HEALTH ADVANCE INC. - Quarter Report: 2017 September (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2017
or
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______to______.
Commission File Number: 333-177122
HEALTH ADVANCE INC.
(Exact name of registrant as specified in its Charter)
WYOMING |
| 460525223 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
685 Citadel Drive East, Suite 290
Colorado Springs, CO 80909
(Address of Principal Executive Offices)(Zip Code)
1
719-466-6699
(Registrants telephone number, including area code)
N/A
(Former name, or former address and former fiscal year if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ 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 ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer | ☐ |
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| Accelerated Filer | ☐ |
Non-Accelerated Filer | ☐ | (Do not check if a smaller reporting company) |
| Smaller Reporting Company | ☒ |
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock. As of December 20, 2017, there were 153,897,500 shares of the issuer’s common stock issued and outstanding.
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HEALTH ADVANCE INC.
FORM 10-Q
September 30, 2017
INDEX
PART I — FINANCIAL INFORMATION |
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Item 1. | Condensed Financial Statements - Unaudited | 4 |
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 13 |
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 19 |
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Item 4. | Controls and Procedures | 19 |
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PART II — OTHER INFORMATION |
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Item 1. | Legal Proceedings | 20 |
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Item 1A. | Risk Factors | 20 |
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Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 20 |
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Item 3. | Defaults Upon Senior Securities | 20 |
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Item 4. | Mine Safety Disclosures | 21 |
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Item 5. | Other Information | 21 |
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Item 6. | Exhibits | 22 |
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SIGNATURE | 23 | |
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PART I – FINANCIAL INFORMATION
Item 1. | Condensed Financial Statements |
HEALTH ADVANCE INC.
CONDENSED FINANCIAL STATEMENTS
September 30, 2017
CONTENTS
PAGE - 4 | CONDENSED BALANCE SHEETS AS AT September 30, 2017 (UNAUDITED) |
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PAGE - 5 | CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE MONTHS ENDED September 30, 2017 AND Fiscal Year ended on July, 31,2017 (UNAUDITED) |
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PAGE - 6 | CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED September 30, 2017 (UNAUDITED) AND FISCAL YEAR ENDED July 31, 2016 (AUDITED) |
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PAGE - 7 | NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) |
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HEALTH ADVANCE INC.
CONDENSED BALANCE SHEETS
AS AT September 30, 2017 (UNAUDITED) AND July 31, 2016 (AUDITED)
(Expressed in United States Dollars)
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| September 30, |
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| July 31, |
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| 2017 |
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| 2016 |
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| $ |
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ASSET |
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License agreement costs, net of accumulated amortization of $35,000 (Note 9) |
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| 2,965,000 |
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| - |
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CURRENT ASSET |
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Cash |
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| 100 |
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| - |
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TOTAL ASSET |
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| 2,965,100 |
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| - |
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CURRENT LIABILITIES |
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Accounts payable |
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| 17,891 |
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| 58,353 |
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Accrued liabilities |
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| 159,896 |
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| 2,500 |
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Advances from a shareholder (Note 6) |
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| 6,409 |
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| 98,542 |
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Short Term Loans |
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| 98,922 |
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TOTAL LIABILITIES |
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| 283,118 |
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| 159,395 |
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SHAREHOLDERS' DEFICIENCY |
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Authorized:500,000,000 common stock, par value $0.001 Issued and outstanding: 126,797,500 common stock as at September 30, 2017 and 24,520,000 common stock as at January 31, 2017 |
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| 126,797 |
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| 24,520 |
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Additional paid-in capital |
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| 3,083,803 |
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| 186,080 |
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Common stock to be issued |
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| 67,500 |
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| 67,500 |
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Accumulated deficit |
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| (596,118) |
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| (437,495) |
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TOTAL SHAREHOLDERS' DEFICIENCY |
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| 2,681,982 |
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| (159,395) |
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TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY |
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| 2,965,100 |
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| - |
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HEALTH ADVANCE INC.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED September 30, 2017 (UNAUDITED) AND July 31, 2016 (AUDITED)
(Expressed in United States Dollars)
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| Fiscal year | ||||
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| September 30, |
| July 31, | ||||
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| 2016 | ||||
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SALES |
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| - |
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| - |
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COST OF SALES |
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| - |
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| - |
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GROSS PROFIT |
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| - |
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| - |
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EXPENSES |
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Media Services |
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| 1,548 |
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Legal Services |
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| 20,525 |
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Amortization |
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| 15,000 |
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Professional fees |
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| 3,200 |
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| 25,136 |
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Independent Contractors |
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| 25,470 |
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| - |
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Office and general |
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| 8,545 |
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| 4,367 |
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Total expenses |
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| 74,288 |
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| 29,503 |
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Foreign exchange loss |
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| - |
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| - |
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Loss before income taxes |
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| (74,288) |
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| (29,503) |
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Income taxes |
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| - |
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| - |
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NET AND COMPREHENSIVE LOSS FOR THE PERIOD |
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| (74,288) |
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| (29,503) |
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Loss per common share, basic and diluted |
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| (0.0006) |
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| (0.0012) |
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Weighted average number of common stock outstanding, basic and diluted |
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| 126,297,500 |
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| 24,520,000 |
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See accompanying notes |
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HEALTH ADVANCE INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED September 30, 2017 (UNAUDITED) AND JULY 31, 2016 (AUDITED)
(Expressed in United States Dollars)
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| Three months |
| Fiscal year | ||||
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss for the period |
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| (74,288) |
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| (29,503) |
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Adjustments for non-cash items |
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Common stock issued for services |
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| - |
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| - |
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Amortization |
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| 15,000 |
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| - |
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Advances from a stockholder |
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| - |
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| - |
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Net change in non-cash working capital balances: |
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Accounts payable and Accrued liabilities |
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| 53,788 |
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| 3,735 |
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Net cash used in operating activities |
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| (5,500) |
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| (25,768) |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Proceeds from issuance of common stock |
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| - |
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Advances from a shareholder |
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| 5,600 |
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| 25,768 |
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Net cash provided by financing activities |
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| 5,600 |
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| 25,768 |
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Net increase in cash during the period |
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| 100 |
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| - |
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Cash, beginning of period |
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| - |
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| - |
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Cash, end of period |
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| 100 |
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| - |
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See accompanying notes |
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Supplemental cash flow information [Note 8]
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1.NATURE OF OPERATIONS AND ORGANIZATION
Health Advance Inc. (the “Company” or “Health Advance”) was incorporated on April 14, 2010 in the State of Wyoming. The Company was originally an online retailer of home medical products with operations in Canada and the United States.
In March 2017 the company began business with Micro Medtech Ltd., conducting research and development in biotechnology.
Additionally, on August 18, 2017 the Company was incorporated in Colorado as a foreign corporation.
2.BASIS OF PRESENTATION
The condensed financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the USA for interim financial information and the SEC instructions to Form 10Q. Accordingly, they do not include all of the information and notes to the financial statements required by generally accepted accounting principles for complete financial statements. All adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. For further information, refer the financial statements and notes thereto included in the Company’s annual report on Form 10K for the year ending in July 31, 2016.
3.GOING CONCERN
These financial statements have been prepared assuming the Company will continue on a going concern basis. The Company has incurred losses since inception and the ability of the Company to continue as a going concern depends upon its ability to develop profitable operations and to continue to raise adequate financing. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.
There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in these financial statements.
These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
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4.LOSS PER SHARE
The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 260-10 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. There were no potentially dilutive shares outstanding as at September 30, 2017 and the fiscal year ended on July 31, 2016.
5.RECENT ACCOUNTING PRONOUNCEMENTS
Recently Issued Accounting Standards
In March 2016, the Company adopted the accounting pronouncement issued by the Financial Accounting Standards Board ("FASB") to update guidance on how companies account for certain aspects of share-based payments to employees. This pronouncement is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. This guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled and changes the presentation of excess tax benefits on the statement of cash flows.
The Company adopted these provisions on a prospective basis. In addition, this pronouncement changes guidance on: (a) accounting for forfeitures of share-based awards and (b) employers’ accounting for an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation. The adoption of this pronouncement did not have a material impact on Company’s financial position and/or results of operations.
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5.RECENT ACCOUNTING PRONOUNCEMENTS (continued)
In February 2016, an accounting pronouncement was issued by the FASB to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to current accounting guidance. This pronouncement is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The adoption is required to be applied on a modified retrospective basis for each prior reporting period presented. The Company has not yet determined the effect that the adoption of this pronouncement may have on its financial position and/or results of operations.
On January 1, 2016, the Company adopted the accounting pronouncement issued by the FASB to update the guidance related to the presentation of debt issuance costs. This guidance requires debt issuance costs, related to a recognized debt liability, be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability rather than being presented as an asset. The Company adopted this pronouncement on a retrospective basis, and the adoption did not have a material impact on its financial position and/or results of operations.
In November 2015, an accounting pronouncement was issued by the FASB to simplify the presentation of deferred income taxes within the balance sheet. This pronouncement eliminates the requirement that deferred tax assets and liabilities are presented as current or non-current based on the nature of the underlying assets and liabilities. Instead, the pronouncement requires all deferred tax assets and liabilities, including valuation allowances, be classified as non current. This pronouncement is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company intend to adopt this pronouncement on January 1, 2017, and the adoption will not have a material impact on its financial position and/or results of operations.
6.RELATED PARTY TRANSACTIONS AND BALANCES
The transactions with related parties were in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the parties. Related party transactions or balances not disclosed elsewhere in these financial statements are as follows:
Advances from the Chairman of the Company as at September 30, 2017 were a total of $6,409. Additionally, advances from Shareholders of the Company as at April 30, 2017 and October 31, 2016 were $259 and as at July 30, 2017 were $102,211, respectively. These advances are non-interest bearing, unsecured and have no specific terms of repayment.
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7.SHAREHOLDERS’ DEFICIENCY
COMMON STOCK - AUTHORIZED
As at September 30, 2017, the Company has 500,000,000 authorized shares of common stock with a par value of $0.001 per share.
COMMON STOCK - ISSUED AND OUTSTANDING
As of September 30, 2017 the Company has 126,797,500 shares of common stock issued and outstanding and July 31, 2016, the Company had 24,520,000 shares of common stock issued and outstanding.
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7.SHAREHOLDERS’ DEFICIENCY (continued)
There were 33,527,500 stock shares issued by the Company between July 1, 2017 and September 30, 2017 for employment agreements executed on March 1, 2017 by and between former President, Jordan Starkman and Director, Christian Diesveld.
8.SUPPLEMENTAL CASH FLOW INFORMATION
During the three months ended September 30, 2017, there were no interest or taxes paid by the Company.
9.SUBSEQUENT EVENTS
The Company’s management has evaluated subsequent events up to December 20, 2017, the date the financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following subsequent events to report.
On December 12, 2017 the Company issued Green Health Advocates, LLC twenty million (20,000,000) Common Stock Shares of the Company as a derivative for a cash toward debt repayment for advances and short term loans to the Company in the amount of $98,922 for operating expenditures between February 1, 2017 and September 30, 2017.
On December 19, 2017 the Company issued JHM Capital Ltd. one million, six hundred thousand (1,600,000) Common Stock Shares of the Company as a derivative for a cash payment of $48,000 for consulting services.
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Overview
Health Advance Inc. (the “Company”) operates within the U.S. and Asia-Pacific as a developer and researcher for biotechnology, primarily focused on medical foods to treat pain and other severe illnesses usually treated with pharmaceutical drugs derived from opioids, in addition to developing dietary supplements to serve as alternatives for medicine. Our strategy is to attract opportunities in the health care industry through the development of patented product formulations for medical foods Cebidofen and Polyoxyfen, and Gynspeq, a food additive made from botanical extract blends that include kava and mitrigyna speciosa. Furthermore, the Company will explore ways to use the product formulations through research studies and clinical trials with medical schools, research organizations, hospitals, and government agencies. We believe that we can operate more cost efficiently over the next three years by outsourcing duties of operations within the Company to independent contractors. Our goal is to position the Company for a merger or acquisition with a larger company in the health care industry within the next five years.
From inception to September 30, 2017 the Company incurred a net loss of $59,288. The ability of the Company to continue as a going concern depends upon its ability to raise adequate financing and develop profitable operations. If we cannot generate sufficient revenues from our services, we may have to delay the implementation of our business plan. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.
The Company is actively seeking financing for its current business operation. The Company is optimistic that the financing will be secured and the going concern risk will be removed. We are in discussions with various parties and believe a successful financing is likely. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of shares of common stock from the Company’s authorized capital. In addition, the Company is also seeking acquisitions within the health space as a means to grow the Company.
On February 14, 2014, the Company affected a 10-for-1 forward split of the Company’s issued and outstanding common shares. The Company’s issued and outstanding common shares were therefore increased from 2,452,000 to 24,520,000. All per share amounts have been restated to reflect this stock split.
Plan of Operation
The Company was incorporated on April 14, 2010 in Wyoming. The former business office (virtual office) located at 3651 Lindell Road, Suite D#155, Las Vegas, NV, 89103, which has changed to a physical office location 685 Citadel Drive East - Suite 290, Colorado Springs, CO 80909 as result to resolution(s) entered at the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017 (Exhibit 99.2: Section 9).
The Company’s primary telephone number 702-943-0309 has been changed to 719-466-6699 as result to resolution(s) entered by a majority vote from the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017.
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The Company’s primary website and email domain name ‘healthadvanceinc.com’ has been changed to ‘hadvinc.com’ as result to resolution(s) entered at the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017 (Exhibit 99.2: Section 17).
The Company’s founder Jordan Starkman, who served the Company as President, Chairman of the Board of Directors, and Director was placed on a Leave of Absence by the Control Stock Committee of Shareholders on April 19, 2017 and submitted a Letter of Resignation to the Company on November 1, 2017.
Upon the Leave of Absence Notice to former President, Starkman on April 19, 2018, Dr. Muhammad Mukhtar, Ph.D. has served the Company as a (Non-Voting, Interim) Director, Chief Advisor for Control Stock Committee, Special Adviser to the Chairman,, and (Acting) Chief Executive Officer since April 19, 2017 is contracted with the Company through December 31, 2017. On June 6, 2017, Muhktar was appointed as Secretary to the Company on an interim basis.
Gregory Shusterman, who was appointed as Vice Chairman and Board Director on April 8, 2017, has served as ‘Acting Chairman’ and Executive Director since April 19, 2017, as a result to reason specified in Exhibits 99.2, 99.5, 99.6 and 99.7. The Company issued one-million (1,000,000) common stock shares of the Company to Shusterman upon entering an Independent Contractor Agreement as the Executive Director and Acting Chairman for the Company on June 8, 2017. Additionally, around or about November 15, 2017, Shusterman was appointed Chairman of the Board of Directors and Executive Director for the Company, as stated in Form 8-K filed on November 20, 2017.
On June 6, 2017 it has been resolved by a majority vote from the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017 that the Company will change its Industry Classification to Research and Development in Biotechnology (541714 ) in efforts to prepare for new business ventures, partnerships, business development as a developer and manufacturer of cost-effective dietary supplements and medical foods from organic sources that contain botanical extract blends as an alternative to synthetic drugs and herbal supplements, in efforts to treat pain, cancer, opiates/alcohol withdrawal, epilepsy, PTSD, and other severe illnesses.
June 8, 2017 through August 31, 2017 Dr. Hauke Kolster, Ph.D., served the Company as the (Interim) Vice President (Non-Voting, Interim) Director under an Independent Contractor Agreement.
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In the fiscal year of 2017, the Company plans to build an experienced and highly credentialed executive management and advisory team to support successful results for market research, clinical and regulatory studies, and business development to manufacturer, license, and distribute cost effective, organic solutions for pain, nutrition, and severe illness through the use of uniquely developed medical foods and dietary supplements. In addition, the Company’s growth plan for fiscal year includes partnerships with universities, hospitals, research organizations, and media relations specialists to raise awareness on the Health Advance products currently in development, which the Company anticipates to introduce to the general marketplace shortly after end of the current fiscal year. A market research study and survey to 3,700 pain medicine specialists in North America was conducted between March and August 2017 by Green Health Advocates, a media relations consultant hired by a stockholder of the Company in effects to raise awareness for Health Advance’s potential product formulations that were acquired by the Company in March 2017.
On October 13, 2016, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Hantian Labs Limited, a corporation existing under the laws of the United Kingdom (“Hantian Labs”), to acquire all of the issued and outstanding shares of Hantian Labs. Pursuant to the Share Exchange Agreement, the Company will acquire from Hantian Labs one hundred percent (100%) interest in Hantian Labs and its controlling subsidiaries. In consideration for the Share Exchange Agreement, the Company shall issue to Hantian Labs 1.5 common shares of the Company for each share of Hantian Labs issued and outstanding at the time of closing. As a closing condition to the Share Exchange Agreement, Hantian Labs is required to complete a financing of a minimum of $250,000 for the marketing of Hantian Labs’ product line. This closing condition has not been met and it was resolved by majority vote at the Board of Directors and Shareholder Minutes of Meeting on June 6, 2017 to terminate the Share Exchange Agreement. The Company and Hantian Labs have since re-negotiated the Share Exchange Agreement and made an addendum to the original agreement executed on January 16, 2017, pursuant to Exhibit 99.4, Section 9, allowing Hantian Labs additional time to complete its audit report for Transition Period between August 1, 2016 through June 30, 2017 and Fiscal Year Ending March 31, 2018.
The Company has made a decision to submit an application to trade on OTQCB exchange before the end of the fiscal year.
The Company expects to start preparing for an online and retail marketing campaigns in the Americas and Europe with sales and marketing affiliates for organic dietary supplements, and herbal foods and beverages derived from non-medicinal botanical extract blends, while awaiting the completed Product Development Report and results from FDA regulatory and clinical testing (e.g.; meeting Generally Recognized As Safe federal regulations) on the two patent-pending product formulations for medical foods acquired in March 2017.
The Company expects that these new medicinal and non-medicinal product launches will be outlined and planned within the current fiscal year, once our short-term financing is completed. During the next 24 months following our March 31, 2018 fiscal year-end, the Company plans to work with our manufacturing and distribution partners to increase sales revenue from approved pharmaceutical and nutritional products and raise awareness of ‘Stay Klean’ brand and slogan. In November 2017 the Company entered a Letter of Intent for the ‘KLEAN Program’ supported by a medical college and a government agency in the South Pacific (see Exhibit 99.8). Together with our domestic and foreign government affiliates, sales affiliates, and marketing partners the Company intends to position itself for a merger or acquisition with a mid-cap or large-cap company within five years from the fiscal year ending on March 31, 2018.
Between February and June 6, 2017 the Company has received $23,390 in form of a loan for operating expenses (e.g.; professional services, website development, communications, office space and equipment; etc.) from a stockholder who hired Green Health Advocates in 2017 for an additional $35,835 for market research studies, digital media service, video production, and related media services to raise awareness for the Company. and the year following our July 31, 2017 year-end in order to maintain our business operations. The Company will attempt to complete a financing for a minimum of $3,961,680 within the 12-month period following the Company’s 2017 year-end. Any capital raised will be through either a product sales, product licensing, private placement, or a convertible debenture and will result in the issuance of common shares from the Company’s authorized capital.
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Marketing & Business Development |
| $ | 221,000 |
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Professional Services |
| $ | 560,000 |
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Salaries and Independent Contractor Fees |
| $ | 1,154,000 |
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Advertising and Marketing |
| $ | 325,000 |
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Research & Development |
| $ | 872,000 |
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Logistics & Inventory |
| $ | 871,000 |
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Office Space Related Facilities |
| $ | 33,600 |
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Working Capital (e.g.; Business Travel, Events, Cash On-hand; etc.) |
| $ | 250,000 |
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Total Expenses |
| $ | 3,961,680 |
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The above represents managements’ best estimate of our cash requirements based on our business plans and current market conditions. The above is based on our ability to raise sufficient financing and generate adequate revenues to meet our cash flow requirements. The actual allocation between expenses may vary depending on the actual funds raised and the industry and market conditions over the next 12 months following our March 31, 2018 year-end.
If we are able to complete a financing through a private offering for a minimum of $3,961,680 within the 12 month period following our March 31, 2018 year-end, we expect to broaden our market research, clinical, and regulatory studies and business development with the healthcare marketplace and resellers of nutritional products, in addition to increasing the investment into agricultural material needed to manufacturer goods more cost effectively, which would allow the Company to remain competitive among its relevant industries.
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Results of Operations
For the three months ended September 30, 2017 and 2016
For the three months ended September 30, 2017 did not have any sales. The Company is currently working with Micro Medtech Ltd.; who has been conducting market research studies and surveys on and offline with pain medicine specialist in North America and is working with research organizations to development medical foods, nutritional beverages, and dietary supplements that are derived from botanical extract blends containing kava, mitragyna speciosa, or cannabidiol that will meet local and/or federal regulations to sufficiently generate sales revenue from product sales and licensing.
Operating expenses for the three months ended September 30, 2017 were $74,288, as compared to $9,460 the three months ended April 30, 2017.
During the three months ended September 30, 2017 and April 30, 2017, we had no provision for income taxes due to the net operating losses incurred.
The Company has hired two welly-credentialed independent contractors as (non-voting) Directors and (Acting) Officers of the Company on an interim basis in hopes to turnaround less-than marginal productivity of the Company’s goals and establish more lucrative business relationships.
On November 20, 2017 filed Form 8-K announcing that Mr. Jordan Starkman has resigned from the Board of Directors of HADV (the 'Board'), as well as from the position of Board Executive, President, and Director with his resignation taking effect from November 1, 2017. Mr. Starkman has been a Board Executive, Director and President since the Company's inception. Additionally, the Form 8-K filed on November 20, 2017 by the Company states that it has appointed Vice Chairman and Director, Gregory Shusterman as interim Chairman/Executive Director, Christian Diesveld as a voting Director of the Board, and Dr. Muhammad Mukhtar as the Special Advisor to the Chairman and shall be the appointed (Interim) Chief Executive Officer and a non-voting Director of the Board.
Mr. Shusterman is a Canadian citizen who has worked previously in various senior leadership positions for a number of companies in the healthcare industry and has work experience as the Vice Chairman and ‘Acting Chairman’ for the Company since being elected in April of this year.
Mr. Diesveld is a Canadian citizen and UK resident who has worked previously in various senior leadership positions for a number of companies, including, but not limited to, Hantian Labs Limited, a recent acquisition of the Company, where Mr. Diesveld was recently named UK CEO of the Year – Small Enterprise in the Health and Wellness sector
Dr. Mukhtar has served as a professor at the American University of Ras Al Khaimah (AURAK), United Arab Emirates. Before his arrival at AURAK, he served as Vice Chancellor/Professor of three Universities in Pakistan concomitantly – a unique honor for any academic leader. Through his wise academic leadership and innovative governance, he converted a regional higher education institution in Pakistan to one of the top-ranked in the country. Mukhtar received his Master and MPhil in the field of Biochemistry from Pakistan and his Ph.D. in biosciences from the Drexel University of Philadelphia, USA, and also completed a Graduate Certificate in Research Management from Thomas Jefferson University in Philadelphia, USA. He served in various academic/administrative positions in the USA on an outstanding scientist (O-1) visa.
Mukhtar is an avid researcher also. His laboratory developed an in-vitro model of the human blood-brain barrier to study viral neuropathogenesis. Dr. Mukhtar as Principal or Co-Investigator has received several awards from organizations including American Diabetes Association, American Society for Microbiology, Diabetes Trust Foundation, US National Institutes of Health, Pfizer Pharmaceuticals (NYSE: PFE), and the Higher Education Commission of Pakistan. Human blood-brain barrier model developed in his laboratory is extensively used to understand ferrying of viruses into the brain and finding cures for neurological ailments.
Dr. Mukhtar holds specialized Certificates in Public Health and Bioinformatics. Committed to the role of technology in biomedical research, he serves as managing editor of Frontiers in Bioscience and is on the editorial board of several research journals. He feels pride in mentoring researchers, scientists, teachers and administrators and committed professionals aspiring to excel in their practical life. He has several research publications, including peer-reviewed research, review articles, invited articles, book chapters, commissioned articles and critiques to his credit.
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A book describing accomplishments of Dr. Mukhtar’s educational leadership has been published in Urdu language entitled “Hayat Zauq e Safar Kay Siwa Kuch Aur Naheen” and it’s English Version “The Making of a Best National University” is in progress.
Liquidity and Capital Resources
As of September 30, 2017, the Company had a cash balance and a working capital deficiency of $283,118.
The Company is currently seeking funding for our continued operations. The Company intends to raise a minimum of $3,961,680 and a maximum of $10,000,000 in order to continue the awareness and branding campaign for K.L.E.A.N. (staycleanmed.org). There is no assurance that the Company will be able to raise the capital required to complete its goal and objectives and the Company is currently seeking capital to further its business plan. We will likely raise funds through either debt or issuing shares of our common stock in order to achieve our business goals. The issuance of additional shares or securities convertible into any such shares by us, any shares issued would dilute the percentage ownership of our current shareholders. There are no agreements with any parties at this point in time for additional funding; however, we are in discussions with potential accredited investors, private financiers, government funding sources in the United States, Canada, Australia, Europe, and United Arab Emirates.
The Company cannot assure investors that adequate revenues will be generated and there are no formal commitments with the Company, its shareholders, or Board of Directors to finance the Company in the state of an emergency or financial crisis. However, the success of the Company’s operations is dependent on attaining adequate revenue. In the absence of our projected revenues, the Company may be unable to proceed with our plan of operations or we may require financing to achieve our profit, revenue, and growth goals.
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Recently Issued Accounting Standards
As explained in note 5 to the condensed financial statements, the Company evaluated all recent accounting pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company.
Off-Balance Sheet Arrangements
The Company does not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts.
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Not required for Smaller Reporting Companies.
Item 4. | Controls and Procedures |
Evaluation of disclosure controls and procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were not effective as of September 30, 2017 to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in internal controls
No change in our system of internal control over financial reporting occurred since the most recent fiscal year ended on July 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. | Legal Proceedings |
The Company currently not involved in any litigation that is believed could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
The Company has received a default judgment order against the Company in favor of Anslow & Jaclin in the amount of $8,737.00 plus interest for previous legal fees. The Company is will hire legal counsel to prepare and file an Interpleader Action with Wyoming Superior Court by or before end of current fiscal year for common stock shares of the Company and resolution to cure court judgment in favor of the dissolved entity due to the fact that Anslow and Jaclin LLP was dissolved before June 13, 2017 and is not longer active.
The Company filed a civil lawsuit against former President/Chairman Jordan Starkman et al, CV-132-S on August 4, 2017 at U.S. District Court of Wyoming and was granted a court order for a Temporary Restraining Order and Declaratory Relief on August 7, 2017 (see Exhibits 99.5 and 99.6). Following a civil hearing held on September 22, 2017, the Company’s legal counsel filed a Notice of Voluntary Dismissal on September 26, 2017.
Item 1A. | Risk Factors |
Not required for Smaller Reporting Companies.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
No recent sales of equity securities.
Item 3. | Defaults Upon Senior Securities |
None
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Item 4. | Mine Safety Disclosures |
Not Applicable
Item 5. | Other Information |
Amendments to Form 8-K’s referenced below were filed pursuant to requests of clarification and more accurate disclosure, pursuant to a letter sent by the SEC to the Company on August 22, 2017 (see Exhibit 99.9) as follows:
Form 8-K/A Filing Date | Original Date of Original Form 8-K | Items Amended or Added |
December 20, 2017 | March 7, 2017 | Item 5.01 - Changes in Control of Registrant |
December 20, 2017 | April 21, 2017 | Item 2.01 - Completion of Acquisition Item 6.01 - Exhibits |
December 20, 2017 | June 14, 2017 | Item 6.01 - Exhibits |
December 20, 2017 | November 20, 2017 | Item 5.03 - Amendments to Articles of Incorporation or Bylaws; New Board Resolution and Change in Fiscal Year Item 6 - Exhibits |
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Item 6. | Exhibits |
Item 8.01. Other Events
BACKGROUND AND FACTS OF DISCUSSION RELATED TO SECTION 8 - 8.01
FORWARD-LOOKING STATEMENTS :
Pursuant with the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995, this Current Report on Form 10-Q contains forward-looking statements about the Company's business affairs affiliate partners for research and development, marketing, production, and sale of medical equipment and nutritional and pharmaceutics products, in additional to pertinent intellectual properties. These statements involve risks and uncertainties, and actual results may differ materially from the Company's expectations. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, whether the Company will be able to complete and fulfill actions specified within agreements with affiliated parties. Other risks and uncertainties that can affect the Company's performance are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report on Form 10-K for the year ended March 31, 2018 which is on file with the Securities and Exchange Commission (SEC) and are available on the SEC’s website at www.sec.gov and on the Company websites (www.hadvinc.com). All information provided in this Current Report on Form 10-Q is as of December 20, 2017, and the Company undertakes no duty to update this information unless required by law.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Health Advance, Inc. |
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Dated: December 26, 2017 | By: | /s/ Gregory Shusterman |
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| Gregory Shusterman |
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| Chairman, Board of Directors; |
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