Panacea Global (HOML) 10QSB/A 2007 Q4 Quarterly report (small business) (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB/A

x Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended November 30, 2007

o Transition Report Under Section 13 or 15(d) of the Securities Exchange Act; For the transition period from _________ to __________

Commission File Number #000-1024048

HOMELIFE, INC.

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

Nevada	33-0680443
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1503 South Coast Drive, Suite 204, Costa Mesa, CA	92626
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code:

(714) 241-3030

Check whether the issuer (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 o

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

Yes o  No x

The issuer had 12,371,886 common shares outstanding as of November 30, 2007

Transitional Small Business Disclosure Format (check one):

Yes o  No x

HOMELIFE, INC.

INDEX

	PAGE NO.
PART I - FINANCIAL INFORMATION	1
Item 1. Financial Statements		1
Consolidated Balance Sheet at November 30, 2007 (Unaudited)		1
Consolidated Statements of Operations for the three months ended		3
November 30, 2007 and 2006 (Unaudited)
Consolidated Statements of Operations for the six months ended		4
November 30, 2007 and 2006 (Unaudited)
Consolidated Statements of Cash Flows for the six months ended		5
November 30, 2007 and 2006 (Unaudited)
Notes to Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.		7
Item 3. Controls and Procedures.		10
PART II - OTHER INFORMATION		10
Item 1. Legal Proceedings.		10
Item 2. Changes in Securities and Use of Proceeds.		11
Item 3. Defaults Upon Senior Securities.		11
Item 4. Submission of Matters to a Vote of Security Holders.		11
Item 5. Other Information.		11
Item 6. Exhibits and Reports on Form 8-K.		11
(a) Exhibits
(b) Reports on Form 8-K
Signatures.		12

PART I - FINANCIAL INFORMATION

HOMELIFE, INC.

Consolidated Balance Sheet

At November 30, 2007

(unaudited)

ASSETS
Current Assets
Cash	$	13,395
Marketable securities, at fair value		900
Accounts receivable, net		12,352
Prepaid expenses and deposits		15,525
Total Current Assets		42,172
Property and Equipment, net		72
Other Assets
Goodwill		100,000
Total Assets	$	142,244

1

HOMELIFE, INC.

Consolidated Balance Sheet (Continued)

At November 30, 2007

(unaudited)

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Bank indebtedness	$	95,759
Accounts payable		231,855
Reserve for warranty		31,838
Deferred revenue		21,943
Total Current Liabilities		381,395
Other Liabilities
Due to Stockholder		669,087
Total Liabilities		1,050,482
Minority Interest		20,843
Stockholders’ Deficit
Capital Stock (Note 4)		1,037,372
Additional Paid in Capital		3,731,741
Accumulated Other Comprehensive Loss		(1,747	)
Accumulated Deficit		(5,696,447	)
Total Stockholders’ Deficit		(929,081	)
Total Liabilities and Stockholders’ Deficit	$	142,244

2

HOMELIFE, INC.

Consolidated Statements of Operations

Three months ended November 30, 2007and 2006

(unaudited)

	2007			2006
REVENUE
Royalty and franchise fees	$	79,172		$	84,946
Warranty fees		11,368			19,784
Other income		6,259			5,466
Total Revenue		96,799			110,196
DIRECT COSTS		8,025			11,399
GROSS PROFIT		88,774			98,797
EXPENSES
Salaries and fringe benefits		41,433			49,255
General and administrative		256,976			74,258
Occupancy		7,485			13,326
Financial		14,397			5,730
Amortization		-			12,963
Total Expenses		320,291			155,532
NET LOSS		(231,517	)		(56,735	)
BASIC AND FULLY DILUTED LOSS	$	(0.02	)	$	(0.00	)
PER COMMON SHARE
WEIGHTED-AVERAGE NUMBER OF		12,371,886			12,371,886
COMMON SHARES

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HOMELIFE, INC.

Consolidated Statements of Operations

Six months ended November 30, 2007and 2006

(unaudited)

	2007			2006
REVENUE
Royalty and franchise fees	$	172,472		$	176,531
Warranty fees		24,729			42,850
Other income		14,723			8,735
Total Revenue		211,924			228,116
DIRECT COSTS		12,500			20,554
GROSS PROFIT		199,424			207,562
EXPENSES
Salaries and fringe benefits		92,793			92,121
General and administrative		392,088			129,949
Occupancy		19,404			25,570
Financial		25,874			10,918
Depreciation		-			1,865
Amortization		1,000			25,925
Total Expenses		531,159			286,348
NET LOSS		(331,735	)		(78,786	)
BASIC AND FULLY DILUTED LOSS	$	(0.03	)	$	(0.01	)
PER COMMON SHARE
WEIGHTED-AVERAGE NUMBER OF		12,371,886			12,371,886
COMMON SHARES

4

HOMELIFE, INC.

Consolidated Statements of Cash Flows

Six months ended November 30, 2007and 2006

(unaudited)

	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(331,735	)	$	(78,786	)
Adjustments to reconcile net loss to net cash from operating activities
Depreciation		-			1,865
Amortization		1,000			25,926
Changes in assets and liabilities
Accounts receivable		10,057			(11,831	)
Prepaid expenses and deposits		-			501
Accounts payable		11,992			23,056
Reserve for warranty		(5,663	)		(5,928	)
Deferred revenue		(1,364	)		(5,693	)
Net Cash Flows from Operating Activities		(315,713	)		(50,890	)
CASH FLOWS FROM INVESTING ACTIVITIES		-			-
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from lines of credit, net		6,907			18,700
Due to stockholder		304,726			42,906
Repayments on note payable		(3,961	)		(6,006	)
Net Cash Flows from Financing Activities		307,672			55,600
NET CHANGE IN CASH		(8,041	)		4,710
Cash, beginning of period		21,436			53,376
CASH, END OF PERIOD	$	13,395		$	58,086
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Interest paid	$	3,731		$	2,803
Income taxes paid	$	-		$	-

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HOMELIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. MANAGEMENT’S PLAN AND FUTURE OPERATIONS

At November 30, 2007, adverse principal conditions and events are prevalent that require necessary action by management to enable the Company to return to profitability and to reverse these adverse conditions and events. These conditions and events include recurring operating losses, working capital deficiencies, and adverse key financial ratios. Management’s plans to mitigate these adverse conditions and events include:

-  attempting to raise additional funding through private and public offering,

-   investigating and pursuing potential mergers/acquisitions,

-   the core business of franchising nationwide

-   making efforts to reduce unnecessary operating expenses on a monthly basis

The accompanying consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary in the event that the Company is unable to continue as a going concern.

Note 2. BASIS OF CONSOLIDATED FINANCIAL STATEMENTS PRESENTATION

The condensed consolidated financial statements of HomeLife, Inc. and Subsidiaries (the “Company”) included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in conjunction with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and the notes thereto included in the Company’s Form 10-KSB Annual Report, and other reports filed with the SEC.

The accompanying unaudited interim consolidated financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period of or for the fiscal year taken as a whole. Certain financial information that is not required for interim financial reporting purposes has been omitted.

Reclassifications

Certain amounts in the prior year consolidated financial statements have been reclassified to conform with the current year presentation. The reclassifications made to the prior year have no impact on the net income (loss), or overall presentation of the consolidated financial statements.

Note 3. COMMITMENTS AND CONTINGENCIES

The Company is currently a plaintiff in a lawsuit. Legal fees have been paid by a majority shareholder of the company and have been properly reflected in the financial statements.

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Note 4. CAPITAL STOCK

a)Authorized

100,000 Class A Preferred shares of no par value, 6% non-cumulative dividend, voting, convertible to common shares at the option of the shareholder at a price equal to the face value of the Class A shares. Each Class A Preferred share carries 1,000 votes as compared with 1 vote for each Common share.

2,000 Class AA Preferred shares of $500 par value, 8% cumulative dividend, non-voting, redeemable at face value by the company, convertible after 12 months from the date of issuance, at the option of the shareholder, to Common shares at a price equal to the 125% of the face value of the Class AA shares as compared with the market price of the common stock.

100,000,000 Common shares of $0.001 par value

Issued
	2008		2007
10,000 Class A Preferred shares	$	1,000,000	$	1,000,000
50 Class AA Preferred shares		25,000		25,000
12,371,886 Common shares		12,372		12,372
	$	1,037,372	$	1,037,372

Note 5.SUBSEQUENT EVENT

On January 08, 2008 the Company entered into an Agreement and Plan of Merger with Agdas Financial Holdings and Moneylogix, Inc.. This agreement provides the following:  (1) Moneylogix’s shareholders will exchange all of the issued and outstanding stock of Moneylogix in exchange for the transfer of 80,000,000 new issued shares of the common stock , par value $0.01 per share, that will constitute 98.70% of the issued and outstanding capital stock of the company (2) $250,000 payment to the Company to pay present liabilities; (3) Andrew Cimerman will receive 490,310 shares of the Company common stock after a 22 to 1 reverse stock split; Mr. Cimerman will transfer 458,000 of these restricted shares to the shareholders of the company. As part of the deal, 10,000 Class A Preferred Shares will be cancelled.

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

Overview

The Company has experienced growth primarily through its acquisitions of and combinations with various other companies. This includes the acquisition in August 1996 of the Keim Group of Companies and MaxAmerica Home Warranty Company (Michigan) adding 60 real estate offices and a home warranty company in Michigan. In 1997, the Company purchased certain assets of S & S Acquisition Corp. providing the Company with Red Carpet Real Estate Services and National Real Estate Services adding 58 real estate offices. The acquisition of the real estate computer technology of House by Mouse and Virtual Assistant provided the Company with the ability to enhance its Internet communication services to its franchises. In July 1997, the Company acquired the licensing agreements, trademarks and franchise offices of Network Real Estate, Inc. This acquisition provided the Company with an additional 12 offices in Northern California and access to the “high-end” luxury division of “International Estates”. In February 1998, the Company acquired Builders Realty (Calgary) Ltd. providing access to the Alberta, Canada market in both retail real estate and mortgage loans. Certain assets of Builders Realty (Calgary) were sold during fiscal year 2002. On September 15, 1998, the Company purchased the stock of the investment banking firm of Aspen, Benson and May, LLC for common stock.

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From time to time, the Company has entered into strategic alliances with various companies in order to explore the cross-marketing of their services to customers of the Company or its franchises. To date, these strategic alliances have not included any funding agreements or other liabilities on the part of the Company.

The following is management’s discussion and analysis of HomeLife’s financial condition and results of operations. Detailed information is contained in the financial statements included with this document. This section contains forward-looking statements that involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations and intentions. The cautionary statements made in this document should be read as being applicable to all related forward-looking statements wherever they appear in this document.

Three Months Ended November 30, 2007 (unaudited) compared to the Three Months Ended November 30, 2006 (unaudited).

Revenues. The Company generated gross sales of $96,799 for the quarter ended November 30, 2007 compared to gross sales of $110,196 for the quarter ended November 30, 2006. Revenue by business segment is shown below:

	November 30, 2007				November 30, 2006
	Amount		%		Amount		%
Royalty & franchise fees	$	79,172		82	$	84,946		77
Home warranty sales		11,368		12		19,784		18
Other		6,259		6		5,466		5
TOTAL	$	96,799		100	$	110,196		100

 Royalty fees & franchise fees were lower in the current quarter due to the overall slow down in the real estate market. Fewer offices and fewer sales have led to the decline. Home warranty fees were lower in the current quarter compared to the prior year due to fewer contracts written and a lower per contract average than in the prior year. This has also been a result of the slow down in the real estate market.

Direct Costs. Direct costs on total revenue in the current quarter are lower than the second quarter last year due to lower warranty claims during the period.

Salaries and fringe benefits. Salaries and fringe benefits decreased from $49,255 for the three months ended November 30, 2006 to $41,433 for the three months ended November 30, 2007. This decrease is a result of one employee in Michigan that was replaced during the current year.

General and administrative. General and administrative costs are higher in the current fiscal quarter compared to prior year mainly due to the legal fees paid by shareholder related to the existing lawsuit.

Occupancy. Occupancy costs are lower in the current quarter due to the relocation of the Michigan office.

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Financial. Financial costs were higher for the quarter ended November 30, 2007 due to the accrued interest on the higher average outstanding amount due to shareholder.

Amortization. The intangibles became fully amortized in the prior quarter. Therefore there was no amortization expense in the current quarter.

Six Months Ended November 30, 2007 (unaudited) compared to the Six Months Ended November 30, 2006 (unaudited).

Revenues. For the first half of the current fiscal year, the Company generated gross sales of $211,924 compared to $228,116 in the prior year same period. Revenue by business segment is shown below:

	November 30, 2007				November 30, 2006
	Amount		%		Amount		%
Royalty & franchise fees	$	172,472		81	$	176,531		77
Home warranty sales		24,729		12		42,850		19
Other		14,723		7		8,735		4
TOTAL	$	211,924		100	$	228,116		100

Royalty fees & franchise fees were down slightly in the current period due to the overall slow down in the real estate market, especially in home resales. Fewer offices and fewer sales have led to the decline. The slow down in the market has largely affected the home warranty sales. Warranty fees were lower in the current half of year compared to the prior year due to fewer contracts written and a lower per contract average than in the prior year.

Direct Costs. Direct costs on total revenue in the current period are lower than the first half of last year due to lower warranty fees and related warranty claims in the current period.

Salaries and fringe benefits. Salaries and fringe benefits are comparable for the two periods.

General and administrative. General and administrative costs are higher in the current fiscal year compared to prior year mainly due to the legal fees paid by shareholder related to the existing lawsuit.

Occupancy. Occupancy costs are lower in the current year first half due to the relocation of the Michigan office.

Financial. Financial costs were higher for the six months ended November 30, 2007 due to the accrued interest on the higher average outstanding amount due to shareholder.

Depreciation. Depreciation expense was immaterial for the period.

Amortization. The intangibles became fully amortized in the prior quarter.

Liquidity and capital resources. The Company has lines of credit with two banks with available credit of $95,000 and a term loan of $25,000. The capital requirements of the Company are for operating expenses and to service and the use of its lines of credit. The Company has recorded significant operating losses in the prior two years. These losses are primarily due to increased direct costs and operating expenses. The Company does not have any derivative instruments or hedging activities, therefore, the Company believes that SFAS No. 133 will have no material impact on the Company’s financial statements or notes thereto.

The Company has experienced recurring operating losses and has a working capital deficiency of $339,223 as of November 30, 2007. Management has initiated changes in operational procedures, reduced staff and expenses and focused its efforts on its core business. Management believes that, despite the losses incurred and the deterioration in stockholders’ equity, it has developed a plan, which, if successfully implemented, can improve the operating results and financial condition of the Company. Furthermore, the Company continues its attempt to raise additional financing through private and public offerings.

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Application of Critical Accounting Policies. The Company’s financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Critical accounting policies for the Company includes revenue recognition, goodwill and accounting for income taxes.

The Company recognizes revenue in accordance with Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements”. The Company recognizes revenue when it is realized or realizable and earned. Income from the sale of franchises is recognized over a 5-year period. Master franchise agreement fees are recognized over 10 years. Royalty income stemming from the gross commissions on the sales of real estate by the franchise offices is recognized at the date of receipt; this is due to the complexity of attempting to forecast the actual closing date of the properties. Warranty income is recognized over the term of the contract which is usually 12 months; anticipated obligations which represent incurred but not reported losses (IBNR) under these warranties have been recorded as reserve for warranty and are based on past loss experience. Real estate brokerage income is recognized at the close of escrow. Loan fees are recognized as income when the loan is closed and funded at the close of escrow. Revenue received or receivable, from the sale of franchises, master franchises and warranties, which is not recognized as income is recorded on the balance sheet as deferred revenue.

The Company accounts for income tax under the provisions of Statement of Financial Accounting Standards No. 109, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred income taxes are provided using the liability method. Under the liability method, deferred income taxes are recognized for all significant temporary differences between the tax and financial statement bases of assets and liabilities. In addition, the Company is required to record all deferred tax assets, including future tax benefits of capital losses carried forward, and to record a “valuation allowance” for any deferred tax assets where it is more likely than not that the asset will not be realized.

Item 3. Controls and Procedures

Based on the evaluation of the Company's disclosure controls and procedures by Andrew Cimerman, the Company's Chief Executive Officer and Marie M. May, the Company’s Chief Financial Officer, as of a date within 45 days of the filing date of this quarterly report, such officers have concluded that the Company's disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time period specified by the Securities and Exchange Commission's rules and forms.

There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On November 29, 2006, Homelife filed in Federal Court against MIT Holding, Inc. for breach of contract and is seeking $2 Million in damages.

10

On March 22, 2007, both parties agreed to terminate the agreement with the payment of $27,500 from MIT Holding, Inc. to Homelife.

The company is involved in a lawsuit with a company named HomeLife Communities for illegally using the HomeLife name. HomeLife Communities has agreed to change its name but has not yet done so. HomeLife Inc. is suing for royalties.

At the time of filing, there is no determinable outcome of the lawsuit. Legal fees have been paid by a majority shareholder of the company and have been properly reflected in the financial statements.

Item 2.Changes in Securities and use of proceeds.

None.

Item 3.Defaults upon senior securities.

None.

Item 4.Submission of matters to a vote of security holders.

None.

Item 5.Other Information.

None.

Item 6.Exhibits and Reports on Form 8-K.

(a) Exhibits:

31 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K:

Entry into a Material Definitive Agreement, Financial Statements and Exhibits - filed September 15, 2006

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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HOMELIFE, INC. Registrant
By:	/s/ Andrew Cimerman	Date: January 17, 2008
	Chief Executive Officer, President, Director

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Andrew Cimerman	Date: January 17, 2008
	Chief Executive Officer, President, Director

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