Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited consolidated financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean Panamera Healthcare Corporation, unless otherwise indicated.
General Overview
We were incorporated under the laws of the State of Nevada on May 20, 2014. We intend to offer management and consulting services to healthcare organizations. We intend to focus on ambulatory surgical centers (ASCs) that currently have an incentive to be acquired by hospitals in order to increase compensation levels. We believe the short term strategy of converting to hospital based compensation is not sustainable because fundamental changes in the way healthcare is being provided are being undertaken by both government and private insurance carriers. The demographics of an aging population also mandate such changes to avoid economic disruption, healthcare rationing or unsustainable taxation.
Our address is 4180 Orchard Hill Drive, Edmond, OK 73025. Our telephone number is (405) 413-5735. Our corporate website is www.panamerahealth.com.
We have not ever declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this report. Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Plan of Operations and Cash Requirements
We intend to offer management and consulting services to healthcare organizations. We intend to devote our marketing efforts toward identifying ambulatory surgical centers (ASC) that currently have an incentive to be acquired by hospitals in order to increase compensation levels. We intend to reorganize ASCs and consolidate several such centers into larger entities that can immediately take advantage of higher reimbursement rates permitted by the reorganization. At the same time, we expect to institute the necessary medical records and management systems to make the transition to value based compensation.
Cash Requirements
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through equity financing arrangements,
Our net loss for the nine months ended April 30, 2019, was $24,073 compared to a net loss of $25,192 for the nine months ended April 30, 2018.
During the nine months ended April 30, 2019, we incurred operating expenses of $21,578 compared to $23,696 incurred during the nine months ended April 30, 2018.
As of April 30, 2019, our current assets were $1,602 compared to $4,180 in current assets at July 31, 2018. As of April 30, 2019, our current liabilities were $85,329 compared to $63,834 in current liabilities at July 31, 2018.
Stockholders’ deficit was $83,727 as of April 30, 2019 compared to $59,654 as of July 31, 2018
Results of Operations for the three months ended April 30, 2019 and 2018
The following tables provide selected financial data about our company as of the three months ended April 30, 2019.
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Three Months Ended
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April 30,
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|
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2019
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|
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2018
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Changes ($)
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Operating expenses
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$
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4,539
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|
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$
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5,361
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$
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(822
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)
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Interest expense
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$
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911
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$
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523
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$
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388
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Net loss
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$
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5,450
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$
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5,884
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$
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(434
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)
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During the three months ended April 30, 2019 and 2018, no revenues were recorded.
Net loss was $5,450 for the three months ended April 30, 2019, and $5,884 for the three months ended April 30, 2018. The decrease in net loss is mainly due to decrease in operating expense as compared to 2018.
Operating expenses for the three months ended April 30, 2019 and 2018 were $4,539 and $5,361, respectively. The operating expenses were primarily attributed to professional fees for maintaining reporting status with the Securities and Exchange Commission (“SEC”) and general and administrative expenses. Professional fees for the three months ended April 30, 2019, was $4,307 compared to $5,025 for the same period ended April 30, 2018. General and administration expenses decreased by $104, to $232 for the three months ended April 30, 2019, from $336 for the three months ended April 30, 2018.
Interest expenses represent interest expense to a related party on funds advanced to the Company.
Results of Operations for the nine months ended April 30, 2019 and 2018
The following table provides selected financial data about our company as of the nine months ended April 30, 2019 and 2018.
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Nine Months Ended
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April 30,
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2019
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2018
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Changes ($)
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Operating expenses
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$
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21,578
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$
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23,696
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$
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(2,118
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)
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Interest expense
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$
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2,495
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$
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1,496
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$
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999
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Net loss
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$
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24,073
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$
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25,192
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$
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(1,119
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)
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During the nine months ended April 30, 2019 and 2018, no revenues were recorded.
We had a net loss of $24,073 for the nine months ended April 30, 2019, and $25,192 for the same period ended April 30, 2018. The decrease in net loss of $1,119, was primarily due to decrease in operating expenses of $2,118 and offset by an increase in interest expenses of $999.
Operating expenses for the nine months ended April 30, 2019 and 2018 were $21,578 and $23,696, respectively. The operating expenses were primarily attributed to professional fees for maintaining reporting status with the Securities and Exchange Commission (“SEC”) and general and administrative expenses. Professional fees for the nine months ended April 30, 2019, was $20,908 compared to $22,640 for the same period ended April 30, 2018. General and administration expenses decreased by $386 to $670 for the nine months ended April 30, 2019, from $1,056 for the nine months ended April 30, 2018.
Interest expenses represent interest expense to a related party on funds advanced to the Company.
Balance Sheet Data:
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April 30,
2019
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July 31,
2018
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Changes
($)
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Cash
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$
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1,602
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$
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4,180
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$
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(2,578
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)
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Working capital deficiency
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$
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83,727
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$
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59,654
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$
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24,073
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Total assets
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$
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1,602
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$
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4,180
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$
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(2,578
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)
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Total liabilities
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$
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85,329
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$
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63,834
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$
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21,495
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Total stockholders’ deficit
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$
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83,727
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$
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59,654
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$
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24,073
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As at April 30, 2019, our current assets were $1,602, and our current liabilities were $85,329 which resulted in working capital deficiency of $83,727. As of April 30, 2019, current assets were comprised of $1,602 in cash, compared to $4,180 in cash as of July 31, 2018. As of April 30, 2019, current liabilities were comprised of $0 in accounts payable and $85,329 in due to related parties and accrued interest, compared to $7,999 in accounts payable and $55,835 due to related party and accrued interest as of July 31, 2018.
As of April 30, 2019, our working capital deficiency increased by $24,073 from $59,654 on July 31, 2018, to $83,727 on April 30, 2019, primarily due to an increase in current liabilities of $21,495.
Cash Flow Data:
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Nine Months Ended
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April 30,
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2019
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2018
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Changes ($)
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Cash Flows used in Operating Activities
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$
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(29,578
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)
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$
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(18,424
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)
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$
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(11,154
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)
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Cash Flows used in Investing Activities
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$
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-
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$
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-
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$
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-
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Cash Flows provided by Financing Activities
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$
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27,000
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$
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5,000
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$
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22,000
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Net Change in Cash During Period
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$
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(2,578
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)
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$
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(13,424
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)
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$
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10,846
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Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the nine months ended April 30, 2019, net cash flows used in operating activities was $29,578, consisting of a net loss of $24,073, increased by a decrease in accounts payable of $7,999 and reduced by an increase in accrued interest due to related parties of $2,494. For the nine-month period ended April 30, 2018, net cash flows used in operating activities was $18,424, consisting of a net loss of $25,192, decreased by an increase in accounts payable of $5,271 and accrued interest due to related parties of $1,497.
Cash Flows used in Investing Activities
During the nine months ended April 30, 2019 and 2018, no cash flows used in investing activities.
Cash Flows from Financing Activities
We have financed our operations from the issuance of equity and loans from related parties. For the nine months ended April 30, 2019, and 2018, we received $27,000 and $5,000 from financing activities, respectively.
Limited Operating History; Need for Additional Capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are an early stage corporation and have not generated any revenues from operations to fully implement our business plan. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and competition from larger organizations. We will require equity and/or debt financing to provide for the capital required to implement our plans. We will require additional funds to operate for the next year.
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing as envisioned by our Offering will result in additional dilution to existing shareholders.
Liquidity and Capital Resources
From May 20, 2014 (inception) through April 30, 2019, we have relied on funds loaned to us by Kratos Healthcare Inc (“Kratos”), a company controlled by an officer and director, to fund our initial working capital requirements. The current amount due is $80,101 in principal and Kratos has agreed to loan us additional amounts of up to a total of $100,000 (inclusive of cash advances to date).
In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able 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.
The controlling shareholders have pledged their support to fund continuing operations during an early stage; however, there is no written commitment to this effect. The Company is dependent upon the continued support.
As of April 30, 2019, we have no employees. Other than our chief financial officer, who we have verbally agreed to pay for management services, our officers and directors are donating their time to the development of our company.
The officers and directors of the Company may be involved in other business activities and may, in the future, become involved in other business opportunities that become available. They may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Going Concern
As of April 30, 2019, our company had a net loss of $24,073 and has earned no revenues. Our company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending July 31, 2019. The ability of our company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of our business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings. These factors, among others, raise substantial doubt about our company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.