UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PERSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: October 31, 2009
o 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: 333-153402 |
MED CONTROL, INC.
(Exact name of registrant as specified in its charter)
(State of or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
| 112 North Curry Street, Carson City | 89703 |
| (Address of principal executive offices) | (Zip Code) |
(775) 333-1182
(Registrant’s telephone number, including area code)
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 o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer o | Accelerated filer | o |
Non-accelerated filer o | (Do not check if a smaller reporting company) | Smaller reporting company x |
Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes x No o
Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of October 31, 2009, the registrant had 6,190,500 shares of common stock, $0.001 par value, issued and outstanding.
Index
| | | | | | | | | | Page |
PART I - FINANCIAL INFORMATION | | | | | | Number |
| | | | | | | | | | |
Item 1. | Financial Statements | | | | | | | | 3 |
| | | | | | | | | | |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of | | |
| Operations | | | | | | | | 10 |
| | | | | | | | | | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | | | | 12 |
| | | | | | | | | | |
Item 4. | Controls and Procedures | | | | | | | 12 |
| | | | | | | | | | |
| | | | | | | | | | |
PART II - OTHER INFORMATION | | | | | | | |
| | | | | | | | | | |
Item 1. | Legal Proceedings | | | | | | | | 13 |
| | | | | | | | | | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | | | | 13 |
| | | | | | | | | | |
Item 3. | Defaults Upon Senior Securities | | | | | | 13 |
| | | | | | | | | | |
Item 4. | Submission of Matters to a Vote of Security Holders | | | | 14 |
| | | | | | | | | | |
Item 5. | Other Information | | | | | | | | 14 |
| | | | | | | | | | |
Item 6. | Exhibits | | | | | | | | | 14 |
| | | | | | | | | | |
MED CONTROL, INC.
(A Development Stage Enterprise)
FINANCIAL STATEMENTS
October 31, 2009
(Unaudited)
MED CONTROL, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
| As of October 31, 2009 (Unaudited) | As of July 31, 2009 (Audited) |
| | |
ASSETS | | |
| | |
CURRENT ASSETS | | |
Cash | $ 24 | $ 24 |
Total current assets | 24 | 24 |
| | |
Total assets | $ 24 | $ 24 |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | |
| | |
CURRENT LIABILITIES | | |
Accounts payable and accrued liabilities | $ 7,500 | $ 6,500 |
Due to related party | 9,785 | 6,285 |
Total current liabilities | 17,285 | 12,785 |
| | |
Total liabilities | 17,285 | 12,785 |
| | |
STOCKHOLDERS’ DEFICIT | | |
Common stock, $0.001 par value, | | |
Authorized 75,000,000 shares of common stock, | | |
Issued and outstanding 6,190,500 and 6,190,500 shares of common stock, respectively | 6,190 | 6,190 |
Additional paid in capital | 3,620 | 3,620 |
Deficit accumulated during the development stage | (27,071) | (22,571) |
| | |
Total stockholders’ deficit | (17,261) | (12,761) |
| | |
Total liabilities and stockholders’ deficit | $ 24 | $ 24 |
| | |
The accompanying notes are an integral part of these financial statements
MED CONTROL, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)
| | Three months ended October 31, 2009 | Three months ended October 31, 2008 | From inception (July 1, 2008) through October 31, 2009 |
| | | | |
REVENUE | | $ - | $ - | $ - | |
| | | | | |
EXPENSES | | | | | |
General and administrative | | - | (1,089) | (5,371) | |
Professional fees | | (4,500) | (4,750) | (21,700) | |
Total expenses | | (4,500) | (5,839) | (27,071) | |
| | | | | |
NET LOSS | | $ (4,500) | $ (5,839) | $ (27,071) | |
| | | | | | |
BASIC NET LOSS PER SHARE | | $ (0.00) | $ (0.00) | | | |
| | | | | | |
WEIGHTED AVERAGE NUMBER | | | | | | |
| OF COMMON SHARES | | | | | | |
| OUTSTANDING-BASIC | | 6,190,500 | 6,017,578 | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements
MED CONTROL, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS’ DEFICIT
FROM INCEPTION (JULY 1, 2008) TO OCTOBER 31, 2009
(Unaudited)
| Common Stock | Additional | Deficit accumulated during the | Total |
Number of shares | Amount | paid in capital | development stage | stockholders’ deficit |
| | | | | |
Balance July 1, 2008 | - | $ - | $ - | $ - | $ - |
| | | | | |
Common stock issued for cash at $0.001 | | | | | |
per share July 1, 2008 | 6,000,000 | 6,000 | - | - | 6,000 |
Net loss | | | | (2,722) | (2,722) |
| | | | | |
Balance July 31, 2008 | 6,000,000 | 6,000 | - | (2,722) | 3,278 |
| | | | | |
Common stock issued for cash at $0.02 per share – October/November 2008 | 190,500 | 190 | 3,620 | - | 3,810 |
Net loss | | | | (19,849) | (19,849) |
| | | | | |
Balance July 31, 2009 | 6,190,500 | $ 6,190 | $ 3,620 | $ (22,571) | $ (12,761) |
| | | | | |
Net loss | | | | (4,500) | (4,500) |
| | | | | |
Balance October 31, 2009 (unaudited) | 6,190,500 | $ 6,190 | $ 3,620 | $ (27,071) | $ (17,261) |
The accompanying notes are an integral part of these financial statements
MED CONTROL, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months ended October 31, 2009 | Three Months ended October 31, 2009 | From inception (July 1, 2008) through October 31, 2009 |
| | | |
| | | |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net loss | $ (4,500) | $ (5,839) | $ (27,071) |
Changes in assets and liabilities | | | |
Accounts payable and accrued liabilities | 1,000 | 500 | 7,500 |
NET CASH USED IN OPERATING ACTIVITIES | (3,500) | (5,339) | (19,571) |
| | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Due to related party | 3,500 | 400 | 9,785 |
Issuance of common stock | - | - | 9,810 |
| | | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 3,500 | 400 | 19,595 |
| | | |
NET INCREASE (DECREASE) IN CASH | - | (5,939) | 24 |
| | | |
CASH, BEGINNING OF PERIOD | 24 | 6,000 | - |
| | | |
CASH, END OF PERIOD | $ 24 | $ 61 | $ 24 |
| | | | |
| | | | | |
The accompanying notes are an integral part of these financial statements
MED CONTROL, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
October 31, 2009
(Unaudited)
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Med Control, Inc. (the Company”) was incorporated on July 1, 2008 in the State of Nevada and established a fiscal year end of July 31. The Company is a development stage enterprise organized to help elderly persons to get a healthier life by providing easy-handling and reliable products. The main intended product is called “Med Time”, an electronic and portable device aimed to control the right amount and the schedule of the medications which an elderly person has to take. The Company is currently in the development stage as defined in SFAS No. 7. All activities of the Company to date relate to its organization, initial funding and share issuances.
The financial information is unaudited. In the opinion of management, all adjustments necessary to present fairly the financial position as of October 31, 2009 and the results of operations, stockholders' deficit and cash flows presented herein have been included in the financial statements.
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Regulation S-X. Accordingly, they 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 considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the three month period ended October 31, 2009, are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2010. For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for the year ended July 31, 2009.
The Company has evaluated subsequent events through November 24, 2009, the date which the financial statements were available to be issued. The Company has determined that there were no such events that warrant disclosure or recognition in the financial statements.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements present the balance sheets, statements of operations, stockholders' equity (deficit) and cash flows of the Company. These financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States. The Company’s functional currency is U.S. dollars.
Going concern
The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have cash nor material assets, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company has a deficit accumulated since inception (July 1, 2008) through October 31, 2009 of ($27,071). The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern. The financials statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the company cannot continue in existence.
The Company is funding its initial operations by way of issuing Founder’s shares. As of October 31, 2009, the Company had issued 6,000,000 Founder’s shares at $0.001 per share for net receivable funds to the Company of $6,000 and 190,500 common shares at $0.02 per share for net receivable funds of $3,810.
MED CONTROL, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
October 31, 2009
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The officers and directors have committed to advancing certain operating costs of the Company.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Income Taxes
The Company follows the liability method of accounting for income taxes in accordance with Statements of Financial Accounting Standards (“SFAS”) No.109, “Accounting for Income Taxes” and clarified by FIN 48 “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.” Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.
Net Loss per Share
Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive loss per share reflects the potential dilution of securities that could share in the losses of the Company. Because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.
Stock-based Compensation
The Company has not adopted a stock option plan and has not granted any stock options. Accordingly no stock-based compensation has been recorded to date.
Fair Value of Financial Instruments
In accordance with the requirements of SFAS No. 107 and SFAS No. 157, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.
NOTE 3 – STOCKHOLDERS’ DEFICIT
The Company is authorized to issue an aggregate of 75,000,000 common shares with a par value of $0.001 per share. No preferred shares have been authorized or issued.
As of October 31, 2009, the Company has not granted any stock options and has not recorded any stock-based compensation.
MED CONTROL, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
October 31, 2009
(Unaudited)
NOTE 3 – STOCKHOLDERS’ DEFICIT (continued)
On July 1, 2008, the sole Director purchased 6,000,000 shares of the common stock in the Company at $0.001 per share for $6,000.
During the month of September 2008, the Company sold 20,000 common shares at $0.02 per share for $400.
During the month of October 2008, the Company sold 113,000 common shares at $0.02 per share for $2,260.
During the month of November 2008, the Company sold 57,500 common shares at $0.02 per share for $1,150.
NOTE 4 – RELATED PARTY TRANSACTIONS
As of October 31, 2009 and July 31, 2008, the Company received advances from a Director in the amount of $9,785 and $6,285, respectively to pay for incorporation costs and filing fees and other expenses. The amounts due to the related party are unsecured and non-interest bearing with no set terms of repayment.
Item 2. Management`s Discussion and Analysis of Financial Condition and Results of Operations
This section of this report 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, which apply only as of the date of this report. These forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
Overview
MED CONTROL, INC. ("Med Control", "the Company", “our” or "we") was incorporated in the State of Nevada as a for-profit company on July 01, 2008. The Company is a development stage company whose mission is to help elderly people get a healthier life, by providing easy-handling and reliable products. Our main intended product is called “Med Time”, an electronic and portable device aimed to control the doses and schedules of medications taken by elderly individuals.
Plan of Operation
The Company has not yet generated any revenue from its operations. As of the fiscal quarter ended October 31, 2009, we had $24 of cash on hand. We incurred operating expenses in the amount of $4,500 for the quarter ended October 31, 2009. These operating expenses were comprised of professional fees and office and general expenses.
Our current cash holdings will not satisfy our liquidity requirements and we will require additional financing to pursue our planned business activities. We have registered 2,500,000 shares of our common
stock for sale to the public. Our registration statement became effective on September 26, 2008 and we are in the process of seeking equity financing to fund our operations over the next 12 months.
Management believes that if subsequent private placements are successful, we will generate sales revenue within the following twelve months thereof. However, additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.
If Med Control is unsuccessful in raising the additional proceeds through a private placement offering it will then have to seek additional funds through debt financing, which would be very difficult for a new development stage company to secure. Therefore, the company is highly dependent upon the success of the anticipated private placement offering described herein and failure thereof would result in Med Control having to seek capital from other resources such as debt financing, which may not even be available to the company. However, if such financing were available, because Med Control is a development stage company with no operations to date, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing and determine whether the business could sustain operations and growth and manage the debt load. If Med Control cannot raise additional proceeds via a private placement of its common stock or secure debt financing it would be required to cease business operations. As a result, investors in Med Control common stock would lose all of their investment.
After raising enough funds the following steps would be necessary to be accomplished in order for Med Control to become fully operational:
| • | Develop the Med Time prototype and do all the necessary tests including the regulation research. Over the subsequent months, Med Control plans to roll a market research before starting the manufacturing process of the products. This would help to get more information and a better perspective of the possible success of Med Time in the market. This phase would take approximately 6 months. |
| • | After getting the approval of the prototype and all the information necessary for the product success is checked, we should develop a manufacturing plan. |
| • | Concurrently, Med Control plans to start the development of the website. Management has estimated the time frame to accomplish all these tasks to be about 4 months. |
| • | The future success and possible expansion of the business, beyond the initial development stages, as described above, would require significant well planned sales strategy, which we will also adapt accordingly with the results of the market research. These efforts may include negotiations of partnerships with doctors and retirement houses. We intend to devote about 2 months for this stage. |
We do not currently have any employees and management does not plan to hire employees at this time. We do not expect the purchase or sale of any significant equipment and have no current material commitments.
Off Balance Sheet Arrangement
The company is dependent upon the sale of its common shares to obtain the funding necessary to carryout its business plan. Our President, Eliane Mayumi Kato, has undertaken to provide the Company with operating capital to sustain its business over the next twelve month period, as the expenses are incurred, in the form of a non-secured loan. However, there is no contract in place or written agreement securing these agreements. Investors should be aware that Mrs. Kato’s expression is neither a contract nor agreement between her and the company.
Other than the above described situation the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's 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
Not required.
Item 4. Controls and Procedures
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as required by Sarbanes-Oxley (SOX) Section 404 A. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
As of October 31, 2009, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in 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 control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by the
Company's Chief Financial Officer in connection with the review of our financial statements as of October 31, 2009 and communicated the matters to our management.
Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not affect the Company's financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures can affect the Company's results and its financial statements for the future years.
We are committed to improving our financial organization. As part of this commitment, we will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and ii) Preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company's Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result in proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turn over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the company may encounter in the future.
We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during the small business issuer's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.
No director, officer, or affiliate of the issuer and no owner of record or beneficiary of more than 5% of the securities of the issuer, or any security holder is a party adverse to the small business issuer or has a material interest adverse to the small business issuer.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote Security Holders
Item 5. Other Information
Item 6. Exhibits
3.1 | Articles of Incorporation [1] |
31.2 | Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer |
31.2 | Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer * |
32.2 | Section 1350 Certification of Chief Financial Officer ** |
32.2 | Section 1350 Certification of Chief Financial Officer ** |
[1] | Incorporated by reference from the Company’s filing with the Commission on September 10, 2008. |
* | Included in Exhibit 31.1 |
** | Included in Exhibit 32.1 |
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MED CONTROL, INC.
| BY: | /s/ Eliane Mayumi Kato |
Eliane Mayumi Kato
President, Treasurer, Principal Executive Officer,
Principal Financial Officer and sole Director
Dated: December 10, 2009
