Panamera Holdings Corp - Quarter Report: 2015 October (Form 10-Q)

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, 2015

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: 333-198977

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  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, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one).

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

As of  December 10, 2015 there were 17,990,000 shares of the issuer's common stock, par value $0.0001, issued and outstanding.

 

PANAMERA HEALTHCARE CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2015

TABLE OF CONTENTS

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PART I – FINANCIAL INFORMATION

Item 1.      Financial Statements.

PANAMERA HEALTHCARE CORPORATION

October 31, 2015

Index to the Unaudited Interim Financial Statements

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The accompanying notes to the unaudited financial statements are an integral part of these statements.

 

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Notes to the Unaudited Interim Financial Statements

October 31, 2015

The Company intends to offer management and consulting services to healthcare organizations that are increasingly facing various stresses including financial, organizational, and information technology challenges. To date, the Company’s activities have been limited to its formation and the raising of equity capital.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading.  The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended July 31, 2015, as filed with the SEC on October 29, 2015.

NOTE 3 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.  As of October 31, 2015, the Company has a loss from operations of $9,465 an accumulated deficit of $68,639 and has earned minimal revenues from related parties.  The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending July 31, 2016.

The ability of the Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan.  In response to these problems, management intends to raise additional funds through public or private placement offerings.

These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern.  The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4 - EQUITY

Preferred Stock

The Company has authorized 50,000,000 preferred shares with a par value of $0.0001 per share.  The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.  No shares of preferred stock have been issued.

 

The Company has authorized 150,000,000 common shares with a par value of $0.0001 per share.  Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

NOTE 5 - RELATED PARTY TRANSACTIONS

Accounts Payable

During the period ended October 31, 2015 an officer and director of the company invoiced the Company $3,000 for labor costs and was repaid $11,000, in the performance of servicing contracts with a related party company and additional corporate administrative work.  As at October 31, 2015, the Company was obligated to this individual for amounts payable of $9,750 and plans to pay the amount as cash flows become available.

Note Payable

On July 15, 2014, a corporation controlled by an officer and director committed $75,000 Promissory Note in the form of a line of credit.  Any unpaid balance is due December 15, 2015 at an annual interest rate of 5% and may be prepaid without penalty.  During the period ended October 31, 2015, net repayments under the line of credit to the Company were made in the amount of $81. As of October 31, 2015 the Company was obligated to the Company, for this interest bearing loan with a balance of $58,402, which includes no accrued interest. The Company plans to pay the loan and interest back as cash flows become available.  The remaining balance available under the line of credit is $16,598, as of October 31, 2015.  For the three months ended October 31, 2015, the Company paid $734 in interest on this note payable.

 

Revenue and Accounts Receivable

During the period ended October 31, 2015, related corporations were responsible for 100% of our revenue and accounts receivable. As of October 31, 2015 and July 31, 2014 accounts receivable from related parties was $12,500 and $13,000, respectively.

Other

The controlling shareholders have pledged their support to fund continuing operations during the development stage; however there is no written commitment to this effect.  The Company is dependent upon the continued support.

The officers and directors of the Company may be involved in other business activities and may, in the future, become involved in other business opportunities that become available. They may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.

The Company does not own or lease property or lease office space. The office space used by the Company was arranged by the founder of the Company to use at no charge.

The Company does not have employment contracts with its key employees, the controlling shareholders, who are officers and directors of the Company.

 

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

 

Forward-Looking Statements

 

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses.  Such forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language.  Our actual results may differ significantly from those projected in the forward-looking statements.  Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the "Description of Business – Risk Factors" section in our Annual Report on Form 10K, as filed on October 29, 2015.  You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission.  You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report.  We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

All references in this Form 10-Q to the "Company," "Panamera," "we," "us," or "our" are to Panamera Healthcare Corporation.

Overview

We were incorporated on May 20, 2014 in Nevada. Our business office is located at 4180 Orchard Hill Drive., Edmond, OK 73025.  Our telephone number is (405) 413-5735.

Panamera Healthcare Corporation offers management and consulting services to healthcare organizations.  We intend to focus on ambulatory surgical centers (ASC) that currently have an incentive to be acquired by hospitals in order to increase compensation levels.  We believe the short term strategy of simply converting to hospital based compensation is not sustainable because fundamental changes in the way healthcare is being provided are being undertaken by both government and private insurance carriers. The demographics of an aging population also mandate such changes to avoid economic disruption, healthcare rationing or unsustainable taxation.

We intend to reorganize ASCs and consolidate several such centers into larger entities that can immediately take advantage of higher reimbursement rates permitted by the reorganization.  At the same time, we expect to institute the necessary medical records and management systems to make the transition to value based compensation.

The Company had a loss from operations for the quarter ended October 31, 2015, of $8,731 and an accumulated deficit of $68,639.   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.

 

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The Company is actively seeking financing for its current business operation.  Any capital raised will be through either a private placement of our common stock, the issuance of preferred shares, the Designation, Preferences, and Rights of which are not yet determined, one or more convertible debentures, or other form of indebtedness.  If such financing is concluded, it will result in the issuance of shares of the appropriate class of stock from the Company’s authorized capital.

Results of Operations

During the three months ended October 31, 2015 we recognized revenue from one of our contracts, which represents a flat fee of $1,500 per month.  Historically we had two contracts, one of which ended on January 31, 2015.  The contract that ended represented revenues of $2,500 monthly, thus for the three months ended October 31, 2014, we had revenues of $12,000.

Net loss was $9,465 for the period ended October 31, 2015 and $26,242 for the period ended October 31, 2014. The decrease in operating expenses was the primary contributing factor for the reduced loss during the period ended 2015. 

Operating expenses for the period ended October 31, 2015 and 2014 were $13,231 and $37,824 respectively. The operating expenses were primarily attributed to professional fees, consulting fees, and other general overhead. Professional fees for the period ended October 31, 2015 was $10,066 compared to $23,667 for the period ended October 31, 2014.  The decrease in professional fees during the period ended October 31, 2015 compared to the period ended October 31, 2014 is primarily attributed to a one-time consulting fee of $20,000 paid during 2014, and reduced by increased accounting costs, audit and legal fees related to the Company’s SEC filings during 2015. General and administration fees decreased $3,165, from $14,157 for the period ended October 31, 2014,  primarily from an officer who charged for services totaling $3,000 for the period ended October 31, 2015 as compared to $12,750 for the period ended October 31, 2014.  

 

Other expenses represent interest paid to a related party on funds advanced to the Company.

 

As at October 31, 2015, our current assets were $108,304 and our current liabilities were $75,394 which resulted in working capital of $32,910. As at October 31, 2015, current assets were comprised of $95,804 in cash, and $12,500 in accounts receivable, compared to $6,784 in cash, $26,650 in restricted cash, and $13,000 in accounts receivable at July 31, 2015. As at October 31, 2015, current liabilities were comprised of $7,242 in accounts payable and $68,152 in due to related parties, compared to $1,176 in accounts payable and $76,233 in due to related parties at July 31, 2015.

As at October 31, 2015 our working capital increased $63,885, from a deficiency of $30,975 at July 31, 2015 to $32,910 at October 31, 2015, primarily due to the increase of cash from the closing of our recent public offering.  We sold 2,500,000 shares of common stock (100% of the offering), for net proceeds of $100,000, $26,650 of which was received during the year ended July 31, 2015.

We have not generated positive cash flows from operating activities. For the period ended October 31, 2015, net cash flows used in operating activities was $10,899 consisting of a net loss of $9,465 and was reduced by an decrease in accounts receivable of $500, increase in accounts payable of $6,066 and increased by a payment made to a related party for $8,000.  For the period ended October 31, 2014, net cash flows used in operating activities was $20,120 consisting of a net loss of $26,242 and was increased by an increase in accounts receivable of $2,500 and increase in prepaid expenses of $2,833 and decrease in accrued expenses of $1,582 and was reduced by an increase in accounts payable of 287 and related party payable of 12,750.

We have financed our operations from the issuance of equity and loans from related parties. For the year ended July 31, 2015 and the period ended July 31, 2014, we generated $99,919 and $29,649 from financing activities, respectively.  During June and July 2015, we received $26,650 from our initial public offering, from the subscription for 666,250 shares of common stock, which was restricted as of July 31, 2015.  During the period ended October 31, 2015, the restriction on the cash was released when we sold an additional 1,833,750 shares of common stock, for proceeds of $73,350, and closed our offering having sold the maximum of 2,500,000 shares of common stock for net proceeds of $100,000.  For the period ended October 31, 2014, the Company received net loans from a related party of $29,500 and received $149 from a stock subscription for the sale of 1,490,000 shares of common stock in the period ended July 31, 2014. 

 

Limited Operating History; Need for Additional Capital

There is no historical financial information about us upon which to base an evaluation of our performance.  We are a development stage corporation and have not generated sufficient revenues from operations to fully implement our business plan.  We cannot guarantee we will be successful in our business operations.  Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and competition from larger organizations.  We will require equity and/or debt financing to provide for the capital required to implement our plans. We will require additional funds to operate for the next year.

We have no assurance that future financing will be available to us on acceptable terms.  If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. 

Liquidity and Capital Resources

Our officers have agreed to advance funds if needed but the agreement is verbal and is unenforceable as a matter of law.

As of October 31, 2015, we have no employees and our only employees are our officers and directors. As of October 31, 2015, an officer, who is also a director and a shareholder, was owed $9,750 for management fees.

 

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

As a "smaller reporting company", we are not required to provide the information required by this item.

 

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

 

As of October 31, 2015, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

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The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management is dominated by two individuals without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of October 31, 2015.

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Changes in Internal Controls

 

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended October 31, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings.

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A.  Risk Factors.

As a "smaller reporting company", we are not required to provide the information required by this Item.

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

None.

Item 3.  Defaults Upon Senior Securities.

None.

Item 4.  Mine Safety Disclosure.

Not applicable.

Item 5.  Other Information.

None.

 

Item 6.  Exhibits.

The following exhibits are included as part of this report:

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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.