United States

Securities and Exchange Commission

Washington, D.C. 20549

 

FORM 10-Q

 

 

(Mark One)

 

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended October 31, 2013

 

OR

 

[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

 

From the transition period ___________ to ____________.

 

Commission File Number  333-152444

 

MEDCAREERS GROUP, INC.

(Exact name of small business issuer as specified in its charter)

 

Nevada	7389	26-1580812
(State or jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(IRS Employer Identification No.)

 

758 E Bethel School Road, Coppell, Texas 75019

(Address of principal executive offices)

 

(972) 393-5892

(Issuer's telephone number)

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

Yes [X] 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 [X] 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. 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 [ ] Smaller Reporting Company [X]

 

Indicate by a check mark whether the company is a shell company (as defined by Rule 12b-2 of the Exchange Act:

 

Yes [ ] No [X ].

 

As of December 20, 2013 there were 57,779,962 shares of Common Stock of the issuer outstanding.

TABLE OF CONTENTS

 

 

PART I.	FINANCIAL STATEMENTS	3
ITEM 1.	Financial Statements	3
	Notes to Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	12
ITEM 3.	Quantitative and Qualitative Disclosure About Market Risk	16
ITEM 4.	Controls and Procedures	16
PART II.	OTHER INFORMATION	17
ITEM 1.	Legal Proceedings	17
ITEM 1A.	Risk Factors	17
ITEM 2.	Unregistered Sales of Securities and Use of Proceeds	17
ITEM 3.	Default Upon Senior Securities	21
ITEM 4.	Mine Safety Disclosures	21
ITEM 5.	Other Information	21
ITEM 6.	Exhibits	21

 

 

MEDCAREERS GROUP, INC.

(A Development Stage Company)

Consolidated Balance Sheets

October 31, 2013 and January 31, 2013

 

 

		As of October 31, 2013				As of January 31, 2013
Assets
Current Assets
Cash and Cash Equivalents		$	7,697			$	89,680
Other Current Assets			1,095				—
Total Current Assets			8,792				89,680
Property, Plant & Equipment
Equipment			1,799				1,799
Less: Accumulated Amortization			(1,799	)			(1,799	)
Total Property, Plant & Equipment			0				0
Other Assets
Deferred Loan Fees (net)			13,750				92,217
Total Assets		$	22,542			$	181,897
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable		$	58,017			$	6,918
Accrued Expenses			18,661				11,852
Due to Related Parties			243,093				178,143
Accrued Interest Payable			104,767				89,333
Current Portion of Long Term Debt			555,650				578,150
Total Current Liabilities			980,189				864,396
Long Term Liabilities
Notes Payable			555,650				603,150
Less: Current Portion			(555,650	)			(578,150	)
Total Long Term Liabilities			0				25,000
Total Liabilities			980,189				889,396
Stockholders’ Equity
Preferred Stock, $0.001 par value, 10,000,000 shares, none outstanding
Common Stock, $0.001 par value, 350,000,000 shares,
57,562,962 and 50,125,528 shares issued and outstanding			57,563				50,126
Additional Paid In Capital			4,638,531				3,997,996
Accumulated (Deficit)			(5,653,740	)			(4,755,621	)
Total Stockholders’ Equity (Deficit)			(957,647	)			(707,499	)
Total Liabilities and Stockholders’ Equity		$	22,542			$	181,897

 

 

 

The Accompanying Notes are an Integral Part of these Financial Statements.

 

 

 

 

MEDCAREERS GROUP, INC. (A Development Stage Company) Consolidated Statement of Operations For the Three and Nine Months Ended October 31, 2013 and 2012, and Cumulative Since Re-Entering the Development Stage January 1, 2009 Through October 31, 2013

 

 

 

		Three Months Ended								Nine Months Ended								Cumulative Since Re-entering the Development Stage, Jan 1, 2009
		October 31, 2013				October 31, 2012				October 31, 2013				October 31, 2012
Revenue		$	3,185			$	8,040			$	11,405				13,990			$	52,569
Cost of Sales			7,017				7,430				30,969				23,128				141,683
Gross Profit (Loss)			(3,832	)			610				(19,564	)			(9,138	)			(89,114	)
Operating Expenses:
Depreciation and Amortization			162,168				54,825				251,801				274,816				799,581
Selling and Marketing			6,806				7,712				20,692				21,129				105,113
General and Administrative			253,151				96,974				545,315				470,174				3,360,240
Total Operating Expenses			422,125				159,511				817,808				766,119				4,264,934
Net Operating Loss			(425,937	)			(158,901	)			(837,372	)			(775,257	)			(4,354,048	)
Other Income (Expense)
Loss on Sale of Assets			0				0				0				0				(4,087	)
Loss on Recapitalization			0				0				0				0				(223,454	)
Interest Expense			(22,731	)			(17,760	)			(60,748	)			(50,586	)			(399,250	)
Total Other Income (Expense)			(22,731	)			(17,760	)			(60,748	)			(50,586	)			(626,791	)
Net Loss		$	(448,688	)		$	(176,661	)		$	(898,120	)			(825,843	)		$	(4,980,839	)
Basic and Diluted Earnings (Loss) per share		$	(0.01	)		$	(0.00	)		$	(0.02	)		$	(0.02	)
Weighted Average Shares Outstanding:
Basic and Diluted			54,493,241				47,256,131				51,039,602				45,016,265

 

 

 

 

The Accompanying Notes are an Integral Part of these Financial Statements.

 

 

 

 

 

MEDCAREERS GROUP, INC.

(A Development Stage Company)

Consolidated Statement of Changes in Stockholders’ Equity (Deficit)

For the Nine Months Ended October 31, 2013 and

For the Year Ended January 31, 2013

														Retained
			Common Stock								Paid-In				Earnings
			Shares				Amount				Capital				(Deficit)				Totals
Balance, January 31, 2012			43,315,000			$	43,315			$	2,819,470			$	(3,407,669	)		$	(544,884	)
Issuance of Common Stock for Cash			3,220,000				3,220				318,780								322,000
Issuance of Common Stock for Services			750,000				750				74,250								75,000
Issuance of Common Stock for Deferred Fees			2,840,528				2,841				307,129								309,970
Stock Option Expense											478,367								478,367
Net (Loss)															(1,347,952	)			(1,347,952	)
Balance, January 31, 2013			50,125,528			$	50,126			$	3,997,996			$	(4,755,621	)		$	(707,499	)
Issuance of Common Stock for Cash			199,000				199				19,701								19,900
Issuance of Common Stock for Services			1,700,000				1,700				138,300								140,000
Issuance of Common Stock for Deferred Fees			1,732,720				1733				171,600								173,333
Issuance of Common Stock for Debt and Accrued Interest			3,805,714				3,805				310,934								314,739
Net (Loss)															(898,120	)			(898,120	)
Balance, October 31, 2013			57,562,962			$	57,563			$	4,638,531			$	(5,653,741	)		$	(957,647	)

 

The Accompanying Notes are an Integral Part of these Consolidated Financial Statements.

 

 

 

MEDCAREERS GROUP, INC. (A Development Stage Company) Consolidated Statements of Cash Flows For the Nine Months Ended October 31, 2013 and 2012, and Cumulative Since Re-Entering the Development Stage January 1, 2009 Through October 31, 2013

 

 

 

		Nine Months Ended October 31, 2013				Nine Months Ended October 31, 2012				Cumulative Since Re-Entering the Development Stage, January 1, 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)		$	(898,120	)		$	(825,843	)		$	(4,980,839	)
Adjustments to reconcile net deficit to cash used by operating activities:
Depreciation and Amortization of Property and Equipment			0				0				25,826
Amortization of Deferred Loan Fees			251,801				274,816				773,754
Common Stock Issued for Services			140,000				75,000				305,000
Stock Option Expense			0				178,384				1,986,017
Change in Assets and Liabilities:
(Increase) Decrease in Other Current Assets			(1,095	)			400				59,099
(Increase) Decrease in Other Assets			0				0				0
Increase (Decrease) in Accounts Payable			51,099				0				66,237
Increase (Decrease) in Accrued Expenses			61,982				51,032				154,328
Increase (Decrease) in Due to Related Party			64,950				83,664				243,093
Increase (Decrease) in Other Liabilities			0				0				0
CASH FLOWS (USED IN) OPERATING ACTIVITIES			(329,383	)			(163,347	)			(1,367,485	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Disposal of Fixed Assets			0				0				191,026
Purchase of Fixed Assets			0				0				(215,543	)
CASH FLOWS (USED IN) INVESTING ACTIVITIES			0				0				(24,427	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Notes Payable			227,500				45,650				805.650
Payments on Notes Payable			0				0				(35,731	)
Proceeds from Sale of Common Stock			19,900				122,000				341,900
Debt Assumed on Acquisition			0				0				246,670
Debt Assumed by Buyer on Asset Sale			0				0				(185,939	)
Interest Added to Notes Payable			0				0				209,429
Common Stock Issued on Recapitalization			0				0				16,000
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES			247,400				167,650				1,397,979
NET INCREASE (DECREASE) IN CASH			(81,983	)			4,302				6,067
Cash, beginning of period			89,680				912				1,630
Cash, end of period		$	7,697			$	5,214			$	7,697
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid		$	4,575			$	0			$	43,,518
Taxes paid		$	0			$	0			$	0
Issuance of Common Stock for Services		$	140,000			$	75,000			$	305,000
Issuance of Common Stock for Debt		$	314,739			$	0			$	1,199,210
Issuance of Common Stock for Loan Fees		$	173,333			$	309,970			$	787,503

 

The Accompanying Notes are an Integral Part of these Financial Statements.

 

 

MEDCAREERS GROUP, INC.

(A Development Stage Company)

Notes to Financial Statements

October 31, 2013 and January 31, 2013

 

 

NOTE 1 – NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES

 

Nature of Activities, History and Organization – The Company was formed as RX Scripted, LLC on December 30, 2004 as a North Carolina limited liability company and converted to a Nevada Corporation as RX Scripted, Inc. on December 5, 2007.  On December 16, 2009, an amendment was filed with the State of Navada to change the name to “MedCareers Group, Inc.” (the “Company” or “MedCareers”) and change the authorized capital of the Company. On November 5, 2010, the Company issued 24,000,000 shares of its Common Stock in exchange for 100% of Nurses Lounge, Inc. (“Nurses Lounge”), a Texas corporation. As a result of the share exchange, Nurses Lounge became the wholly owned subsidiary of MedCareers. As a result, the shareholders of Nurses Lounge owned a majority of the voting stock of MedCareers. The transaction was regarded as a reverse merger whereby Nurses Lounge was considered to be the accounting acquirer as its shareholders retained control of MedCareers after the exchange, although MedCareers is the legal parent company. The share exchange was treated as a recapitalization of MedCareers. As such, Nurses Lounge (and its historical financial statements) is the continuing entity for financial reporting purposes. The financial statements have been prepared as if MedCareers had always been the reporting company and, on the share exchange date, changed its name and reorganized its capital.  The Company operates a website for nurses, nursing schools and nurses organizations which enables the respective entities to communicate more easily and efficiently with their members.

 

Significant Accounting Policies:

 

The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application.  The application of accounting principles requires the estimating, matching and timing of revenue and expense. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements.

 

The financial statements and notes are representations of the Company’s management which is responsible for their integrity and objectivity. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud.  The Company's system of internal  accounting control is designed to assure, among other items, that  1) recorded  transactions  are valid;  2) valid  transactions  are recorded;  and  3) transactions  are  recorded in the proper  period in a timely  manner to produce financial  statements which present fairly the financial  condition,  results of operations  and cash  flows of the  Company  for the  respective  periods  being presented.

 

Basis of Presentation:

 

The Company prepares its financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States.

 

Principles of Consolidation:

 

The financial statements include the accounts of Medcareers Group, Inc. as well as Nurses Lounge, Inc. All significant inter-company transactions have been eliminated.  All amounts are presented in U.S. Dollars unless otherwise stated.

 

 

 

Emerging Growth Company Critical Accounting Policy Disclosure:

 

The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.   As an emerging grown company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.     The Company may elect to take advantage of the benefits of this extended transition period in the future.

 

Cash and Cash Equivalents:

 

The Company considers all highly liquid debt instruments with a maturity of three months or less to be cash equivalents.  At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits.  The carrying amount approximates fair market value.

 

Fixed Assets:

 

Fixed assets are carried at cost.  Depreciation is provided over each asset’s estimated useful life.  Upon retirement and disposal, the asset cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the determination of the net income.  Additions and significant improvements are capitalized and depreciated.

 

Advertising Costs:

 

The Company incurred no advertising costs for the periods ended October 31, 2013 and 2012.

 

Income Taxes:

 

Income from the corporation is taxed at regular corporate rates per the Internal Revenue Code.  Although the Company has tax loss carry-forwards (see Note 6), there is uncertainty as to utilization prior to their expiration.  Accordingly, the future income tax asset amounts have been fully offset by a valuation allowance.

 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized when items of income and expense are recognized in the financial statements in different periods than when recognized in the tax return. Deferred tax assets arise when expenses are recognized in the financial statements before the tax returns or when income items are recognized in the tax return prior to the financial statements. Deferred tax assets also arise when operating losses or tax credits are available to offset tax payments due in future years. Deferred tax liabilities arise when income items are recognized in the financial statements before the tax returns or when expenses are recognized in the tax return prior to the financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

  

Use of Estimates:

 

In order to prepare financial statement in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and assumptions that affect the amounts reported in the financial statements and determines whether contingent assets and liabilities, if any, are disclosed in the financial statements. The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements are based.

 

Fair Value of Financial Instruments:

 

Pursuant to ASC No. 820, “Fair Value Measurements and Disclosures”, the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of January 31, 2010.  The Company’s financial instruments consist of cash, accounts payable, advances and notes payable.  The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments.

 

 

Revenue Recognition: 

 

Revenue from contracts for consulting services with fees based on time and materials or cost-plus are recognized as the services are performed and amounts are earned.  The Company considers amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectability is reasonably assured.  For contracts with fixed fees, the Company recognizes revenues as amounts become billable in accordance with contract terms, provided the billable amounts are not contingent, are consistent with the services delivered, and are earned. The Company recognizes revenue in accordance with ASC 605-10, "Revenue Recognition in Financial Statements", (formerly Staff Accounting Bulletin No. 104 (“SAB 104”).   Revenue is recognized when persuasive evidence of an arrangement exists, delivery or service has occurred, the sale price is fixed or determinable and receipt of payment is probable.

 

Development Stage Company:

 

The Company complies with Accounting Codification Standard 915-10 for its characterization of the Company as development stage.

 

Earnings per Common Share:

 

Earnings (loss) per share are calculated in accordance with ASC 260 “Earnings per Share”.   The weighted average number of common shares outstanding during each period is used to compute basic earnings (loss) per share.  Diluted earnings per share are computed using the weighted average number of shares and potentially dilutive common shares outstanding.   Dilutive potential common shares are additional common shares assumed to be exercised.     Potentially dilutive common shares consist of stock options and are excluded from the diluted earnings per share computation in periods where the Company has incurred a net loss, as their effect would be considered anti-dilutive.

 

There were no potentially dilutive common stock equivalents as of January 31, 2013, therefore basic earnings per share equals diluted earnings per share for the year ended January 31, 2013.  The Company had 8,743,000 options outstanding at January 31, 2013. As the Company incurred a net loss during the year ended January 31, 2013, the basic and diluted loss per common share is the same amount, as any common stock equivalents would be considered anti-dilutive.

 

As the Company incurred a net loss during the period ended October 31, 2013, the basic and diluted loss per common share is the same amount.   As of October 31, 2013, the Company had 11,970,500 stock options outstanding and zero options that could potentially have a dilutive effect on basic earnings per share in the future. As the Company incurred a net loss during the period ended October 31, 2013, the basic and diluted loss per common share is the same amount, as any common stock equivalents would be considered anti-dilutive.

 

Recently Issued Accounting Pronouncements:

 

The Company  does not expect  the  adoption  of  recently  issued  accounting pronouncements  to have a significant  impact on the Company’s  results of  operations, financial position or cash flows.  

 

NOTE 2 – DEFERRED LOAN FEES

 

Deferred loan fees represent fees paid to make or extend notes payable. Stock was issued and valued at the date of issue and amortized over the term of the loan. Deferred loan fees at October 31, 2013 and January 31, 2013 were as follows:

 

		October 31, 2013				Jan 31, 2013
Deferred Loan Fees – Net		$	13,750			$	92,217

 

 

NOTE 3 - NOTES PAYABLE

 

The components of the Company’s debt as of October 31, 2013 and January 31, 2013 were as follows:

 

			Oct, 2013				Jan, 2013
Note Payable - $100,000, 12% interest payable monthly or accrued, due Nov 4, 2013		$	100,000			$	100,000
Note Payable - $223,150, 12% interest payable monthly or accrued, due Jan 31, 2014			223,150				288,150
Note Payable - $25,000, 12% interest payable monthly or accrued, due Oct 31, 2013			25,000				25,000
Note Payable - $45,000, 12% interest added to note quarterly, due January 31, 2014			45,000				25,000
Note Payable - $16,000, 12% interest added to note quarterly, due January 31, 2014			16,000				16,000
Note Payable - $70,000, 12% interest added to note quarterly, due February 4, 2013			—				70,000
Note Payable - $40,000, 20% interest added to note quarterly, due October 31, 2013			40,000				40,000
Note Payable - $4,000, 12% interest added to note quarterly, due January 31, 2014			4,000				4,000
Note Payable - $30,000, 12% interest added to note quarterly, due November 5, 2013			—				30,000
Note Payable - $25,000, 12% interest added to note quarterly, due October 31, 2013			25,000				0
Note Payable - $5,000, 12% interest added to note quarterly, due November 5, 2013			5,000				5,000
Note Payable - $30,000, 12% interest added to note quarterly, due October 31, 2013			30,000				0
Note Payable - $42,500, 12% interest added to note quarterly, due April 23, 2013			42,500				0
Subtotal			555,650				603,150
Less – currently payable			(555,650	)			(578,150	)
Long-term debt		$	0			$	0

 

 

The Company expensed $60,748 of interest, of which $4,575 was paid and the balance added to accrued interest at October 31, 2013 and $52,186 of interest expense at January 31, 2013 respectively.

 

NOTE 4 - STOCKHOLDERS’ EQUITY

 

Preferred Stock:

The Company is authorized to issue 10,000,000 shares of Preferred Stock, having a par value of $0.001 per share.  There are no preferred shares outstanding at October 31, 2013 and January 31, 2013.

 

Common Stock:

The Company is authorized to issue 350,000,000 common shares at a par value of $0.001 per share.  These shares have full voting rights.  At October 31, 2013 there were 57,562,962 shares outstanding and 50,125,528 shares outstanding at January 31, 2013.  No dividends were paid in the periods ended October 31, 2013 or year ended January 31, 2013.  

 

In the nine months ended October 31, 2013, the Company issued common stock for the following:

199,000 shares issued for cash for $19,900;

1,700,000 shares issued for services valued at $140,000;

1,732,720 shares issued for loan fees;

3,805,714 for conversion of $275,000 notes payable and accrued interest of $39,739.

 

 

 

Options and Warrants:

The Company had the following options or warrants outstanding at October 31, 2013:

 

Issued To	# Options	Dated	Expire	Strike Price
President and CEO	4,000,000	11/18/2010	11/18/2015	$0.25 per share
Vice President	2,000,000	11/18/2010	11/18/2015	$0.25 per share
Shareholder	127,500	08/28/2011	08/28/2016	$0.10 per share
Shareholder	50,000	04/04/2012	04/04/2013	$0.20 per share
Shareholder	8,000	04/27/2012	04/27/2013	$0.20 per share
Shareholder	127,500	04/29/2012	04/29/2017	$0.10 per share
Shareholder	200,000	05/17/2012	05/17/2013	$0.20 per share
Shareholder	50,000	05/22/2012	05/22/2013	$0.20 per share
Shareholder	80,000	05/21/2012	05/21/2013	$0.20 per share
Shareholder	25,000	07/12/2012	07/12/2013	$0.20 per share
Shareholder	25,000	07/10/2012	07/10/2013	$0.20 per share
Shareholder	50,000	08/09/2012	08/09/2013	$0.20 per share
Shareholder	1,000,000	08/31/2012	08/31/2016	$0.12 per share
Shareholder	2,000,000	01/18/2013	01/18/2018	$0.12 per share
Shareholder	100,000	03/29/2013	03/29/2016	$0.10 per share
Shareholder	127,500	07/31/2013	07/30/2018	$0.10 per share
CFO	2,000,000	09/23/2013	09/22/2016	$0.25 per share
Total	11,970,500

 

 

NOTE 5 – EMPLOYEE BENEFIT PLANS

 

At October 31, 2013, there were no qualified or non-qualified employee pension, profit sharing, stock option, or other plans authorized for any class of employees.

 

NOTE 6 – INCOME TAXES

 

MedCareers Group, Inc. has incurred losses since inception.  Therefore, MedCareers has no federal tax liability.  Additionally there are limitations imposed by certain transactions which are deemed to be ownership changes.  The net deferred tax asset generated by the loss carryforward has been fully reserved.  The cumulative net operating loss carryforward is $5,653,740 at October 31, 2013 of which $4,709,107 is available for carryforward for federal income tax purposes and will expire in fiscal year 2026 to 2028.  Prior to November 5, 2010, there was no income tax carryforward due to the loss being incurred while the Company was taxed as a partnership and the income taxed pro rata to its partners. At October 31, 2013 and January 31, 2013, the deferred tax asset consisted of the following:

 

		October 31, 2013				Jan 31, 2013
Deferred tax asset:
From net operating loss		$	1,601,096			$	1,295,736
Less valuation allowance			(1,601,096	)			(1,295,736	)
Net deferred tax asset		$	0			$	0

 

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

The Company may from time to time be involved with various litigation and claims that arise in the normal course of business.  As of October 31, 2013, no such matters were outstanding.

 

NOTE 8 - GOING CONCERN

 

MedCareers’ financial statements are prepared using United States generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has incurred cumulative losses through October 31, 2013 of $5,653,740 and has a working capital deficit at October 31, 2013 of $971,397.

 

Historically, revenues have not been sufficient to cover operating costs that would permit the Company to continue as a going concern.  The potential proceeds from the sale of common stock and other contemplated debt and equity financing, and increases in operating revenues from new development and business acquisitions might enable MedCareers to continue as a going concern.  There can be no assurance that the Company can or will be able to complete any debt or equity financing, or develop or acquire one or more business interests on terms favorable to it.  MedCareers’ financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, which we refer to in this quarterly report as the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to in this quarterly report as the Exchange Act. Forward-looking statements are not statements of historical fact but rather reflect our current expectations, estimates and predictions about future results and events. These statements may use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “predict,” “project” and similar expressions as they relate to us or our management. When we make forward-looking statements, we are basing them on our management’s beliefs and assumptions, using information currently available to us. These forward-looking statements are subject to risks, uncertainties and assumptions, including but not limited to, risks, uncertainties and assumptions discussed in this quarterly report. Factors that can cause or contribute to these differences include those described under the headings “Risk Factors” and “Management Discussion and Analysis and Plan of Operation.”

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statement you read in this quarterly report reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by this paragraph. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this quarterly report. The Company expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements to reflect any change in its views or expectations. The Company can give no assurances that such forward-looking statements will prove to be correct.

 

Company.

Medcareers Group, Inc. (“MedCareers”, the “Company”, “we” or “us”), the Company described herein, is a Nevada corporation, with offices located at 758 E Bethel School Road, Coppell, Texas 75019. It can be reached by phone at (972) 393-5892.

 

History.

The Company was formed as RX Scripted, LLC on December 30, 2004 as a North Carolina limited liability company and converted to a Nevada Corporation as RX Scripted, Inc. on December 5, 2007.  On December 16, 2009, an amendment was filed with the State of Nevada to among other things, change the name of the company to “MedCareers Group, Inc.” and affect a 10 for 1 forward stock split (which became effective January 7, 2010). Unless otherwise stated or the context suggests otherwise, the number of shares disclosed throughout this report have been retroactively reflected for the stock split.

 

On or around November 19, 2010, the Company entered into a Share Exchange Agreement (the “Exchange”) with Nurses Lounge, Inc., a Texas corporation (“Nurses Lounge”) and the nine shareholders of Nurses Lounge (the “Nurses Lounge Shareholders”).  Pursuant to the Exchange, we agreed to issue 24,000,000 restricted shares of our common stock to the Nurses Lounge Shareholders in exchange for 100% of the issued and outstanding shares of common stock of Nurses Lounge.  Pursuant to the Exchange, Nurses Lounge became a wholly-owned subsidiary of the Company.

 

History and Description of the Operations of Nurses Lounge

 

At the beginning of 2003 in Dallas, Texas, Timothy Armes (our Chief Executive Officer, sole director and largest shareholder) took over control of the nursing internet portal and nursing job board NursesLounge.com and re-launched the web site shortly thereafter.  Mr. Armes also launched a localized direct mail magazine as a companion to the website. Years of managing a portal and publishing a monthly magazine gave Mr. Armes insight to numerous organizations in need of a more efficient way to communicate important information to nursing professionals such as news, meetings and continuing education requirements on a timely basis.

 

 

 

With this understanding, and the development of social media technology, Mr. Armes designed and launched a beta version of a professional network for nurses in the summer of 2009 designed to provide a common platform for nursing organizations such as nursing schools, associations and major nurse employers to connect and communicate more effectively to their nurse constituents and broader nursing profession. Additionally, the network was developed to allow individual nurses the ability to interact with these organizations and other professionals via a professional profile separate from a social profile that they may have on Facebook as example.

 

Today, Nurses Lounge operates as a free online professional network for nursing professionals, and provides a secure place for nurses to connect with colleagues, network on a professional level and subscribe to professional “Lounges” (groups) to receive email updates of relevant news, events and other info.

 

Interactive Lounges are created primarily by nursing schools, local chapters of nurse associations and major nurse employers. Additionally, Nurses Lounge also has 73 metro/state lounges which aggregate all of the professional nursing news, events and employment opportunities within that certain geographic region.

 

As a communication utility, Nurses Lounge solves many of the communication issues these organizations face:

 

·	Local chapters of nurse associations use Nurses Lounge (opposed to outdated, hard to manage static web sites and email lists) as a more efficient way to communicate with their members as well as for recruiting new members and disseminating news and information to their local nursing profession.

 

·	Nursing Schools benefit with a group in the Nurses Lounge not only as a means to easily distribute news and info, but also to manage and keep alumni notified of educational opportunities as well as providing a professional networking platform between students, faculty and alumni.

 

·	Employer’s benefits include managing a positive brand, distribution of news, job postings, managing employee referral programs as well as internal communications for things such as shared governance.

 

There is no cost to schools, associations or other non-profit organizations to utilize the Nurses Lounge communication and networking capabilities while employers, and other for profit organizations, are charged minimal set-up fees that also may include unlimited job postings for a limited time.

 

Nurses that register with the Nurses Lounge by creating a professional profile are then able to share their perspectives through their participation in these groups in order to keep current on news, information, meetings and jobs openings as well as to network professionally with like-minded colleagues.  Participation and postings by members in Lounges creates new connections and makes it easier for people to find and connect with each other.  Finally, by inviting new colleagues and contacts to join them in the Nurses Lounge, members both grow their own network of connections and help to increase membership in Nurses Lounge.

 

Along with the professional network, Nurses Lounge has a fully functional job board for nursing professionals as well as a nursing faculty job board specialty site for nursing schools looking to hire faculty. This specialty site was launched in June 2012.

 

The faculty job board was launched in response to the increasing number of schools joining our network and adding their faculty and graduate degree nurses coupled with a growing shortage of nursing faculty.

 

To date Nurses Lounge, with no dedicated sales force or marketing campaign, has generated small amounts of job posting revenue from these job sites as well as from employers and other for profit organizations paying set-up fees for activating their interactive lounges.

 

Plans Moving Forward

 

The Company previously operated as an event planning consulting company engaged in the planning and execution of medical meetings and educational programs for nurses, physicians, pharmacists and other healthcare professionals.  Subsequent to the acquisition of Nurses Lounge, we have focused solely on Nurses Lounge, and have discontinued and spun-off the event planning and consulting operations as of November 30, 2010.  

 

Moving forward in the near term, management intends to concentrate on growing individual nurse membership by adding Nursing Schools, Student Nurse Associations and Professional Nurse Associations to our network.

 

We expect to do this by introducing these organizations to and educating them on the benefits that our network offers. Specifically in terms of providing them a free, branded turn-key solution for instant communications of news and information to their constituents as well as increased exposure for their organization to the broader nursing profession.

 

As these organizations join our network they invite their members to join their “interactive lounge”. As an example, the University of Texas at Arlington College of Nursing to date has had over 900 students, alumni and faculty connect with them in the Nurses Lounge via an invitation sent from the Dean of their nursing school as well as Nurses Lounge “NL” icon they have placed on their web site.

 

We also intend to strengthen our brand and grow membership through increased marketing efforts and expanded and enhanced features and functionalities over time, funding permitting.

 

Additionally, as membership grows, management will look to diversify the revenue model from primarily job posting revenue. Potential income streams are expected to include targeted banner ads, email sponsorships, Groupon type sales as well as mobile apps.

 

With funds permitting, to support these revenue streams and grow our network, management will be looking to hire 12-15 “regional publishers” as well as marketing support personnel. These publishers will be responsible for revenue generation and membership growth in their assigned markets.

 

We are currently considering offerings of securities under private placements, acquisitions (which are directly related to Nurses Lounge), issuing debt instruments, and joint ventures with other companies public and private and other activities to either build sales or generate much needed capital to grow and undertake our business plan (for example, obtain, if possible, loans).  However, we do not currently have any lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt securities and loans from our shareholders and other third parties.

 

Our financial statements contain information expressing substantial doubt about our ability to continue as a going concern. The consolidated financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we satisfy our liabilities and commitments in the ordinary course of business.

 

Moving forward throughout fiscal year 2014, we hope to expand our services into providing Student Nurse Associations (SNAs), a needed professional communication platform that will allow them to help communicate more efficiently with current members while additionally building their organizations membership. Additionally, with our administration and after our SEC reporting obligations are current, we will be positioned to spend the majority of any equity raised to build a national sales team with needed sales and marketing.  The Company estimates it needs $750,000 to fully implement its business plan.  However, the Company can support its operations for 90 days with its cash on hand.

 

 

  

Recent Activity

 

From the launch of the Nurses Lounge network in 2009 through the year ending January 31, 2011 Nurses Lounge focused on working with organizations around the Dallas Fort Worth, Texas area. This process and time allowed us to better understand the communication needs and desires of these organizations and provided us the insight on how best to structure the network to meet the communication needs of our target markets across the nation.

 

During the fiscal year ending January 31, 2012, with 2 full time employees, Nurses Lounge concentrated on building out the network by creating 73 metro lounges representing all the major metro areas and/or states across the U.S.  Additionally we created over 500 “interactive lounges” for Bachelor of Science in Nursing (BSN) schools across the nation and positioned ourselves for a national rollout as funds became available.

 

During the fiscal year that ended January 31, 2013 we began marketing to BSN schools and selected associations across the U.S.

 

Additionally we launched a “Nursing Faculty” specialty job site in June of 2012. This was done based on the numerous experienced faculty members and educationally qualified nurses (MSN and PhD candidates) that were joining our network as well as the growing demand for nursing faculty across the U.S.  Additionally management found very little direct competition in the space.

 

***

 

Results for the three and nine months ended October 31, 2013

Revenue. Revenue for the three months ended October 31, 2013 and 2012 was $3,185 and $8,040, respectively. Revenue for the nine months ended October 31, 2013 and 2012 was $11,405 and $13,990, respectively.

Cost of Revenues. Cost of revenues were $7,017 and $7,430 for the three months ended October 31, 2013 and 2012 respectively. Cost of revenues were $30,969 and $23,128 for the nine months ended October 31, 2013 and 2012 respectively. The increase in costs was due to the operation of its websites and increasing capacity in anticipation of building business volume.

Operating Expenses. Operating expenses for the three months ended October 31, 2013 and 2012 were $422,125 and $159,511 respectively. The above expenses include depreciation and amortization amounts of $162,168 and $54,825 for the three months ended October 31, 2013 and 2012, respectively. Operating expenses for the nine months ended October 31, 2013 and 2012 were $817,808 and $766,119, respectively. The above expenses include depreciation and amortization amounts of $251,801 and $274,816 for the nine months ended October 31, 2013 and 2012, respectively. The significant increase in the quarterly expenses was due to the legal, professional and auditing fees incurred in order to bring our regulatory filings up to date.

Other Income (Expense). Other income represents interest paid on loans which was $22,731 and $17,760 for the three months ended October 31, 2013 and 2012, respectively, and $60,748 and $50,586 for the nine months ended October 31, 2013 and 2012, respectively.

Liquidity and Capital Resources

As of October 31, 2013, the Company had negative working capital of $971,397, comprised of current assets of $8,792 and current liabilities of $980,189.

 

Net cash used in operations for the nine months ended October 31, 2013 was $329,383 compared to $163,347 for the nine months ended October 31, 2012.

 

Cash used for purchase of fixed assets was $0 in the nine months ended October 31, 2013 and $0 for the same period in 2012.

 

Cash provided by financing activities for the nine months ended October 31, 2013 was $247,400 compared to $167,650 for the same period in 2012.

 

 

 

The Company has borrowed funds and/or sold stock for working capital.  These transactions are detailed in the section “Recent Sales of Unregistered Securities”.

 

Currently the Company does not have sufficient cash reserves or revenues to meet its contractual obligations under its outstanding notes payable and to pay its ongoing monthly expenses, which the Company anticipates totaling approximately $250,000 over the next 12 months.  The Company has been able to continue operating to date largely from loans made by its shareholders and other debt financings to date.  The Company is currently looking at both short-term and more permanent financing opportunities, including debt or equity funding, bridge or short term loans, and/or traditional bank funding, but we have not decided on any specific path moving forward.  Until we have raised sufficient funding to pay our ongoing expenses associated with being a public company, and we have sufficient funds to support our planned operations, the Company can provide no assurances that it will be able to meet its short and long term liquidity needs, until necessary financing is secured.  The Company continues to generate revenue from the Nurses Lounge business, which the Company believes will increase to the point where the Company can cover its basis monthly obligations, of which there can be no assurance.

 

We do not currently have any additional formal commitments or identified sources of additional capital from third parties or from our officers, director or significant shareholders. We can provide no assurance that additional financing will be available on favorable terms, if at all. If we are not able to raise the capital necessary to continue our business operations, we may be forced to abandon or curtail our business plan.

 

In the future, we may be required to seek additional capital by selling additional debt or equity securities, selling assets, if any, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then shareholders. We provide no assurance that financing will be available in amounts or on terms acceptable to us, or at all.

 

 

ITEM 3. Quantitative and Qualitative Disclosure about Market Risk.

 

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), we are not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

 

ITEM 4. Controls and Procedures

(a)           Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q (the "Evaluation Date"), has concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  Moving forward, we hope that our Chief Executive Officer and Principal Financial Officer will be able to devote the additional time and effort required so that our disclosure controls and procedures are once again effective.  Notwithstanding the assessment that our internal controls and procedures were not effective, we believe that our financial statements contained in this Quarterly Report for the quarter ended October 31, 2013 fairly present our financial position, results of operations and cash flows for the years and months covered thereby in all material respects.

 

(b)           Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II

 

Item 1. Legal Proceedings

 

From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.

 

Item 1A. Risk Factors

 

There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended January 31, 2013, filed with the Commission on September 23, 2013, other than as set forth below, and investors are encouraged to review such risk factors below and in the Form 10-K, prior to making an investment in the Company.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Recent Sales of Unregistered Securities

 

The following table describes sales of unregistered securities since the end of our last fiscal year:

 

 

	Consideration		Date	# Shares
Balance, Number of shares outstanding, January 31, 2013				50,125,528
Shares issued for deferred fees	Incentive for new loan	(1)	Feb, 2013	600,000
Shares issued for deferred fees	Incentive for new loan	(2)	July 19, 2013	200,000
Shares issued for deferred fees	Incentive for new loan	(3)	July 31, 2013	166,667
Shares issued for deferred fees	Incentive for new loan	(4)	July 31, 2013	133,334
Shares issued for deferred fees	Incentive for new loan	(5)	July 31, 2013	133,334
Shares issued for deferred fees	Note extension	(6)	July 31, 2013	1,100,000
Shares issued for note conversion	Convert $25,000 note	(7)	Aug 5, 2013	250,000
Shares issued for note conversion	Convert $20,000 note			200,000
Shares issued for note conversion	Convert $20,000 note			200,000
Shares issued to convert note plus accrued interest	Convert $140,000 + Int.			2,205,714
Shares issued to convert note plus accrued interest	Convert $70,000 + Int.			949,385
Issue common stock for services	Services			1,000,000
Issue common stock for services	Services			100,000
Issue common stock for cash	Cash @ $0.10 per share			199,000
Issue common stock for services	Services			100,000
Issue common stock for cash	Cash @ $0.10 per share			20,000
Shares issued for note conversion	Convert portion of note			97,000
Balance, Number of shares outstanding, December 20, 2013				57,779,962

 

 

(1) 600,000 Shares Restricted common stock issued as compensation for engagement term for one year of Consultant's (Inspire Value) services valued at $5,000 per month or $60,000 total. The stock was issued with an agreed upon value of $0.10 per share. The value of these shares were determined on the day of agreement and booked in the financial statements as Deferred Fees and amortized over the life of the loan.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(2) 200,000 total shares issued on July 19, 2013 in consideration for lending the Company $30,000, note dated July 19, 2013, 12% annual interest rate, due October 31, 2013, Jamie Bernard was issued a total of 200,000 shares of restricted common stock. Additionally, the note is convertible at $0.10 per share. The value of these shares were determined on the day of agreement and booked in the financial statements as Deferred Fees and amortized over the life of the loan.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(3) 166,667 shares were issued on 7/31/2013 in consideration for lending the Company $25,000, note dated October 31, 2013, 12% annual interest rate, due Oct 31, 2013. Additionally, the note is convertible at $0.10 per share. The value of these shares was determined on the day of agreement and booked in the financial statements as Deferred Fees and amortized over the life of the loan.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(4) 133,334 shares were issued on 7/31/2013 in consideration for lending the Company $20,000, note dated October 31, 2013, 12% annual interest rate, due Oct 31, 2013. Additionally, the note is convertible at $0.10 per share. The value of these shares was determined on the day of agreement and booked in the financial statements as Deferred Fees and amortized over the life of the loan.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(5) 133,334 total shares issued on 7/31/2013, In consideration for lending the Company $20,000, note dated October 31, 2013, 12% annual interest rate, due Oct 31, 2013 - the note was converted on August 5, 2013. Additionally, the note is convertible at $0.10 per share. The value of these shares was determined on the day of agreement and booked in the financial statement as Deferred Fees and amortized over the life of the loan.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

 

(6) 1,100,000 shares issued on 7/31/2013 in consideration for extending his original  note a second time with his original note  dated  November 4, 2010 and due November 4, 2011 and then renewed and due November 4, 2012 and additionally renewed a second time and due November 4, 2013 in the amount of $100,000 for an additional year. The value of these shares was determined on the day of agreement and booked in the financial statements as Deferred Fees and amortized over the life of the loan.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(7) Conversion of Note dated July 31, 2013 that had a conversion feature at $.10 per share. These shares were issued for the conversion of a $25,000 note.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(8) Conversion of Note dated July 31, 2013 that had a conversion feature at $.10 per share. These shares were issued for the conversion of a $20,000 note.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(9) Conversion of Note dated July 31, 2013 that had a conversion feature at $.10 per share. These shares were issued for the conversion of a $20,000 note.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(10) Conversion of Note dated July 31, 2013 that had a conversion feature at $.07 per share. These shares were issued for the conversion of a $140,000 note plus accrued interest.

 The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

 

(11) Conversion of Note dated July 31, 2013 that had a conversion feature at $.10 per share. These shares were issued for the conversion of a $70,000 note plus accrued interest.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(12) Sale of 199,000 shares of common stock for cash at $.10 per share.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

Options and Warrants

 

(13)  Three options for 127,500 shares of restricted common stock at an exercise price of $0.10 per share and for a term of 5 years was awarded Geneva7, LLC in consideration for loaning the Company $25,000 and renewing the note two additional times. Geneva7, LLC originally loaned the Company $25,000 at 12% interest on August 29, 2011 and was awarded an option to purchase 127,500 shares of restricted common stock at an exercise price of $0.10. The term of the option is 5 years. The loan matured on April 30th 2012 and Geneva 7 agreed to renew the loan and accrue interest thru October 31, 2013 and additionally renewed the loan thru October 31, 2013 when it matured on October 31, 2013. With each additional renewal Geneva7 received an additional option to purchase 127,500 shares of restricted common stock at an exercise price of $0.10 per share and for a term of 5 years.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(14) Warrant to purchase 1,000,000 shares. The Company entered into a contract for services with Horse and Hammerhead Marketing Solutions, LLC, a management consulting firm. Based on the agreement, the consultant was issued a warrant for 1,000,000 shares of MCGI’s restricted common stock at an exercise price of $0.12 per/share with a 4-year term.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(15) Warrant to purchase 100,000 shares. The Company entered into a contract for services with EBCO, LLC. Based on the agreement, in consideration for extending their $16,000 loan, they were issued a warrant for 100,000 shares of MCGI’s restricted common stock at an exercise price of $0.10 per/share, expiring March 29, 2016.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

(16) Warrant to purchase 2,000,000 shares as part of an employment agreement. The Company entered into an employment agreement with our CFO. Based on the agreement, in consideration for accepting the position of CFO, he was issued a warrant for 1,000,000 shares of MCGI’s restricted common stock at an exercise price of $0.25 per share, expiring September 23, 2016.

 

The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances and grants did not involve a public offering, the recipients took the shares and options for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.

 

Item 3. Default Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

See the Exhibit Index immediately following the signature page of this Report on Form 10-Q.

 

 

SIGNATURES

 

In accordance with 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.

 

Medcareers Group, Inc.

 

By:  /s/ Timothy Armes

Timothy Armes

Chairman (Director), Chief Executive Officer, President, Secretary and Treasurer

 

Date: December 20, 2013

 

EXHIBIT INDEX

 

Exhibit Number	Description of Exhibit
3.1(1)	Articles of Incorporation
3.2(5)	Certificate of Amendment to Articles of Incorporation
3.3(5)	Certificate of Correction to Certificate of Amendment to Articles of Incorporation
3.2(1)	Bylaws
10.1(1)	Revolving Credit Promissory Note with Kevin McAdams (December 12, 2007)
10.2(1)	Convertible Promissory Note with David M. Loev (March 11, 2008)
10.3(2)	Amended Convertible Promissory Note with David M. Loev
10.4(3)	Amended Revolving Credit Promissory Note with Kevin McAdams
10.5(3)	Second Amended Convertible Promissory Note with David M. Loev
10.6(4)	Stock Purchase Agreement
10.7(4)	Voting Agreement
10.8(4)	Debt Extinguishment Agreement (Kevin McAdams)
10.9(4)	Debt Extinguishment Agreement (David M. Loev)
10.10(6)	Agreement with Premier Healthcare Professionals, Inc.
10.11(7)	Promissory Note
10.12(8)	Asset Purchase Agreement Relating to the Purchase of WorkAbroad.com
10.13(8)	WorkAbroad.com Development Proposal
10.14(9)	Share Exchange Agreement with Nurses Lounge and the Shareholders of Nurses Lounge
10.15(9)	Cancellation of Shares Agreements
10.16(9)	Voting Agreement
10.17(9)	Employment Agreement with Timothy Armes (Nurses Lounge)
10.18(9)	Option Agreement with Garret Armes
10.19(9)	Option Agreement with Timothy Armes
10.20(9)	Spin-Off Agreement
10.21(9)	$190,000 Promissory Note

 

 

10.22(9)	$100,000 Promissory Note
10.23(10)	$50,000 Promissory Note
10.24(13)	Asset Purchase Agreement workabroad.com (July 8, 2011)
10.25(13)	Employment Agreement (Timothy Armes)( November 18, 2010)
10.26(13)	Employment Agreement (Garret Armes)(November 18, 2010)
10.27(13)	Common Stock Purchase Option (Timothy Armes)(November 18, 2010)(4,000,000 shares)
10.28(13)	Common Stock Purchase Option (Garret Armes)(November 18, 2010)(2,000,000 shares)
16.1(11)	Letter from GBH CPAs, PC dated March 29, 2013
31.1*	Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1(8)	Financial Statements of WorkAbroad.com
99.2(8)	Pro Forma Financial Information of WorkAbroad.com
99.3(12)	Audited Balance Sheets of Nurses Lounge as of October 31, 2010 and December 31, 2009; Audited Statement of Operations of Nurses Lounge for the ten months ended October 31, 2010, year ended December 31, 2009 and cumulative period since re-entering the development stage on January 1, 2009; Audited Statement of Partners’ Capital of Nurses Lounge for the year ended December 31, 2009 and ten months ended October 31, 2010; and Audited Statements of Cash Flows of Nurses Lounge for the ten months ended October 31, 2010, year ended December 31, 2009 and cumulative period since re-entering the development stage on January 1, 2009, and the notes thereto
99.4(12)	Unaudited Pro Forma Condensed Statement of Operations for the nine months ended October 31, 2010 and Unaudited Pro Forma Condensed Balance Sheet as of October 31, 2010, and the notes thereto

 

*   Filed herewith.

 

** Furnished herewith. 

 

(1)  Filed as Exhibits to the Company’s Registration Statement on Form S-1 filed with the Commission on July 22, 2008, and incorporated herein by reference.

 

(2) Filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q filed with the Commission on December 19, 2008, and incorporated herein by reference.

 

(3) Filed as an Exhibit to the Company’s Annual Report on Form 10-K filed with the Commission on May 8, 2009, and incorporated herein by reference.

 

(4) Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the Commission on October 9, 2009, and incorporated herein by reference.

 

 

(5) Filed as an Exhibit to the Company’s Current Report on Form 8-K, filed with the Commission on January 7, 2010, and incorporated herein by reference.

 

(6) Filed as an Exhibit to the Company’s Current Report on Form 8-K, filed with the Commission on May 7, 2010, and incorporated herein by reference.

 

(7) Filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q, filed with the Commission on May 14, 2010, and incorporated herein by reference.

 

(8) Filed as an Exhibit to the Company’s Current Report on Form 8-K, filed with the Commission on August 11, 2010, and incorporated herein by reference.

 

(9) Filed as an Exhibit to the Company’s Current Report on Form 8-K, filed with the Commission on December 2, 2010, and incorporated herein by reference.

 

(10) Filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q, filed with the Commission on March 11, 2011, and incorporated herein by reference.

 

(11) Filed as an Exhibit to the Company’s Current Report on Form 8-K, filed with the Commission on March 29, 2011, and incorporated herein by reference.

 

(12) Filed as an Exhibit to the Company’s Current Report on Form 8-K/A, filed with the Commission on August 16, 2013, and incorporated herein by reference.

 

(13) Filed as an Exhibit to the Company’s Annual Report on Form 10-K, filed with the Commission on September 3, 2013, and incorporated herein by reference.