LIFESTYLE MEDICAL NETWORK, INC. - FORM 10-Q

Attached files

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EXCEL - IDEA: XBRL DOCUMENT - LIFESTYLE MEDICAL NETWORK, INC.	Financial_Report.xls
EX-31 - CERTIFICATION - LIFESTYLE MEDICAL NETWORK, INC.	f10q0314ex31_lifestyle.htm
EX-32 - CERTIFICATION - LIFESTYLE MEDICAL NETWORK, INC.	f10q0314ex32_lifestyle.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________

Form 10-Q

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

For the quarterly period ended March 31, 2014

o 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 000-52408

LIFESTYLE MEDICAL NETWORK INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		13-1026995
(State or Other Jurisdiction of		(I.R.S. Employer Identification No.)
Incorporation or Organization)

201 South Orange Ave., Suite 1510, Orlando, FL		32810
(Address of principal executive offices)		(Zip Code)

(407) 514-1230

(Registrant's Telephone Number, Including Area Code)

_____________________________________________

(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. x Yes o 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 o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. (Check One):

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o	Smaller reporting company x

(Do not check if a smaller reporting company)

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

The number of shares outstanding of the issuer's common stock, $0.001 par value per share, was 25,835,101 as of May 14, 2014.

LIFESTYLE MEDICAL NETWORK, INC.

INDEX

		Page

Part I.	Financial Information	3

Item 1.	Financial Statements.	3

	Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013 (unaudited)	4

	Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013, and for the period October 8, 2010 (Date of Formation) through March 31, 2014 (unaudited)	5

	Consolidated Statement of Stockholders’ Equity for the Period October 8, 2010 (Date of Formation) through March 31, 2014 (unaudited)	6

	Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013, and for the period October 8, 2010 (Date of Formation) through March 31, 2014 (unaudited)	7

	Notes to Unaudited Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	17

Item 4.	Controls and Procedures.	18

Part II.	Other Information	18

Item 6.	Exhibits.	18

Signatures		19

PART I — FINANCIAL INFORMATION

ITEM 1.

CONSOLIDATED FINANCIAL STATEMENTS.

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. The following unaudited consolidated financial statements should be read in conjunction with the year-end restated consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended December 31, 2013.

The results of operations for the three months ended March 31, 2014 and 2013, and for the period October 8, 2010 (Date of Formation) through March 31, 2014 are not necessarily indicative of the results for the entire fiscal year or for any other period.

LIFESTYLE MEDICAL NETWORK INC. AND SUBSIDIARIES

(a Development Stage Company)

CONSOLIDATED BALANCE SHEETS

ASSETS

	March 31,			December 31,
	2014			2013
	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	16,057		$	19,974
Loan receivable - net of allowance of $42,500		-			-
Prepaid expenses		8,333			3,750
Total Current Assets		24,390			23,724

Property, plant and equipment – net		2,442			2,667
Intangible assets – net		93,060			94,448
Deposit on acquisition		100,000			-
Other assets		6,000			6,000
TOTAL ASSETS	$	225,892		$	126,839

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
Short-term debt to related parties	$	879,133		$	779,133
Short-term debt		251,000			176,000
Accounts payable and accrued expenses		81,290			88,310

Total Current Liabilities		1,211,423			1,043,443

Commitments and Contingencies		-			-

STOCKHOLDERS' DEFICIENCY:
Common stock, $.001 par value, 200,000,000 shares authorized; 26,085,101 and 25,835,101 shares issued and 26,084,983 and 25,834,983 shares outstanding at March 31, 2014 and December 31, 2013, respectively		26,085			25,835
Additional paid-in-capital		7,176,920			7,112,725
Accumulated deficit during the development stage		(8,179,299	)		(8,045,927	)
Less: Cost of common stock in treasury, 118 and 118 shares at March 31, 2014 and December 31, 2013, respectively		(9,237	)		(9,237	)
Total Stockholders' Deficiency		(985,531	)		(916,604	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	225,892		$	126,839

See notes to unaudited consolidated financial statements

LIFESTYLE MEDICAL NETWORK INC. AND SUBSIDIARIES

(a Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

							For the Period October 8, 2010
	For the Three Months Ended						(Date of Formation)
	March 31,						through
	2014			2013			March 31, 2014
Revenues	$	-		$	-		$	-

Costs and expenses:
Selling, general and administrative expenses		105,455			92,274			1,935,949
Impairment loss		-			-			5,392,308
Total Costs and expenses		105,455			92,274			7,328,257

Loss from operations		(105,455	)		(92,274	)		(7,328,257	)

Other income (expense):
Interest expense		(27,917	)		(1,875	)		(196,385	)
Loss on extinguishment of debt		-			-			(654,657	)
Total Other income (expense)		(27,917	)		(1,875	)		(851,042	)

Loss from operations before provision for income taxes		(133,372	)		(94,149	)		(8,179,299	)

Provision for income taxes		-			-			-

Net loss	$	(133,372	)	$	(94,149	)	$	(8,179,299	)

Loss per common share	$	(0.01	)	$	(0.00	)

Weighted average common shares outstanding - basic and diluted		25,990,657			25,204,983

See notes to unaudited consolidated financial statements

LIFESTYLE MEDICAL NETWORK INC. AND SUBSIDIARIES

(a Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)

(Unaudited)

				Common Stock				Additional			Retained
				Number of				Paid In			Earnings			Treasury
	Total			Shares		Amount		Capital			(Deficit)			Stock
Balance, October 8, 2010 (Date of Formation)	$	-			5,000,000	$	5,000	$	(5,000	)	$	-		$	-

Balance, December 31, 2010		-			5,000,000		5,000		(5,000	)		-			-

Effect of reverse acquisition		-			1,195,101		1,195		8,042			-			(9,237	)

Contribution of capital from shareholders		3,000,300							3,000,300

Net loss for the year ended December 31, 2011		(556,467	)									(556,467	)

Balance, December 31, 2011		2,443,833			6,195,101		6,195		3,003,342			(556,467	)		(9,237	)

Issuance of common stock for repayment of note payable and accrued interest		3,800,000			19,000,000		19,000		3,781,000

Issuance of common stock for services		5,500			10,000		10		5,490

Amortization of warrants issued for services		144,193							144,193

Net loss for the year ended December 31, 2012		(7,066,235	)									(7,066,235	)

Balance, December 31, 2012		(672,709	)		25,205,101		25,205		6,934,025			(7,622,702	)		(9,237	)

Issuance of common stock as incentive for debt		10,000			500,000		500		9,500

Issuance of common stock for services		11,550			130,000		130		11,420

Amortization of warrants issued for services		157,780							157,780

Net loss for the year ended December 31, 2013		(423,225	)									(423,225	)

Balance, December 31, 2013		(916,604	)		25,835,101		25,835		7,112,725			(8,045,927	)		(9,237	)

Issuance of common stock as incentive for debt		25,000			250,000		250		24,750

Amortization of warrants issued for services		39,445							39,445

Net loss for the three months ended March 31, 2014		(133,372	)									(133,372	)

Balance, March 31, 2014	$	(985,531	)		26,085,101	$	26,085	$	7,176,920		$	(8,179,299	)	$	(9,237	)

See notes to unaudited consolidated financial statements

LIFESTYLE MEDICAL NETWORK INC. AND SUBSIDIARIES

(a Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

							For the Period October 8, 2010
	For The Three Months Ended						(Date of Formation)
	March 31,						through
	2014			2013			March 31, 2014
Cash flows from operating activities:
Net loss	$	(133,372	)	$	(94,149	)	$	(8,179,299	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		1,388			1,388			514,632
Depreciation		225			-			263
Reserve for bad debt		-			-			42,500
Impairment loss		-			-			5,392,308
Loss on extinguishment of debt		-			-			654,657
Non-cash compensation		64,445			39,445			393,468
Changes in operating assets and liabilities:
Increase in prepaid expenses		(4,583	)		-			(8,333	)
Increase in other assets		-			-			(6,000	)
Increase (decrease) in accrued expenses		(7,020	)		30,925			226,633
Expenses paid on behalf of the company		-			2,466			21,933

Net Cash Used In Operating Activities		(78,917	)		(19,925	)		(947,238	)

Cash flows from investing activities:
Advances on loans		-			-			(42,500	)
Purchase of property, plant and equipment		-			-			(2,705	)
Deposit on acquisition		(100,000	)		-			(100,000	)

Net Cash Used In Investing Activities		(100,000	)		-			(145,205	)

Cash flows from financing activities:
Proceeds from contributions from shareholders		-			-			3,000,300
Proceeds from related parties		100,000			20,000			857,200
Proceeds from short-term debt		75,000			-			255,000
Repayment of debt		-			-			(3,004,000	)

Net Cash Provided by Financing Activities		175,000			20,000			1,108,500

Net increase (decrease) in cash		(3,917	)		75			16,057

Cash and cash equivalents - Beginning of year		19,974			38			-

Cash and cash equivalents - End of period	$	16,057		$	113		$	16,057

See notes to unaudited consolidated financial statements

LIFESTYLE MEDICAL NETWORK INC. AND SUBSIDIARIES

(a Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Unaudited)

					For the Period October 8, 2010
	For The Three Months Ended				(Date of Formation)
	March 31,				through
	2014		2013		March 31, 2014

Supplemental disclosure cash flow information:

Cash paid for interest	$	-	$	-	$	-

Cash paid for income taxes	$	-	$	-	$	-

Supplementary information:
Non-cash during the year for:

Issuance of common stock	$	-	$	-	$	5,000

Intangible asset in exchange for short-term debt	$	-	$	-	$	6,000,000

Common stock issued in exchange for debt and interest	$	-	$	-	$	3,800,000

Details of reverse acquisition:

Common stock issued	$	-		-	$	1,195

Paid-in capital in connection with common stock issued		-		-		8,042

Treasury stock acquired		-		-		(9,237	)

Net assets acquired	$	-	$	-	$	-

See notes to unaudited consolidated financial statements

LIFESTYLE MEDICAL NETWORK INC. AND SUBSIDIARIES

(a "Development Stage Company")

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013 AND THE PERIOD OCTOBER 8, 2010

(Date of Formation) THROUGH MARCH 31, 2014

1.	DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated balance sheet as of March 31, 2014 and the consolidated statements of operations, stockholders' deficiency and cash flows for the periods presented have been prepared by Lifestyle Medical Network, Inc. and Subsidiaries (the "Company" or "Lifestyle") and are unaudited. The consolidated financial statements are prepared in accordance with the requirements for unaudited interim periods, and consequently, do not include all disclosures required to be made in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations, changes in stockholders' deficiency and cash flows for all periods presented have been made. The information for the consolidated balance sheet as of December 31, 2013 was derived from audited financial statements of the Company.

Organization

Lifestyle Medical Network Inc. and Subsidiaries (the “Company” or “Lifestyle”) was incorporated in the State of Nevada. The Company directs its operations through its subsidiaries. During 2011, the Company sold its media business in Moldova in exchange for 730,000 of its common shares. In December 2011, the Company entered into an exchange agreement and purchased Lifestyle Medical Corp. ("LMC"). In connection with the acquisition, the operations of the Company are now the operations of LMC. LMC operates its business under a License related to patent rights used in connection with the operations of medical clinics that provide medical services related to men's health, with proprietary trade names and logo designs.

On July 11, 2012, through a merger with the Company's wholly-owned Nevada subsidiary, Lifestyle Medical Network Inc., the name of the Company was changed to Lifestyle Medical Network Inc. This corporate action was permitted to be taken by the Company’s Board of Directors without stockholder approval under Nevada law. In the merger, which was for the sole purpose of changing the Company’s name, there were no other changes to the Articles of Incorporation or any changes to the capital stock of the Company, or to its By-Laws or its officers and directors. The change of the corporate name was approved by FINRA, effective for trading purposes July 31, 2012.

The Company is considered a development stage enterprise as defined in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 915, "Development Stage Entities" ("ASC 915"). The Company has limited revenue to date, continues to raise capital and there is no assurance that ultimately the Company will achieve a profitable level of operations.

Acquisition of Lifestyle Medical Corporation

On December 29, 2011, the Company closed an acquisition of 100% of the outstanding shares of Lifestyle Medical Corp., incorporated under the laws of Florida, pursuant to an Exchange Agreement, executed on that date, by and between the Company and Lifestyle Medical Corporation. The consideration paid by the Company for the acquisition of LMC was 5,000,000 shares of the Company's common stock paid to the holders of 100% of the outstanding shares of LMC, valued at $2,500,000, the fair market value at the date of issuance.

LMC was incorporated under the laws of the state of Florida on November 14, 2011, and on December 27, 2011 (immediately prior to LMC’s acquisition by the Company) acquired 100% of the membership interests in Elite Professional IP Licensing, LLC, a Delaware limited liability company formed on October 8, 2010 (“Elite”), and 100% of the outstanding shares of Regional Professional Alliance, Inc., a Florida corporation incorporated on October 11, 2010 (“RPA”). LMC, Elite and RPA are entities under common control and all three entities have the same ownership. At the time of its acquisition by LMC, Elite was the assignee, pursuant to an assignment effective May 9, 2011 (the “Assignment”), from Worldwide Medassets, Ltd. SAL (“WMA”) of WMA’s rights as licensee under an October 5, 2010, License Agreement (the “License” or "License Agreement") with Modular Properties Limited, Inc., as Licensor (“MPL”). The fee that was payable to WMA in connection with the Assignment of the MPL License was $6,000,000, represented by a secured promissory note dated May 7, 2011 the (“WMA Note”) in the principal amount of $6,000,000 issued by Saddleworth Ventures, LLC, a Florida limited liability company ("Saddleworth Ventures") to WMA. At that time the ownership of Saddleworth Ventures was identical to the ownership of Elite (now a wholly-owned subsidiary of the Company). Mr. Christopher Smith, the Company's Chief Executive Officer, had a 25.6% equity interest in Elite at the time of the assignment of the license and the same interest in Saddleworth Ventures. As of the December 27, 2011 acquisition of Elite by LMC, $3,000,000 of the amount owing under the WMA Note had been paid to WMA.

For accounting purposes only, the transactions between LMC with Elite and RPA and the transaction between EMH and LMC were treated as a recapitalization of LMC, as of December 29, 2011, with LMC as the acquirer. The financial statements prior to December 29, 2011, are those of LMC and reflect the assets and liabilities of LMC at historical carrying amounts. The financial statements show a retroactive restatement of LMC's historical stockholders' equity to reflect the equivalent number of shares issued to LMC.

Acquisition by the Company of the Rights to the License with MPL

As of January 5, 2012, Saddleworth Ventures, with the consent of WMA, assigned the WMA Note to Saddleworth Consulting, LLC, a Florida limited liability company (“Saddleworth Consulting”), and Saddleworth Consulting assumed all obligations under the WMA Note, $3,000,000 of the principal amount of which was outstanding as of the date of the assignment.

Pursuant to a Stock Purchase Agreement, dated as of February 8, 2012, between the Company and Saddleworth Consulting, the Company agreed to issue 19,000,000 shares of its common stock to Saddleworth Consulting in exchange for the satisfaction by Saddleworth Consulting of the outstanding $3,000,000 principal balance and accrued interest on the WMA Note. In consideration of the stock issuance, such outstanding principal balance and all obligations under the WMA note to WMA were satisfied by Saddleworth Consulting.

Going Concern

The consolidated financial statements for the three months ended March 31, 2014 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. The Company has a past history of recurring losses from operations and is a development stage company. The Company will require additional funding to execute its future strategic business plan. Successful business operations and its transition to attaining profitability are dependent upon obtaining additional financing and achieving a level of revenue to support its cost structure. These factors raise substantial doubt about the Company's ability to continue as a going concern.

Management has signed a letter of intent to purchase the assets and operations of a group of six primary care and specialty medical clinics in Houston, Texas, including the real estate properties of the clinics. Management intends to make further acquisitions of other medical clinics during 2014.

Management believes these acquisitions will be profitable and the cash flows from these operations will enable the Company to fund the operations of the consolidated group over the next twelve months. Therefore, the annual financial statements continue to be prepared on a going concern basis.

Significant Accounting Policies

The Company’s significant accounting policies are summarized in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There were no significant changes to these accounting policies during the three months ended March 31, 2014 and the Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

2.	INTANGIBLES

The MPL License Agreement

The MPL License Agreement, under which the Company's wholly-owned subsidiary, Elite, is the licensee pursuant to the Assignment from WMA, provides for the license of medical services, operational systems, manuals, certain names and logo designs and other intellectual property in connection with the operation of medical clinics that provide services related to men’s health within the territory of the continental United States (the “Licensed Rights”). The License Agreement provides for a fee of 6% of gross receipts of Licensee, payable quarterly. The term of the License Agreement is for twenty (20) years from the effective date, May 9, 2011. The Company plans to establish new medical clinics or acquire existing clinics, as well as to provide consulting services to medical clinics utilizing the Licensed Rights.

Intangibles are the value of the MPL license. Amounts assigned to this intangible were determined by management. Management considered a number of factors in determining the allocations, including valuations and independent appraisals. The intangibles are being amortized over 19.5 years, the life of the license.

As of December 31, 2013, management concluded the fair value of the license should be reduced to $100,000 based on a market analysis and the failure of the Company to open any clinics during 2013 and no contracts for the use of the license in the foreseeable future. The Company recorded an impairment charge of $5,392,308 which is included in the Company’s consolidated statement of operations for the year ended December 31, 2012.

The components of intangible assets are as follows:

License Agreements

Balance January 1, 2011	$	-

Acquisition of license		6,000,000

Amortization for the period May 8, 2011 through December 31, 2011		(200,000	)

Balance December 31, 2011		5,800,000

Amortization for the year ended December 31, 2012		(307,692	)

Impairment charge		(5,392,308	)

Balance December 31, 2012		100,000

Amortization for the year ended December 31, 2013		(5,552	)

Balance December 31, 2013		94,448

Amortization for the three months ended March 31, 2014		(1,388	)

Balance March 31, 2014	$	93,060

Amortization expense for the three months ended March 31, 2014 and 2013 amounted to $1,388 and $1,388, respectively. Amortization expense for the period October 8, 2010 (date of formation) through March 31, 2014 amounted to $514,632.

Estimated amortization expense for intangible assets for the next five years is as follows:

Year Ending	Amortization
December 31,	Expense
Remainder 2014	$	4,167
2015		5,555
2016		5,555
2017		5,555
2018		5,555

3.	LOAN RECEIVABLE

On February 3, 2012, LMC loaned $32,000 to Health Clinics of Florida, LLC. On April 9, 2012 and August 10, 2012, LMC advanced an additional $10,500. The unsecured notes are interest free and due June 15, 2013. In the event of default, interest on the outstanding balance shall accrue at a rate of ten percent (10%) per annum from the date of the default. The manager of Health Clinics of Florida, LLC is a shareholder of the Company. As of December 31, 2012, the Company recorded a reserve for the full amount of the receivable reducing the balance to $-0-. The bad debt expense of $42,500 is included in the Company’s consolidated statement of operations for the year ended December 31, 2012.

4. DEBT

Short-term debt as of March 31, 2014 and December 31, 2013 were as follows:

	March 31,		December 31,
	2014		2013
Short-term Debt to Related Parties
Unsecured promissory note, interest free, due October 15, 2014 (1)	$	200,000	$	200,000

Unsecured promissory note, interest free, due October 14, 2014 (2)		75,000		75,000

Unsecured promissory note, interest free, due October 14, 2014 (2)		60,000		60,000

Unsecured promissory notes, interest @ 10% per annum, due October 14, 2014 (3)		75,000		75,000

Unsecured promissory notes, interest free due October 14, 2014 (4)		347,200		347,200

Unsecured promissory note, interest free, due on demand (5)		21,933		21,933

Unsecured promissory note, interest free, due July 15, 2014, (9)		100,000		--
		879,133		779,133
Less: Current portion		879,133		779,133
	$	-	$	-

	March 31,		December 31,
		2014		2013
Short-term Debt

Unsecured promissory note, interest free, due on demand (6)	$	26,000	$	26,000

Secured promissory note, interest @ 12% per annum, due July 15, 2014 (7)		150,000		150,000

Unsecured promissory note, interest @ 10%, due July 15, 2014 (8)		75,000		-
	$	251,000	$	176,000
Less: Current portion		251,000		176,000
	$	-	$	-

(1) On January 5, 2012, LMC borrowed $200,000 from the Dellinger Fund, a shareholder of the Company. The note is interest free and has been extended to October 14, 2014. In the event of default, the Dellinger Fund has the right to request and will be granted the issuance of two million shares of the Company's common stock.

(2) On February 3, 2012 and March 1, 2012, LMC borrowed $75,000 and $60,000, respectively, from the Dellinger Fund, a shareholder of the Company. The unsecured notes are interest free and are due October 14, 2014. In the event of default, interest on the outstanding balance shall accrue at a rate of ten percent (10%) per annum from the date of the default.

(3) On April 3, 2012, LMC borrowed $75,000 from the Dellinger Fund, a shareholder of the Company. The unsecured note bears interest @ 10% per anum and is due October 14, 2014. In the event of default, interest on the outstanding balance shall continue to accrue at a rate of ten percent (10%) per annum from the date of the default.

(4) On various dates from March 23, 2012 through November 26, 2012, LMC borrowed $327,200 from the Dellinger Fund, a shareholder of the Company. In February 2013, LMC borrowed an additional $20,000. The unsecured notes are interest free and are due October 14, 2014. In the event of a default, interest on the outstanding balance shall accrue at a rate of ten percent (10%) per annum from the date of the default.

(5) During the year ended December 31, 2013, Saddleworth Ventures LLC, a related party, paid expenses amounting to $21,933 on behalf of the Company. These advances are unsecured, interest free and are due on demand.

(6) On May 13, 2013, LMC borrowed $30,000 from Forbes Investment, LLP. The unsecured note is interest free and payable upon demand. In December 2013, LMC repaid $4,000 against the outstanding balance.

(7) On October 16, 2013, LMC borrowed $150,000 from Edmund Malits, a shareholder of the Company. The secured note bears interest @ 12% per annum and interest and principal are payable in full on or before February 16, 2014. LMC provided the Corporation’s shell on the OTCBB as collateral for the loan. In addition, LMC issued Edmund Malits 500,000 shares of the Company’s common stock with a fair value of $10,000. The note has been extended to July 15, 2014.

(8) On February 4, 2014, the Company executed an unsecured promissory note with Curt Maes and received $75,000. The promissory note bears interest @ 10% per annum and both principal and interest are payable on or before July 15, 2014. As additional consideration, the Company issued Curt Maes 250,000 shares of the Company’s common stock valued @ $25,000.

(9) In February 2014, the Company received from Saddleworth Ventures an advance of $100,000 that was used as an initial down payment for an acquisition. The advance is interest free and due July 15, 2014. Saddleworth Ventures has the option to convert the note representing the advance, in whole or in part, into shares of the Company’s common stock at a price of $0.10 per share.

Interest expense for the three months ended March 31, 2014 and 2013 and the period October 8, 2010 (Date of Formation) through March 31, 2014 amounted to $27,917, $1,875 and $196,385, respectively.

5.	ACCOUNTS PAYABLE AND ACCRUED EXPENSES

	March 31,		December 31,
	2014		2013
Interest	$	24,150	$	16,650
Salaries - Officer		-		13,250
Rent		13,418		22,418
Other		43,722		35,992
	$	81,290	$	88,310

6. INCOME TAXES

The Company adopted the provisions of ASC 740, "Income Taxes", ("ASC 740"). As a result of the implementation of ASC 740, the Company recognized no adjustment in the net liability for unrecognized income tax benefits. The Company believes there are no potential uncertain tax positions and all tax returns are correct as filed. Should the Company recognize a liability for uncertain tax positions, the Company will separately recognize the liability for uncertain tax positions on its balance sheet. Included in any liability for uncertain tax positions, the Company will also setup a liability for interest and penalties. The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a component of the current provision for income taxes.

There is no U.S. tax provision due to losses from U.S. operations during the three months ended March 31, 2014 and 2013. Deferred income taxes are provided for the temporary differences between the financial reporting and tax basis of the Company's assets and liabilities. The principal item giving rise to deferred taxes is the net operating loss carryforward in the U.S. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has set up a valuation allowance for losses for certain carryforwards that it believes may not be realized.

Section 382 of the U.S. Internal Revenue Code imposes an annual limitation on the availability of NOL carryforwards to offset taxable income when an ownership change occurs. The Company's reverse capitalization meets the definition of an ownership change and some of the NOL's will be limited.

7.	STOCKHOLDERS' EQUITY

Pursuant to a Stock Purchase Agreement, dated as of February 8, 2012, between the Company and Saddleworth Consulting, the Company agreed to issue 19,000,000 shares of its common stock to Saddleworth Consulting in exchange for the satisfaction by Saddleworth Consulting of the outstanding $3,000,000 principal balance and $165,000 of accrued interest on the WMA Note. In consideration of the stock issuance, such outstanding principal balance and all obligations under the WMA note to WMA, a shareholder of the Company, were satisfied by Saddleworth Consulting.

The fair value of the common shares issued amounted to $3,800,000. The Company recorded a loss of $654,657 upon the extinguishment of debt which is included in the Company’s consolidated statement of operations for the year ended December 31, 2012.

8.	STOCK-BASED COMPENSATION

For the three months ended March 31, 2014 and 2013 and for the period October 8, 2010 (Date of formation) through March 31, 2014, the Company issued -0-, -0-, and 140,000 shares and recorded compensation expense of $-0-, $-0-, and $17,050, respectively.

On February 4, 2014, the Company issued Curt Maes 250,000 shares of the Company’s common stock with a fair value of $25,000 as incentive for debt financing.

In October 2013, the Company issued Edmund Malits 500,000 shares of the Company’s common stock with a fair value of $10,000 as incentive for debt financing.

WARRANTS

On February 6, 2012, the Company issued warrants as compensation to a third party to purchase 2,400,000 shares of the Company's common stock for services performed. The warrants expire February 6, 2017. The estimated value of the compensatory warrants was determined using the Black Scholes pricing model using the following assumptions: Expected term of 3 years, a risk free interest rate of 0.32%, a dividend yield of -0-% and volatility of 432%. The fair value of the warrant amounted to $479,912 to be amortized over 3 years. The Company recorded an expense of $39,445 and $39,445 on the Company’s consolidated statement of operations for the three months ended March 31, 2014 and 2013, respectively, and $341,418 for the period October 8, 2010 (Date of formation) through March 31, 2014.

The following table summarizes the changes in warrants outstanding and the related price of the shares of the Company's common stock issued to non-employees of the Company. The warrants were granted in lieu of cash compensation for services performed.

			Weighted Average
	Shares		Exercise Price
Outstanding, January 1, 2014		-	$	-
Granted		2,400,000		0.20
Expired/Cancelled		-		-
Exercised		-		-
Outstanding - period ending March 31, 2014		2,400,000	$	0.20
Exercisable - period ending March 31, 2014		2,400,000	$	0.20

10.	RELATED PARTY TRANSACTIONS

During the year ended December 31, 2011, Elite had activities with Saddleworth Ventures LLC, a related party. The ownership of Saddleworth Ventures is identical to the ownership of Elite. Saddleworth Ventures assigned the rights to Elite as licensee under the License Agreement with MPL. In connection with the purchase of the license, $3 million of the $6 million purchase price was paid by the members of Elite on the amount owing under the WMA note.

The Company entered into a consulting agreement with Saddleworth Ventures LLC. Consulting fees for the three months ended March 31, 2014 and 2013 were $-0- and $-0-, respectively. See Note 11 (a) for further information.

During the year ended December 31, 2013, Saddleworth Ventures LLC paid expenses amounting to $21,933 on behalf of the Company. These advance are unsecured, interest free and due on demand. As of March 31, 2014, no repayments have been made.

	d)	During the year ended December 31, 2012, the Company received $737,200 in advances from the Dellinger Fund, a shareholder of the Company. During the year ended December 31, 2013, the Dellinger Fund advanced an additional $20,000. The majority of these advances are interest free. The Company recorded interest expense for the three months ended March 31, 2014 and 2013 in the amount of $1,875 and $1,875, respectively, on the advances that were not interest free. See Note 4 for further information.

	(e)	In February 2014, the Company received from Saddleworth Ventures an advance of $100,000 that was used as an initial down payment for an acquisition. The advance is interest free and due July 15, 2014. Saddleworth Ventures has the option to convert the note representing the advance, in whole or in part, into shares of the Company’s common stock at a price of $0.10 per share.

11.	COMMITMENTS AND CONTINGENCIES

Consulting Agreements

In January 2012, Lifestyle entered into a consulting agreement with Saddleworth Ventures LLC ("Consultant"). The Consultant will provide services for management consulting, business advisory, shareholder information and public relations. The term of the agreement is for three years. Upon execution of the agreement, Lifestyle issued a payment to the Consultant in the amount of $25,000. Additional cash fees or reimbursement of expenses shall be agreed upon by Lifestyle and the Consultant from time to time during the term of the agreement. Consulting fees for the three months ended March 31, 2014 and 2013 amounted to $-0- and $-0-, respectively.

During 2013 and 2012, Lifestyle entered into various consulting agreements with third parties in connection with business advisory services. For the three months ended March 31, 2014 and 2013, consulting services amounted to $12,500 and $700, respectively.

On July 1, 2012, Lifestyle entered into an employment agreement with Christopher Smith ("Smith"), the Company's Chief Executive Officer. The term of the agreement is for five years. Lifestyle will pay Smith minimum compensation of $60K per year. Smith will also receive a performance bonus based on a percentage of the Company's net operating profit before income taxes. For the three months ended March 31, 2014, and 2013, payroll-officer amounted to $15,000 and $15,000, respectively.

12.	SUBSEQUENT EVENTS

On April 14, 2014, the Company entered into an agreement providing for the acquisition by the Company from the two owners of six medical clinics in Houston, Texas, of which one primary care and one skin care clinic are located in leased facilities, and three primary care medical clinics and one skin care clinic are located in three separate buildings, which real estate properties we have agreed to purchase as part of the transaction. All real estate will be held in a newly formed Lifestyle real estate holding company.

The purchase price for the clinics and the three real estate properties is $4,250,000, consisting of $3,500,000 of cash (with up to a $10,000 adjustment for additional assets acquired by the clinics), and $750,000 in our 6% secured promissory note due August 15, 2015, secured by an assignment to the sellers of the management agreement that the Company will enter into to provide administrative and business services to the medical group. The Company is required to pay the sellers deposits totaling $300,000, of which we have paid $100,000, and which we will forfeit if we fail to fulfil the closing conditions set forth in the Agreement by May 30, 2014, and the agreement shall have been terminated by the sellers. Under the terms of the agreement, we will not own the medical practices but, pursuant to a management agreement, the Company will own all of the assets, and arrange for space and equipment leases. In turn, as manager, we would receive an agreed percentage of the gross revenues of the practice group, with adjustments designed to ensure that management fees do not exceed an agreed cap, or that the remaining amounts distributed to the doctors are no less than a specified floor percentage of gross revenues.

We are presently negotiating an extension of the closing date under the agreement to June 30, 2014, in conjunction with the payment of the balance of the deposits owing.

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

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto and the other financial information included elsewhere in this report. Certain statements contained in this report, including, without limitation, statements containing the words “believes,” “anticipates,” “expects” and words of similar import, constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, sustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions.

Organization

The Company was incorporated in the State of Nevada on September 3, 2003, under the name Beverly Hills Film Studios, Inc. and changed its name to Emerging Media holdings, Inc. on September 28, 2006. On September 30, 2006, we effectuated a share exchange whereby we acquired all of the outstanding equity interests in our wholly-owned subsidiary, IM “Media Alianta” SRL, the 100% owner of SA “Analiticmedia-Grup”, both Moldovan companies ("AMG"), and on May 2, 2008, the Company acquired the common stock of “TNT-Bravo” channel-ICS “Media Top Prim” SRL, the exclusive operator in Moldova of Russian channel TNT programs owned by Gazprom Media.

On July 11, 2012, through a merger with our wholly-owned Nevada subsidiary, Lifestyle Medical Network Inc., the name of our Company was changed from Emerging Media Holdings, Inc. to Lifestyle Medical Network Inc. The change of our corporate name was approved by FINRA, effective for trading purposes on July 31, 2012.

Acquisition of Lifestyle Medical Corp.

On December 29, 2011, we closed an acquisition of 100% of the outstanding shares of Lifestyle Medical Corp. (“Lifestyle Medical”), which has rights to technologies and practices licensed to its subsidiary, Elite Professional IP Licensing, LLC (“Elite”), pursuant to an October 5, 2010 License Agreement with Modular Properties Limited, Inc. (the “License Agreement”). The consideration paid by the Company for the acquisition of Lifestyle Medical was 5,000,000 shares of our common stock paid to the holders of a majority of the outstanding shares of LMC, valued at $2,500,000. On February 2, 2012, we completed acquisition of the rights to our licensed men’s medical clinic operating technologies and processes, by acquiring from Worldwide Medassets, Ltd. (SAL) the full assignment of rights to the License Agreement, by the issuance of 19,000,000 shares of our common stock in exchange for the satisfaction of the outstanding $3,000,000 principal balance on the note issued to Worldwide Medassets, Ltd. in connection with the assignment of rights to the License Agreement to Elite.

On December 29, 2011, we completed the sale of our remaining Moldova media subsidiaries in exchange for the assumption of the liabilities of the subsidiaries and 250,000 shares of our common stock.

Recent Developments

On April 14, 2014, we entered into an agreement providing for the acquisition by the Company from the two owners of six medical clinics in Houston, Texas, of which one primary care and one skin care clinic are located in leased facilities, and three primary care medical clinics and one skin care clinic are located in three separate buildings, which real estate properties we have agreed to purchase as part of the transaction. All real estate will be held in a newly formed Lifestyle real estate holding company.

The purchase price for the clinics and the three real estate properties is $4,250,000, consisting of $3,500,000 of cash (with up to a $10,000 increase for additional assets acquired by the clinics prior to closing), and $750,000 in our 6% secured promissory note due August 15, 2015, secured by an assignment to the sellers of the management agreement that we will enter into to provide administrative and business services to the medical group. We are required to pay the sellers deposits totaling $300,000, of which we have paid $100,000, and which we will forfeit if we fail to fulfil the closing conditions set forth in the Agreement by May 30, 2014, and the agreement shall have been terminated by the sellers. Under the terms of the agreement, we will not own the medical practices but, pursuant to a management agreement, the Company will own all of the assets, and arrange for space and equipment leases. In turn, as manager, we would receive an agreed percentage of the gross revenues of the practice group, with adjustments designed to ensure that management fees do not exceed an agreed cap, or that the remaining amounts distributed to the doctors are no less than a specified floor percentage of gross revenues. We are presently negotiating an extension of the closing date under the agreement to June 30, 2014, in conjunction with the payment of the balance of the deposits owing.

Basis of Presentation

Throughout this Form 10-Q, the terms "we," "us," "our" and "Company" refer to Lifestyle Medical Network, Inc., a Nevada corporation, and, unless the context indicates otherwise, includes our subsidiaries.

Significant Accounting Policies

The Company’s significant accounting policies are summarized in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There were no significant changes to these accounting policies during the three months ended March 31, 2014, and the Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

PLAN OF OPERATION

As of the date of this report, we are focusing our efforts on evaluating the start-up and/or the identification for acquisition of additional medical clinic businesses. We plan also to license our Licensed Rights to clinics that we do not own. As of this date, we have not entered into any further agreements relating to any such initial start-up of a clinic or any acquisition of a clinic business.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2014 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2013

During the three months ended March 31, 2014, we incurred a net loss of $133,372, compared to a loss of $94,149 for the three months ended March 31, 2013. The decrease in the loss is primarily due to a decrease of approximately $17,000 in general and administrative expense, primarily consulting fees and amortization, and a decrease of approximately $26,000 in interest expense.

LIQUIDITY AND FINANCIAL RESOURCES

At March 31, 2014, we had a working capital deficiency of approximately $1,200,000. At March 31, 2014, we had total assets of approximately $225,000, including cash of $16,057. Net cash used in operating activities in the three months ended March 31, 2014 was $78,917, primarily from the net loss of approximately $133,000, offset by net cash from financing activities of $175,000 in that period, which was reduced by a deposit payment of $100,000.

It is expected that we will continue to incur operating losses in the future. In the first three months of 2014, we had $-0- of revenues, operating expenses of $105,455, and no net income. As of March 31, 2014, we had $16,057 cash on hand to fund operations. There is no assurance that we will operate profitably in the future.

We have obtained interim capital through a $150,000 loan, evidenced by a 12% Promissory Note with a principal amount of $150,000, the due date on which has been extended to July 15, 2014, in connection with which we agreed to issue the lender 500,000 shares of our common stock, and a $75,000 loan, evidenced by a 10% Promissory Note due July 15, 2014. We will have to obtain significant additional capital to continue with our proposed business. There is no assurance that we will be able to obtain sufficient capital to implement our business plans. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. These conditions and uncertainties raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Off Balance Sheet Arrangements

We do not currently have any off balance sheet arrangements falling within the definition of Item 303(c) of Regulation S-B.

Inflation

To date inflation has not had a material impact on our operations.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

ITEM 4. Controls and Procedures.

As of March 31, 2014, the end of the period covered by this quarterly report, the Chief Executive and Chief Financial Officer of the Company (the “Certifying Officer”) conducted an evaluation of the Company’s disclosure controls and procedures. As defined under Sections 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the Certifying Officer, to allow timely decisions regarding required disclosure.

Based on this evaluation, the Certifying Officer has concluded that the Company’s disclosure controls and procedures were not effective for the quarter ended March 31, 2014, to ensure that material information is recorded, processed, summarized and reported by management of the Company on a timely basis in order to comply with the Company’s disclosure obligations under the Exchange Act, and the rules and regulations promulgated there under.

Further, there were no changes in the Company’s internal control over financial reporting during the first fiscal quarter of our 2014 fiscal year that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

Other Information

Item 6. Exhibits.

31	Certification of Chief Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a)

32	Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

SEC Ref. No.		Title of Document
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Label Linkbase Document
101.PRE		XBRL Taxonomy Presentation Linkbase Document

The XBRL related information in Exhibits 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of those sections.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	LIFESTYLE MEDICAL NETWORK INC. (Registrant)

Date: May 16, 2014	By:	/s/ Christopher Smith
		Christopher Smith, Chief Executive Officer and Principal Financial Officer

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