distribution and manufacture of healthcare supplies and equipment
is highly competitive. Many of the healthcare
distribution products we sell are available to our customers from a
number of other suppliers. In addition, our competitors
could obtain exclusive rights from manufacturers to market
particular products. Manufacturers also could seek to
sell directly to end-users, and thereby eliminate or reduce our
role and that of other distributors.
In
North America, we compete with distributors, as well as several
manufacturers primarily on the basis of price, breadth of product
line, customer service and value-added products and services. Our
primary competitors in the sale of medical products are the General
Medical division of McKesson Corp., PSS World Medical, Inc. and the
Allegiance division of Cardinal Health, Inc., which are national
distributors.
Significant
price reductions by our competitors could result in a similar
reduction in our prices. Any of these competitive
pressures may materially adversely affect our operating
results.
Brick
and mortar senior specialty stores - Generally speaking senior
supply brick and mortar retail stores focus on high-end expensive
equipment. Retails stores catering to seniors also
provide very little price comparison or depth of
product. They tend to focus on durable medical equipment
items from one or two wholesalers and tend to focus on products
that are covered by Medicare.
Large
Chains - Increasingly with Walgreens, CVS, and Walmart are entering
the smaller ticket item Durable Medical Equipment and Products
areas, but their brand and product selection at any one store is
limited. Many seniors in many States do not live near
major cities and don’t have easy access to retail stores for
their medical needs. With very little
visibility consumers are turning to the internet for their home
medical supplies.
Senior
Websites - The biggest advantage derived by seniors, their care
givers and family from using the internet is price comparison,
product selection and reach (i.e. access to seniors who are not
able to get to or drive to a retail location nearby). Today
there are numerous companies on the web catering to the senior
market. They fall or position themselves into four
areas:
●
Durable Medical
Product Companies who cover a wide range of products and
predominately are resellers.
●
Lifestyle
Companies who position themselves as a place to purchase luxury
Senior care products
●
Specialized web
and TV direct response business sites specialize in certain areas
such as Diabetes Care or Wheelchair/Power Chair
mobility
●
Content companies
– that provide knowledge, content and care. Companies such as
agingcare.com
Growth Markets
Respiratory Diseases
According
to COPD International, over 16 million people in the U.S. have
respiratory diseases, including chronic obstructive lung disease,
asthma, and chronic bronchitis. In 2002, these diseases had a total
estimated cost of over $32.1 billion. In 2001, the NHBLI reports
12.1 million adults 25 and older were diagnosed with these diseases
and as many as 14 million remain undiagnosed. These ailments
require frequent treatment with oral medications and/or aerosol
medications, which require a compressor or atomizing device during
preparation.
Diabetes
Diabetes
is the seventh leading cause of death among Americans, accounts for
$98 billion in medical costs and lost productivity each year,
according to the Centers for Disease Control and Prevention
(cdc.org). In recent years, cases of type 2 (“adult
onset”) diabetes have been on the rise in the United States;
it is now considered a national epidemic. We intend to launch an
aggressive campaign to build up this sector of our
business.
Mastectomy Supplies
Mastectomy
supplies typically generate substantial revenues and high gross
margins for home health care providers. Mastectomy products include
items such as the prosthesis and special bras, sleep and swimwear.
According to the National Institute of Health, breast cancer
treatment costs nearly $7 billion.
Regular
screening mammographies and self-examinations can result in
increased early detection and treatment. With improved diagnostic
and treatment technologies, survival rates are increasing,
resulting in a rising number of post-mastectomy consumers for
longer repeat purchase periods.
Ostomy Products
An
ostomy is a surgically created opening in the body, which allows
body fluids or excrement to escape into a collection
device. Product focus areas including two piece,
drainable pouches, cohesive seals, skin barrier protective
products, irrigation products, tapes, adhesives and deodorants and
accessories. Ostomy and Incontinence products market is
expected to reach $11.2 billion by 2017, according to Global
Industry Analysts.
Incontinence & Urological
The
larger consumer base for adult incontinence, combined with this
growth, has created opportunities for new products in the segment
that respond to three major requirements—comfort, discretion
and ease of use. As sufferers of incontinence seek more active
lifestyles, they are demanding products that can work with them as
they go about their daily lives.
Durable Medical Equipment
To
address the growing senior market, our online site,
Leadingmedicalproducts, carries a full spectrum of durable medical
equipment, including:
Bath
related Products key products, include: bidets, portable showers,
wheel chair showers, bath traction, bidet accessories, inflatable
bidets, inflatable commodes, bath in a bag, high-end bidet system
for toilets, and hemorrhoid toilet supports systems.
Bed and
Sleeping aids key products, include: bed rails, wedge pillows,
mattress protectors, folding bed boards, air mattress overlays, bed
protection, incontinence bed products, bed rails, and a range of
beds for seniors
Bariatric
key products include: obesity aids, bariatric aids,
bariatric box-springs, bariatric ring cushions, bariatric home
equipment, and extra large blood pressure cuffs.
Power Mobility Sales
As the
population ages, people’s ability to walk and move around can
be diminished, creating increased demand for power mobility
equipment, such as power wheelchairs and scooter.
Operations
Product Sourcing
As
sales increase, we believe that we will be in a position to
negotiate large discounts from its suppliers indicating
manufacturer confidence in our company. We will also
source products from FDA approved manufacturers in China for
private label purposes. We are also developing direct from
manufacturer sourcing programs.
If our
supplier is no longer carrying a given product: we may
suppress the product altogether. We may keep the product
on as a means to attract customers who may be interested in a
discontinued product and then we up-sell them to the latest product
from the same manufacturer. We have found that in many
cases it is good to keep even discontinued older models active on
our site. We also learn which products have been
discontinued where there is demand and that may result in us
considering finding or re developing such product direct from
MFG.
We plan
to carry a wide selection of products for post-operative and
healthcare, and ranging from the following:
Aids To
Daily Living, Ambulatory Products, Bath Safety, Bed Accessories,
Catheters, Core Wound Care, Diabetic, Diagnostic equipment, Enteral
Nutrition-Feeding, Home Diagnostics, Incontinence, Lift Chairs /
Geri Chairs, IV Supplies, Needles / Syringes, Orthopedics, Ostomy,
Pain Management, Patient Lifts & Acc, Personal Protection /
Gloves, Professional Use and Diagnostics, Respiratory, Scooters
& Accessories, Seating / Cushions, Specialty Medical Equipment
& Accessories, Tracheostomy Care, Urologicals /
Collection Device, Specialty Wound Care, Wheelchairs Accessories,
and Womens-Infant Products.
Inventory
Currently,
we are working on a cash basis with our suppliers and we have
multiple suppliers to facilitate our purchases, therefore we do not
have any formal agreements with our suppliers. Each
supplier will handle the shipping of our product once the order is
received. Our suppliers carry in excess of 10,000
products and with the drop-ship arrangements we will be able to
operate more efficiently, and easily update and change our product
mix based on changes in online demand for our products without
having to financial risk of carrying inventory. Currently we have
purchase accounts set up with Invacare, Briggs Healthcare and
Complete Medical Supplies. As our operations increase we intend to
formalize relationships with additional suppliers and will attempt
to set up net 30-day terms with most suppliers.
System Management
We
currently offer about 3,900 products through our website. In
partnership with various vendors we plan to add another 6,000
products over the next 12 months. To optimize and keep
current the pricing and product details we are running a routine
database extraction mapping and rationalizing program outlined in
some detail below.
We do
not have any formal agreements in place with our suppliers.
Currently, we have accounts set up with multiple wholesale
distributors enabling us to make purchases with them. Since there
are various vendors that we can make purchases from, we do not
believe it is necessary to formalize any long-term contracts with
any particular vendor.
We map
the Leadingmedicalproducts Website to our preferred suppliers
products’ database that contain a total of more than 10,000
unique products with all the latest pricing. This
database is updated monthly by the supplier. Our
programs extract the latest pricing and flag which products have
been discontinued.
During
our weekly product and pricing reviews we make decisions based on
our database scan of our vendors systems. Each situation
is unique and we assess the best strategy in terms of merchandising
optimization. Scenarios that we evaluate and decision we
make, include the following:
Optimizing Margins and Pricing
As a
discounter we will need to make at least 23 % gross margin on any
order after paying back the supplier and the paying other
transaction costs. We use a rules based system to track
and optimize profits and margins. We create and model
numerous profitability scenarios daily by product, brand, region
and inventory.
New
Product Uploads: Our multi-vendor database is designed
to correctly manage wholesalers data feeds to our database and
shopping cart template, as well as upload data files and images
feeds from third party FTP sites. These business rules
enable us to categorize product correctly, guaranteeing that all
products and images are properly visible and place correctly, and
key word search terms are added on a timely basis to optimize
search engine marketing.
Website Daily Maintenance & Support
We
outsource our Website’s daily maintenance including new
product uploading, shipping code management and updates from
various vendors, management of our Access database, daily website
HTML support and various updates and edits to the front-end of the
website as needed.
Website Product Management
To
streamline operations we have a strategic partner responsible for
uploading data files and image feeds manually and from third party
FTP sites to the Leadingmedicalproducts website. Their
responsibilities include categorizing product correctly,
guaranteeing that all products and images are properly visible and
located in correct sub-categories on our website, making sure that
the correct key word search terms are added in our shopping cart
for each product, and matching correct shipping code and rates
provided by different vendor.
Customer Service
There
is a knowledge gap and fear today as elder citizens and their
families fend for themselves through a range of medical
complications. This provides an opportunity for a
trusted knowledge service provider who will take the time to listen
and solve problems specific to each customer’s unique product
needs and concerns. Many medical needs for senior
citizens are chronic, and life-long but are not life
threatening. This creates a long term annuity business
opportunity.
Customer Inquiry Management
We plan
to establish an operating team to handle inbound customer calls in
the US and Canada during the working hours from 8-8 pm
Pacific. We will begin extended hours and provide
support service for International inquiries in the second half of
our operating year once we develop quality level standards that are
consistent across multiple markets. We also plan
to launch a live 24-hour nursing service hotline and 24-hour
global customers handling by phone, email and chat within the first
six months of operations once funding has been
obtained.
●
Level
1 - Simple questions that can be answered on the spot – i.e.
order status, delivery costs, etc.
●
Level
2 - More complex (Needs Analysis) questions – that require
research with the wholesaler about availability, color, dimensions
etc
●
Level
3 - Product inquiries (Problem Solving) that for items we do not
carry on our site, but may be able to source. This requires
significant research and may or may not be worth the investment.
Within one-hour from receiving customer call, we will complete
research from various vendors if needed, confirm product
availability and verify and product questions from the prospective
customer
Customer - Privacy and Security
Health
Advance has created this privacy statement in order to demonstrate
our firm commitment to privacy. The following discloses our
information gathering and dissemination practices for this web
site.
We do
not sell customer e-mail address or related information to third
parties and unless customers join our mailing list they will not
receive advertising e-mails from us. We track IP addresses for
security reasons to discourage fraudulent activity attempts. By
doing this we are making our customer shopping experience more safe
and secure.
Our
site uses cookies to keep track of customers shopping cart for
multiple purchases while our customers are shopping with us. We do
not require our customers to open an account with us in order to
shop so each purchase session usually means you may need to
re-enter your information.
Our
site's registration form requires users to give us contact
information, like their name and email address, and unique
identifiers. We use customer contact information from the
registration form to send the user information about purchases that
have been processed. The customer's contact information is also
used to contact the visitor when necessary if they have subscribed
to the mail list. Users may opt-out of receiving future mailings by
choosing to unsubscribe.
This
site may contain links to other sites. We are not responsible for
the privacy practices or the content of such web
sites.
Order Fulfillment
Our
order fulfillment is handling systematically when we are working
with vendors whose systems can integrate with
Leadingmedicalproducts. However, there are a number of
product vendors and wholesalers with whom we have not integrated
our systems.
Currently,
management will process any order received. The order
fulfillment process entails, checking and monitor for incoming
orders (during US business Hours), verifying product inventory
availability by calling wholesalers and checking their online
catalogue and handling any clarifications with customer before
charging their credit card.
Returns
We have
a general set of standards we use to manage our returns
process. Returns are accepted for the full product
credit if received at our vendors warehouse within 30 days form the
date of purchase. After 30 days, a minimum restocking fee of
15% will be applied to all returns. Merchandise returns are
not accepted after 60 days from the date of purchase.
Shipping cost refunds will not include reimbursing of the original
shipping fees. The return process begins by calling our
1-800-854-7970 number or sending an email to
info@healthadvanceinc.com. Return without an authorized
number or an expired authorization number will not be
accepted. Return merchandise must be in the same unit of
measure as originally purchased. Refunds will not be granted for
merchandise unsuitable for resale.
Sterile
items, incontinence, underwear, etc and product that are made
unsuitable for resale once opened are not returnable. Defective
merchandise will be repaired or replaced based on the
manufacturer’s policy. Our close-out and special
orders are not returnable.
Shipping
We will
have different drop-ship arrangements with each
supplier. Generally we will allow each of our suppliers
to decide which shipping company to use for a particular
shipment. For domestic shipment orders our
suppliers ship via Fedex, UPS Ground or United States Postal
Service Priority Mail depending on the size and weight of the
order. Small orders generally ship Priority Mail. Large
orders generally ship by Fedex. Very small orders, at our
discretion, may be sent via First Class Mail with a reduced
shipping and handling charge.
Health
Advance offers “auto-ship” on frequently consumed items
and we currently have an auto-ship program running for Incontinence
products. At this time we do not offer free shipping as
part of a plan to be as upfront as possible about our pricing while
many companies build the shipping price into their products while
supposedly offering free shipping. We would like to
offer the lowest possible product price therefore we charge
separately for shipping so the customer knows the exact cost of the
product and the exact cost of the shipping.
International Shipments
Shipping
charges for international orders vary greatly. For
international shipping we have requested that customers email us
with the items they are interested in buying with their address and
the destination country. We email back international customers with
information on ordering, including shipping and handling
charges.
The
Leadingmedicalproducts website is also planning to partner with
Bongo International Parcel and mail forwarding to service our
international customers. Bongo International provides
its customers with their very own US address (not a P.O. Box). Once
customers have a US address, they will be able to make purchases at
our website as well as other US based online retailers. Bongo
receives customer orders and logs them into their online system
where they are consolidated with other orders. This
process saves international customers up to 82% off typical
international shipping rates.
Payment Handling
We
accept payments today on a cash and carry basis that means we do
not accept or process Medicare or Medicaid payments. For
our website business, Health Advance is setting up a merchant
account and processes American Express, Visa, MasterCard, and
Discover through the merchant service provider Merchant Warehouse,
Inc., and has set up a Paypal account.
Warranties
We act
as a reseller and as such our product liability is mitigated
through the warranty and liability coverage provided by the product
manufacturers and distributors we work with. Each of our
supplier and manufacturers who sell on our site provide a minimum
of a one-year warranty on the products that we sell to protect the
consumer from product defects. Health Advance will be an
authorized dealer for all of the home medical equipment we sell.
This means our customers can buy with knowing that the
manufacturers provide their manufacturer’s warranty behind
all the products we sell. Customers receive full
warranties from the manufacturers when a customer purchases a
product from Health Advance.
Typically
the product manufacturers offer one-year warranty and product
coverage parts & labor on any internal-wear of components &
control-panel components. Any other product defects are
addressed on an as-is basis. Customers can call our Toll-Free
telephone number and we will direct them to the needed manufacturer
to resolve their product warranty claims within the first
year. After the first year we direct our customers
directly to the manufacturers.
At this
time we do not sell or offer any extended product warranties on any
product we sell. These programs may exist with
individual suppliers and from time to time we investigate this
option for a customer.
Marketing and Sales
Marketing and Brand Recognition
Strategic
communications are central to building and reinforcing the Health
Advance brand. The Health Advance advertising, marketing and public
relations strategy are expected to be established by the
Company’s management and, where appropriate, implemented with
the support of industry professionals. The Company’s
marketing communications strategy will focus on both brand
awareness as well as more traditional product/price advertising.
Brand awareness advertising will focus on the Company’s
health care services and private label products and is used to
communicate to consumers that Health Advance is a market leader in
terms of understanding consumer needs and bringing innovative
products and services to market.
Market Segments
We have
two distinct market channel segments: B2B –
hospitals, elderly care facilities, hospitals, nursing facilities,
clinics, schools, and private business practices. B2C - nurse
practitioners, adult children of senior citizens and increasingly
the senior citizens themselves.
Internet Sales and Home Delivery
Health
Advance believes it can position itself to capitalize on e-commerce
opportunities through its user friendly, state of the art website
with the added benefit of the next day home delivery
infrastructure. Health Advance’s e-commerce
initiative will encompasses a dynamic web site configured to
provide a comprehensive shopping experience for both professionals
and customers. The web site is designed utilizing the latest in
technology web software and high-end graphics providing pictures
and descriptions of all items available for
sale.
Professionals
will be able to either make purchases at a wholesale level or refer
clients to make their own purchases. Health Advance will offer
“auto-ship” on frequently consumed items.
We are
also developing targeted marketing tie-ins with content providers
to create and distribute co-produced content for blog spots,
videos, webinars and internet direct response
Infomercials. We also advertising on major search
engines, affiliate markets and link exchanges, and social media
sites that reach our target audiences. We are also
increasingly using comparison shopping sites such as Amazon,
Shopzilla, Nextag, and Shopping.com.
Sales Force
Health
Advance will implement a strong sales force to call on our B2B
channels. B2B – hospitals, elderly care facilities,
hospitals, nursing facilities, clinics, schools, and private
business practices. We believe success can be attained
through an aggressive promotional campaign tailored to the medical
profession. Fast delivery, great prices, and
professional customer service will be our focus.
Sales
reps will handle inbound calls to establish initial contact,
qualify the consumer, identify the need and close the sale.
Aggressive contact management efforts, outbound mailings and
outbound phone calls by sales reps on active leads and established
customers results in re-orders, cross selling opportunities and
higher conversion rates than traditional mail-order
businesses.
Telemarketing
Health
Advance will also use telemarketing to reach out to its B2C
customers and generate repeat sales within each market
segment. We are in the process of launching a number of
outreach marketing programs targeting nurse practitioners, adult
children of senior citizens and increasingly the senior citizens
themselves.
Web Site
We are
looking at 6 approaches to the overall marketing. Health
Advances’ first priority to drive web traffic organically
through search engine optimization, online PR and social networking
campaigns and sustained initiative. We will also
evaluate the value of making key word purchases when we run
campaign for a specific line of products. Thirdly, we
will evaluate and test the return on investment from both direct
email marketing and affiliate marketing.
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Search
Engine Optimization
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Online
PR – blogging and other online events and media
|
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Social
Networking
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Direct
- email marketing
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Media
buys – keyword
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Affiliate
marketing
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Along
with other sales and marketing channels, successful search engine
optimization is a key approach to drive web traffic and improve
conversion for our web based property
Leadingmedicalproducts.
Target
the right search terms and phrases that are getting typed into
search engines when consumers and professionals are looking for
products that we carry. The strategy we are employing is a niche
targeted marketing model. This requires a niche
marketing approach where we focus in on a number of verticals and
invest in marketing and driving traffic to those specific product
lines.
We will
link our web pages together so the search engine spiders can
navigate easily through our website. Key word anchor text linking
helps search engine spiders understand what we are offering from
our website and will give you the advantage in ranking in natural
search results. Keyword anchor text linking will be used as one of
the methods of improving search engine optimization.
We have
a consultant working with us on a range of online PR initiatives
including writing producing, news articles, blogs, forums and press
releases that highlight new product developments across the range
of products line we carry. Online PR is another avenue
for sending highly targeted visitors directly to our site and
compliment our search engine optimization strategy.
Employees
As of
July 31, 2016, we had two part-time consultants to the
Company.
ITEM 1A. RISK FACTORS
Much of the information included in this annual report includes or
is based upon estimates, projections or other “forward
looking statements”. Such forward looking statements include
any projections and estimates made by us and our management in
connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect our current judgment
regarding the direction of our business, actual results will almost
always vary, sometimes materially, from any estimates, predictions,
projections, assumptions or other future performance suggested
herein.
Such estimates, projections or other “forward looking
statements” involve various risks and uncertainties as
outlined below. We caution the reader that important factors in
some cases have affected and, in the future, could materially
affect actual results and cause actual results to differ materially
from the results expressed in any such estimates, projections or
other “forward looking statements”.
We have a limited operating history that you can use to evaluate
us, and the likelihood of our success must be considered in light
of the problems, expenses, difficulties, complications and delays
frequently encountered by a small developing company.
We were
incorporated in Wyoming in April 14, 2010. We have no significant
financial resources and nominal revenues to date. The
likelihood of our success must be considered in light of the
problems, expenses, difficulties, complications and delays
frequently encountered by a small developing company starting a new
business enterprise and the highly competitive environment in which
we will operate. Since we have a limited operating history, we
cannot assure you that our business will be profitable or that we
will ever generate sufficient revenues to meet our expenses and
support our anticipated activities.
We will require financing to achieve our current business strategy
and our inability to obtain such financing could prohibit us from
executing our business plan and cause us to slow down our expansion
of operations.
We will
need to raise additional funds through public or private debt or
sale of equity to achieve our current business strategy. Such
financing may not be available when needed. Even if such financing
is available, it may be on terms that are materially adverse to
your interests with respect to dilution of book value, dividend
preferences, liquidation preferences, or other terms. Our capital
requirements to implement our business strategy will be
approximately $500,000. Moreover, in addition to monies needed to
continue operations over the next twelve months, we anticipate
requiring additional funds in order to implement our plan of
operations. No assurance can be given that such funds will be
available or, if available, will be on commercially reasonable
terms satisfactory to us. There can be no assurance that we will be
able to obtain financing if and when it is needed on terms we deem
acceptable.
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.
Our auditor has expressed substantial doubt as to our ability to
continue as a going concern.
Based
on our financial history since inception, our auditor has expressed
substantial doubt as to our ability to continue as a going concern.
During the year ended July 31, 2016 we have incurred a net loss of
$29,503 and have an accumulated deficit of $437,495as of July 31,
2016. If we cannot generate sufficient revenues from our services,
we may have to delay the implementation of our business
plan.
Our future success is dependent, in part, on the performance and
continued service of Jordan Starkman, our sole officer and
director. Without his continued service, we may be forced to
interrupt or eventually cease our operations.
We are
presently dependent to a great extent upon the experience,
abilities and continued services of Jordan Starkman, our
Company’s Officer and Director. We currently do not have an
employment agreement with Mr. Starkman. The loss of his services
could have a material adverse effect on our business, financial
condition or results of operation.
Our sole officer has a full time job which may interfere with his
responsibilities to us.
Jordan
Starkman, our sole officer and director and only employee will not
be in a position to devote a substantial amount of his time to our
company. Mr. Starkman believes that he can perform his
duties sufficiently on a part time basis. It is possible that our
plan of operations may be materially delayed to his limited work
schedule with us.
We are selling our products in a highly competitive market and we
are unsure as to whether there will be any consumer demand for our
products.
We
compete with companies that are larger and more capitalized than we
are. Our competitors may be able to seize the same market
opportunities that we are targeting. These competitors, either
alone or with collaborative partners, may succeed in developing
business models that are more effective or have greater market
success than our own. The Company is especially susceptible to
larger manufacturers that invest more money in marketing. Moreover,
the market for our products is large but highly competitive. There
is little or no hard data that substantiates the demand for our
products or how this demand will be segmented. It is possible that
there will be low consumer demand for our products, or that
interest in our products could decline or die out, which would
cause us to be unable to sustain our operations. The
availability of health care supplies at lower or more competitive
prices may cause potential customers to purchase products elsewhere
which would negatively impact our business.
The ability to successfully deploy our business model is heavily
dependent upon economic conditions in the United States and
Canada.
The
ability to successfully deploy our business model is heavily
dependent upon the general state of the US and Canadian economy. We
cannot assure you that favorable conditions will exist in the
future. A general economic recession in the United States and
Canada could have a serious adverse economic impact on us and our
ability to obtain funding and generate projected
revenues.
The healthcare industry is experiencing changes that could
adversely affect our business.
The
healthcare industry is highly regulated and subject to changing
political, economic and regulatory influences. In recent
years, the healthcare industry has undergone significant change
driven by various efforts to reduce costs, including the reduction
of spending budgets by government and private insurance programs,
such as Medicare, Medicaid and corporate health insurance plans;
pressures relating to potential healthcare reform; trends toward
managed care; consolidation of healthcare distribution companies;
consolidation of healthcare manufacturers; collective purchasing
arrangements and consolidation among office-based healthcare
practitioners; and changes in reimbursements to
customers. Both our own profit margins and the profit
margins of our customers may be adversely affected by laws and
regulations reducing reimbursement rates for pharmaceuticals and/or
medical treatments or services or changing the methodology by which
reimbursement levels are determined. If we are unable to
react effectively to these and other changes in the healthcare
industry, our operating results could be adversely
affected. In addition, the enactment of any significant
healthcare reforms could have a material adverse effect on our
business.
Expansion of group purchasing organizations (“GPO”) or
hospital purchasing power and the multi-tiered costing structure
may place us at a competitive disadvantage.
The
medical-products industry is subject to a multi-tiered costing
structure, which can vary by manufacturer and/or product. Under
this structure, certain institutions are eligible for favorable
pricing of medical products. The multi-tiered costing structure
continues to expand as many large integrated healthcare providers
and others with significant purchasing power, such as GPOs, demand
more favorable pricing terms. This may threaten our ability to
compete effectively, which could negatively impact our results of
operations. Although we are seeking to obtain similar terms from
manufacturers and obtain access to lower prices demanded by GPO
contracts or other contracts, we cannot assure such terms will be
obtained or contracts will be executed.
Because substantially all of the products that we intend to
distribute will not be manufactured by us, we will be dependent
upon third parties for the manufacture and supply of substantially
all of our products.
We will
obtain substantially all of our products from third-party
suppliers. We do not expect to enter into long- term contracts
with our suppliers. Therefore, suppliers may not provide the
products we need in the quantities we request. Because
we will not control the actual production of the products we intend
to sell, we may be subject to delays caused by interruption in
production based on conditions outside of our
control. In the event that any of our intended
third-party suppliers were to become unable or unwilling to
continue to provide the products in required volumes, we would need
to identify and obtain acceptable replacement sources on a timely
basis. There is no guarantee that we would be able to
obtain such alternative sources of supply on a timely basis, if at
all. An extended interruption in the supply of any of
our intended products, could have an adverse effect on our results
of operations, which most likely would adversely affect the value
of our common stock.
Increases in the cost of shipping or service issues with our
third-party shippers could harm our business.
We pass
through our shipping costs directly to our customers. We
compete against store-front (retail) locations and if the shipping
costs escalate whereby the cost is not prohibitive for the customer
to shop online, we could potentially become less competitive
thereby affecting our sales. Accordingly, any
significant increase in shipping rates could have an adverse effect
on our operating results. Similarly, strikes or other
service interruptions by those shippers could cause our operating
expenses to rise and adversely affect our ability to deliver
products on a timely basis.
Our revenues will depend on our relationships with capable sales
personnel as well as customers, suppliers and manufacturers of the
products that we distribute.
Our
future operating results will depend on our ability to maintain
satisfactory relationships with qualified sales personnel as well
as customers, suppliers and manufacturers. If we fail to
maintain relationships with such persons or fail to acquire
relationships with such key persons in the future, our business may
be adversely affected.
We may incur significant costs to be a public company to ensure
compliance with United States corporate governance and
accounting requirements and we may not be able to absorb such
costs.
We may
incur significant costs associated with our public company
reporting requirements, costs associated with newly applicable
corporate governance requirements, including requirements under the
Sarbanes-Oxley Act of 2002 and other rules implemented by the
Securities and Exchange Commission. We expect all of these
applicable rules and regulations to significantly increase our
legal and financial compliance costs and to make some activities
more time consuming and costly. We also expect that these
applicable rules and regulations may make it more difficult and
more expensive for us to obtain director and officer liability
insurance and we may be required to accept reduced policy limits
and coverage or incur substantially higher costs to obtain the same
or similar coverage. As a result, it may be more difficult for us
to attract and retain qualified individuals to serve on our board
of directors or as executive officers. We are currently evaluating
and monitoring developments with respect to these newly applicable
rules, and we cannot predict or estimate the amount of additional
costs we may incur or the timing of such costs. In addition, we may
not be able to absorb these costs of being a public company which
will negatively affect our business operations.
There is no assurance of an active public market or that the common
stock will ever actively trade on a recognized exchange. Therefore,
you may be unable to liquidate your investment in our
stock.
There
is no established public trading market for our common stock. Our
shares are listed or quoted on the OTCPinks under the trading
symbol HADV. In the absence of an active trading market, an
investor may be unable to liquidate their investment.
We do not intend to pay dividends and there will thus be fewer ways
in which you are able to make a gain on your
investment.
We have
never paid dividends and do not intend to pay any dividends for the
foreseeable future. To the extent that we may require additional
funding currently not provided for in our financing plan, our
funding sources may prohibit the declaration of dividends. Because
we do not intend to pay dividends, any gain on your investment will
need to result from an appreciation in the price of our common
stock. There will therefore be fewer ways in which you are able to
make a gain on your investment.
Our common stock is considered a penny stock, which is subject to
restrictions on marketability, so you may not be able to sell your
shares.
If our
common stock becomes tradable in the secondary market, we will be
subject to the penny stock rules adopted by the Securities and
Exchange Commission that require brokers to provide extensive
disclosure to their customers prior to executing trades in penny
stocks. These disclosure requirements may cause a reduction in the
trading activity of our common stock, which in all likelihood would
make it difficult for our shareholders to sell their
securities.
Penny
stocks generally are equity securities with a price of less than
$5.00 (other than securities registered on certain national
securities exchanges or quoted on the NASDAQ system). Penny stock
rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information
about penny stocks and the risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and
offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and monthly
account statements showing the market value of each penny stock
held in the customer’s account.
The
broker-dealer must also make a special written determination that
the penny stock is a suitable investment for the purchaser and
receive the purchaser’s written agreement to the transaction.
These requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security
that becomes subject to the penny stock rules. The additional
burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in our
securities, which could severely limit their market price and
liquidity of our securities. These requirements may restrict the
ability of broker-dealers to sell our common stock and may affect
your ability to resell our common stock.
The Financial Industry Regulatory Authority, or FINRA, has adopted
sales practice requirements which may also limit a shareholder's
ability to buy and sell our stock.
In
addition to the "penny stock" rules described above, FINRA has
adopted rules that require that in recommending an investment to a
customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior
to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable
efforts to obtain information about the customer's financial
status, tax status, investment objectives and other information.
Under interpretations of these rules, FINRA believes that there is
a high probability that speculative low priced securities will not
be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers
buy our common stock, which may limit your ability to buy and sell
our stock and have an adverse effect on the market for its
shares.
We face risks related to compliance with corporate governance laws
and financial reporting standards.
The
Sarbanes-Oxley Act of 2002, as well as related new rules and
regulations implemented by the Securities and Exchange Commission
and the Public Company Accounting Oversight Board, require changes
in the corporate governance practices and financial reporting
standards for public companies. These new laws, rules and
regulations, including compliance with Section 404 of the
Sarbanes-Oxley Act of 2002 relating to internal control over
financial reporting, referred to as Section 404, have materially
increased our legal and financial compliance costs and made some
activities more time-consuming and more burdensome.
Other Risks
Trends, Risks and Uncertainties
We have
sought to identify what we believe to be the most significant risks
to our business, but we cannot predict whether, or to what extent,
any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should
carefully consider all of such risk factors before making an
investment decision with respect to our common stock.