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EXCEL - IDEA: XBRL DOCUMENT - THERALINK TECHNOLOGIES, INC.Financial_Report.xls
EX-31.1 - EXHIBIT 31.1 - THERALINK TECHNOLOGIES, INC.exhibit31-1.htm
EX-32.1 - EXHIBIT 32.1 - THERALINK TECHNOLOGIES, INC.exhibit32-1.htm

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: November 30, 2013

or

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

For the transition period from __________________ to __________________

Commission file number: 000-52218

QUINT MEDIA INC.
(Exact name of registrant as specified in its charter)

Nevada
20-2590810
State or other jurisdiction of
(I.R.S. Employer
incorporation or organization
Identification No.)

3250 NE 1st. Ave., Suite 305, Miami, Florida 33137
(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code: (786) 431-2174

N/A
Former name, former address and former fiscal year, if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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   [   ] (Do not check if a smaller reporting company) Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes [   ]     No [X]


- ii -

APPLICABLE TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court
Yes [   ]     No [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 62,833,000 shares of common stock are issued and outstanding as of January 14, 2014.


- iii -

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION 4
   
ITEM 1. FINANCIAL STATEMENTS 4
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 5
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 19
ITEM 4. CONTROLS AND PROCEDURES 19
   
PART II – OTHER INFORMATION 20
   
ITEM 1. LEGAL PROCEEDING 20
ITEM 1A. RISK FACTORS 20
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 25
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 25
ITEM 4. MINE SAFETY DISCLOSURES 25
ITEM 5. OTHER INFORMATION 25
ITEM 6. EXHIBITS 25
   
SIGNATURES 28


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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


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Quint Media, Inc.
(Formerly PediatRx Inc.)
(A Development Stage Company)
Balance Sheets
(Unaudited)

    November 30,     February 28,  
    2013     2013  
Assets            
             
Current Assets            
Cash and cash equivalents $  62,452   $  512,484  
Prepaid expenses   4,680     22,635  
   Total Current Assets   67,132     535,119  
Website and website development cost   348,800     -  
Assets from discontinued operations   200,000     250,556  
             
   Total Assets $  615,932   $  785,675  
             
Liabilities and Stockholders’ equity (deficit)            
             
Current Liabilities            
Accounts payable and accrued liabilities $  127,508   $  104,728  
Accounts payable and accrued liabilities, related party   207,006     -  
Short-term notes payable   400,000     500,000  
Liabilities from discontinued operations   121,268     119,382  
             
   Total current liabilities   855,782     724,110  
Stockholders’ equity (deficit)            
Capital stock            
Authorized 
     450,000,000 common shares, par value $0.0001
Issued and outstanding 
     February 28, 2013 – 62,508,000 common shares 
     November 30, 2013 – 62,883,000 common shares
  6,288     6,251  
Additional paid-in capital   2,697,541     2,622,578  
Deficit accumulated during the development stage   (2,943,679 )   (2,567,264 )
   Total stockholders' equity (deficit)   (239,850 )   61,565  
             
   Total liabilities and stockholders' equity (deficit) $  615,932   $  785,675  

The accompanying notes are an integral part of these unaudited financial statements.


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Quint Media, Inc.
(Formerly PediatRx Inc.)
(A Development Stage Company)
Statements of Operations
(Unaudited)

    For the Three Months     For the Nine Months     For the Period from Inception  
    Ended November 30,     Ended November 30,     on March 18, 2005 Through  
    2013     2012     2013     2012     November 30, 2013  
                               
Net revenues $  -    $   $   $ -   $  -  
                               
Expenses                              
Professional fees   83,528     13,189     197,748     123,564     759,221  
Salaries and wages   -     35,970     -     277,213     654,204  
General and administrative   79,137     -     150,699     -     1,089,666  
                               
Total Expenses   162,665     49,159     348,447     400,777     2,503,091  
                               
Other Income (Expenses)                              
Interest Expense   (6,575 )   (14,959 )   (24,668 )   (31,081 )   (111,471 )
Other income   55     -     622     -     622  
                               
Net Loss From Continuing Operations   (169,185 )   (64,118 )   (372,493 )   (431,858 )   (2,613,940 )
                               
Income (Loss) From Discontinued Operations   2,388     (259,468 )   (3,922 )   686,945     (329,739 )
                               
Net Income (Loss) $  (166,797 ) $ (323,586 ) $ (376,415 ) $ 255,087   $  (2,943,679 )
                               
Basic and diluted loss per common share from continuing operations $  (0.00 ) $ (0.00 ) $ (0.01 ) $ (0.01 )    
                               
Basic and diluted income (loss) per common share from discontinued operations $  0.00   $ (0.00 ) $ (0.00 ) $ 0.01      
                               
Basic and diluted income (loss) per common share $  (0.00 ) $ (0.00 ) $ (0.01 ) $ 0.00      
                               
Weighted average number of common shares   62,528,604     62,508,000     62,514,818     62,508,000      

The accompanying notes are an integral part of these unaudited financial statements.


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Quint Media, Inc.
(Formerly PediatRx Inc.)
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)

    For the Nine Months Ended     For the Period from  
    November 30,     Inception on March 18,  
                2005 Through  
    2013     2012     November 30, 2013  
                   
Cash Flows From Operating Activities                  
Net income (loss) $  (376,415 ) $  255,087   $  (2,943,679 )
Items to reconcile net loss to net cash used in operating activities:            
           Contributions to capital by related parties – expenses   -     -     58,799  
           Contributions to capital by related party – forgiveness of debt   -     -     38,950  
           Common shares issued for services   -     -     30  
           Stock based compensation   -     132,138     346,050  
           (Increase) decrease in prepaid expenses and deposits   17,955     (5,377 )   (4,680 )
           Increase in accounts payable and accrued liabilities, related party   207,006     -     207,006  
           Increase (decrease) in accounts payable and accrued liabilities   22,780     (235,571 )   244,423  
             Net cash provided by (used in) continuing operations   (128,674 )   146,277     (2,053,101 )
             Net cash provided by (used in) discontinued operations   52,442     (496,478 )   (142,512 )
             Net cash used in operating activities   (76,232 )   (350,201 )   (2,195,613 )
                   
Cash Flows From Investing Activities                  
             Acquisition of SlickX and Flawsome   (50,000 )   -     (50,000 )
             Capitalized website and website development costs   (298,800 )   -     (298,800 )
             Net cash used in continuing investing activities   (348,800 )   -     (348,800 )
             Net cash provided (used) in discontinued investing activities   -     123,464     (53,135 )
             Net cash provided by (used in) investing activities   (348,800 )   123,464     (401,935 )
                   
Cash Flows From Financing Activities                  
Proceeds from issuance of promissory notes   100,000     -     805,000  
Principal payments on promissory notes   (200,000 )   -     (200,000 )
Common shares returned to treasury   -     -     (5,000 )
Proceeds from issuance of common stock   75,000     -     2,060,000  
             Cash provided by (used in) financing activities   (25,000 )   -     2,660,000  
                   
             Increase (decrease) in cash and cash equivalents   (450,032 )   (226,737 )   62,452  
             Cash and cash equivalents, beginning of period   512,484     258,140     -  
             Cash and cash equivalents, end of period $  62,452   $  31,403   $  62,452  
                   
                   
Noncash investing activity                  
           Apricus Biosciences, Inc. common stock received in 
           consideration for termination of merger agreement
$  -   $  -   $  1,000,000  

The accompanying notes are an integral part of these (unaudited) financial statements.


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Quint Media, Inc.
(Formerly PediatRx Inc. )
(A Development Stage Company)
Notes to the Unaudited Financial Statements

1.

Nature of Operations, Continuance of Business, and Basis of Presentation

   

The accompanying unaudited condensed financial statements of Quint Media, Inc. (formerly PediatRx Inc.) (the “Company” or “Quint”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. In the opinion of the management of Quint, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three month periods and for the period from the date of inception have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms “Company”, “we” , “us” or “our” mean Quint Media, Inc. Certain information and note disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements for the year ended February 28, 2013.

   

From the date of its acquisition of Granisol® (granisetron #C1) oral solution (“Granisol”), on July 23, 2010, until early this year, Quint engaged in the pharmaceutical business. Quint has decided to divest itself of the balance of its pharmaceutical assets and engage in the digital media business. Quint has evaluated Granisol and believes that upon sale Quint will be able to receive the net realizable value of $200,000 net of any commissions as currently stated on the balance sheet as of November 30, 2013.

   

Quint is in the process of transitioning to its new operating business, digital media. The digital media business encompasses entrance into the social discovery aspects of the internet, primarily through the development of an engagement website with mobile and tablet applications. Quint capitalizes costs of licenses for the use of Internet domain names or Universal Resource Locators, website development costs, other information technology licenses and marketing and technology related intangibles. All such assets are capitalized at their original cost and upon substantial completion, will be amortized over their estimated useful.

   

Effective August 7, 2013, Quint effected a three-for-one forward stock split of our authorized, and issued and outstanding shares of common stock. Authorized common stock increased from 150,000,000 shares of common stock to 450,000,000 shares of common stock, and issued and outstanding capital increased from 20,836,000 shares of common stock to 62,508,000 shares of common stock. All references to Quint common stock have been retroactively restated to reflect the effect of the forward split.

   
2.

Going Concern

   

Quint’s financial statements as of November 30, 2013 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Quint has a net loss of $376,415 for the nine month period ended November 30, 2013 and a cumulative deficit of $2,943,679 at November 30, 2013. The losses from operations of Quint raise substantial doubt about Quint’s ability to continue as a going concern. Management cannot provide assurance that Quint will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that Quint’s capital resources are not currently adequate to continue operating and maintaining its business strategy for the fiscal year ending February 28, 2014. Quint will seek to raise capital through additional debt and/or equity financings to fund its operations in the future. Although Quint has historically raised capital from sales of equity and from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If Quint is unable to raise additional capital or secure additional lending in the near future, management expects that Quint will need to curtail or cease operations. These unaudited financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should Quint be unable to continue as a going concern.

   

As of November 30, 2013, Quint was in the process of transitioning to its new operating business and expects to incur operating losses for the next twelve months as it moves forward. This new operating business encompasses entrance into the social discovery aspects of the internet; primarily development of an engagement website with mobile and tablet application.



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3.

Related Party Transactions

   

On March 8, 2013, the Company entered into a Business Development/Advisory Services Agreement with Phys Pharma LLC, a company of which Dr. Durrant is a principal, pursuant to which Phys Pharma agreed to provide the Company a list of select biopharmaceutical companies which might have an interest in acquiring Granisol and assist the Company in marketing and selling Granisol to the prospective purchasers. If the Company sells Granisol to the prospective purchaser introduced by Phys Pharma, the Company agreed to pay Phys Pharma a fee in an amount equal to 20% of the net proceeds received by the Company at closing.

   

On April 5, 2013, and pursuant to a purchase and sale agreement dated for reference March 5, 2013, Dr. Cameron Durrant, our former President, Chief Executive Officer and director, sold to Constantin Dietrich, a director of our company, 12,750,000 shares of our common stock for total consideration of $51,000. Mr. Dietrich paid the $51,000 purchase price for these shares using cash on hand. In addition, Mr. Dietrich assumed all of Dr. Durrant’s obligations under the Lock-Up Agreement between Dr. Durrant and our company dated February 9, 2011, pursuant to which 8,499,999 of the 12,750,000 shares sold by Dr. Durrant remain “locked up”. Our company has consented to the transfer of the shares and to the assignment and assumption of the obligations under the Lock-Up Agreement. Also on April 5, 2013, and pursuant to a purchase and sale agreement dated for reference March 8, 2013, David Tousley, our former Chief Financial Officer, Secretary, Treasurer and director, sold to Joseph Carusone, our Vice President, Investor Relations and a member of our Board of Directors, 1,200,000 shares of our common stock for total consideration of $9,600. Mr. Carusone paid the $9,600 purchase price for these shares using cash on hand. In addition, Mr. Carusone assumed all of Mr. Tousley’s obligations under the Lock-Up Agreement between Mr. Tousley and our company dated February 9, 2011, pursuant to which 799,998 of the 1,200,000 shares sold by Mr. Tousley remain “locked up”. Our company has consented to the transfer of the shares and to the assignment and assumption of the obligations under the Lock-Up Agreement.

   

On May 17, 2013, the Company entered into a definitive Web Site Asset Purchase Agreement (the “Agreement”) with Lakefield Media Holding AG and its wholly-owned subsidiary, Flawsome XLerator GmbH (Flawsome). Constantin Dietrich, our current president and director of our company, is the founder and Chief Executive Officer of Lakefield Media Holding AG, which wholly-owns Flawsome.Pursuant to the Agreement, the Company acquired the internet domain name “Slickx.com”, the website and related software, intellectual property rights, accounts, contracts, goodwill and infrastructure for $50,000. This transaction was completed on May 21, 2013.

   

On May 29, 2013 the Company entered into a consulting agreement with Flawsome, whereby Flawsome agreed to provide us with certain services, including general management, product management, requirements engineering, quality management, project management, design creation, development team lead, deployment management, content management, reporting services, web development, mobile development, basic content creation, server hosting and monitoring and update services. In return, we agreed to pay Flawsome a consulting fee on a monthly basis. The agreement will terminate on December 31, 2013 or can be terminated by either party with two months’ notice. During the nine months ended November 30, 2013, the Company capitalized $298,800 in development costs contracted through Flawsome related to the “Slickx.com” website. As of November 30, 2013, the Company owes $142,200 to Flawsome.

   

As of November 30, 2013, the Company owes $64,806 for consulting services to a director and a Company whose shareholder is a director of the Company. The payable does not bear interest.



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4.

Short-term notes payable


        November 30,       February 28,  
        2013     2013  
 

Issued on June 15, 2009, this unsecured promissory note, originally bearing interest at five percent (5%) per annum on the principal balance of $50,000, was originally due on June 15, 2011. Effective May 18, 2011 this promissory note was amended whereby the maturity date of the note was extended until February 28, 2013. The promissory note is now past due and the principal amount or such portion thereof as shall remain outstanding from time to time shall accrue simple interest, calculated monthly in arrears, at a rate of 12% per annum commencing on the date of the promissory note and payable at maturity. Effective September 1, 2013, this promissory note was amended whereby the maturity date of the note was extended until June 30, 2014 and the interest rate was reduced to 7%.

  $ 50,000   $  50,000  
 

 

             
 

Issued on July 26, 2010, this unsecured promissory note, bearing interest at five percent (5%) per annum on the principal balance of $200,000, was originally due on July 26, 2011. Effective May 23, 2011 this promissory note was amended whereby the maturity date of the note was extended until February 28, 2013. The promissory note was paid in full in March 2013.

    -0-     200,000  
 

 

             
 

Issued on May 6, 2011, this unsecured promissory note, originally bearing interest at five percent (5%) per annum on the principal balance of $250,000, was originally due on February 28, 2013. The promissory note is past due and the principal amount or such portion thereof as shall remain outstanding from time to time shall accrue simple interest, calculated monthly in arrears, at a rate of 12% per annum commencing on the date of the promissory note and payable at maturity. Effective September 1, 2013, this promissory note was amended whereby the maturity date of the note was extended until June 30, 2014 and the interest rate was reduced to 7%.

    250,000     250,000  
 

 

             
 

Issued on September 24, 2013, this unsecured promissory note, bears interest at seven percent (7%) per annum on the principal balance of $100,000 and is due on June 30, 2014.

    100,000     -  
 

 

             
 

Total Promissory Notes

  $  400,000     $  500,000  

As of November 30, 2013, Quint entered into an amendment of a previously amended unsecured promissory note originally dated June 15, 2009 in the principal amount of $50,000. Effective September 1, 2013, the maturity date of the note has been extended from December 31, 2012 until June 30, 2014 and the interest rate on the outstanding principal balance has been decreased from twelve percent per annum to seven percent per annum. All other terms of the promissory note remain the same.

In addition, as of November 30, 2013, we entered into an amendment of a previously amended unsecured promissory note originally dated May 6, 2011 in the principal amount of $250,000. Effective September 1, 2013, the maturity date of the note has been extended from December 31, 2012 until June 30, 2014 and the interest rate on the outstanding principal balance has been decreased from twelve percent per annum to seven percent per annum. All other terms of the promissory note remain the same.


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The Company determined that concessions granted in the form of extensions of the due dates and reductions in interest rates on these above mentioned promissory notes are considered debt modifications as defined under Accounting Standards Codification 470-60, “Troubled Debt Restructurings by Debtors”.

   

Accrued interest on promissory notes payable totaled $69,282 and $78,968 at November 30, 2013 and February 28, 2013, respectively.

   
5.

Discontinued Operations

   

During the period ended November 30, 2013, the Company’s management elected to discontinue the operations of its pharmaceutical business, divest itself of the balance of its pharmaceutical assets and engage in the digital media business. As such, all assets, liabilities and expenses of the pharmaceutical business have been presented as discontinued operations in the consolidated financial statements. A summary of those assets and liabilities as of November 30, 2013 and February 28, 2013 and revenues and expenses as of November 30, 2013 and 2012 and from Inception March 18, 2005 through November 30, 2013:


      November 30,     February 28,  
      2013     2013  
  Assets from discontinued operations            
  Accounts receivable, net of reserves   -     50,556  
  Intangible assets, net (available for sale)   200,000     200,000  
               
     Total Assets $  200,000   $  250,556  
               
  Liabilities from discontinued operations            
  Accounts payable and accrued liabilities $  121,268   $  119,382  

                            For the Period from  
    For the Three Months     For the Nine Months     Inception on March 18,  
    Ended November 30,     Ended November 30,     2005 Through  
    2013     2012     2013     2012     November 30, 2013  
                               
Net revenues $  6,310   $  -   $ 6,310   $  120,640   $  1,131,517  
                               
Expenses                              
Cost of goods sold         1,152     6,310     36,276     363,081  
Amortization expense   -     20,214     -     64,355     682,820  
                               
Consulting fees   1,611     242     1,611     3,276     632,797  
Write down of mineral property acquisition costs   -     -     -     -     5,000  
Management fees   -     -     -     -     48,000  
Mineral property rights   -     -     -     -     15,124  
Marketing   2,311     30,949     2,311     46,883     631,659  
General and administrative   -     34,718           110,712     -  
                               
Total Expenses   3,922     87,275     10,232     261,502     2,378,481  
                               
Other Income (Expenses)                              
Gain on sale of product rights   -     -     -     -     64,900  
Other income (expense)   -     (172,193 )         827,807     852,325  
                               
Net Income (Loss) From Discontinued Operations $  2,388   $  (259,468 ) $  (3,922 ) $  686,945   $  (329,739 )


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6.

Common Stock and Common Stock Warrants

   

On November 25, 2013, the Company sold 375,000 units of our securities at a price of $0.20 per unit for gross proceeds of $75,000. Each unit consists of one share of common stock and one non-transferable common stock purchase warrant, with each common stock purchase warrant entitling the holder to acquire one additional share of our common stock at a price of $0.50 per share for a period of 60 months.



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

This quarterly report contains forward-looking statements. All statements other than statements of historical facts contained in this quarterly report, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are 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”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue” or the negative of these terms or other comparable terminology. Such forward-looking statements include, without limitation, statements regarding our future products and statements regarding our anticipated future cash position.

We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our company’s 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.

Moreover, we are a new entrant to the social media business and our management cannot predict all of the risks we will face in establishing our company in this industry, nor can we assess the impact that these risk factors might have on our business or the extent to which any risk factor, or any combination of risk factors, may cause actual results to differ materially from those contained in any forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. 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.

As used in this quarterly report and unless otherwise indicated, the terms “we”, “us”, “Quint” and “our” refer to Quint Media Inc., a Nevada corporation. Unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in Quint’s capital stock.

Our Business

Granisol

We have decided not to focus on the pharmaceutical industry and we are looking to divest the balance of our pharmaceutical assets. We recognized an impairment charge in the fourth quarter of 2013 to reduce the carrying amount of our pharmaceutical product rights to the estimated realizable value.

Slickx

On April 26, 2013, we entered into a non-binding letter of intent with Lakefield Media Holding AG to acquire the Slickx name, technology, source code, domain name and all other tangible and intangible assets relating to internet portals and platforms commonly known as “Slickx” for $50,000.

Pursuant to the above letter of intent, on May 17, 2013, we entered into a Web Site Asset Purchase Agreement with Lakefield Media Holding AG and its wholly-owned subsidiary, Flawsome XLerator GmbH to acquire the internet domain name “Slickx.com”, the website and related software, intellectual property rights, accounts, contracts, goodwill and infrastructure for $50,000. On May 21, 2013, we completed the acquisition of these assets and paid $50,000 to Lakefield. Constantin Dietrich, a director of our company, is the founder and Chief Executive Officer of Lakefield.

In addition, the letter of intent provides that for a period of one year, Lakefield will not enter into discussions or negotiations with respect to an acquisition of its assets or company. During this time, we may negotiate with Lakefield the terms of a sale of all of the remaining assets of Lakefield, either by way of an asset sale or through the sale of all of the outstanding securities of Lakefield, for consideration consisting of a maximum of 31,950,000 shares of our common stock. The completion of this transaction is subject to the entry into a definitive formal agreement. There is no assurance that the transaction contemplated by the letter of intent for the remaining assets of Lakefield will be completed as planned or at all.


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Functions and Services

We plan to enable users to not only consume digital content from the lifestyle, fashion and entertainment industry, but also to find, create and share the content within these verticals in which they are interested. Our service will connect consumers, creators and advertisers in an environment that is both engaging and social. By building a media network that delivers curated quality content we will offer a global platform that will enable the user to find, share and connect with like-minded people and opinion-leaders. The service is planned to be available on multiple platforms including web, tablet and mobile.

Revenue Model

We plan to generate revenue from the following:

Advertisements

One of the major benefits of advertising on a social media site is that advertisers can take advantage of the users’ demographic information and target their ads appropriately. We may sell advertisement space to companies that may be interested in targeting our subscribers. We anticipate that interested advertisers will include premium brand advertisers as well as local and regional advertisers who are looking for innovative new and exciting formats to carefully target the consumer to create an experience that benefits consumers and advertisers. The focus will be to offer content with targeted advertising that reaches the right audience with the right content and the right advertising.

Subscriptions

As the service matures, we may offer paid subscription services that enhance and augment the user experience. Further, there may be a cost for the consumer to download the application.

Competition

We will face substantial competition from dominant digital media companies and websites such as gawker.com and glam.com, as well as Facebook application providers in the social media space such as Pinterest. We believe that users often utilize multiple digital and social media websites or applications, and the use of one of these website or application is not necessarily to the exclusion of others.

Achieving a critical mass of users or subscribers is crucial for digital and social websites and applications. Even though we seek to offer products and services that are unique in the industry, superior in quality, and more appealing than those of our competitors, we will need to establish a solid initial user base and critical mass.

Although we believe that we have access to the tools and certain inherent efficiencies to attract the initial user base, we need to do that at a lower cost per visitor than certain of our traditional online competitors in order to essentially become successful. We also believe that the industry offers substantial room for growth as social networking application platforms and mobile platforms continue to expand and as the Internet especially mobile continues to become the primary source to engage with social media activities and consume, create and share news, events and other lifestyle-related content.

Marketing and Sales Strategy

The use of the Internet is continuing to evolve as a global platform for doing business. We anticipate that our major focus in the first year will be to enhance the Slickx website and the cultivation of our user base. We anticipate using various online marketing methods such as Facebook’s viral channels, online marketing programs and other advertising and marketing programs in order to drive traffic to our own website. We plan to take advantage of a well balanced mix of online and offline marketing strategies.

Our primary target market is focused on Internet users who already participate in social media websites. We therefore plan to take advantage of various well-established online marketing programs and make them an integral part of our long-term strategy. Our marketing campaigns will monitor daily statistics and track information such as interests, favorite topics and most read stories in order to quickly get synchronized with our Internet audience.


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We plan to participate in other marketing activities that will also aim to raise awareness of the Slickx.com brand and attract users by promoting the unique content and quality of our product and services. We plan to primarily advertise through Internet and mobile advertising and will have to run extensive user acquisition campaigns at any given time, targeting various classifications of users.

We plan to use media buying and in-house tools to effectively and efficiently track, measure and optimize the success of our advertising campaigns. We plan to initiate a marketing strategy with a focus on campaigns that we believe will produce a positive return on ad-spend in the medium- to long-term.

Online Advertising

The majority of our advertising and promotional activities will be concentrated on online advertising campaigns and Search Engine Marketing (SEM). SEM is a form of internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages (SERPs) like Google or Bing through optimization and advertising. SEM may use search engine optimization (SEO), that adjusts or rewrites website content to achieve a higher ranking in search engine results pages or use pay per click listings.

We have selected Google because of its success and popularity for web users wishing to find something using internet search. The Google Adwords program will allow us to customize the text of our advertisements, the frequency of each advertisement’s appearance, and the length of the advertising contract. For our purposes, we believe that this will give us the maximum amount of flexibility and allow us to closely monitor the costs of the marketing campaign.

Using this strategy will allow us also to design our own ads, and to select target locations such as a city or state and use keywords in our ads. A keyword is a word that is used by an Internet user who is performing an online search to find out information on a specific topic.

Optimizing Our Website

We plan to work with the web site development contractor to optimize our websites in terms of Search Engine Optimization (SEO). SEO is a technique which helps search engines find and rank a website or –page higher than others by affecting their visibility in a search engine’s “natural” or un-paid (“organic”) search results. Its objective is getting traffic from the “free,” “organic,” “editorial” or “natural” listings on search engines such as the major search engines Google, Yahoo and Bing that have such results. In general it is believed that a result (site) that appears earlier or higher and more frequently in the search results list on SERPs will get more visitors (traffic) from that search engine. SEO may target various kinds of search, including name search, local or image search, video search or search for events and news. Based on the type of search, SERPs Web pages and other content such as videos or local listings are shown and ranked based on what the search engine considers most relevant to users. Payment is not involved, as it is with paid search ads (SEM)

As part of our internet marketing strategy, we regard SEO to consider how search engines work, what users search for, the actual search terms or keywords typed into search engines and which search engines are preferred by their targeted audience. Thus, SEO may involve editing our website’s and –pages’ content, HTML and associated coding to both increase its relevance to specific keywords and to remove barriers to the indexing activities of search engines. We therefore plan to work with the web site development contractor to develop a series of keywords or meta-tags for each of the pages of our web site. Meta-tags are keywords that are added to a web page to make it easier to find that specific web page through search engines, web browser software and other applications. The information is not intended to be seen by the casual Internet user. Search engines like Google and Yahoo are designed to seek out these keywords when someone is performing an Internet search for a specific topic.

Intellectual Property

We own one registered trademark for Granisol and an unregistered trade-mark “Slickx”.

We are planning to develop the Slickx website and intend to protect its contents by registering for appropriate copyright and trademark protection where we deem such registration necessary or beneficial. We have not conducted any independent searches or other inquiry into patents or other intellectual property which may be owned by others and which may constrain our business plan, nor have we received independent opinions of counsel on such matters.


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Governmental Regulations

We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet, many of which are still evolving and could be interpreted in ways that could harm our business. In the United States and abroad, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories based on the nature and content of the materials searched, the ads posted, or the content provided by users. Any court ruling or other governmental action that imposes liability on providers of online services for the activities of their users and other third parties could harm our business. In addition, rising concern about the use of social media technologies for illegal conduct, such as the unauthorized dissemination of national security information, money laundering or supporting terrorist activities may in the future produce legislation or other governmental action that could require changes to our products or services, restrict or impose additional costs upon the conduct of our business or cause users to abandon material aspects of our service.

In the area of information security and data protection, many states have passed laws requiring notification to users when there is a security breach for personal data, or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to practically implement. The costs of compliance with these laws may increase in the future as a result of changes in interpretation. Furthermore, any failure on our part to comply with these laws may subject us to significant liabilities.

We are also subject to federal, state, and foreign laws regarding privacy and protection of member data. We intend to post on our website our privacy policy and user agreement, which describe our practices concerning the use, transmission and disclosure of member data. Any failure by us to comply with our posted privacy policy or privacy related laws and regulations could result in proceedings against us by governmental authorities or others, which could harm our business. In addition, the interpretation of data protection laws, and their application to the Internet is unclear and in a state of flux. There is a risk that these laws may be interpreted and applied in conflicting ways from state to state, country to country, or region to region, and in a manner that is not consistent with our current data protection practices. Complying with these varying international requirements could cause us to incur additional costs and change our business practices. Further, any failure by us to adequately protect our members’ privacy and data could result in a loss of member confidence in our services and ultimately in a loss of members and customers, which could adversely affect our business.

In addition, because we anticipate that our services will be accessible worldwide, certain foreign jurisdictions have claimed and others may claim that we are required to comply with their laws, including in jurisdictions where we have no local entity, employees, or infrastructure.

Research and Development Activities

Expenditures attributable to research and development of Granisol over the last two fiscal years were zero.

We have plans to undertake certain research and development activities during the first year of operation related to the development of the Slickx website.

Employees

At present, we have no employees other than Constantin Dietrich, our President, Chief Executive Officer, Chief Financial Officer, Treasurer and director. We intend to conduct our social media business largely through agreements with consultants and other independent third parties.

Liquidity and Capital Resources

Our financial condition at November 30, 2013 and February 28, 2013 for the respective items are summarized below.

We have suffered recurring losses from inception. Our ability to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our directors and shareholders, the continued issuance of equity to new or existing shareholders, and our ability to achieve and maintain profitable operations.


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Working Deficit

    November 30,     February 28,  
    2013     2013  
Current Assets $  67,132   $  535,119  
Current Liabilities   855,782     724,110  
Working Deficit $  (788,650 ) $  (188,991 )

From February 28, 2013 to November 30, 2013, our working deficit increased by approximately $707,688, due largely to $450,032 decrease in cash on hand, mainly due to the acquisition of the SlickX and Flawsome assets totaling $348,800 and cash used to fund our operations of $76,232.

Cash Flows

    Nine     Nine  
    Months     Months  
    ended     ended  
    November 30,     November 30,  
    2013     2012  
Cash used in operating activities $  (76,232 ) $  (350,201 )
Cash used in financing activities   (25,000 )   -  
Cash (used in) provided by investing activities   (348,800 )   123,464  
Net increase (decrease) in cash and cash equivalents $  (450,032 ) $  (226,737 )

Cash Used in Operating Activities

Our cash used in operating activities for the nine months ended November 30, 2013, compared to our cash used in operating activities for the nine months ended November 30, 2012, decreased $273,969 due to the reduction of our operations as compared to the previous years’ quarter.

Cash Used in Financing Activities

Our cash used in financing activities for the nine months ended November 30, 2013, compared to our cash used in financing activities for the nine months ended November 30, 2012, increased $25,000 mainly due to the repayment of a $200,000 promissory note, partially offset by $100,000 in proceeds from a promissory note and $75,000 in proceeds from the issuance of common stock for cash.

Cash Used in Investing Activities

Our cash used in investing activities for the nine months ended November 30, 2013, compared to our cash provided by investing activities for the nine months ended November 30, 2012, increased $472,446 due to the acquisition of SlickX and Flawsome assets for $50,000 and $298,800 from the capitalization of software development costs.

Cash Requirements

We estimate our operating expenses, excluding stock based compensation and amortization expense, and working capital requirements for the next 12 months to be as follows:


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Expense   Amount  
Bank charges and interest $  5,000  
Filing fees   10,000  
Investor relations   120,000  
Legal and accounting fees   220,000  
Licenses and permits   50,000  
Marketing expense   150,000  
Insurance expense   100,000  
Personnel and consulting expense   500,000  
Transfer agent fees   10,000  
Other general & administrative expense   95,000  
Total $  1,260,000  

Our management does not believe that our current capital resources will be adequate to continue operating our company and maintaining our business strategy for more than 12 months. Accordingly, we will have to raise additional capital in the near future to meet our working capital requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.

Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements for the nine month periods ended November 30, 2013 and November 30, 2012.

Operating Expenses

During the three months ended November 30, 2013, we incurred operating expenses totaling $162,665 compared with $49,159 for the three months ended November 30, 2012. The increase in operating expenses is mainly attributable to an increase in professional fees and general and administrative expenses of approximately $149,476 related to the commencement of our new operations, partially offset by a decrease of salaries and wages of $35,970.

During the nine months ended November 30, 2013, we incurred operating expenses totaling $348,447 compared with $400,777 for the nine months ended November 30, 2012. The decrease in operating expenses is mainly attributable to a decrease of $277,213 in salaries and wages as a result of terminating and winding down the pharmaceutical business in the current year, partially offset by an increase of $224,883 in professional fees and general and administrative expenses.

Net Loss

During the three months ended November 30, 2013, we realized net loss from continuing operations of $169,185 compared with a net loss from continuing operations of $64,118 for the three months ended November 30, 2012. The increase in net loss is mainly attributable to an increase in professional fees and general and administrative expenses of approximately $149,476 related to the commencement of our new operations, partially offset by a decrease of salaries and wages of $35,970.

During the nine months ended November 30, 2013, we realized a net loss from continuing operations of $372,493 compared with a net loss of $431,858 for the nine months ended November 30, 2012. The decrease in net loss was mainly attributable to a decrease of $277,213 in salaries and wages as a result of terminating and winding down the pharmaceutical business in the current year, partially offset by an increase of $224,883 in professional fees and general and administrative expenses.

Going Concern

Our financial statements and information for the period ended November 30, 2013, have been prepared by our management on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We have decided not to focus on the pharmaceutical industry and we are looking to divest our pharmaceutical assets. We have generated limited revenues to date and have incurred a net loss of $376,415 during the nine month period ended November 30, 2013, and $2,943,679 from inception (March 18, 2005) through November 30, 2013. We cannot provide any assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional funds through the sale of debt and/or equity.


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On November 30, 2013, we had cash and cash equivalents of $62,452. Our management does not believe that our current capital resources will be adequate to continue operating our company and maintaining our business strategy for more than 12 months. If we are unable to raise additional capital in the near future, we expect that we will need to curtail operations, liquidate any assets that we might own, seek additional capital on less favorable terms and/or pursue other remedial measures. Our financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Future Financing

We will require additional financing to fund our planned operations. We currently do not have committed sources of additional financing and may not be able to obtain additional financing particularly, if the volatile conditions of the stock and financial markets, and more particularly the market for early development stage company stocks persist.

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to further delay or further scale down some or all of our activities or perhaps even cease the operations of the business.

Since inception we have funded our operations primarily through equity and debt financings and we expect that we will continue to fund our operations through the equity and debt financing, either alone or through strategic alliances. If we are able to raise additional financing by issuing equity securities, our existing stockholders’ ownership will be diluted. Obtaining commercial or other loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his, her, or its investment in our common stock. Further, we may continue to be unprofitable.

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 our stockholders.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure controls and procedures

We maintain “disclosure controls and procedures”, as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer to allow timely decisions regarding required disclosure.

As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, as amended, our management, with the participation of our principal executive officer and principal financial officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on that evaluation, our principal executive and financial officer concluded that, as of November 30, 2013, our disclosure controls and procedures were effective.


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Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting during our last fiscal quarter ended November 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting,

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDING

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this report in evaluating our company and its business before purchasing shares of our company’s common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. You could lose all or part of your investment due to any of these risks.

Risks Related to Our Company

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.

During the nine month period ended November 30, 2013, we generated net loss of $346,415. From inception through November 30, 2013, we incurred an aggregate loss of $2,943,679. We anticipate that we will continue to generate losses and will require additional funding to remain in business. On November 30, 2013, we had cash and cash equivalents of $62,452. In order to fund our anticipated budget for the next 12 months, excluding any development or product acquisition costs, we believe that we will need to raise in excess of $1,000,000. This amount could increase if we encounter difficulties that we cannot anticipate at this time. We have traditionally raised our operating capital from the sale of equity securities and the placement of notes payable, but there can be no assurance that we will continue to be able to do so.

These circumstances raise substantial doubt about our ability to continue as a going concern, as described in the explanatory paragraph to our independent auditors’ report on our financial statements for the year ended February 28, 2013. Although our financial statements raise substantial doubt about our ability to continue as a going concern, they do not reflect any adjustments that might result if we are unable to continue our business. Our financial statements contain additional note disclosure describing the circumstances that lead to this disclosure by our independent auditors.

Our substantial debt and other financial obligations could impair our financial condition and our ability to fulfill our debt obligations. Any refinancing of this substantial debt could be at significantly higher interest rates.

At August 31, 2013, we entered into amendments to two previously amended unsecured promissory notes with outstanding principal amounts of $50,000 and $250,000 and originally dated June 15, 2009 and May 2, 2011, respectively. The unsecured promissory notes were due December 31, 2012 and accrued interest at a rate of 12% per annum. Effective September 1, 2013, the maturity date of the notes was extended until June 30, 2014 and the interest rate on the outstanding principal balance has been deceased from twelve percent per annum to seven percent per annum. All other terms of the promissory note remain the same. On September 24, 2013, we received proceeds of $100,000 from the issuance of an unsecured promissory note bearing interest at 7% per annum and due June 30, 2014. Our substantial indebtedness and other current financial obligations and any that we may become a party to in the future could:

  • impair our ability to obtain financing in the future for working capital, capital expenditures, partnerships, acquisitions or general corporate purposes;

  • have a material adverse effect on us if we fail to comply with financial and affirmative and restrictive covenants in debt agreements and an event of default occurs as a result of a failure that is not cured or waived;


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  • require us to dedicate a substantial portion of our cash flow for interest payments on our indebtedness and other financial obligations, thereby reducing the availability of our cash flow to fund working capital and capital expenditures;

  • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

  • place us at a competitive disadvantage compared to our competitors that have proportionally less debt.

If we are unable to meet our debt service obligations and other financial obligations, we could be forced to restructure or refinance our indebtedness and other financial transactions, seek additional equity capital or sell our assets. We might then be unable to obtain such financing or capital or sell our assets on satisfactory terms, if at all. Any refinancing of our indebtedness could be at significantly higher interest rates, and/or incur significant transaction fees.

If we do not successfully divest our pharmaceutical assets, we may not have sufficient capital to pursue our new social media business.

We have decided not to focus on the pharmaceutical industry and we are looking to divest our pharmaceutical assets. If we do not successfully divest our pharmaceutical assets and we do not raise additional capital to pursue our social media projects, we will have to revisit our business strategy in an effort to determine what changes may be required in order for us to continue our operations. Further, we may need to consider raising additional capital or financing in order to continue as a going concern even if we do not pursue such projects or if the sale of our pharmaceutical assets is not completed. No assurance can be given whether we would be able to successfully raise capital or financing in such circumstances or, if so, under what terms.

Efforts to expand will place a significant strain on our management, operational, financial and other resources.

Given sufficient capital, we plan to expand our operations by marketing our Slickx website, which will place a significant strain on our management, operations, technical performance and financial resources. There can be no assurance that we will be able to manage expansion effectively. Our current and planned personnel, systems, procedures, and controls may not be adequate to support and effectively manage our future operations, especially as we employ personnel in multiple geographic locations. We may not be able to hire, train, retain, motivate, and manage required personnel, which may limit our growth. If any of this were to occur, it could damage our reputation, limit our growth, negatively affect our operating results and harm our business. We do not currently have the required capital to market either of the offerings.

We are an early-stage company with a limited operating history, which may hinder our ability to successfully meet our objectives.

We are an early-stage company with a limited operating history upon which to base an evaluation of our new business. As a result, the revenue and income potential of our new business is unproven. In addition, because of our limited operating history, we have limited insight into trends that may emerge and affect our business. Errors may be made in predicting and reacting to relevant business trends and we will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies in evolving markets. We may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause our business, results of operations and financial condition to suffer.

Our development efforts rely on external software engineers.

We will be dependent on outside software engineers to drive our development. If our management is not able to execute on our business plan, it is likely stockholders would lose their entire investment.

Risks Relating to the Social Media Business

We are a social media company in a highly competitive field with high investment costs and high risks.

We are a social media company. We must achieve a certain level of users of our website, Slickx before it can be monetized and produce revenue for us. We will have to raise substantial additional capital to drive users to our website and eventually generate revenues and reach profitability, if ever. We will be dependent upon selling advertisements and finding other ways to monetize our users by selling add-on services. For a social application or site to be able to sell advertisements, it must first attract a sufficient number of users to gain the interest of advertisers in buying ads and offering products on the site or the application. It will take time, management effort and capital to attract users to our website. There can be no assurance that any users will come. These timeframes, along with the general state of development create additional uncertainty as to the potential success of our website. The application may not continue to work as we plan and even if it does, there can be no assurance that an economically viable level of users will come, that advertisers will want to advertise or that we can monetize it. Therefore, it will be costly to maintain the application and market it to attract users and advertisers.


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We are entering a very crowded social media marketplace where existing competitors have years of experience, are well financed and have the name recognition to draw consumers, none of which we possess.

Our board of directors has determined that the future direction of our company will focus on development of Slickx website. This puts our business focus in a very competitive field dominated by several very large and well financed companies such as Facebook, MySpace and Twitter. These companies have established an online presence and community that have become destinations in and of themselves and it will be difficult to make inroads into this space. We will be dependent on a new twist to entry into this space but in the end, all social media sites have similar features and it is likely that if any part of our offering becomes compelling, the competitors will adjust their offerings to be directly competitive with us. This creates substantial uncertainty on our ability to survive in this space or to be able to attract enough users to be able to monetize our site to produce revenues.

The revenue models for our social media business require we first obtain a sufficient number of users of our website before we can sell advertisements or generate other revenue and it will take time to generate such users and to then monetize the site.

We will be dependent on selling advertisements and finding other ways to monetize our users by selling add-on services. For a social media site to be able to sell advertisements, they first must attract a sufficient number of users to gain the interest of advertisers in buying ads on the sites. It will take time and money to bring users to our site and there is no assurance any users will come. These time frames along with the general state of development create additional uncertainty as to the potential success of our company. The site may not work as we plan and even if they do there can be no assurance any users will come, that advertisers will want to advertise or that we can monetize them. Additionally, it will be costly to maintain the offerings and market them to attract users.

The security risks or perception of risks of using social media websites may discourage users from using our website.

We and other market participants must be able to transmit confidential information securely over public networks. Third parties may have the technology or know-how to breach the security of user data. Any breach could cause users to lose confidence in the security of our website and choose not use our site.

We cannot assure you that advances in computer capabilities, new discoveries in the field of cryptography or other events or developments will not result in a compromise or breach of the algorithms that we will use to protect user data. If any such compromise of our security were to occur, it could harm our reputation, business, prospects, financial condition and results of operations. A party who is able to circumvent our security measures could misappropriate information or cause interruptions in our operations. We may be required to expend significant capital and other resources to protect against such security breaches or to alleviate problems caused by such breaches. We cannot assure you that our security measures will prevent security breaches or that failure to prevent such security breaches will not harm our business, prospects, financial condition and results of operations.

We may be liable if third parties misappropriate our users’ personal information.

If third parties are able to penetrate our network security or otherwise misappropriate our users’ personal information, or if we give third parties improper access to our users’ personal information, we could be subject to liability. This liability could include claims for impersonation or other similar fraud claims. This liability could also include claims for other misuses of personal information, including unauthorized marketing purposes. These claims could result in litigation. Liability for misappropriation of this information could adversely affect our business. In addition, the Federal Trade Commission and state agencies have been investigating various Internet companies regarding their use of personal information. We could incur additional expenses if new regulations regarding the use of personal information are introduced or if government agencies investigate our privacy practices.

System and online security failures could harm our business and operating results.

Our services will depend on the efficient and uninterrupted operation of our computer and communications hardware systems. Our systems and operations will be vulnerable to damage or interruption from a number of sources, including fire, flood, power loss, telecommunications failure, break-ins, earthquakes and similar events. Our Internet host provider does not guarantee that our Internet access will be uninterrupted, error-free or secure. Our servers are also vulnerable to computer viruses, physical, electrical or electronic break-ins and similar disruptions. Any substantial interruptions could result in the loss of data and could completely impair our ability to generate revenues from our service. We do not presently have a full disaster recovery plan in effect to cover the loss of all facilities and equipment.


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We currently do not have any patents associated with our Slickx website and if we are not able to develop intellectual property protection around our product offering, we may not be able to prevent competitors from recreating our product offering.

Other than certain unregistered trademarks, we do not have any intellectual property protection on the features and software behind our Slickx website. We are planning to develop our website and intend to protect its contents by registering for appropriate copyright and trademark protection where our management deems such registration necessary or beneficial, but there is no assurance that we will be able to obtain such protection. We have not conducted any independent searches or other inquiry into patents or other intellectual property which may be owned by others and which may constrain our business plan, nor have we received independent opinions of counsel on such matters.

If we do not respond to rapid technological changes, our services could become obsolete and we could lose users.

To remain competitive, we will need to continually enhance and improve the functionality and features of our social media website. We may face material delays in introducing new services, products and enhancements. If this happens, our users may forgo the use of our website and use those of our competitors. The Internet and the social media industry are rapidly changing. If competitors introduce new products and services using new technologies or if new industry standards and practices emerge, our existing website and our technology and systems may become obsolete. Our failure to respond to technological change or to adequately maintain, upgrade and develop our computer network and the systems used to process users’ uses of our website could harm our business, prospects, financial condition and results of operations.

Existing or future government regulation could harm our business, results of operation and financial condition.

We are subject to the same federal, state and local laws as other companies conducting business on the Internet. Today there are relatively few laws specifically directed towards conducting business on the Internet. However, due to the increasing popularity and use of the Internet, many laws and regulations relating to the Internet are being debated at the state and federal levels. These laws and regulations could cover issues such as user privacy, freedom of expression, pricing, fraud, quality of products and services, taxation, advertising, intellectual property rights and information security. Applicability to the Internet of existing laws governing issues such as property ownership, copyrights and other intellectual property issues, taxation, libel, obscenity and personal privacy could also harm our business. For example, United States and foreign laws regulate our ability to use user information and to develop, buy and sell mailing lists. The vast majority of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised thereby. Those laws that do reference the Internet are only beginning to be interpreted by the courts and their applicability and reach are therefore uncertain. These current and future laws and regulations could harm our business, results of operation and financial condition.

The content of our website could expose us to various kinds of liability, which, if prosecuted successfully, could negatively impact our business.

We will face potential liability for negligence, copyright infringement, patent infringement, trademark infringement, defamation, and/or other claims based on the nature and content of the materials our user’s post. Various claims have been brought, and sometimes successfully prosecuted, against Internet content distributors. We could be exposed to liability with respect to the unauthorized duplication of content or unauthorized use of other parties’ proprietary technology. Any imposition of liability that is not covered by insurance, or is in excess of insurance coverage, could materially adversely affect our financial condition and results of operations. Any claim of infringement, with or without merit, could be time consuming, result in costly litigation or require us to enter into royalty or licensing agreements. Such royalty or licensing agreements might not be available on terms acceptable to us, or at all. As a result, any such claim of infringement against us could have a material adverse effect upon our business, financial condition, results of operations and cash flows.

Risks Relating to Our Common Stock

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

Our articles of incorporation authorize the issuance of up to 450,000,000 shares of common stock with a par value of $0.0001 per share. Our board of directors may choose to issue some or all of such shares to acquire one or more products and to fund our overhead and general operating requirements. The issuance of any such shares will reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.


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Trading of our stock is restricted by the Securities Exchange Commission’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our common stock.

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (known as “FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Although our common stock is currently listed for quotation on the OTCQB operated by the OTC Markets Group, trading through the OTCQB is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

We do not intend to pay dividends on any investment in the shares of stock of our company.

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen and investors may lose all of their investment in our company.


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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. Exhibits

Exhibits required by Item 601 of Regulation S-K:

No. Description
3.1

Articles of Incorporation (attached as an exhibit to our registration statement on Form 10-SB filed on September 8, 2006)

3.2

Certificate of Change (attached as an exhibit to our current report on Form 8-K filed on September 15, 2008)

3.3

Articles of Merger (attached as an exhibit to our current report on Form 8-K filed on December 28, 2010)

3.4

Certificate of Change dated effective August 7, 2013 (attached as an exhibit to our current report on Form 8-K filed on August 8, 2013)

3.5

Articles of Merger dated effective August 7, 2013 (attached as an exhibit to our current report on Form 8-K filed on August 8, 2013)

3.6

Amended and Restated Bylaws (attached as an exhibit to our current report on Form 8-K filed on November 1, 2013)

10.1

Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on November 6, 2008)

10.2

Form of Private Placement Subscription Agreement dated June 15, 2009 (attached as an exhibit to our quarterly report on Form 10-Q filed on June 16, 2009)

10.3

Form of promissory note dated June 15, 2009 (attached as an exhibit to our quarterly report on Form 10-Q filed on June 16, 2009)

10.4

Consulting Agreement with Cameron Durrant dated May 28, 2010 (attached as an exhibit to our quarterly report on Form 10-Q filed on June 28, 2010)

10.5

Letter of Intent with Cypress Pharmaceuticals Inc. (attached as an exhibit to our quarterly report on Form 10-Q filed on June 28, 2010)

10.6

Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on June 17, 2010)

10.7

Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on July 9, 2010)

10.8

Asset Purchase Agreement dated July 22, 2010 with Cypress Pharmaceuticals, Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010) (portions of the exhibit have been omitted pursuant to a request for confidential treatment)

10.9

Assignment and Assumption of Contract dated July 22, 2010 with Cypress Pharmaceuticals, Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010)

10.10

Consent to Assignment by Therapex and E-Z-EM Canada Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010)

10.11

Manufacturing and Supply Agreement dated July 22 2010 between Cypress Pharmaceuticals, Inc. and Therapex, a division of E-Z-EM Canada Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010) (portions of the exhibit have been omitted pursuant to a request for confidential treatment)



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10.12

Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on July 29, 2010)

10.13

Form of Promissory Note dated July 26, 2010 (attached as an exhibit to our current report on Form 8-K filed on July 29, 2010)

10.14

Employment Agreement effective July 1, 2010 with David L. Tousley (attached as an exhibit to our current report on Form 8-K filed on September 16, 2010)

10.15

Employment Agreement effective July 1, 2010 with Jorge Rodriguez (attached as an exhibit to our current report on Form 8-K filed on September 16, 2010)

10.16

Consulting Agreement effective July 1, 2010 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010)

10.17

Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010)

10.18

Form of Promissory Note dated September 16, 2010 (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010)

10.19

Termination Agreement effective July 1, 2010 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010)

10.20

Management Stock Agreement made effective July 1, 2010 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on November 3, 2010)

10.21

Management Stock Agreement made effective July 1, 2010 with David Tousley (attached as an exhibit to our current report on Form 8-K filed on November 3, 2010)

10.22

Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on November 3, 2010)

10.23

Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on December 2, 2010)

10.24

Form of Shares for Debt Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on December 2, 2010)

10.25

Cancellation Agreement dated February 9, 2011 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011)

10.26

Cancellation Agreement dated February 9, 2011 with David Tousley (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011)

10.27

Lock-up Agreement dated February 9, 2011 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011)

10.28

Lock-up Agreement dated February 9, 2011 with David Tousley (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011)

10.29

2011 Stock Option Plan (attached as an exhibit to our current report on Form 8-K filed on February 22, 2011)

10.30

Form of Stock Option Agreement (attached as an exhibit to our current report on Form 8-K filed on March 7, 2011)

10.31

Form of Private Placement Subscription Agreement including Form of Promissory Note dated May 6, 2011 (attached as an exhibit to our current report on Form 8-K filed on May 11, 2011)

10.32

Form of Promissory Note Amendment dated May 18, 2011 (attached as an exhibit to our current report on Form 8-K filed on May 18, 2011)

10.33

Form of Promissory Note Amendment dated May 23, 2011 (attached as an exhibit to our current report on Form 8-K filed on May 23, 2011)

10.34

Form of Stock Option Agreement (attached as an exhibit to our current report on Form 8-K filed on July 26, 2011)

10.35

Co-Promotion Agreement dated September 12, 2011 with Bi-Coastal Pharmaceutical Corp., (attached as an exhibit to our current report on Form 8-K filed on September 14, 2011) (portions of the exhibit have been omitted pursuant to a request for confidential treatment)

10.36

Form of Stock Option Agreement (attached as an exhibit to our current report on Form 8-K filed on September 15, 2011

10.37

Independent Contractor Agreement effective July 1, 2011 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on September 30, 2011)

10.38

Amendment to Stock Option Agreement, Waiver and Release dated December 15, 2011 with Jorge Rodriguez (attached as an exhibit to our quarterly report on Form 10-Q filed on January 17, 2012)

10.39

Binding term sheet for (1) Granisol and Aquoral US Co-promotion Agreement, (2) Sale of ex- US rights for Granisol and non-binding term sheet for merger of PediatRx Inc. and Apricus Biosciences, Inc. dated January 26, 2012 (attached as an exhibit to our current report on Form 8-K filed on January 27, 2012)

10.40

Asset Purchase Agreement dated February 21, 2012 with Apricus Biosciences, Inc. (attached as an exhibit to our annual report on Form 10-K filed on May 18, 2012)



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10.41 Co-Promotion Agreement dated February 21, 2012 with Apricus Biosciences, Inc. (attached as an exhibit to our annual report on Form 10-K filed on May 18, 2012) (portions of the exhibit have been omitted pursuant to a request for confidential treatment)
10.42

Form of $50,000 Promissory Note Amendment dated April 19, 2012 (attached as an exhibit to our annual report on Form 10-K filed on May 18, 2012)

10.43

Form of $250,000 Promissory Note Amendment dated April 19, 2012 (attached as an exhibit to our annual report on Form 10-K filed on May 18, 2012)

10.44

Termination Agreement dated June 27, 2012 with Apricus Biosciences, Inc. (attached as an exhibit to our current report on Form 8-K filed on June 28, 2012)

10.45

Form of $200,000 Promissory Note Amendment dated July 25, 2012 (attached as an exhibit to our current report on Form 8-K filed on July 27, 2012)

10.46

Form of $50,000 Promissory Note Amendment dated July 25, 2012 (attached as an exhibit to our current report on Form 8-K filed on July 31, 2012)

10.47

Form of $250,000 Promissory Note Amendment dated July 25, 2012 (attached as an exhibit to our current report on Form 8-K filed on July 31, 2012)

10.48

Business Development/Advisory Services Agreement dated March 8¸2013 with Phys Pharma LLC (attached as an exhibit to our annual report on Form 10-K filed on June 28, 2013)

10.49

Web Site Asset Purchase Agreement dated May 17, 2013 between Lakefield Media Holding AG, Flawsome XLerator GmBH and Pediatrix Inc. (attached as an exhibit to our annual report on Form 10-K filed on June 28, 2013)

10.50

Consulting Agreement dated May 29, 2013 with Flawsome XLerator GmBH (attached as an exhibit to our annual report on Form 10-K filed on June 28, 2013)

10.51

Form of Private Placement Subscription Agreement including Form of Promissory Note (attached as an exhibit to our current report on Form 8-K filed on September 26, 2013)

10.52

Form of Promissory Note Amendment dated August 31, 2013 (attached as an exhibit to our current report on Form 8-K filed on September 26, 2013)

10.53

Form of Promissory Note Amendment dated August 31, 2013 (attached as an exhibit to our current report on Form 8-K filed on September 26, 2013)

10.54

Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on December 2, 2013)

10.55

Form of Warrant Certificate (attached as an exhibit to our current report on Form 8-K filed on December 2, 2013)

31.1*

Certification of Constantin Dietrich Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002

32.1*

Certification of Constantin Dietrich Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002

101.INS*

XBRL INSTANCE DOCUMENT

101.SCH*

XBRL TAXONOMY EXTENSION SCHEMA

101.CAL*

XBRL TAXONOMY EXTENSION CALCULATION LINKBASE

101.DEF*

XBRL TAXONOMY EXTENSION DEFINITION LINKBASE

101.LAB*

XBRL TAXONOMY EXTENSION LABEL LINKBASE

101.PRE*

XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

* Filed herewith.


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

QUINT MEDIA INC.

/s/ Constantin Dietrich                              
Constantin Dietrich
President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
Date: January 14, 2014