4Less Group, Inc. - FORM 10-Q

Attached files

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EX-32 - CERTIFICATE OF THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER P - 4Less Group, Inc.	exhibit_32-1.htm
EX-31 - CERTIFICATE OF THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER P - 4Less Group, Inc.	exhibit_31-1.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, 2017

[_] 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.)

6515 Goodman Rd., #258, Olive Branch, MS. 38654

(Address of principal executive offices)

(662) 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 July 31, 2018 there were 962,143,141 shares of Common Stock of the issuer outstanding.

TABLE OF CONTENTS


PART I.	FINANCIAL STATEMENTS (Unaudited)	3

ITEM 1.	Consolidated Financial Statements (Unaudited)	3

	Notes to Consolidated Financial Statements (Unaudited)	6

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

ITEM 3.	Quantitative and Qualitative Disclosure About Market Risk	17

ITEM 4.	Controls and Procedures	17

PART II.	OTHER INFORMATION	17

ITEM 1.	Legal Proceedings	17

ITEM 1A.	Risk Factors	17

ITEM 2.	Unregistered Sales of Securities and Use of Proceeds	18

ITEM 3.	Default Upon Senior Securities	19

ITEM 4.	Mine Safety Disclosures	19

ITEM 5.	Other Information	19

ITEM 6.	Exhibits	19

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MEDCAREERS GROUP, INC.

Consolidated Balance Sheets

As of October 31, 2017 and January 31, 2017

(Unaudited)


	October 31, 2017			January 31, 2017

Assets
Current Assets
Cash and Cash Equivalents	$	64		$	1,156

Total Assets	$	64		$	1,156

Liabilities and Stockholders’ Deficit
Current Liabilities
Accounts Payable	$	74,641		$	67,424
Accrued Expenses		97,474			44,023
Accrued Expenses – Related Parties		342,445			145,650
Accrued Interest Payable		493,137			407,681
Deferred Revenue		9,565			10,902
Derivative Liabilities		355,504			421,973
Short Term Debt, net of Debt Discount of $1,256 and $45,526, respectively		1,070,538			1,023,927
Total Liabilities		2,443,304			2,121,580

Stockholders’ Deficit
Preferred Stock, $0.001 par value, 19,500,000 shares authorized, 0 shares outstanding		—			—
Preferred Stock Series A, $0.001 par value, 500,000 shares, 330,000 shares outstanding		330			330
Preferred Stock Series B, $0.001 par value, 1,000 shares, 1,000 shares outstanding		1			1
Common Stock, $0.001 par value, 4,000,000,000 shares authorized, 561,655,477 shares issued and outstanding		561,655			561,655
Additional Paid In Capital		5,554,626			5,554,626
Accumulated Deficit		(8,559,852	)		(8,237,036	)
Total Stockholders’ Deficit		(2,443,240	)		(2,120,424	)

Total Liabilities and Stockholders’ Deficit	$	64		$	1,156

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

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MEDCAREERS GROUP, INC.

Consolidated Statements of Operations

For the Three and Nine Months Ended October 31, 2017 and 2016

(Unaudited)


	Three Months Ended						Nine Months Ended
	October 31, 2017			October 31, 2016			October 31, 2017			October 31, 2016

Revenue	$	7,496		$	3,385		$	26,357		$	22,853

Operating Expenses:
Cost of Revenues		—			1,445			—			2,945
Selling and Advertising		1,786			489			3,055			43,000
General and Administrative		93,967			79,885			283,107			182,692
Total Operating Expenses		95,753			81,819			286,162			228,637

Net Operating Loss		(88,257	)		(78,434	)		(259,805	)		(205,784	)

Other Income (Expense)
Gain (Loss) on Change of Derivative Liabilities		59,962			(72,785	)		66,469			376,858
Interest Expense		(38,892	)		(67,025	)		(129,480	)		(200,512	)
Total Other Income (Expense)		21,070			(139,810	)		(63,011	)		176,346

Net Loss	$	(67,187	)	$	(218,244	)	$	(322,816	)	$	(29,438	)

Weighted Average Common Shares Outstanding - Basic and Diluted		561,655,477			561,655,477			561,655,477			543,686,983

Loss per Common Share - Basic and Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

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

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MEDCAREERS GROUP, INC.

Consolidated Statements of Cash Flows

For the Nine Months Ended October 31, 2017 and 2016

(Unaudited)


	2017			2016

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(322,816	)	$	(29,438	)
Adjustments to reconcile net loss to cash used by operating activities:
Gain on Change of Derivative Liabilities		(66,469	)		(376,858	)
Amortization of Debt Discount		44,270			114,361
Change in Operating Assets and Liabilities:
Other Current Assets		—			83
Accounts Payable		9,558			16,717
Accrued Expenses		53,451			7,354
Accrued Expenses – Related Parties		196,795			73,085
Accrued Interest Payables		85,456			83,198
Deferred Revenue		(1,337	)		6,578
CASH FLOWS USED IN OPERATING ACTIVITIES		(1,092	)		(104,920	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Short-Term Debt		—			105,000
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		—			105,000

NET INCREASE (DECREASE) IN CASH		(1,092	)		80

CASH AT BEGINNING OF PERIOD		1,156			—
CASH AT END OF PERIOD	$	64		$	80

Supplemental Disclosures of Cash Flow Information:
Cash Paid for Interest	$	—		$	—
Cash Paid for Income Taxes	$	—		$	—

Non-Cash Financing Items:
Discount Related to Convertible Debt	$	—		$	90,318
Issuance of Common Shares for Debt Conversion	$	—		$	23,421
Gain on Additional Paid-in Capital from Debt Conversion	$	—		$	55,032

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

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MEDCAREERS GROUP, INC.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 – NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES

Business:

The Company currently operates a website for nurses, nursing schools and nurses organizations which enables the respective entities to communicate more easily and efficiently with their members.

Significant Accounting Policies:

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

Basis of Presentation:

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

The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. The unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended January 31, 2017 and notes thereto contained in the Company’s Annual Report on Form 10-K.

Principles of Consolidation:

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

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.

Cash and Cash Equivalents:

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

Income Taxes:

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

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

Fair Value of Financial Instruments:

The Company’s financial instruments consist of cash, accounts payable, advances and notes payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments. Derivatives are recorded at fair value at each period end. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date.

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.

The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of October 31, 2017:


	October 31, 2017		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities:
Derivative Liabilities – embedded redemption feature	$	355,504	$	—	$	—	$	355,504
Totals	$	355,504	$	—	$	—	$	355,504

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 Tyco’s 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.

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Revenue Recognition:

Revenue is recognized when persuasive evidence of an arrangement exists, delivery or service has occurred, the sales price is fixed or determinable and receipt of payment is probable. Certain sales are for services over the period of six months or a year and those sales are recognized ratably over the period. Any amount collected but not earned is recorded as deferred revenue.

Stock-Based Compensation:

The Company accounts for stock options at fair value. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option.

Earnings per Common Share:

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

The Company had 5,627,500 options and warrants outstanding at October 31, 2017 which were potentially dilutive common stock equivalents but would be antidilutive and are not included. As the Company incurred a net loss during the period ended October 31, 2017, the basic and diluted loss per common share is the same amount, as any common stock equivalents would be considered anti-dilutive.

Recently Issued Accounting Pronouncements:

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.

There were various other accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows.

NOTE 2 – 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, 2017 of $8,559,852 and has a working capital deficit at October 31, 2017 of $2,443,304.

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.

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NOTE 3 – SHORT-TERM DEBT

The components of the Company’s short-term debt as of October 31, 2017 and January 31, 2017 were as follows:


			Outstanding Principal at
Maturity Date	Interest Rate	Conversion Price	October 31, 2017			January 31, 2017
Nov 4, 2013	12%	Not convertible	$	100,000		$	100,000
Jan 31, 2014	12%	$0.10		16,000			16,000
Jan 31, 2014	12%	$0.10		45,000			45,000
July 31, 2013	12%	$0.06		5,000			5,000
Nov 30, 2014	12%	Not convertible		18,000			18,000
Apr 30, 2013	12%	Not convertible		25,000			25,000
Jan 31, 2014	12%	$0.10		30,000			30,000
Dec 24, 2015	8%	(1)		5,000			5,000
Sep 10, 2017	8%	(2)		57,958			57,958
Sep 10, 2017	8%	(2)		23,863			23,863
Sep 10, 2017	8%	(2)		12,355			12,355
Sep 10, 2017	8%	(2)		10,950			10,950
Sep 10, 2017	8%	(2)		38,677			38,677
Dec 4, 2017	8%	(2)		25,000			25,000
Feb 3, 2017	8%	(2)		25,000			25,000
Mar 3, 2017	8%	(2)		30,000			30,000
Mar 24, 2017	8%	(2)		25,000			25,000
Feb 5, 2017	8%	(3)		25,000			25,000
Jan 2014 to Jan 2018	12%	$0.07 to $0.10		479,150			479,150
July 8, 2015	8%	(1)		5,500			5,500
May 5, 2015	8%	(1)		4,500			4,500
May 14, 2015	8%	(1)		23,297			23,297
May 19, 2015	8%	(1)		7,703			7,703
June 12, 2015	8%	(1)		26,500			26,500
July 19, 2016	8%	(1)		5,000			5,000
Due on demand	8%	Not convertible		2,341			—
Deferred Financing Costs				(93	)		(3,248	)
Debt Discount				(1,163	)		(42,278	)
Subtotal			$	1,070,538		$	1,023,927

__________


(1)	52% of the lowest trading price for the fifteen trading days prior to conversion day.
(2)	50% of the lowest trading price for the fifteen trading days prior to conversion day.
(3)	50% of the lowest trading price for the twenty trading days prior to conversion day.

The Company had accrued interest payable of $493,137 and $407,681 interest at October 31, 2017 and January 31, 2017, respectively.

The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that some instruments 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. The fair value of the embedded conversion option resulted in a discount to the note on the debt modification date. For the nine months ended October 31, 2017 and 2016, the Company recorded amortization expense of $41,115 and $27,282, respectively.

During the nine months ended October 31, 2017 and 2016, the Company converted a total of $0 and $23,421, respectively, of the convertible debt plus accrued interest into zero and 106,817,377 common shares.

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As of October 31, 2017, the Company had $738,293 of aggregate debt in default. The agreements provide legal remedies for satisfaction of defaults, none of the lenders 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.

On April 25, 2018, the Company entered into replacement notes with 4 existing note holders. The new notes combined the principle amounts of each of their existing notes along with each note’s accrued interest, extended the maturity dates to April 24, 2020 with an interest rate per annum of 15%. The total principal and accrued interest replaced were $530,650 and $ 316,679, respectively.

NOTE 4 – DERIVATIVE LIABILITIES

The derivatives arise from convertible debt where the debt is convertible into common stock at variable conversion prices. The fair value of the derivative liability is determined using the 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, 2017, volatility ranged from 178 to 215%, the term ranged from 0.25 to 0.66 years, and the risk free interest rate was 1.38 to 1.42%. The following table sets forth a reconciliation of changes in the fair value of financial liabilities classified as level 3 in the fair value hierarchy for the nine months ended October 31, 2017.


	Level 3
	Derivatives
Balance, January 31, 2017	$	421,973
Market to Market adjustment of Derivatives		(66,469	)
Balance, October 31, 2017	$	355,504

For the nine months ended October 31, 2017 and 2016, the Company recorded gain from the change in the fair value of derivative liabilities of $66,469 and $376,858, respectively.

NOTE 5 – 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.

The Series A Preferred Stock has 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. As of October 31, 2017, the Company had 330,000 shares of Series A Preferred issued and outstanding.

The Series B Preferred Stock has voting rights equal to 51% of the total voting rights at any time. There are no conversion rights granted holders of Series B Preferred shares. As of October 31, 2017, the Company had 1,000 shares of Series B Preferred Stock issued, outstanding and held by Timothy Armes.

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. During the nine months ended October 31, 2017, the Company did not issue any common stock. At October 31, 2017 and January 31, 2017, there were 561,655,477 shares issued and outstanding.

Options and Warrants:

During the nine months ended October 31, 2017, the Company did not issue any options or warrants. The Company had the following warrants outstanding at October 31, 2017:

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	Number of Warrants		Weighted Average Exercise Price For Share	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value

Outstanding and exercisable at January 31, 2017	5,755,000		$ 0.08
Expired	(255,000	)	$ 0.10
Outstanding and exercisable at October 31, 2017	5,500,000		$ 0.08	1.14	$ —

NOTE 6 – RELATED PARTY TRANSACTIONS

As of October 31, 2017 and January 31, 2017, the Company had $342,445 and $145,650 of related party accrued expenses related to accrued compensation for employees and consultants.

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 and the CEO moved the office to 6515 Goodman Rd., #258, Olive Branch, MS. 38654 in July 2018. The Company plans to lease office space when their operations require it and funding permits.

NOTE 7 – 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 initiating litigation to dispute the note and the 10,151,540 shares that have been issued.

NOTE 8 – SUBSEQUENT EVENTS

Conversion of notes

On November 15, 2017, 55,938,667 shares were issued for the conversion of a $6,050 Note and $2,341 interest that had a conversion feature at 50% of the market price per share.

On November 15, 2017, 61,429,041 shares were issued for the conversion of a $4,400 Note and $1,743 interest that had a conversion feature at 50% of the market price per share.

On December 8, 2017, 61,455,342 shares were issued for the conversion of a $4,400 Note and $1,745 interest that had a conversion feature at 50% of the market price per share.

On January 19, 2018, 34,000,000 shares were issued for the conversion of $2,550 of debt. This amount was a partial conversion of a $12,500 note that existed as of January 31, 2017 and assigned to another holder. The note had a conversion feature of 50% of the lowest bid price of common stock reported on National Quotations Bureau OTC Markets for the 40 prior days but not higher than $.000075 per share. Conversion of the $2,550 Note that existed as of January 31, 2017 to another party. The note had a conversion feature of 50% of lowest bid but not higher than $0.000075 per share.

On June 6, 2018, 66,897,096 shares were issued for the conversion of a $2,200 Note and $1,145 interest that had a conversion feature at 50% of the market price per share.

On July 30, 2018, 54,767,518 shares were issued for the conversion of a $1,760 Note and $978 interest that had a conversion feature at 50% of the market price per share.

Issuance of shares for services

On January 31, 2018, 1,000,000 shares valued at $300 were issued for services to Seaside Advisors, LLC.

On January 31, 2018, 10,000,000 shares valued at $3,000 were issued to Eilers Law Group P.A. for services.

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Settlement of accounts payable

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

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

On January 31, 2018, 15,000,000 shares were issued to Lynn Management, LLC to settle $1,125 of accrued payables.

Issuance of convertible notes

On December 27, 2017, the Company issued a convertible note with a principal amount of $51,750. The note bears 15% interest, and is due on December 27, 2018. The note can be converted at 50% of the lowest bid price of common stock reported on the 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.

Issuance of replacement notes

On April 25, 2018, the Company entered into replacement notes with 4 existing note holders including Larry Glenn, Jr., Charles Hickle, Dynacap Global Capital Fund II, LP., and Phenix Suites, LLC. The new notes combined the principle amounts of each of their existing notes along with each note’s accrued interest, extended the maturity dates to April 24, 2020 with an interest rate per annum of 15%.

Each note is convertible with a conversion price for each share equal to the lower of: (a) 50% lowest bid price of the common stock, as reported on the National Quotations Bureau OTC Markets which the Company’s shares are traded or any exchange upon which the common stock may be traded in the future, for the 20 (twenty) prior trading days including the day of issuance of this herein Note or (b) 50% lowest bid price of the common stock, as reported on the National Quotations Bureau OTC Markets which the Company’s shares are traded or any exchange upon which the common stock may be traded in the future, for the 20 (twenty) prior trading days including the day upon which a Notice of Conversion of the Note, is received by the Company. The total principal and accrued interest replaced were $530,650 and $ 316,679, respectively.

Cancellation of convertible notes

On February 1, 2018, the Company entered a loan cancellation agreement with Optimum MCGI Holdings LLC. An aggregate total amount of $36,837 was cancelled and released.

Modification to rights of security holders

On June 8, 2018, the Company filed a Certificate of Designation for its Series D Preferred Stock with the Secretary of State of Nevada designating 870 shares of its authorized preferred stock as Series D Preferred Stock (“Series D”). The shares of Series D shall have a par value of $0.001 per share. The shares of Series D do not have any dividend rights, voting rights or pre-emptive rights and are redeemable by either the Company or the holder at an amount of $1,000 per share.

On June 13, 2018, the Company, after having obtained requisite shareholder approval, filed amendments to its Certificate of Designation with the Secretary of State of Nevada, decreased the authorized Series A Preferred Stock to 330,000 shares and modified certain rights and preferences.

Acquisition

On June 18, 2018, the Company entered into a Binding Letter of Intent (“Binding LOI”), with The 4 Less Corp. (“4Less”). The Company will acquire all of the issued and outstanding shares of common stock of 4Less. The Company shall issue (1) 19,000 shares of Series B preferred stock (2) 6,750 shares of Series C preferred stock (3) 750 shares of Series D preferred stock to shareholders and pay $150,000 to 4Less within 15 days of execution of this Binding LOI. Timothy Armes, CEO of the Company, agreed to return 60,000,000 shares of common stock of the Company in exchange 120 shares of Series D preferred stock at the time of execution of the definitive agreement.

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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 6515 Goodman Rd., #258, Olive Branch, MS. 38654. It can be reached by phone at (972) 393-5892.

History and Description of the Operations of Nurses Lounge

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

With this understanding, and the development of social media technology, Mr. Armes designed and launched a beta version of a professional network for nurses in the summer of 2009 designed to provide a common platform for nursing organizations such as nursing schools, associations and major nurse employers to connect and communicate more effectively to their nurse constituents and broader nursing profession.

In June 2014, Nurses Lounge began the development of a 2.0 version of the network. The new version was a complete upgrade that went into beta testing on August 1, 2014 and then live on September 2, 2014. With the completion of this upgrade Nurses Lounge functions as a true Professional Network for Nurses (or comparatively a Linkedin for Nurses). Like Linkedin, when a nurse joins they can create an online professional profile and invite colleagues to join their online professional network.

With the added capabilities of the new network, the new version was launched with an “Interactive Lounge” (comparable to a group on Linkedin or Facebook) for approximately 600 schools that offer a Bachelor of Science in Nursing (BSN), 1,000 nursing schools that offer an Associate Degree in Nursing (ADN), 6,000 medical facilities, plus interactive lounges for 97 nurse specialties. Representatives from these organizations can take administrative control of these lounge pages, customize their pages with images, logos, and videos, as well as the ability to post news and info that is instantly distributed to their nurse followers.

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

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As members of the Nurses Lounge, nurses are able to participate in groups created by organizations such as schools, associations and employers in order to keep current on news, information, meetings and jobs openings as well as to network professionally with like-minded colleagues. Participation and postings by members in Lounges creates new connections and makes it easier for people to find and connect with each other. Finally, by inviting new colleagues and contacts to join them in the Nurses Lounge, members both grow their own network of connections and help to increase membership in Nurses Lounge.

Along with the professional network, Nurses Lounge has a fully functional job board for nursing professionals as well as a nursing faculty for nursing schools looking to hire faculty.

Nurses Lounge expects to generate a substantial percentage of revenue from the job board and, as nurse membership grows, expects to generate additional revenue from targeted ads and email campaigns both from employers and nursing schools looking to fill online classes as well as continuing education offerings.

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 Gannett; NurseConnect - owned and operated by AMN healthcare, a large travel firm; NurseZone - also owned and operated by AMN healthcare; 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.

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.

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

•	Approximately 5,000 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 SIMPLYHIRED 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, 2017

Revenues

For the three months ended October 31, 2017 and 2016, revenues were $7,496 and $3,385, respectively. The Company did not have many activities for both quarter due to insufficient cash. However, it received fewer contracts for the three months ended October 31, 2016.

Cost of revenues

Cost of revenues were $0 and $1,445 for the three months ended October 31, 2017 and 2016, respectively. The changes reflect the swings in costs as the Company promotes its nurse portal and the variation in those costs as the Company has yet to enter a period where the operations in sales and cost of sales are relatively constant. Until the Company enters a reasonably constant operating period, the costs will vary widely.

Selling and advertising expenses

Selling and advertising expenses were $1,786 and $489 for the three months ended October 31, 2017 and 2016, respectively. The increase is from tradeshow related expenses.

General and administrative expenses

General and administrative expenses for the three months ended October 31, 2017 and 2016 were $93,967 and $79,885, respectively. The increase was mainly resulted from the increase in the website development related fees.

Other income (expense)

Other income (expense) includes interest expense of $38,892 and $67,025 for the three months ended October 31, 2017 and 2016, respectively, and gain on derivatives of $59,962 and $72,785 for the three months ended October 31, 2017 and 2016, respectively. The change in interest expense was mainly because of debt discounts were fully amortized during the year ended January 31, 2017. The change in gain from derivatives was mainly due to the change in expected term and volatility assumptions.

Results for the nine months ended October 31, 2017 and 2016

Revenues

For the nine months ended October 31, 2017 and 2016, revenues were $26,357 and $22,853, respectively. . The Company did not have many activities for both periods due to insufficient cash. However, it received fewer contracts for the nine months ended October 31, 2016.

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Cost of revenues

Cost of revenues were $0 and $2,945 for the nine months ended October 31, 2017 and 2016, respectively. The changes reflect the swings in costs as the Company promotes its nurse portal and the variation in those costs as the Company has yet to enter a period where the operations in sales and cost of sales are relatively constant. Until the Company enters a reasonably constant operating period, the costs will vary widely.

Selling and advertising expenses

Selling and advertising expenses were $3,055 and $43,000 for the nine months ended October 31, 2017 and 2016, respectively. This decrease was due to our President doing more of the sales presentations rather than outsourcing to third party.

General and administrative expenses

General and administrative expenses for the nine months ended October 31, 2017 and 2016 were $283,107 and $182,692, respectively. The increase was mainly resulted from the increase in the website development related fees.

Other income (expense)

Other income (expense) includes interest expense of $129,480 and $200,512 for the nine months ended October 31, 2017 and 2016, respectively, and gain on derivatives of $66,469 and $376,858 for the nine months ended October 31, 2017 and 2016, respectively. The change in interest expense was mainly because debt discounts were fully amortized during the year ended January 31, 2017. The change in gain from derivatives was mainly due to the change in expected term and volatility assumptions.

Liquidity and Capital Resources

As of October 31, 2017, the Company had negative working capital of $2,443,239, comprised of current assets of $64 and current liabilities of $2,443,303.

Net cash used in operations for the nine months ended October 31, 2017 was $1,092 compared to $104,920 for the nine months ended October 31, 2016.

Net cash used for purchase of fixed assets was $0 for the nine months ended October 31, 2017 and 2016.

Net cash provided by financing activities for the nine months ended October 31, 2017 was $0 compared to $105,000 for the same period in 2016.

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.

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.

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.

Acquisition

On June 18, 2018, the Company announced that, effective June 14, 2018, it entered into a Binding Letter of Intent, with The 4 Less Corp., a corporation duly formed under the laws of the State of Nevada. The Company intend to acquire all of the issued and outstanding shares of common stock in The 4Less Corp.

To facilitate the transaction we plan to be current with all required filings including the January 31, 2018 Form 10-K and April 30, 2018 Form 10-Q. Additionally, we are looking at various strategic options to further enhance shareholder value, including the option of selling our subsidiary, which could relieve the Company of much of its debt.

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, 2017 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

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.

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, 2017, filed with the Commission on May 23, 2018, 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.

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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 issued at fifty percent discount to market per note conversion agreement	Convert a portion of note payable	(1)	Feb 5, 2016	27,525,867
Common stock issued at fifty percent discount to market per note conversion agreement	Convert a portion of note payable	(2)	Mar 11, 2016	43,328,767
Common stock issued at fifty percent discount to market per note conversion agreement	Convert a portion of note payable	(3)	May 10, 2016	35,962,743
Balance, Number of shares outstanding, January 31, 2017				561,655,477
NONE				0
Balance, Number of shares outstanding, October 31, 2017				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 $4,000 of the note plus $129 of accrued interest.

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

(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 $12,500 of the note and $498 of accrued interest.

(3) Partial conversion of Note that had a conversion feature at 50% of market price per share. These shares were issued for the conversion of $4,000 of the note and $2,293 of accrued interest.

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Options and Warrants

The Company had the following options or warrants outstanding at October 31, 2017:


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

(1) 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.

(2) 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.

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: August 6, 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 - August 6, 2018

Attached files

4Less Group, Inc. Reports