4Less Group, Inc. - FORM 10-Q

Attached files

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EX-31 - CERTIFICATE OF THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER P - 4Less Group, Inc.	exhibit_31-1.htm
EX-32 - CERTIFICATE OF THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER P - 4Less Group, Inc.	exhibit_32-1.htm

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended October 31, 2016

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

From the transition period ___________ to ____________.

Commission File Number 333-152444

MEDCAREERS GROUP, INC.

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


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

758 E Bethel School Road, Coppell, Texas 75019

(Address of principal executive offices)

(972) 393-5892

(Issuer’s telephone number)

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

Yes [X] No [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [_].

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

Large Accelerated Filer [_] Accelerated Filer [_]

Non-accelerated Filer [_] Smaller Reporting Company [X] Emerging Growth Company [_]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_]

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

Yes [_] No [X].

As of April 30, 2018, there were 840,478,527 shares of Common Stock of the issuer outstanding.

TABLE OF CONTENTS


PART I.	FINANCIAL STATEMENTS (Unaudited)	3

ITEM 1.	Financial Statements (Unaudited)	3

	Notes to Financial Statements (Unaudited)	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	13

ITEM 3.	Quantitative and Qualitative Disclosure About Market Risk	16

ITEM 4.	Controls and Procedures	16

PART II.	OTHER INFORMATION	16

ITEM 1.	Legal Proceedings	16

ITEM 1A.	Risk Factors	16

ITEM 2.	Unregistered Sales of Securities and Use of Proceeds	16

ITEM 3.	Default Upon Senior Securities	18

ITEM 4.	Mine Safety Disclosures	18

ITEM 5.	Other Information	18

ITEM 6.	Exhibits	18

- 2 -

MEDCAREERS GROUP, INC.

Consolidated Balance Sheets

October 31, 2016 and January 31, 2016

(Unaudited)


	October 31, 2016			January 31, 2016

Assets
Current Assets
Cash and Cash Equivalents	$	80		$	—
Accounts Receivable		995			995
Other Current Assets		—			83
Total Current Assets		1,075			1,078

Total Assets	$	1,075		$	1,078

Liabilities and Stockholders’ Deficit
Current Liabilities
Accounts Payable	$	64,943		$	48,226
Accrued Expenses		44,043			39,590
Accrued Expenses – Related Party		73,085			—
Deferred Revenue		6,578			—
Accrued Interest Payable		370,959			290,682
Derivative Liabilities		403,557			745,129
Short Term Debt, net of Debt Discount of $84,915 and $104,900		911,036			799,572
Short Term Debt – Related Party, net of Debt Discount of $0 and $0		72,500			72,500
Total Current Liabilities		1,946,681			1,995,699

Total Liabilities		1,946,681			1,995,699

Stockholders’ Deficit
Preferred Stock, $0.001 par value, 20,001,000 shares authorized, 330,000 and 0 shares issued and outstanding		—			—
Preferred Stock, Series A, $0.001 par value, 500,000 shares authorized, 330,000 and 330,000 issued and outstanding		330			330
Preferred Stock, Series B, $0.001 par value, 1,000 shares authorized, 1,000 and 1,000 issued and outstanding		1			1
Common Stock, $0.001 par value, 4,000,000,000 shares authorized, 561,655,477 and 454,838,100 shares issued and outstanding		561,655			454,838
Additional Paid In Capital		5,554,626			5,582,990
Accumulated Deficit		(8,062,218	)		(8,032,780	)
Total Stockholders’ Deficit		(1,945,606	)		(1,994,621	)

Total Liabilities and Stockholders’ Deficit	$	1,075		$	1,078

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

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MEDCAREERS GROUP, INC.

Consolidated Statement of Operations

For the Three and Nine Months Ended October 31, 2016 and 2015

(Unaudited)


	Three Months Ended						Nine Months Ended
	October 31, 2016			October 31, 2015			October 31, 2016			October 31, 2015

Revenue	$	3,385		$	5,175		$	22,853		$	42,725
Cost of Sales		1,445			2,050			2,945			9,483
Gross Profit (Loss)		1,940			3,125			19,908			33,242

Operating Expenses:
Selling and Marketing		489			12,845			43,000			46,132
General and Administrative		79,885			115,648			182,692			263,493
Total Operating Expenses		80,374			128,493			225,692			309,625

Net Operating Loss		(78,434	)		(125,368	)		(205,784	)		(276,383	)

Other Income (Expense)
Gain (Loss) on Derivatives		(72,785	)		(159,880	)		376,858			(292,712	)
Loss on Debt Extinguishment		—			—			—			(45,359	)
Interest Expense		(67,025	)		(49,308	)		(200,512	)		(269,568	)
Total Other Income (Expense)		(139,810	)		(209,188	)		176,346			(607,639	)

Net Loss	$	(218,244	)	$	(334,556	)	$	(29,438	)	$	(884,022	)

Basic and Diluted Earnings (Loss) per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted Average Shares Outstanding: Basic and Diluted		561,655,477			333,440,671			543,686,983			236,761,001

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

- 4 -

MEDCAREERS GROUP, INC.

Consolidated Statement of Changes in Stockholders’ Deficit

For the Nine Months Ended October 31, 2016 (Unaudited)


	Preferred Stock			Preferred Stock
	Series A			Series B			Preferred Stock			Common Stock			Paid-In			Retained
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital			(Deficit)			Total

Stockholders’ Deficit at January 31, 2016	330,000	$	330	1,000	$	1	—	$	—	454,838,100	$	454,838	$	5,582,990		$	(8,032,780	)	$	(1,994,621	)

Conversion of Notes Payable to Common Stock	—		—	—		—	—		—	106,817,377		106,817		(83,396	)		—			23,421
Derivative Liability Reclassification Due to Debt Conversion	—		—	—		—	—		—	—		—		55,032			—			55,032

Net Loss	—		—	—		—	—		—	—		—		—			(29,438	)		(29,438	)

Stockholders’ Deficit at October 31, 2016	330,000	$	330	1,000	$	1	—	$	—	525,692,734	$	561,655	$	5,554,626		$	(8,062,218	)	$	(1,945,606	)

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

- 5 -

MEDCAREERS GROUP, INC.

Consolidated Statement of Cash Flows

For the Nine Months Ended October 31, 2016 and 2015

(Unaudited)


	2016			2015

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(29,438	)	$	(884,022	)
Adjustments to reconcile net loss to cash used in operating activities:
(Gain) Loss on change of Derivative Liabilities		(376,858	)		292,712
Loss of Debt Extinguishment		—			45,359
Amortization of Debt Discount		114,361			159,109
Common Stock Issued for Services		—			6,000
Change in Operating Assets and Liabilities:
Decrease (Increase) in Other Current Assets		83			—
Decrease (Increase) in Accounts Receivable		—			—
(Decrease) Increase in Accounts Payable		16,717			13,314
Increase in Accrued Expenses		7,354			17,284
Increase in Accrued Expenses – Related Party		73,085			—
Increase in Deferred Revenue		6,578			(9,000	)
Increase in Interest Payable		83,198			81,442
CASH FLOWS USED IN OPERATING ACTIVITIES		(104,920	)		(277,802	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Sale of Preferred Stock		—			50,000
Proceeds from Notes Payable		105,000			207,685
Payments on Notes Payable		—			(27,000	)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		105,000			230,685

NET INCREASE (DECREASE) IN CASH		80			(47,117	)

CASH AT BEGINNING OF PERIOD		—			49,881

CASH AT END OF PERIOD	$	80		$	2,764

Supplemental disclosure of cash flow information:
Cash Paid for Interest	$	—		$	66,258
Cash Paid for Income Taxes	$	—		$	—

Noncash Investing and Financing Activities:
Discount Related to Convertible Debt	$	90,318		$	155,218
Issuance of Common Shares for Debt Conversion	$	23,421		$	121,373
Issuance of Preferred Shares for Debt	$	—		$	290,103
Reclass of Derivatives to Equity Due to Debt Conversion	$	55,032		$	389,855

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

- 6 -

MEDCAREERS GROUP, INC.

Notes to Financial Statements

October 31, 2016 and 2015

(Unaudited)

NOTE 1 – NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities, History and Organization – The Company was formed as RX Scripted, LLC on December 30, 2004 as a North Carolina limited liability company and converted to a Nevada corporation as RX Scripted, Inc. on December 5, 2007 and operates a website for nurses, nursing schools and nurses organizations which enables the respective entities to communicate more easily and efficiently with their members.

Additionally, we are working towards becoming current with all required filings including the January 31, 2018 Form 10-K. With the completion of this process coming to a close, we are presently looking at various strategic options to enhance shareholder value, including the option of selling our subsidiary, which could relieve the Company of much of its debt.

Significant Accounting Policies:

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

Basis of Presentation:

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and include the financial statements of the Company and its subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The financial statements have been prepared in accordance with U.S. GAAP applicable to interim financial information and the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These interim financial statements should be read in conjunction with the audited financial statements for the years ended January 31, 2015 and 2014, as not all disclosures required by generally accepted accounting principles for annual financial statements are presented. The interim financial statements follow the same accounting policies and methods of computation as the audited financial statements for the years ended January 31, 2015 and 2014. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.

Use of Estimates:

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

Policy on Related Party Transactions:

The company has a formal, written policy that includes procedures intended to ensure compliance with the related party provisions in common practice for public companies. For purposes of the policy, a “related party transaction” is a transaction in which the Company or any one of its subsidiaries participates and in which a related party (including all of MedCareers’ directors and executive officers) has a direct or indirect material interest, other than ordinary course, arms-length transactions of less than 1% of the revenue of the counterparty. Any transaction exceeding the 1% threshold, and any transaction involving consulting, financial advisory, legal or accounting services that could impair a director’s independence, must be approved by the CEO. Any related party transaction in which an executive officer or a Director has a personal interest, or which could present a possible conflict under the Guide to Ethical Conduct, must be approved by Board of Directors, following appropriate disclosure of all material aspects of the transaction.

- 7 -

Recently Issued Accounting Pronouncements:

Revenue from Contracts with Customers: In May 2014, ASC 606 was issued related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The standard will be effective for the Company’s fiscal year beginning January 1, 2017, including interim reporting periods within that year. The new guidance is not expected to have an impact on the Company’s consolidated financial statements.

NOTE 2 - NOTES PAYABLE

The components of the Company’s debt as of October 31, 2016 and January 31, 2016 were as follows:


	October 2016			January 2016
Note Payable - $100,000, 12% interest payable monthly or accrued, due Nov 4, 2013	$	100,000		$	100,000
Note Payable - $16,000, 12% interest added to note quarterly, due January 31, 2014		16,000			16,000
Note Payable - $45,000, 12% interest added to note quarterly, due Nov 5, 2013		45,000			45,000
Note Payable - $5,000, 12% interest added to note quarterly, due Nov 5, 2013		5,000			5,000
Note Payable - $40,000, 12% interest added to note quarterly, due April 28, 2013		18,000			18,000
Note Payable - $490,150, 12% interest payable monthly or accrued, due Oct 29, 2013		479,150			479,150
Note Payable - $4,000, 12% interest added to note quarterly, due April 30, 2013		—			4,000
Note Payable - $25,000, 12% interest added to note quarterly, due April 30, 2013		25,000			25,000
Note Payable - $5,000, 12% interest added to note quarterly, due Nov 5, 2013		30,000			30,000
Note Payable - $5,000, 8% interest payable accrued to maturity, due Nov 25, 2015		5,000			5,000
Note Payable - $57,958, 8% interest payable accrued to maturity, due Sept 10, 2017		57,958			57,958
Note Payable - $57,958, 8% interest payable accrued to maturity, due Sept 10, 2017		—			259
Note Payable - $23,863, 8% interest payable accrued to maturity, due Sept 10, 2017		23,863			23,863
Note Payable - $12,355 8% interest payable accrued to maturity, due Sept 10, 2017		12,355			12,355
Note Payable - $34,280, 8% interest payable accrued to maturity, due Sept 10, 2017		7,167			27,450
Note Payable - $38,677, 8% interest payable accrued to maturity, due Sept 10, 2017		38,677			38,677
Note Payable - $25,000, 8% interest payable accrued to maturity, due Dec 7, 2017		25,000			25,000
Note Payable - $25,000, 8% interest payable accrued to maturity, due Feb 3, 2018		25,000			—
Note Payable - $30,000, 8% interest payable accrued to maturity, due March 3, 2018		30,000			—
Note Payable - $25,000, 8% interest payable accrued to maturity, due March 24, 2018		25,000			—
Note Payable - $25,000, 8% interest payable accrued to maturity, due March 24, 2018		25,000			—
Deferred Financing Costs		(4,516	)		(8,240	)
Debt Discount		(77,618	)		(104,900	)
Subtotal	$	911,036		$	799,572
Related Party Debt
Note Payable - $19,500, 8% interest payable accrued until maturity, due Jan 2, 2015
Note Payable - $5,500, 8% interest payable accrued until maturity, due July 8, 2015		5,500			5,500
Note Payable - $4,500, 8% interest payable accrued to maturity, due May 5, 2015		4,500			4,500
Note Payable - $24,297, 8% interest payable accrued to maturity, due May 14, 2015		23,297			23,297
Note Payable - $7,703, 8% interest payable accrued to maturity, due May 19, 2015		7,703			7,703
Note Payable - $26,500, 8% interest payable accrued to maturity, due June 12, 2015		26,500			26,500
Note Payable - $5,000, 8% interest payable accrued until maturity, due July 19, 2016		5,000			5,000
Subtotal – Related Party Debt		72,500			72,500
Total	$	983,536		$	872,072

The Company had accrued interest payable of $369,711 and $290,682 interest on the notes at October 31, 2016 and January 31, 2016, respectively.

The Company has entered in to various promissory notes with lenders during the periods ended October 31, 2016 and the year ended January 31, 2016 bearing interest at between 8% and 12% rate per annum, unsecured, payable on demand and convertible into the Company’s common stock. The conversion price ranges from 52% to 50% of the average of the three lowest closing bid prices of the common stock during the 10 or 25 trading days prior to conversion.

- 8 -

The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as liabilities due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The instrument is measured at fair value at the end of each reporting period or termination of the instrument with the change in fair value recorded to earnings.

During the nine months ended October 31, 2016, the Company converted a total of $23,421 of the convertible debt plus accrued interest into 106,817,377 common shares.

A summary of the debt in total is as follows:


	2016		2015
Convertible debt – fixed conversion rate	$	693,150	$	692,150
Convertible debt – variable conversion rates, net of debt discount		192,886		82,422
Convertible debt – variable conversion rates, Related Party, net of debt discount		72,500		72,500
Non-Convertible debt		25,000		25,000
Net	$	983,536	$	872,072

The Company has $693,150 and $692,150 of debt that is convertible at ranges from $0.06 to $1.00 per share and accrues interest between 8% and 12% at October 31, 2016 and January 31, 2016 respectively.

The Company has $25,000 and $25,000 of debt which has no conversion feature at October 31, 2016 and January 31, 2016 respectively.

The Company has $192,886 and $82,422 of debt (net of debt discount) with variable conversion price ranges from 52% to 50% of the average of the three lowest closing bid prices of the common stock during the 10 or 25 trading days prior to conversion as of October 31, 2016 and January 31, 2016 respectively.

The company has $72,500 of related party convertible debt at October 31, 2016 and January 31, 2016.

The Company is in default on a number of its promissory notes which provide legal remedies for satisfaction of defaults, none of which to this point have pursued their legal remedies. The Company continues to accrue interest at the listed rates, and plans to seek their conversion or payoff within the next twelve months. Accordingly, the Company has classified the entire loan amounts as a current liability.

NOTE 3 - STOCKHOLDERS’ DEFICIT

Preferred Stock:

The Company is authorized to issue 20,001,000 shares of Preferred Stock, having a par value of $0.001 per share, of which 500,000 are designated as Series A and 1,000 are designated as Series B.

On April 27, 2016, the Company filed a designation of 500,000 shares of Series A Preferred Stock and 1,000 shares of Series B Preferred Stock.

The Series A Preferred Stock have an automatic forced conversion upon the completion of the repurchase or extinguishing of all “toxic” debt, the extinguishing of all other existing dilutive debt or equity structures, and total recapitalization of the Company. For more information regarding the Series A Preferred Stock, please see Exhibit 3.1 Currently there are 330,000 Series A Preferred Shares issued.

The Series B Preferred have voting rights equal 51% of the total voting rights at any time. There are no conversion rights granted holders of Series B Preferred shares. For more information regarding the Series B Preferred Stock, please see Exhibit 3.1. Currently, there are 1,000 shares issued and outstanding of the Series B Preferred Stock, held by Timothy Armes.

There were 330,000 Series A preferred shares outstanding at October 31, 2016 and January 31, 2016.

There were 1,000 Series B preferred shares outstanding at October 31, 2016 and January 31, 2016.

- 9 -

Common Stock:

The Company is authorized to issue 4,000,000,000 common shares at a par value of $0.001 per share. These shares have full voting rights. At October 31, 2016 and January 31, 2016, there were 561,655,477 and 454,838,100 shares outstanding, respectively. No dividends were paid in the period ended October 31, 2016 or in the year ended January 31, 2016.

The Company issued the following shares of common stock in the nine months ended October 31, 2016:

The company issued 106,817,377 shares of common stock for the conversion of Notes payable and accrued interest in the amount of $23,421.

Options and Warrants:

The Company recorded option and warrant expense of $0 in the period ended October 31, 2016 and the year ended January 31, 2016.

The Company had the following options or warrants outstanding at October 31, 2016:


Issued To	# Options	Dated	Expire	Strike Price
Shareholder	127,500	04/29/2012	04/29/2017	$0.10 per share
Shareholder	127,500	07/31/2013	07/31/2017	$0.10 per share
Shareholder	2,000,000	01/18/2013	01/18/2018	$0.05 per share
Lender	3,500,000	07/02/2015	07/01/2019	$0.10 per share


	Options	Weighted Average Exercise Price		Warrants	Weighted Average Exercise Price
Outstanding at January 31, 2016	—	$	—	6,982,500	$	0.09
Granted	—		—	—		—
Exercised	—		—	—		—
Forfeited and canceled	—		—	1,227,500		—
Outstanding at October 31, 2016	—	$	—	5,755,000	$	0.08

Summary of warrants outstanding and exercisable as of October 31, 2016 is as follows:


Range of Exercise Prices	Weighted Average Remaining Contractual Life (years)	Number of Warrants Outstanding	Number of Warrants Exercisable
$ 0.05 to $ 0.12	1.36	5,755,000	5,755,000

NOTE 4 – COMMITMENTS AND CONTINGENCIES

There is pending litigation initiated by the Company around the validity of a $100,000 note which the Company signed based upon representations of funding from the maker which were never received. The Company is initiated litigation to dispute the note and the 10,151, 540 shares that have been issued. There was no consideration for the issuance of the shares and the shares have been accounted for as if they were returned and cancelled although they have not been returned.

NOTE 5 – GOING CONCERN AND FINANCIAL POSITION

MedCareers’ financial statements are prepared using United States generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred cumulative losses through October 31, 2016 of $8,062,218 and has a working capital deficit at October 31, 2016 of $(1,945,606).

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

- 10 -

NOTE 6 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The ASC guidance for fair value measurements and disclosure establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 Inputs – Quoted prices for identical instruments in active markets.

Level 2 Inputs – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 Inputs – Instruments with primarily unobservable value drivers.

As of October 31, 2016 and January 31, 2016, the Company’s financial assets were measured at fair value using Level 3 inputs, with the exception of cash, which was valued using Level 1 inputs.

Fair Value Measurement at October 31, 2016 Using:

October 31, 2016

Quoted Prices in
Active Markets
For Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Assets:

None

—

Totals

—

Liabilities:

Derivative Liabilities

403,557

—

403,557

Totals

403,557

—

403,557

January 31, 2016

Quoted Prices in
Active Markets
For Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Assets:

None

—

Totals

—

Liabilities:

Derivative Liabilities

745,129

—

745,129

Totals

745,129

—

745,129

Derivative Liability:

As of October 31, 2016 and January 31, 2016 the company had $403,557 and $745,129 recorded as derivative liabilities. During the periods ended October 31, 2016 and January 31, 2016 the company recorded $210,460 in loss and $633,185 in loss from the change in the fair value of derivative liabilities.

The derivative liabilities are valued as a level 3 input for valuing financial instruments.

The derivatives arise from convertible debt where the debt is convertible into common stock at variable conversion prices. As the price of the common stock varies it triggers a gain or loss based upon the discount to market assuming the debt was converted at the balance sheet date.

- 11 -

The fair value of the derivative liability is determined using the Black-Scholes option-pricing model and lattice model, is re-measured on the Company’s reporting dates, and is affected by changes in inputs to that model including our stock price, expected stock price volatility, the expected term, and the risk-free interest rate. In our calculation at October 31, 2016, volatility ranged from 385% to 437%, the term ranged from 0.49 to 0.64 years, and the risk free interest rate was 6%.


	Level 3
	Derivatives

Balance, January 31, 2016	$	745,129
Derivative Liabilities due to New Convertible Debt	$	90,318
Reclassification of Derivative Liabilities to Additional Paid in Capital Due to Conversion of Notes Payable	$	(55,032	)
Market to Market adjustment of Derivatives	$	(376,858	)
Ending Balance, October 31, 2016	$	403,557

NOTE 7 – RELATED PARTY TRANSACTIONS

The Company maintains its executive offices of approximately 300 sq. ft., at 758 E. Bethel School Road, Coppell, Texas 75019 in the home of the President and CEO for which it pays no rent. The Company plans to lease office space when their operations require it and funding permits.

The company has $72,500 of related party convertible debt at October 31, 2016 and January 31, 2016 as described further in Note 2.

NOTE 8 – SUBSEQUENT EVENTS

The following shares have been issued subsequent to the balance sheet date:

In November 2017, 55,938,667 shares issued for conversion of $6,050 Note and $2,341 interest that had a conversion feature at 52% of market price per share.

In November 2017, 61,429,041 shares issued for conversion of $4,400 Note and $1,743 interest that had a conversion feature at 52% of market price per share.

In December 2017, 61,455,342 shares issued for conversion of $4,400 Note and $1,745 interest that had a conversion feature at 52% of market price per share.

In January 2018, 34,000,000 shares issued for conversion of $2,250 of debt to JCC Trading, LLC.

On January 31, 2018, 1,000,000 shares were issued for services to Seaside Advisors, LLC.

On January 31, 2018, 30,000,000 shares were issued to Garret Armes to convert $2,250 , a portion of accrued deferred compensation.

On January 31, 2018, 10,000,000 shares were issued to Kate Chambrovich to convert $750, a portion of the accrued deferred compensation.

On January 31, 2018, 15,000,000 shares were issued to Lynn Management, LLC for conversion of $1,125, a portion of an accrued payable owing to them.

On January 31, 2018, 10,000,000 shares were issued to Eilers Law Group P.A. for settlement of $2,000 due to the firm services.

In December 2017, the Company issued a convertible debenture with principal amount of $51,750. The note bears 15% interest, and is due in December 2018. The note can be convertible at 50% of the lowest bid price of common stock reported on National Quotations Bureau OTC Markets for the 40 prior days. The conversion price shall not be higher than $.000075 per share. On March 7, 2018 the Company issued a Warrant to purchase 34,000,000 shares of common stock to the note holder at exercise price of $0.000075 per share. The warrant expires in March, 2021.

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

FORWARD-LOOKING STATEMENTS

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

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

Company

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

Recent Activity

At the end of our fiscal year end and through our first quarter of FY 2017 we have concentrated our efforts into re-launching the employer area of our network into a talent acquisition platform for hiring nurses.

Along with the talent acquisition platform, we have included what we believe to be the first nurses only map oriented job search. This allows nurses the potential to see hundreds of jobs available them within a geographic radius. By clicking on a pin on the job map they can view and apply for jobs at that specific location.

The degree program directory, targeted to 4 year BSN schools, has 26 degree categories to search such as online RN to BSN programs as well as various PhD programs. We do not charge schools for posting their programs in the directory. However, we do request that they place our social link on their web site and invite their students and alumni to follow them in the Nurses Lounge.

Additionally, we are working towards to becoming current with all required filings including the January 31, 2018 Form 10-K. With the completion of this process coming to a close, we are presently looking at various strategic options to enhance shareholder value, including the option of selling our subsidiary, which could relieve the Company of much of its debt.

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

Competition

While there are various online community forums and nurse portals, Nurses Lounge does not believe that there is a direct competitor designed from the ground up as a professional network for nurses and to solve many of the day-to-day communications problems nursing organizations have. The largest competitors of Nurses Lounge bill themselves as “communities” that claim to provide news, career advice and social interaction, and include Nurse.com - owned by OnCourse Learning; and Allnurses – a nursing forum and discussion board. Additionally, and to a lesser extent, Nurses Lounge indirectly competes with other websites that encourage users to create connections with other colleagues and persons with similar interests such as Linkedin and Facebook, however, unlike like these websites which have very broad general appeal, Nurses Lounge focuses solely on the nursing pro and the organizations which support them.

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Proprietary Rights

We plan to rely on a combination of copyright, trade secret and trademark laws, and non-disclosure and other contractual arrangements to protect our proprietary rights moving forward. There can be no assurance that the steps we plan to take in the future to protect our future proprietary rights, however, will be adequate to deter misappropriation of proprietary information, and we may not be able to detect unauthorized use and take appropriate steps to enforce our intellectual property rights. Although we believe that our websites and services will not infringe upon the intellectual property rights of others and that we have all rights necessary to utilize our intellectual property, we are subject to the risk of claims alleging infringement of third-party intellectual property rights. Any such claims could require us to spend significant sums on litigation, pay damages, delay our products and software, develop non-infringing intellectual property or acquire licenses to intellectual property that are the subject of any such infringement. Therefore, such claims could have a material adverse effect on our planned business, operating results and financial condition.

Nursing Profession Overview

From Nurses Lounge business viewpoint, the nursing profession is broken down into the individual registered nurses (RNs) and the professions stake holder organizations consisting of nursing schools, associations and employers.

Throughout their career, nurses need to be connected with numerous organizations in order to simply stay up to date with basic continuing education requirements which they need to meet state guidelines and/or employers qualification to maintain employment.

As such, we believe that there is an opportunity to unite the industry on one simple to use communication platform that can upgrade, simplify and reduce the cost of communications used by stakeholder organizations while providing nurses quick access to the information important to their careers. The market for nurses is growing in the United States and we believe that our website has a significant number of potential users based on the following:


•	According to the Bureau of Labor Statistics’ Employment Projections 2010-2020 released in February 2012, the Registered Nursing workforce is the top occupation in terms of job growth through 2020. It is expected that the number of employed nurses will grow from 2.74 million in 2010 to 3.45 million in 2020, an increase of 712,000 or 26%.

•	Based on findings from the Nursing Management Aging Workforce Survey released in the July 2006 issue of Nursing Management magazine, 55% of surveyed nurses reported their intention to retire between 2011 and 2020.

•	Approximately 660 4-year schools offer a Bachelor of Science in Nursing (BSN) and other advanced degrees such as Masters and PhD.

•	Approximately 2,500 community college type schools offer a 2 year Associate Degree in Nursing (ADN).

•	Approximately 6,000 hospitals are located across the U.S. where approximately 60% of all nurses are employed, according to American Association Colleges of Nursing (AACN).

•	An approximate 250,000 shortage in nurses has been predicted by 2018.

Due to the above factors, the Company’s Nurses Lounge professional Network has a significant market for their services and that even with significant competition for recruitment and job placement services as described below in the risk factor entitled “WE WILL FACE SIGNIFICANT COMPETITION FROM MONSTER.COM and CAREERBUILDER, NICHE HEALTHCARE SITES SUCH AS NURSE.COM AND HEALTHECAREERS AS WELL AS JOB AGGREGATOR SITES SUCH AS INDEED.COM AND OTHER INTERNET JOB POSTING WEBSITES”. “, there will be room in the global marketplace for website posting, recruiting and job placement services for the Company’s niche healthcare related websites.

***

Results for the three and nine months ended October 31, 2016

Revenue for the three months ended October 31, 2016 and 2015 was $3,385 and $5,175, respectively. The lower revenue for the first quarter in 2016 was primarily due to the Company not having cash to hire salespeople.

Revenue for the nine months ended October 31, 2016 and 2015 was $22,853 and $42,725, respectively. The lower revenue for the first quarter in 2016 was primarily due to the Company not having cash to hire salespeople.

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Cost of revenues were $1,445 and $2,050 for the three months ended October 31, 2016 and 2015, respectively. The changes reflect the reduced cash to operate with and the President doing most of the selling.

Cost of revenues were $2,945 and $9,483 for the nine months ended October 31, 2016 and 2015, respectfully. The changes reflect the reduced cash to operate with and the President doing most of the selling.

Selling expenses were $489 and $12,845 for the three months ended October 31, 2016 and 2015. This decrease was due to the President doing more of the sales presentations rather than paying rather than paying others to do this work.

Selling expenses were $25,911 and $46,132 for the nine months ended October 31, 2016 and 2015. This decrease was due to the President doing more of the sales presentations rather than paying rather than paying others to do this work.

Operating expenses for the three months ended October 31, 2016 and 2015 were $32,379 and $115,648 respectively.

Operating expenses for the nine months ended October 31, 2016 and 2015 were $152,275 and $263,493 respectively.

Other expense reflects interest on loans which was $138,633 and $49,308 for the three months ended October 31, 2016 and 2015, respectively. Also, there were other expenses relating to the cost of our convertible debt being a loss on derivatives of $0 and $0 for the three months ended October 31, 2016 and 2015 respectively.

Other expense reflects interest on loans which was $272,120 and $269,568 for the nine months ended October 31, 2016 and 2015, respectively. Also, there were other expenses relating to the cost of our convertible debt being a gain of $400,960 on derivatives and a loss of $292,712 on derivatives for the nine months ended October 31, 2016 and 2015 respectively. In the nine months ended October 31, 2015, the Company also had a loss on debt extinguishment of $45,359.

Liquidity and Capital Resources

As of October 31, 2016, the Company had negative working capital of $1,945,606, comprised of current assets of $1,075 and current liabilities of $1,946,881.

Net cash used in operations for the nine months ended October 31, 2016 was $103,629 compared to $277,802 for the nine months ended October 31, 2015.

Cash used for purchase of fixed assets was $0 for the nine months ended October 31, 2016 and 2015.

Cash provided by financing activities for the nine months ended October 31, 2016 was $103,709 compared to $230,685 for the same period in 2015.

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

Currently the Company does not have sufficient cash reserves or revenues to meet its contractual obligations under its outstanding notes payable and to pay its ongoing monthly expenses, which the Company anticipates totaling approximately $300,000 over the next 12 months. The Company has been able to continue operating to date largely from loans made by its shareholders and other debt financings to date. The Company is currently looking at both short-term and more permanent financing opportunities, including debt or equity funding, bridge or short term loans, and/or traditional bank funding, but we have not decided on any specific path moving forward. Unless we have raised sufficient funding to pay our ongoing expenses associated with being a public company, and we have sufficient funds to support our planned operations, the Company can provide no assurances that it will be able to meet its short and long term liquidity needs. The Company continues to generate revenue from the Nurses Lounge business, which the Company believes will increase to the point where the Company can cover its basis monthly obligations, of which there can be no assurance.

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

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

ITEM 3. Quantitative and Qualitative Disclosure about Market Risk.

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

ITEM 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”), has concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Moving forward, we hope that our Chief Executive Officer and Principal Financial Officer will be able to devote the additional time and effort required so that our disclosure controls and procedures are once again effective. Notwithstanding the assessment that our internal controls and procedures were not effective, we believe that our financial statements contained in this Quarterly Report for the quarter ended October 31, 2016 fairly present our financial position, results of operations and cash flows for the years and months covered thereby in all material respects.

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

PART II

Item 1. Legal Proceedings

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended January 31, 2016, filed with the Commission on June 27, 2016, other than as set forth below, and investors are encouraged to review such risk factors below and in the Form 10-K, prior to making an investment in the Company.

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

Recent Sales of Unregistered Securities


	Consideration		Date	# Shares
Balance, Number of shares outstanding, January 31, 2016				454,838,100
Common stock at issued fifty percent discount to market per note conversion agreement	Convert a portion of note payable	(1)	Feb 5, 2016	27,525,867
Common stock at issued fifty percent discount to market per note conversion agreement	Convert a portion of note payable	(2)	Mar 11, 2016	43,328,767
Common stock at issued fifty percent discount to market per note conversion agreement	Convert note payable	(3)	May 10, 2016	35,962,743
Balance, Number of shares outstanding, October 31, 2016				561,655,477

(1) Partial conversion of Note that had a conversion feature at 50% of market price per share. These shares were issued for the conversion of $4,129 of the note plus accrued interest.

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

(2) Partial conversion of Note that had a conversion feature at 50% of market price per share. These shares were issued for the conversion of $12,998 of the note and accrued interest.

(3) Conversion of Note that had a conversion feature at 50% of market price per share. These shares were issued for the conversion of the $4,000 note and accrued interest.

Options and Warrants

The Company had the following options or warrants outstanding at October 31, 2016:


Issued To	# Options	Dated	Expire	Strike Price
Shareholder (1)	127,500	04/29/2012	04/29/2017	$0.10 per share
Shareholder (1)	127,500	07/31/2013	07/31/2017	$0.10 per share
Shareholder (2)	2,000,000	01/18/2013	01/18/2018	$0.05 per share
Lender (3)	3,500,000	07/02/2014	07/01/2019	$0.10 per share

(1) Two options for 127,500 shares of restricted common stock at an exercise price of $0.10 per share and for a term of 5 years was awarded Geneva7, LLC in consideration for renewing the loan it has with the company of $25,000 two times. Geneva7, LLC originally loaned the company $25,000 at 12% interest on August 29, 2011 and was awarded an option to purchase 127,500 shares of restricted common stock at an exercise price of $0.10. The term of the option is 5 years and expired without it being exercised. The loan matured on April 30^th 2012 and Geneva 7 agreed to renew the loan and accrue interest thru July 31, 2013 and additionally renewed the loan thru October 31, 2103 when it matured on July 31, 2013. With each additional renewal Geneva7 received an additional option to purchase 127,500 shares of restricted common stock at an exercise price of $0.10 per share and for a term of 5 years. This note was sold to a third party who converted the note into common shares at market and sold the shares. At October 31, 2016, one of the options had expired and two remain outstanding.

(2) On January 9, 2013 the company issued 2,000,000 units of its securities in a private placement to an accredited investor. The price of these Units was $0.10 per unit. Each Unit consists of 1 share of restricted common stock valued at $0.10 per share for a total of 2,000,000 shares and one 5 year Warrant. Each Series B Warrant entitles the holder to purchase one share of common stock at an exercise price of $0.05 per share and subject to adjustments due to recapitalization or reclassification of common stock.

(3) Option for 3,500,000 common shares granted to a lender as part of the loan transaction. The options have a strike price of $0.10 per share and expire on July 1, 2019.

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Item 3. Default Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

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

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

MedCareers Group, Inc.

By: /s/ Timothy Armes

Timothy Armes

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

Date: May 3, 2018

EXHIBIT INDEX


Exhibit Number		Description of Exhibit

31.1*		Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed herewith.

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4Less Group, Inc. - FORM 10-Q - May 3, 2018

Attached files

4Less Group, Inc. Reports