Lifestyle Medical Network 10Q 2016 Q2 Quarterly report

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 June 30, 2016

☐ 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 000-52408

LIFESTYLE MEDICAL NETWORK INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		13-1026995
(State or Other Jurisdiction of		(I.R.S. Employer Identification No.)
Incorporation or Organization)

424 E. Central Blvd., Orlando, FL		32801
(Address of principal executive offices)		(Zip Code)

(407) 514-1230

(Registrant's Telephone Number, Including Area Code)

(Former Name, 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 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 ☒ 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. (Check One):

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☐	Smaller reporting company ☒

(Do not check if a 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 ☒

The number of shares outstanding of the issuer's common stock, $0.001 par value per share, was 33,958,257 as of August 22, 2016.

LIFESTYLE MEDICAL NETWORK, INC.

INDEX

		Page

Part I.	Financial Information	1

Item 1.	Financial Statements.	1

	Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015 (unaudited)	2

	Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015 (unaudited)	3

	Consolidated Statements of Cash Flows for the three months ended June 30, 2016 and 2015 (unaudited)	5

	Notes to Unaudited Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	10

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	13

Item 4.	Controls and Procedures.	13

Part II.	Other Information	14

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	14

Item 6.	Exhibits.	14

Signatures		15

PART I — FINANCIAL INFORMATION

ITEM 1.

CONSOLIDATED FINANCIAL STATEMENTS.

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. The following unaudited consolidated financial statements should be read in conjunction with the year-end restated consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended December 31, 2015.

The results of operations for the six months ended June 30, 2016 and 2015 are not necessarily indicative of the results for the entire fiscal year or for any other period.

LIFESTYLE MEDICAL NETWORK INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS

	June 30,			December 31,
	2016			2015
	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	27,147		$	49,719
Accounts receivable-related party		516,100			516,868
Loan receivable-related party		610,181			100,000
Prepaid expenses		18,250			53,107
Total Current Assets		1,171,678			719,694

Property, plant and equipment - net		376,861			134,296
Intangible assets - net		80,562			83,338
TOTAL ASSETS	$	1,629,101		$	937,328

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	301,665		$	197,877
Notes payable		531,000			250,000
Convertible notes payable, net of $387,012 and $105,935 debt discount		728,508			644,065

Total Current Liabilities		1,561,173			1,091,942

Commitments and Contingencies		-			-

STOCKHOLDERS' EQUITY (DEFICIENCY):

Common stock, $.001 par value, 200,000,000 shares authorized; 33,958,257 and 33,658,257 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively		33,959			33,659
Additional paid-in-capital		9,702,517			9,172,696
Accumulated deficit		(9,668,548	)		(9,360,969	)
Total Stockholders' Equity (Deficiency)		67,928			(154,614	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)	$	1,629,101		$	937,328

See notes to unaudited consolidated financial statements

LIFESTYLE MEDICAL NETWORK INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Revenues:
Management fees-related party	$	351,750		$	163,500		$	567,750		$	163,500
Rental income-related party		110,250			103,483			213,750			103,483
Total revenues		462,000			266,983			781,500			266,983

Costs and expenses:
Cost of revenue related to management fees		170,644			29,784			304,607			29,784
Cost of revenue related to rental income		67,894			68,020			135,788			68,020
Selling, general and administrative expenses		161,484			169,253			329,514			211,152
Amortization of warrants		80,000			547,176			80,000			567,335
Total Costs and expenses		480,022			814,233			849,909			876,291

Loss from operations		(18,022	)		(547,250	)		(68,409	)		(609,308	)

Other income (expense):
Loss on extinguishment of debt		(61,697	)		-			(61,697	)		-
Other income		-			-			25,000			-
Interest expense		(115,948	)		(22,325	)		(202,473	)		(32,450	)
Total Other income (expense)		(177,645	)		(22,325	)		(239,170	)		(32,450	)

Loss from operations before provision for income taxes		(195,667	)		(569,575	)		(307,579	)		(641,758	)

Provision for income taxes		-			-			-			-

Net loss	$	(195,667	)	$	(569,575	)	$	(307,579	)	$	(641,758	)

Loss per common share-basic and diluted	$	(0.00	)	$	(0.02	)	$	(0.01	)	$	(0.02	)

Weighted average common shares outstanding
- basic and diluted		33,707,708			31,331,948			33,682,982			28,723,019

See notes to unaudited consolidated financial statements

LIFESTYLE MEDICAL NETWORK INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Six Months Ended
	June 30,
	2016			2015
Cash flows from operating activities:
Net loss	$	(307,579	)	$	(641,758	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		2,776			7,061
Depreciation		32,435			6,912
Loss on extinguishment of debt		61,697
Stock-based compensation		22,000			-
Amortization of warrants		80,000			567,335
Amortization of beneficial conversion feature		145,044			-
Changes in operating assets and liabilities:
Accounts receivable		768			(177,000	)
Prepaid expenses		36,857			16,000
Accounts payable and accrued expenses		157,611			(18,758	)
Net Cash Provided by (Used In) Operating Activities		231,609			(240,208	)

Cash flows from investing activities:
Refund of deposit		-			100,000
Advances to related party		(775,181	)		(135,000	)
Repayments by related party		265,000			80,000
Purchase of equipment		-			(112,743	)
Net Cash Used In Investing Activities		(510,181	)		(67,743	)

Cash flows from financing activities:
Proceeds from related parties		-			42,351
Repayment of related party debt		-			(142,351	)
Repayment of short-term debt		(24,000	)		-
Proceeds from short-term debt		280,000			600,000
Net Cash Provided by Financing Activities		256,000			500,000

Net increase (decrease) in cash		(22,572	)		192,049

Cash and cash equivalents - Beginning of period		49,719			163

Cash and cash equivalents - End of period	$	27,147		$	192,212

Supplementary information:

Cash paid for:
Interest	$	-		$	28,750

Income taxes	$	-		$	-

Non-cash Investing and Financing Activities

Conversion of debt and interest for common stock	$	-		$	999,180

Equipment purchased with note payable	$	275,000		$	-

Issuance of common stock for services	$	-		$	-

Beneficial conversion feature	$	426,121		$	-

See notes to unaudited consolidated financial statements

LIFESTYLE MEDICAL NETWORK INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015

1.	DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated balance sheet as of June 30, 2016 and the consolidated statements of operations, stockholders' deficiency and cash flows for the periods presented have been prepared by Lifestyle Medical Network, Inc. and Subsidiaries (the "Company" or "Lifestyle") and are unaudited. The consolidated financial statements are prepared in accordance with the requirements for unaudited interim periods, and consequently, do not include all disclosures required to be made in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations, changes in stockholders' deficiency and cash flows for all periods presented have been made. The information for the consolidated balance sheet as of December 31, 2015 was derived from audited financial statements of the Company.

Organization

Lifestyle Medical Network Inc. and Subsidiaries (the “Company” or “Lifestyle”) was incorporated in the State of Nevada. The Company directs its operations through its subsidiaries. The Company, through its consulting subsidiaries, plans to continue to identify and enter into management and professional consulting services agreements, and to license medical and health technologies, to medical and health clinic operating companies. The Company also intends to open, operate and acquire medical and health clinics, if financing is available and the profile of the clinics’ is favorable.

Material Agreements

The Company entered management agreements, and have commenced recognizing revenues thereunder, with two medical professional associations located in Houston, Texas, MED-Cure Primary Care Physicians, P.A. and MED-CURE Anti-Aging and Skin Care, P.A. (the “MED-CURE Companies”), effective April 1, 2015, which were purchased by Dr. Ronald Moomaw, a director of the Company. The MED-CURE Companies between them operate six medical clinics in Houston, of which four are primary care clinics and two are skin care clinics. Under management agreements with the MED-CURE Companies, the Company, through its subsidiary LifeStyle Texas Medical Management, LLC (“LifeStyle Management”), provides organizational development, accounting, human resources, computer technical support compliance, scheduling, marketing and advertising, office space, equipment supplies and other management services and receives an agreed percentage of the gross revenues of the practice group, with adjustments designed to ensure that management fees do not exceed an agreed cap, or that the monthly payments do not result in an event of default under the acquisition financing documents for the MED-CURE Companies. The leasing arrangements for the properties leased for the MED-CURE Companies’ clinics’ offices were restructured, with our real estate subsidiary, LifeStyle Texas Real Estate. LLC, leasing the properties and then subleasing the properties back to the MED-CURE Companies.

Through our subsidiary, Regional Professional Alliance, Inc. , a physician’s professional consulting company that provides professional medical consulting services to medical management companies related to matters affecting professional licensure and medical clinic compliance matters for the benefit of clinics managed by Lifestyle Management, we have entered into an agreement with Dr. Moomaw to provide services through Regional Professional Alliance for the benefit of LifeStyle Management related to oversight and professional medical services coordination of the managed clinics which have entered into management services agreements with LifeStyle Management. Through LifeStyle Texas Licensing, LLC (“LifeStyle Licensing”), the Company plans to sublicense to the MED-CURE Companies the non-exclusive right to use, and to sublicense the use of, certain patents, trademarks, trade names, logos, slogans, trade dress, commercial symbols, operational systems, and other intellectual property rights, in connection with operating and managing medical clinics that provide medical services and/or products of a character and quality, in particular relating to men’s health and weight management.

Going Concern

The consolidated financial statements for the period ended June 30, 2016 have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has a past history of recurring losses from operations and is a development stage company. The Company will require additional funding to execute its future strategic business plan. Successful business operations and its transition to attaining profitability are dependent upon obtaining additional financing and achieving a level of revenue to support its cost structure. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The Company has entered into Management agreements with six medical clinics in Houston, Texas. The Company will provide services to the clinic and will receive an agreed percentage of gross revenues of the practice group. Management intends to make further acquisitions of other medical clinics during 2016.

Management believes these acquisitions will be profitable and the cash flows from these operations will enable the Company to fund the operations of the consolidated group over the next twelve months. Therefore, the annual financial statements continue to be prepared on a going concern basis.

Significant Accounting Policies

The Company’s significant accounting policies are summarized in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. There were no significant changes to these accounting policies during the six months ended June 30, 2016 and the Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

INTANGIBLES

The MPL License Agreement

The MPL License Agreement, under which the Company's wholly-owned subsidiary, Elite, is the licensee pursuant to the Assignment from WMA, provides for the license of medical services, operational systems, manuals, certain names and logo designs and other intellectual property in connection with the operation of medical clinics that provide services related to men’s health within the territory of the continental United States (the “Licensed Rights”). The License Agreement provides for a fee of 6% of gross receipts of Licensee, payable quarterly. The term of the License Agreement is for twenty (20) years from the effective date, May 9, 2011. The Company plans to establish new medical clinics or acquire existing clinics, as well as to provide consulting services to medical clinics utilizing the Licensed Rights.

Intangibles are the value of the MPL license. Amounts assigned to this intangible were determined by management. Management considered a number of factors in determining the allocations, including valuations and independent appraisals. The intangibles are being amortized over 19.5 years, the life of the license.

The components of intangible assets are as follows:

License Agreements

Balance January 1, 2015	$	88,893

Amortization for the year ended December 31, 2015		(5,555	)

Balance December 31, 2015		83,338

Amortization for the six months ended June 30, 2016		2,776

Balance June 30, 2016	$	80,562

Amortization expense for the six months ended June 30, 2016 and 2015 amounted to $2,776 and $2,778, respectively.

Estimated amortization expense for intangible assets for the next five years is as follows:

Year Ending	Amortization
December 31,	Expense
2016		2,779
2017		5,555
2018		5,555
2019		5,555
2020		5,555

LOAN RECEIVABLE-RELATED PARTY

The Company advanced operating funds on a short-term basis to the MedCure Companies during the year ended December 31, 2015. The Company advanced the MedCure Companies $180,000 and received repayments of $80,000. During the six months ended June 30, 2016, the Company advanced an additional $775,181 and received repayments of $265,000. As of June 30, 2016 and December 31, 2015, the MedCure Companies owed the Company $610,181 and $100,000, respectively.

4	PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	June 30,		December 31,
	2016		2015
Equipment	$	432,152	$	157,152
Accumulated depreciation		55,291		22,856
	$	376,861	$	134,296

Depreciation expense for the six months ended June 30, 2016 and 2015 was $32,435 and $6,912, respectively.

DEBT

Short-term debt as of June 30, 2016 and December 31, 2015 were as follows:

	June 30,		December 31,
	2016		2015
Short-term Debt

Secured promissory note, interest @ 12% per annum, due December 31, 2016	$	150,000	$	150,000

Unsecured promissory note, interest @ 10%, due December 31, 2016		75,000		75,000

Convertible promissory note, interest @ 10% per annum, due November, 2016		100,000		100,000

Convertible promissory note, interest @ 12% per annum, due April 28, 2017 and June 8, 2017 (2)		255,746		431,465

Convertible promissory note, interest @ 12% per annum, due December 17, 2016		100,000		100,000

Convertible promissory note, interest @ 10% per annum, due September 23, 2016		38,355		12,600

Unsecured promissory note, interest @ 10% per annum, due November 1, 2016		25,000		25,000

Unsecured promissory note, interest @ 10% per annum, due August 15, 2016 (1)		6,000		-

Secured promissory note, interest @ 6% per anum due April 1, 2017 (4)		275,000		-

Convertible promissory note, interest @ 12% per annum, due June 13, 2017 (3)		234,407		-
		1,259,508		894,065
Less: Current portion		1,259,508		894,065
	$	-	$	-

(1)

On February 18, 2016, the Company executed an unsecured promissory note with Gail Keats and received $30,000. The promissory note bears interest at 10% per annum and both principal and interest are payable on or before August 15, 2016. The Company paid $24,000 against the note as of June 30, 2016 and an additional $6,000 in July 2016.

(2)

On May 16, 2016, the Company amended its loan agreements with Roy Meadows (“Meadows”). The Company agreed to pay Meadows a renewal fee of $28,000 and $27,956 on its two outstanding loans with Meadows and extend the maturity dates of the loans to April 28, 2017 and June 8, 2017, respectively. The new outstanding balances of the loans including interest and the renewal fees amounted to $308,000 and $307,520, respectively.

The Company also agreed to amend the conversion price of the loans into the Company’s common stock to $0.10 per share. At any time, the holder of the notes, at his option, shall have the right to convert the outstanding principal balance or any portion of the principal amount hereof, and any accrued interest into shares of common stock of the Company. The fair value of the common stock at the date of issuance of the advance was $0.13, which created a Beneficial Conversion Feature of $409,766, the Beneficial Conversion feature was recorded as a debt discount over the life of the notes. The debt discount as of June 30, 2016 was $359,433.

The Company performed an analysis under ASC 470-50 criteria to determine if the note extension agreement falls under debt modification or debt extinguishment criteria. The Company revalued the warrants issued and agreed the additional consideration, extended maturity dates and interest to the extended agreement. The Company deems that based on the analysis performed, debt extinguishment does exist and recorded loss on debt extinguishment in the amount of $61,697.

(3)

On June 13, 2016, the Company issued a convertible promissory note to Meadows and received proceeds of $250,000.The promissory note bears interest @ 12% per annum and matures one year from the date of issuance. At any time, the holder of the note, at his sole option, shall have the right to convert the outstanding principal amount of this note, or any portion of the principal hereof, and any accrued interest into shares of common stock of the Company, at a conversion price of $0.15 per share.

(4)

On April 1, 2017, the Company issued a secured promissory note to Emile Fares, M,D, (the “Payee”) and promised to the Payee $275,000 in exchange for all the medical equipment owned by RMC Totalcare Medical PA.. The secured promissory note bears interest @ 6% per anum and matures one year from the date issuance. A payment of $75,000 is due October 1, 2016 and the balance due on the maturity date. The note is secured by all collections received by LifeStyle Texas Medical Management LLC pursuant to a Management Agreement with RMC Totoalcare Medical PA.

Interest expense for the six months ended June 30, 2016 and 2015 amounted to $63,170 and $32,450, respectively.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

	June 30,		December 31,
		2016		2015
Interest	$	72,413	$	68,807
Salaries - Officer		-		1,125
Professional fees		96,901		64,306
Consulting		118,800		48,000
Other		13,551		15,639
	$	301,665	$	197,877

7.	BASIC AND DILUTED EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net earnings by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. At June 30, 2016, there were 10,820,621 potential common shares. Because of the net loss, the effect of these potential common shares is anti-dilutive.

WARRANTS

On April 1, 2016, the Company issued a warrant to Harcharan Narang M.D. to purchase 800,000 shares of the Company’s at an exercise price of $0.20 per share. The warrant was issued in connection with services provided to the Company. The fair value of the warrant was $80,000, all of which was expensed during the six months ended June 30, 2016.

On May 16, 2016, the Company issued a warrant to Roy Meadows to purchase 1,059,564 shares of the Company’s common stock at an exercise price of $0.025 per share. The purchase warrant consist of a bonus warrant of 500,000 shares and a renewal warrant of 559,564 shares issued in connection with the extension of two Meadows’ notes. The fair value of the warrants amounted to $112,555, of which $13,877 was expensed as interest during the six months ended June 30, 2016.

On June 30, 2016, the Company issued a warrant to Roy Meadows to purchase 250,000 shares of the Company’s common stock at an exercise price of $0.025 per share. The warrant was issued in connection with a financing provided to the Company. The fair value of the warrant was $16,355, of which $762 was expensed during the six months ended June 30, 2016.

The estimated value of the warrants was determined using the Black Scholes pricing model using the following assumptions: expected term of 5 to 7 years, a risk free interest rate between 1.39% and 1.72%, a dividend yield of -0- and volatility between 427% and 459%. The fair value of the warrants amounted to $208,910.

The following table summarizes the changes in warrants outstanding and the related price of the shares of the Company's common stock issued to non-employees of the Company. The warrants were granted in lieu of cash compensation for services performed.

		Exercise		Remaining	Intrinsic
	Shares		Price	Life		Value
Outstanding, January 1, 2016	8,000,000	$	0.13	4.6
Granted	2,109,564		0.16	5.0
Expired/Cancelled	-		-
Exercised	-		-
Outstanding-period ending June 30, 2016	10,109,564	$	0.12	4.8 years	$	63,339
Exercisable-period ending June 30, 2016	10,109,564	$	0.12	4.8 years	$	63,339

RELATED PARTY TRANSACTIONS

a) Dr. Ronald Moomaw (“Moomaw”), a director of the Company, is the sole owner of the MED-CURE Companies. The Company received a majority of its revenue for the six months ended June 30, 2016 from the MED-Cure Companies.

In connection with the management of the Med-Cure Companies, Moomaw was issued a warrant for the purchase of 5,000,000 shares of the Company’s common stock valued @ $465,000, the fair value at the time of issuance.

Moomaw also received consulting fees of $70,800 and $10,800 for the six months ended June 30, 2016 and 2015, respectively, as part of his management compensation.

b) The Company advanced operating funds on a short-term basis to the MED-CURE Companies and received payments during the six months ended June 30, 2016 and the year ended December 31, 2015. As of June 30, 2016 and December 31, 2015, the MED-CURE Companies owe the Company $610,181 and $100,000, respectively.

10.

COMMON STOCK

On June 15, 2016, the Company issued 100,000 shares of the Company’s common stock to LKB Partners LLC in connection with a service agreement with the Company. The fair value of the common stock issued was $8,000, of which $6,000 was expensed during the six months ended June 30, 2016.

On June 15, 2016, the Company issued 200,000 shares of the Company’s common stock to Harcharan Narang M.D. in connection with a service agreement with the Company. The fair value of the common stock issued was $16,000, all of which was expensed during the six months ended June 30, 2016.

11.

MAJOR CUSTOMERS

100% of the revenues for the six months ended June 30, 2016, was received from companies owned 100% by Dr. Ronald Moomaw, a director of the Company.

12.

COMMITMENTS AND CONTINGENCIES

Consulting Agreements

During 2015 and 2014, Lifestyle entered into various consulting agreements with third parties in connection with business advisory services. For the six months ended June 30, 2016 and 2015, consulting services amounted to $87,501 and $71,987, respectively.

On July 1, 2012, Lifestyle entered into an employment agreement with Christopher Smith("Smith"), the Company's Chief Executive Officer. The term of the agreement is for five years. Effective August 1, 2015, the monthly salary for Smith was increased to $12,500. Smith will also receive a performance bonus based on a percentage of the Company's net operating profit before income taxes. For the six months ended June 30, 2016, and 2015, payroll-officer amounted to $75,000 and $30,000, respectively.

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

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto and the other financial information included elsewhere in this report. Certain statements contained in this report, including, without limitation, statements containing the words “believes,” “anticipates,” “expects” and words of similar import, constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, sustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions.

Organization

The Company was incorporated in the State of Nevada on September 3, 2003, under the name Beverly Hills Film Studios, Inc. and changed its name to Emerging Media Holdings, Inc. on September 28, 2006. On September 30, 2006, we acquired IM “Media Alianta” SRL, the 100% owner of SA “Analiticmedia-Grup”, both Moldovan companies ("AMG"), and on May 2, 2008 “TNT-Bravo” channel-ICS “Media Top Prim” SRL, the exclusive operator in Moldova of Russian channel TNT programs owned by Gazprom Media.

We changed the focus of our business and disposed of three of our Moldova media subsidiaries on February 10, 2011. On December 29, 2011, we completed the sale of our remaining Moldova media subsidiaries and acquired rights to technologies and practices pursuant to an October 5, 2010 License Agreement for operating technologies and processes services related to men’s health within the territory of the continental United States. On February 2, 2012, we acquired the full assignment of rights to this License Agreement. Effective July 31, 2012, the name of our Company was changed from Emerging Media Holdings, Inc. to Lifestyle Medical Network Inc.

Recent Developments

Dr. Ronald Moomaw, a director of the Company and a licensed physician in the State of Texas, who had been assisting the Company in evaluating the acquisition by the Company of two medical practices in Houston, Texas, purchased the two medical professional associations (the “MED-CURE Companies”), effective April 1, 2015, for a purchase price of $2,500,000, utilizing local bank financing. The MED-CURE Companies between them operate six medical clinics in Houston, of which four are primary care clinics and two are skin care clinics. The MED-CURE Companies agreed, effective April 1, 2015, to enter into management agreements with the Company, pursuant to which the Company, through its subsidiary Lifestyle Texas Medical Management, LLC (“Lifestyle Management”), has provided organizational development, accounting, human resources, computer technical support compliance, scheduling, marketing and advertising, office space, equipment supplies and other management services and receives an agreed percentage of the gross revenues of the practice group, with adjustments designed to ensure that management fees do not exceed an agreed cap, or that monthly payments do not result in an event of default under the acquisition financing documents for the MED-CURE Companies. The leasing arrangements for the properties leased for the MED-CURE Companies’ clinics’ offices were restructured, with our real estate subsidiary, Lifestyle Texas Real Estate, LLC, leasing the properties and then subleasing the properties back to the Med-Cure Companies.

Dr. Moomaw on April 21, 2016, acquired an additional clinic in Houston, Texas, which clinic is now operated under the name RCM Total Care Medical PA, PLLC, and has in addition integrated the operations of two other clinics with those of the MED-CURE Companies. The Total Care Clinic and the additional two clinics are managed by Lifestyle Management, pursuant to management agreements between the Lifestyle Management and the clinics for the provision of administrative and business services by the Management Company for the physician practices of the clinics. The clinics will enter into license agreements with Lifestyle Licensing, for the license of specified protocols and procedures for application in their respective medical practices.

Through our subsidiary, Regional Professional Alliance, Inc., a physician’s professional consulting company that provides professional medical consulting services to medical management companies related to matters affecting professional licensure and medical clinic compliance matters for the benefit of clinics managed by Lifestyle Management, we have entered into an agreement with Dr. Moomaw to provide services through Regional Professional Alliance for the benefit of Lifestyle Management related to oversight and professional medical services coordination of the managed clinics which have entered into management services agreements with Lifestyle Management. Through Lifestyle Texas Licensing, LLC (“Lifestyle Licensing”), the Company plans to sublicense to the MED-CURE Companies and RCM Total Care the non-exclusive right to use, and to sublicense the use of, certain patents, trademarks, trade names, service marks, logos, slogans, trade dress, commercial symbols, operational systems, and other intellectual property rights, in connection with operating and managing medical clinics that provide medical services and/or products of a distinctive character and quality, in particular relating to men’s health and weight management.

Throughout this Form 10-Q, the terms "we," "us," "our," "LMN" and the "Company" refer to Lifestyle Medical Network Inc., a Nevada corporation, and unless the context indicates otherwise, includes our subsidiaries.

Critical Accounting Policies and Estimates

The discussion and analysis of our plan of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect our reported results of operations and the amount of reported assets and liabilities.

Some accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. Actual results may differ from the estimates and assumptions used in the preparation of our consolidated financial statements.

The Company’s significant accounting policies are summarized in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. There were no significant changes to these accounting policies during the six months ended June 30, 2016, and the Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

PLAN OF OPERATION

Through our consulting subsidiaries, we plan to contract to provide management and professional consulting services, and to license medical and health technologies, to medical and health clinic operating companies. We are evaluating opening and operating a MSO in the near future, assuming the business outlook would be favorable. We also intend to open, operate and acquire men’s medical and health clinics, if financing is available and the profile of the clinics’ services is consistent with the types of medical businesses we view as favorable for acquisition.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2016 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2015

During the three months ended June 30, 2016, we had revenues from related parties of $ 462,000, as compared with revenues of $266,983 in the three months ended June 30, 2015, and we incurred a net loss of $195,667 in 2016, as compared with a net loss of $569,575 for 2015. The higher net loss in 2015 was principally due to higher total costs and expenses of $814,233 in 2015, as compared with total costs and expenses of $378,022 for 2016, an increase of approximately $0.5 million. The increase is primarily due to the amortization of warrants of $547,176 in 2015. In 2016, cost of revenue related to management fees was $170,644 and of cost of revenue related to rental income was $67,894, for which the 2015 amounts were $29,784 and $68,020, respectively, and amortization of warrant expense in 2016 was $80,000, compared to $547,176 in 2015. Interest expense incurred in 2016 was $115,948 and general and administrative expense was $161,484, as compared with interest expense of $22,325 and $169,253 in general and administrative expense in 2015. The increase in cost of revenue and general and administrative expense in 2016 was due to commencement of medical consulting operations in Houston in April 2015.

SIX MONTHS ENDED JUNE 30, 2016 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2015

During the six months ended June 30, 2016, we had revenues from related parties of $781,500, as compared with revenues of $266,983 in the six months ended June 30, 2015, and we incurred a net loss of $307,579 in 2016, as compared with a net loss of $641,758 for 2015. The higher net loss in 2015 was principally due to higher total costs and expenses of $876,291 in 2015, as compared with total costs and expenses of $849,909 for 2016. In 2016, cost of revenue related to management fees was $304,607 and of cost of revenue related to rental income was $135,788, for which the 2015 amounts were $29,784 and $68,020, respectively, and amortization of warrant expense in 2016 was $80,000, compared to $567,335 in 2015. Interest expense incurred in 2016 was $202,473 and general and administrative expense was $329,514, as compared with interest expense of $32,540 and $211,152 in general and administrative expense in 2015. The increase in cost of revenue and general and administrative expense in 2016 was due to commencement of medical consulting operations in Houston in April 2015.

The Company has financed its operations in 2016 in part with issuances of convertible debt to private investors.

On February 18, 2016, the Company executed an unsecured promissory note with Gail Keats and received $30,000. The promissory note bears interest at 10% per annum and both principal and interest are payable on or before August 15, 2016. The Company paid $6,000 against the note in March 2016 and an additional $6,000 in May 2016.

On June 13, 2016, the Company issued a convertible promissory note to Meadows and received proceeds of $250,000. The promissory note bears interest @ 12% per annum and matures one year from the date of issuance. At any time, the holder of the note, at his sole option, shall have the right to convert the outstanding principal amount of this note, or any portion of the principal hereof, and any accrued interest into shares of common stock of the Company, at a conversion price of $0.15 per share.

There is no assurance that we will be able to obtain sufficient capital to implement our business plans. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. These conditions and uncertainties raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Off Balance Sheet Arrangements

We do not currently have any off balance sheet arrangements falling within the definition of Item 303(c) of Regulation S-B.

Inflation

To date inflation has not had a material impact on our operations.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

ITEM 4. Controls and Procedures.

As of June 30, 2016, the end of the period covered by this quarterly report, the Chief Executive and Chief Financial Officer of the Company (the “Certifying Officer”) conducted an evaluation of the Company’s disclosure controls and procedures. As defined under Sections 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the Certifying Officer, to allow timely decisions regarding required disclosure.

Based on this evaluation, the Certifying Officer has concluded that the Company’s disclosure controls and procedures were not effective for the quarter ended June 30, 2016, to ensure that material information is recorded, processed, summarized and reported by management of the Company on a timely basis in order to comply with the Company’s disclosure obligations under the Exchange Act, and the rules and regulations promulgated there under.

Further, there were no changes in the Company’s internal control over financial reporting during the second fiscal quarter of our 2016 fiscal year that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

Other Information

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

The following table sets forth the sales of unregistered securities since the Company’s last report filed under this item.

				Total Offering Price/
			Principal	Underwriting
Date	Title and Amount(1)	Purchaser	Underwriter	Discounts
June 13, 2016	8% Promissory Note in the principal amount of $250,000, due June 13, 2017, convertible into Common Stock at a conversion price of $.15 per share.	Private investor.	NA	$250,000/NA

Item 6. Exhibits.

31		Certification of Chief Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a)

32		Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

SEC Ref. No.		Title of Document
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Label Linkbase Document
101.PRE		XBRL Taxonomy Presentation Linkbase Document

The XBRL related information in Exhibits 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of those sections.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	LIFESTYLE MEDICAL NETWORK INC. (Registrant)

Date: August 23, 2016	By:	/s/ Christopher Smith
		Christopher Smith, Chief Executive Officer and Principal Financial Officer

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Lifestyle Medical Network (LMNK) 10-Q2016 Q2 Quarterly report

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