HEALTH ADVANCE INC. - FORM 10-Q

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EX-32.1 - CERTIFICATION - HEALTH ADVANCE INC.	ex_321.htm
EX-31.1 - CERTIFICATION - HEALTH ADVANCE INC.	ex_311.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 April 30, 2016

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: 333-177122

HEALTH ADVANCE INC.

(Exact name of registrant as specified in its Charter)

WYOMING		46-0525223
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3651 Lindell Rd. Suite D155

Las Vegas, NV, 89103

(Address of Principal Executive Offices)(Zip Code)

702-943-0309

(Registrants telephone number, including area code)

N/A

(Former name, or 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 Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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 o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	o			Accelerated Filer	o
Non-Accelerated Filer	o	(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 Exchange Act. Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock. As of July 13, 2016, there were 24,520,000 shares of the issuer’s common stock issued and outstanding.

HEALTH ADVANCE INC.

FORM 10-Q

April 30, 2016

INDEX

PART I — FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements - Unaudited	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16

Item 4.	Controls and Procedures	16

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	16

Item 1A.	Risk Factors	16

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3.	Defaults Upon Senior Securities	17

Item 4.	Mine Safety Disclosures	17

Item 5.	Other Information	17

Item 6.	Exhibits	17

SIGNATURE		17

PART I –FINANCIAL INFORMATION

Item 1.

Condensed Financial Statements

HEALTH ADVANCE INC.

CONDENSED FINANCIAL STATEMENTS

APRIL 30, 2016

CONTENTS

PAGE-4	CONDENSED BALANCE SHEETS AS AT APRIL 30, 2016 (UNAUDITED) AND AS AT JULY 31, 2015 (AUDITED)

PAGE-5 & 6	CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2016 AND 2015 (UNAUDITED)

PAGE-7	CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED APRIL 30, 2016 AND 2015 (UNAUDITED)

PAGE-8	NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

HEALTH ADVANCE INC.

CONDENSED BALANCE SHEETS

AS AT APRIL 30, 2016 (UNAUDITED) AND JULY 31, 2015 (AUDITED)

(Expressed in United States Dollars)


	April 30,			July 31,
	2016			2015
	$			$
ASSET
CURRENT ASSET
Cash		—			—
TOTAL ASSET		—			—


LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable		57,062			50,618
Accrued liabilities		2,575			6,500
Advances from a shareholder (Note 4)		94,879			72,774
TOTAL LIABILITIES		154,516			129,892


STOCKHOLDERS' DEFICIENCY
Authorized:
500,000,000 common stock, par value $0.001
Issued and outstanding: (Note 6)
24,520,000 common stock as at April 30, 2016 and July 31, 2015		24,520			24,520
Additional paid-in capital		186,080			186,080
Common stock to be issued (Note 6)		67,500			67,500
Accumulated deficit		(432,616	)		(407,992	)
TOTAL STOCKHOLDERS' DEFICIENCY		(154,516	)		(129,892	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY		—			—

See accompanying notes

HEALTH ADVANCE INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE MONTHS ENDED APRIL 30, 2016 AND 2015 (UNAUDITED)

(Expressed in United States Dollars)


	Three months			Three months
	ended			ended
	April 30,			April 30,
	2016			2015
	$			$

SALES		—			—

COST OF SALES		—			—

GROSS PROFIT		—			—

EXPENSES
Professional fees		5,399			7,463
Office and general		677			715
Consulting and management fees		—			8,000
Total expenses		6,076			16,178

Foreign exchange loss		—			—
Loss before income taxes		(6,076	)		(16,178	)

Income taxes		—			—

NET AND COMPREHENSIVE LOSS FOR THE PERIOD		(6,076	)		(16,178	)

Loss per common share, basic and diluted (Note 6)		(0.0002	)		(0.0007	)

Weighted average number of
common stock outstanding, basic and diluted		24,520,000			24,520,000

See accompanying notes

HEALTH ADVANCE INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE NINE MONTHS ENDED APRIL 30, 2016 AND 2015 (UNAUDITED)

(Expressed in United States Dollars)


	Nine months			Nine months
	ended			ended
	April 30,			April 30,
	2016			2015
	$			$

SALES		—			—

COST OF SALES		—			—

GROSS PROFIT		—			—

EXPENSES
Professional fees		21,512			29,829
Office and general		3,112			3,893
Rent and occupancy		—			7,200
Consulting and management fees		—			20,000
Total expenses		24,624			60,922

Foreign exchange loss		—			251
Loss before income taxes		(24,624	)		(61,173	)

Income taxes		—			—

NET AND COMPREHENSIVE LOSS FOR THE PERIOD		(24,624	)		(61,173	)

Loss per common share, basic and diluted (Note 6)		(0.0010	)		(0.0025	)

Weighted average number of
common stock outstanding, basic and diluted		24,520,000			24,520,000

See accompanying notes

HEALTH ADVANCE INC.

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED APRIL 30, 2016 AND 2015 (UNAUDITED)

(Expressed in United States Dollars)


	Nine months			Nine months
	ended			ended
	April 30,			April 30,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period		(24,624	)		(61,173	)

Adjustments for non-cash items
Common stock issued for services		—			—
In-kind contribution of services		—			20,000


Net change in non-cash working capital balances:
Accounts payable		(3,925	)		—
Accrued liabilities		6,444			8,353
Net cash used in operating activities		(22,105	)		(32,820	)

CASH FLOWS FROM FINANCING ACTIVITIES
Bank indebtedness		—			(28	)
Proceeds from issuance of common stock		—			23,000
Advances from a shareholder		22,105			9,848
Net cash provided by financing activities		22,105			32,820

Net decrease in cash during the period		—			—
Cash, beginning of period		—			—
Cash, end of period		—			—


See accompanying notes

HEALTH ADVANCE INC.

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED APRIL 30, 2016 (UNAUDITED)

(Expressed in United States Dollars)

1.	NATURE OF OPERATIONS AND ORGANIZATION

Health Advance Inc. (the “Company” or “Health Advance”) was incorporated on April 14, 2010 in the State of Wyoming. The Company is an online retailer of home medical products with operations in Canada and the United States of America (“USA”).

2.	BASIS OF PRESENTATION

The condensed financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the USA for interim financial information and the SEC instructions to Form 10Q. Accordingly, they do not include all of the information and notes to the financial statements required by generally accepted accounting principles for complete financial statements. All adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. For further information, refer the financial statements and notes thereto included in the Company’s annual report on Form 10K for the year ended July 31, 2015.

3.	GOING CONCERN

These financial statements have been prepared assuming the Company will continue on a going concern basis. The Company has incurred losses since inception and the ability of the Company to continue as a going concern depends upon its ability to develop profitable operations and to continue to raise adequate financing. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.

There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in these financial statements.

These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

4.	RELATED PARTY TRANSACTIONS

The transactions with related parties were in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the parties. Related party transactions not disclosed elsewhere in these financial statements are as follows:

During the three and nine months ended April 30, 2016, the Company was charged $nil and $nil respectively, as rent and occupancy charges (three and nine months ended April 30, 2015: $nil and $7,200 respectively). In addition, during the three and nine months ended April 30, 2016, the Company was charged $nil and $nil respectively, as consulting and management fees (three and nine months ended April 30, 2015: $6,000 and $18,000 respectively). During the fiscal year 2016, the shareholder decided to discontinue charging rent and consultancy fees due to minimal activities in the Company.

b.	Advances from a shareholder of the Company as at April 30, 2016 and July 31, 2015 were $94,879 and $72,774, respectively. These advances are non-interest bearing, unsecured and with no specific terms of repayment.

HEALTH ADVANCE INC.

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED APRIL 30, 2016 (UNAUDITED)

(Expressed in United States Dollars)

5.	RECENT ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Standards

In March 2016, the Company adopted the accounting pronouncement issued by the Financial Accounting Standards Board ("FASB") to update guidance on how companies account for certain aspects of share-based payments to employees. This pronouncement is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. This guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled and changes the presentation of excess tax benefits on the statement of cash flows.

The Company adopted these provisions on a prospective basis. In addition, this pronouncement changes guidance on: (a) accounting for forfeitures of share-based awards and (b) employers’ accounting for an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation. The adoption of this pronouncement did not have a material impact on Company’s financial position and/or results of operations.

In February 2016, an accounting pronouncement was issued by the FASB to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to current accounting guidance. This pronouncement is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The adoption is required to be applied on a modified retrospective basis for each prior reporting period presented. The Company has not yet determined the effect that the adoption of this pronouncement may have on its financial position and/or results of operations.

On January 1, 2016, the Company adopted the accounting pronouncement issued by the FASB which eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The adoption of this pronouncement did not have a material impact on its financial position and/or results of operations.

On January 1, 2016, the Company adopted the accounting pronouncement issued by the FASB to update the guidance related to the presentation of debt issuance costs. This guidance requires debt issuance costs, related to a recognized debt liability, be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability rather than being presented as an asset. The Company adopted this pronouncement on a retrospective basis, and the adoption did not have a material impact on its financial position and/or results of operations.

In November 2015, an accounting pronouncement was issued by the FASB to simplify the presentation of deferred income taxes within the balance sheet. This pronouncement eliminates the requirement that deferred tax assets and liabilities are presented as current or noncurrent based on the nature of the underlying assets and liabilities. Instead, the pronouncement requires all deferred tax assets and liabilities, including valuation allowances, be classified as noncurrent. This pronouncement is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company intend to adopt this pronouncement on January 1, 2017, and the adoption will not have a material impact on its financial position and/or results of operations.

In May 2014, an accounting pronouncement was issued by the FASB to clarify existing guidance on revenue recognition. This guidance includes the required steps to achieve the core principle that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This pronouncement is effective for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted. The guidance permits the use of one of two retrospective transition methods. The Company has not yet selected a transition method nor have we determined the effect that the adoption of the pronouncement may have on its financial position and/or results of operations.

HEALTH ADVANCE INC.

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED APRIL 30, 2016 (UNAUDITED)

(Expressed in United States Dollars)

6.	LOSS PER SHARE

The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 260-10 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. There were no potentially dilutive shares outstanding as at April 30, 2016 and July 31, 2015.

7.	STOCKHOLDERS’ DEFICIENCY

COMMON STOCK - AUTHORIZED

As at April 30, 2016, the Company has 500,000,000 authorized shares of common stock with a par value of $0.001 per share.

COMMON STOCK - ISSUED AND OUTSTANDING

Company’s outstanding 24,520,000 shares of common stock ($24,520) as at April 30, 2016 consisted of the following:

On April 14, 2010 the Company issued 14,000,000 shares of common stock at $0.0001 per share to the founding stockholder for a total cash proceeds of $1,400.

During fiscal 2011, the Company completed non-brokered private placements of 920,000 shares of common stock at $0.01 per share for a total cash proceeds of $9,200.

During fiscal 2011, the Company issued 6,500,000 common stock for legal, consulting and web design services and directors fees. These services were valued at $0.01 per share.

On November 1, 2011 the Company issued 1,500,000 shares of common stock for professional services rendered. These services were valued at $15,000.

On July 18, 2012 the Company issued 1,600,000 shares at $0.01 per share for a total cash proceeds of $16,000.

COMMON STOCK – TO BE ISSUED

The Company’s 6,790,000 common stock to be issued amounting to $67,500 as at January 31, 2016 consist of the following:

In November 2012, the Company agreed to issue 2,000,000 shares of common stock at an issue price of $0.005 per share for a total cash proceeds of $10,000.

In December 2012, the Company agreed to issue 1,000,000 shares of common stock valued at $0.01 per share for a total value of $10,000 for web design services and repairs.

In January 2013, the Company agreed to issue 500,000 shares of common stock valued at $0.01 per share for a total value of $5,000 for consulting services.

In March 2013, the Company agreed to issue 800,000 shares of common stock at an issue price of $0.01 per share for a total cash proceeds of $8,000.

HEALTH ADVANCE INC.

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED APRIL 30, 2016 (UNAUDITED)

(Expressed in United States Dollars)

In June 2013, the Company agreed to issue 350,000 shares of common stock at an issue price of $0.01 per share for a total cash proceeds of $3,500.

In October 2013, the Company agreed to issue 1,600,000 shares of common stock at an issue price of $0.0025 per share for a total cash proceeds of $4,000.

In April 2014, the Company agreed to issue 40,000 shares of common stock at an issue price of $0.05 per share for a total cash proceeds of $2,000.

In August 2014, the Company agreed to issue 500,000 shares of common stock at an issue price of $0.05 per share for a total cash proceeds of $25,000.

8.	SUPPLEMENTAL CASH FLOW INFORMATION

During the nine months ended April 30, 2016, and 2015, there were no interest or taxes paid by the Company.

9.	SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events up to July 13, 2016, the date the financial statements were issued, pursuant to the requirements of ASC 855 and has determined that there are no material subsequent events to report.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Overview

Health Advance Inc. (the “Company”) was incorporated on April 14, 2010 in Wyoming. The Company is an on-line retailer of home medical products with operations in Canada and the United States, and with administration and infrastructure supported globally. Our strategy is to attract opportunities in the health care industry through the development and growth of our existing web site www.leadingmedicalproducts.com. We believe we can operate more cost efficiently and compete as a discounter that delivers value and low cost branded lines of home medical care products together with valuable customer care that is currently missing in the marketplace. Our goal is to become our customers’ single source for low cost health care supplies, by meeting all of our customer’s needs.

From inception to April 30, 2016 we have incurred a net loss of $432,616. The ability of the Company to continue as a going concern depends upon its ability to raise adequate financing and develop profitable operations. If we cannot generate sufficient revenues from our services, we may have to delay the implementation of our business plan. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.

The Company is actively seeking financing for its current business operation. The Company is optimistic that the financing will be secured and the going concern risk will be removed. We are in discussions with various parties and believe a successful financing is likely. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of shares of common stock from the Company’s authorized capital. In addition, the Company is also seeking acquisitions within the health space as a means to grow the Company.

On February 14, 2014, the Company affected a 10-for-1 forward split of the Company’s issued and outstanding common shares. The Company’s issued and outstanding common shares were therefore increased from 2,452,000 to 24,520,000. All per share amounts have been restated to reflect this stock split.

Plan of Operation

We were incorporated on April 14, 2010 in Wyoming. Our business office is located at 3651 Lindell Road, Suite D#155, Las Vegas, NV, 89103. Our telephone number is 702-943-0309. We were founded by Jordan Starkman, who serves as our President and Director. In addition, Domenico Pascazi was appointed as a director in March 2011. On February 12, 2013, Mr. Pascazi resigned from his position as a member of the board of directors. Mr. Pascazi’s resignation was not a result of any disagreement with the Company or its executive officers, or any matter relating to the Company’s operations, policies or practices.

We are an on-line retailer of home medical products with operations in Canada and the United States, and with administration and infrastructure supported globally. In September 2015, the Company launched a new e-commerce platform, leadingmedicalproducts.com. The site features a new vibrant design with a fresh look, and offers quick and easy access to essential product information that provides a more comprehensive understanding of the Company’s product lines. Our strategy is to attract opportunities in the health care industry through the development and growth of our existing web site. We believe we can operate more cost efficiently and compete as a discounter that delivers value and low cost branded lines of home medical care products together with valuable customer care that is currently missing in the marketplace. Our goal is to become our customers’ single source for low cost health care supplies, by meeting all of our customer’s needs.

We strive to offer health care professionals, medical distributors and consumers the highest quality brands and products at the most affordable prices. We expect to achieve this by forming relationships with suppliers that will be able to provide us with preferred prices once we are able to make bulk purchases.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

In the fiscal year 2016 and continuing into fiscal year 2017, we plan to build our business across four key product categories including: (1) respiratory, (2) diabetes, (3) ostomy, and (4) mastectomy supplies. Our growth plan is to generate operating revenues during fiscal years 2016-2017.

We plan to complete a financing in the fiscal years 2016-2017. We have not yet entered into any agreements with any parties with respect to obtaining financing for the Company.

If we are unable to obtain financing on reasonable terms, we could be forced to delay or scale back our plans for expansion. In addition, such inability to obtain financing on reasonable terms could have a material adverse effect on our business, operating results, or financial condition.

If we are able to obtain financing, we plan to implement both online and offline marketing and customer engagement campaigns for both our traditional durable medical products and our four key product areas mentioned above. We intend to target consumers with on-line marketing, and businesses, including various senior care facilities, with direct mail, telemarketing and flyer campaigns. Initially, we will target small to medium size facilities. We also intend to launch our direct mail onsite flyer campaigns and outbound calling campaigns in unison to increase the frequency and awareness of www.leadingmedicalproducts. We expect to replace and expand any existing major wholesaler relationships we currently work with by fiscal years 2016-2017. Further, during this expected time frame, we plan to establish direct-from-manufacturer programs for our four key growth markets. We intend to continue to run our durable medical products business through the existing wholesaler relationships given the large range of product SKUs in the durable medical product category where we carry no less than a selection of nearly 2,000 products. No steps have been taken thus far to secure customers for our products.

The Company has started the process of preparing for an online marketing campaign. The Company has a relationship with AGS Cybertech located in India who will manage and coordinate all of our online marketing efforts. The campaign will include internet banner ads, search engine optimization, and social media optimization. All banner advertising will be strategically placed with various click per view programs as part of our overall sales and marketing plan.

In our key growth areas we plan to focus on reducing and concentrating the number of product SKUs in each growth category in order to create leverage with our supply chain across selected relationships with respiratory, diabetes, ostomy and mastectomy suppliers. These new direct-from-manufacturer programs will primarily be drop ship programs and will essentially result in no new product inventory risks. They will be predominantly product substitution strategies where direct manufacturers carry the inventory risk in order to get shelf space within our business to consumer e-commerce property www.leadingmedicalproducts.com and other sales channels. These programs will be based on committed but non-binding contracted volume from us with each manufacturer, but where the manufacturer still carries the inventory, marketing investment, and the majority of the time continues to handle drop shipments direct to our customers and sales channels.

The first tranche of these direct-from-manufacturer programs is expected to be with North America based manufacturers given a tendency for higher quality product, margins and their ability to handle inventory and direct shipments to our customers. We also plan to evaluate a select number of overseas supplier relationships if we identify that a select overseas direct supplier can and will meet our delivery, financing and quality and return warranty terms. As a result of these supply chain improvements we expect to increase our net revenues based on margin improvements of an average of 20-25% and this does not include factoring in even higher margins if we choose to source from overseas markets.

We expect that these new product launches will be outlined and planned within the 2017 fiscal year once our financing is completed. During the next 24 months following our 2016 year-end, we plan to work with our manufacturing partners to develop and finalize no less than two new product lines within each core product group for respiratory, diabetes, ostomy and mastectomy supplies and launch them by the second half of fiscal year 2017. Together with our manufacturer partners we intend to develop and test market and then finalize our packaging and product features and licensing requirements by the end of 2017 fiscal year.

In addition to attempting to achieve supply chain optimization by the beginning of fiscal year 2017, which we intend to result in reduced overall cost of goods, we also plan to drive top line growth with a major marketing initiative for new products. No formal products have been discussed as of yet. By the end of July 2017, we intend to achieve the 3 key milestones outlined above including: (1) entering into new growth markets, (2) optimizing our supply chain, and (3) launching new product lines in our new growth from existing product line sales in growth markets for respiratory, diabetes, ostomy and mastectomy supplies through a margin optimized supply chain; a contribution from our traditional durable medical products businesses through existing wholesaler channels and from new products launched.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

We have estimated that we will incur minimum expenses equal to $75,000 in the year following our July 31, 2016 year-end in order to maintain our business operations. However, if we conduct a financing, we will devote the capital raised to operational expenses as indicated below. The Company will attempt to complete a financing for a minimum of $200,000 within the 12-month period following the Company’s 2016 year-end. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of common shares from the Company’s authorized capital.

Web Development and Maintenance	$	5,000
Legal/Accounting	$	15,000
Computer hardware and software systems	$	10,000
Advertising and Marketing	$	130,000
General and administrative	$	10,000
Salaries and Customer Service	$	25,000
Telephone	$	1,000
Travel	$	4,000
Total Expenses	$	200,000

The above represents managements’ best estimate of our cash requirements based on our business plans and current market conditions. The above is based on our ability to raise sufficient financing and generate adequate revenues to meet our cash flow requirements. The actual allocation between expenses may vary depending on the actual funds raised and the industry and market conditions over the next 12 months following our July 31, 2016 year-end.

The Company is currently negotiating financing in the amount of $200,000 to further the Company’s business operations. Any capital raised will likely be through either a private placement or a convertible debenture and will likely result in the issuance of common shares from the Company’s authorized capital.

If we are able to complete a financing through a private offering for a minimum of $200,000 within the 12 month period following our July 31, 2016 year-end, we expect to replace and expand any existing major wholesaler relationships we currently work with by the beginning of July 31, 2017 year-end. Further, during this expected time frame, we plan to establish direct-from-manufacturer programs for our four key growth markets in order to achieve improved margin of between 25-35%. We will continue, however, to run our durable medical products business through the existing wholesaler relationships given the large range of product SKUs in the durable medical product category where we carry no less than a selection of nearly 2,000 products. In addition, the Company is also seeking acquisitions within the health space as a means to grow the Company.

Results of Operations

For the three and nine months ended April 30, 2016 and 2015

For the three and nine months ended April 30, 2016 and 2015 we did not have any sales. The Company has launched a new e-commerce platform, leadingmedicalproducts.com. The site features a new vibrant design with a fresh look, and offers quick and easy access to essential product information that provides a more comprehensive understanding of the Company’s product lines. In addition, the Company has not been successful in completing the required financing to begin its advertising campaign and promotion of www.leadingmedicalproducts.com. We expect to generate increased sales once our advertising campaign begins.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Operating expenses for the three and nine months ended April 30, 2016 were $6,076 and $24,624 respectively, as compared to $16,178 and $60,922 for the three and nine months ended April 30, 2015, respectively.

During the three and nine months ended April 30, 2016, we recorded $5,399 and $21,512 respectively, as professional fees (three and nine months ended April 30, 2015, $7,463 and $29,829 respectively) and $677 and $3,112 respectively, as office and general expenses (three and nine months ended April 30, 2015, $715 and $3,893 respectively). During the three and six months ended April 30, 2016, the Company did not record any expense relating to rent and occupancy and consulting and management fees due to decrease in activities. During the fiscal year 2016, the shareholder decided to discontinue charging rent and consultancy fees due to minimal activities in the Company.

During the three and nine months ended April 30, 2016 and 2015, we had no provision for income taxes due to the net operating losses incurred.

Liquidity and Capital Resources

As of April 30, 2016, we had nil cash balance and a working capital deficit of $154,516.

The Company is currently seeking funding for our continued operations. The Company intends to raise a minimum of $200,000 and a maximum of $500,000 in order to continue the introduction of the www.Leadingmedicalproducts.com e-commerce site to the retail community and health care community. To achieve our goals the Company expects to commit the majority of its funding to the advertising of the Company’s web site. There is no assurance that the Company will be able to raise the capital required to complete its goal and objectives and the Company is currently seeking capital to further its business plan. We are planning to raise funds through either debt or issuing shares of our common stock in order to achieve our business goals. The issuance of additional shares or securities convertible into any such shares may dilute the percentage ownership of our current stockholders. There are no agreements with any parties at this point in time for additional funding; however, we are in discussions with various funders in the United States.

We believe we can satisfy our cash requirements for the next twelve months with our expected revenues and if needed an additional loan from our director, Jordan Starkman. We cannot assure investors that adequate revenues will be generated and there is no current loan commitment in place between the Company and Jordan Starkman. However, the success of our operations is dependent on attaining adequate revenue. In the absence of our projected revenues, we may be unable to proceed with our plan of operations or we may require financing to achieve our profit, revenue, and growth goals.

We anticipate that our fixed costs made up of legal and accounting and general and administrative expenses for the next 12 months will total approximately $25,000. Legal and accounting expenses of $15,000 represents the minimum funds needed to sustain operations. The $25,000 will be financed through the Company’s additional financing, net sales and if needed, an advance from our officer and director, Jordan Starkman. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees, until financing is raised. The foregoing represents our best estimate of our cash needs based on our current business condition. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and our progress with the execution of our business plan. It is currently expected that the Company will spend an additional $175,000 in variable costs relating to marketing and business development that will be funded from future financings.

In the event we are not successful in reaching our initial revenue targets, we will need additional funds to proceed with our business plan for the development and marketing of our core services. Should this occur, we would likely seek additional financing to support the continued operation of our business. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Recently Issued Accounting Standards

As explained in notes to the condensed financial statements, the Company evaluated all recent accounting pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company.

Off-Balance Sheet Arrangements

We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not required for Smaller Reporting Companies.

Item 4.

Controls and Procedures

Evaluation of disclosure controls and procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were not effective as of April 30, 2016 to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in internal controls

No change in our system of internal control over financial reporting occurred during the nine months ended April 30, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A.

Risk Factors

Not required for Smaller Reporting Companies.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

No recent sales of equity securities.

Item 3.

Defaults Upon Senior Securities

None

Item 4.

Mine Safety Disclosures

Not Applicable

Item 5.

Other Information

None

Item 6.

Exhibits

31.1		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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.

	Health Advance, Inc.

	By:	/s/ Jordan Starkman
		Jordan Starkman

		President, Chief Executive Officer, Chief Financial Officer (Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer)

	Dated: July 13, 2016

HEALTH ADVANCE INC. - FORM 10-Q - July 13, 2016

Attached files

HEALTH ADVANCE INC. Reports