10-Q 1 numedform10qmarch14.htm QUARTERLY REPORT ON FORM 10Q FOR THE QUARTER ENDED MARCH 31, 2014 <page> 1

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended March 31, 2014


[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


For the transition period from __________ to __________


Commission File Number 000-54808



NU-MED PLUS, INC.

(Exact name of registrant as specified in its charter)


Utah

45-3672530

(State or other jurisdiction of

(IRS Employer Identification No.)

incorporation or organization)


455 East 500 South, Suite 205, Salt Lake City, Utah    84111

 (Address of principal executive offices)

 (Zip Code)


(801) 746-3570

 (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 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 [   ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).                                                                                                            Yes [X]  No  [  ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large Accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer  ¨ (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 [  ]   No [X]


Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

32,034,679 shares of $0.001 par value common stock on May 12, 2014




TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

2

ITEM 1. FINANCIAL STATEMENTS

4

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

12

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

15

ITEM 4.  CONTROLS AND PROCEDURES.

15

PART II - OTHER INFORMATION

15

ITEM 1.  LEGAL PROCEEDINGS

15

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

15

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

16

ITEM 4.  MINE SAFETY DISCLOSURE

16

ITEM 5.  OTHER INFORMATION.

16

ITEM 6.  EXHIBITS

16

SIGNATURES

18






Part I - FINANCIAL INFORMATION


Item 1. Financial Statements

NU-MED PLUS, INC.

FINANCIAL STATEMENTS

(UNAUDITED)

March 31, 2014


The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted.  However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made.  These financial statements should be read in conjunction with the accompanying notes, and with the historical financial information of the Company.






Nu-Med Plus, Inc.

(A Development Stage Company)

Financial Statements


Table of Contents




 

 

Page No.

 

 

 

Balance Sheets

 

4

 

 

 

Statements of Operations

 

5

 

 

 

Statements of Cash Flows

 

6

 

 

 

Notes to the Financial Statements

 

7

 

 

 








Nu-Med Plus, Inc.

(A Development Stage Company)

Balance Sheets


 

 

 

 

March 31,

December 31,

 

 

 

 

2014

(unaudited)

2013

ASSETS

 

 

 

 

Current assets

 

 

 

 

Cash

 

 $              7,750

$           13,229

 

Prepaid expenses, current

 

315,200

17,995

 

 

Total current assets

 

322,950

31,224

Long-term assets

 

 

 

 

Property and equipment, net

 

             41,510

43,242

 

Prepaid expenses, long-term

 

137,057

21,556

 

 

Total long-term assets

 

178,567

64,798

 

 

 

 

 

 

 

 

Total assets

 

 $          501,517

$           96,022

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

Current liabilities

 

 

 

 

Accounts payable

 

$               2,573

$                 116

 

Accrued Expense

 

24,785

20,862

 

Convertible Promissory Note, Due on demand

 

230,100

199,384

 

 

Total current liabilities

 

       257,458

220,362

 

 

 

 

 

 

Stockholders' equity (deficit)

 

 

 

 

Preferred stock; $0.001 par value per share; 10,000,000 authorized; no shares issued and outstanding, respectively.

 

-



-

 

Common stock; $0.001 par value per share; 90,000,000 authorized; 32,034,679 and 29,972,346 shares issued and outstanding, as of March 31, 2014 and December 31, 2013 respectively.

 

        32,035



29,972

 

Additional paid-in capital

 

1,024,325

404,063

 

Stock subscription receivable

 

-

40,300

 

Deficit accumulated during the development stage

 

(812,301)

(598,675)

 

 

Total stockholders' equity (deficit)

 

244,059 

(124,340)

 

 

 

 

 

 

 

Total liabilities and stockholders' equity (deficit)

 $          501,517

$           96,022

 

 

 

 

 

 

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

 


4






Nu-Med Plus, Inc.

(A Development Stage Company)

Statements of Operations

(unaudited)


 

 

 

 

Three months ended

Three months ended

From Inception on October 19, 2011 Through

 

 

 

 

March 31, 2014

March 31, 2013

March 31, 2014

 

 

 

 

 

 

 

Revenue

 

 $                      -   

 $                      -   

 $                          -   

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

General and administrative expense

 

18,800

5,247

53,017

 

Payroll expense

 

15,131

11,635

126,319

 

Rent expense

 

4,164

4,164

35,312

 

Professional/Consulting Fees

 

139,161

58,771

453,083

 

Depreciation expense

 

1,732

699

6,763

 

 

Total operating expenses

 

178,988

80,516

674,494

 

 

 

 

 

 

 

 

 

Operating Loss

 

(178,988)

(80,516)

(674,494)

 

 

 

 

 

 

 

Other income/expense

 

 

 

 

 

Interest income

 

2

-

21

 

Interest expense

 

(34,639)

(2,142)

(137,828)

 

 

Total other income/expense

 

(34,637)

(2,142)

(137,807)

 

 

 

 

 

 

 

Income tax expense

 

                     -   

                     -   

                     -   

 

 

 

 

 

 

 

 

Net loss

 

$       (213,625)

$         (82,658)

$           (812,301)

 

 

 

 

 

 

 

 

Basic and diluted loss per share

 

$              (0.00)

$              (0.00)

 

 

Weighted average common shares

outstanding - basic and diluted

 

31,743,109

26,804,012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 



-5-





Nu-Med Plus, Inc.

(A Development Stage Company)

Statements of Cash Flows

(unaudited)


 

 

 

Three months ended March 31, 2014

Three months ended March 31, 2013

From Inception on October 19, 2011 through March 31, 2014

Cash flows from operating activities:

 

 

 

 

Net loss

$(213,625)

$  (82,658)

$        (812,301)

 

Adjustment to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Depreciation

1,732

699

6,763

 

 

Stock for service

127,293

-

250,650

 

 

Services rendered for subscription receivable

-

-

13,000

 

 

Services contributed by officers

3,624

-

10,156

 

 

Amortization of the Beneficial Conversion Feature

30,716

-

115,050

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

      Decrease in prepaid expenses

-

42,543

100,000

 

 

      Increase in accounts payable

2,458

1,389

2,574

 

 

      Increase in accrued expense

3,923

1,912

25,285

 

 

Net cash used in operating activities

(43,879)

(36,115)

       (288,823)

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

-

-

             (48,273)

 

 

Net cash used in investing activities

-

-

             (48,273)

Cash flows from financing activities

 

 

 

 

Proceeds from common stock

38,400

-

164,746

 

Proceeds from loan payable

-

39,100

182,008

 

Payments on loan payable

-

-

(1,908)

 

 

Net cash provided by financing activities

38,400

39,100

344,846

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash

(5,479)

2,985

7,750

 

 

 

 

 

 

Cash at beginning of period

13,229

731

                        -   

 

 

 

 

 

 

Cash at end of period

$        7,750

$      3,716

 $              7,750

Supplemental schedule of cash flow information

 

 

 

 

Cash paid for interest

 $              -

$             -

 $                      -

 

Cash paid for income taxes

$               -

$             -

 $                      -

Supplemental schedule of non-cash financing activities

 

 

 

 

During the three months ended March 31, 2014, the Company issued 1,800,000 shares of common stock for services provided by a consultant. The Company also issued 262,333 common shares valued at $0.30 per share for a total value of $78,700 in exchange for a $78,700 stock subscription payable.

 

 

 

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



-6-





Nu-Med Plus, Inc.

(A Development Stage Company)

Notes to the Financial Statements


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS


Nu-Med Plus, Inc. is an emerging growth early stage medical device company principally engaged in the design, innovation, development, enhancement and commercialization of beginning, early, and selective later-stage quality medical devices. The Company's immediate focus is on a Nitric Oxide powder formulation that is 99% pure-with one year shelf life, a "desktop" generator device with controls plus safety monitors built in that delivers inhaled Nitric Oxide to replace expensive pressurized canisters and a compact mobile rechargeable device to deliver inhaled Nitric Oxide gas. The Company is incorporated in Utah.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


a. Accounting Method


The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments which are necessary for a fair statement of the results for interim periods have been included.


b. Revenue Recognition


The Company is currently developing its products. It is anticipated that revenue will be recognized on product sales once the product has been shipped to the customers, persuasive evidence of an agreement exists, the price is fixed or determinable, and collectability is reasonably assured.


c. Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.


d. Cash and Cash Equivalents


The Company considers all deposit accounts and investment accounts with an original maturity of 90 days or less to be cash equivalents.  


e. Fixed Assets


Fixed assets are stated at cost.  Expenditure for minor repairs, maintenance, and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. Expenditures, exceeding $500, for new assets or that increase the useful life of existing assets are capitalized.  Depreciation is computed using the straight-line method.  The lives over which the fixed assets are depreciated are five to seven years.



-7-





Nu-Med Plus, Inc.

(A Development Stage Company)

Notes to the Financial Statements


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS (Continued)


f. Earnings per Share


The computation of earnings per share of common stock is based on the weighted average number of shares outstanding during the period of the financial statement as follows:


 

For the Three-Months Ended

For the Three-Months Ended

 

March 31, 2014

March 31, 2013

 

 

 

Net loss (numerator)

 $                (213,625)

 $                   (82,658)

Shares (denominator)

          31,743,109

26,804,012

Net loss per share amount

 $                      (0.00)

 $                       (0.00)


Diluted earnings per share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. During the year there were no outstanding common stock equivalents. Furthermore, due to the net loss for the year, common stock equivalents would not be included in the calculation of the net loss per common share, as their inclusion would be anti-dilutive.


g. Income Taxes


Deferred taxes are provided on an asset and liability approach whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis.  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.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


h. Equity Instruments Issued for Non-Cash Items


In accordance with ASC Topic 718, the Company records equity instruments issued for non-cash items at the grant-date fair value of the equity instruments issued.


NOTE 3 - GOING CONCERN


The Company anticipates that the funds on hand as of March 31, 2014, will not be sufficient and funding through the sale of equity capital and short term related party and other shareholder loans in order to meet the planned expenditures for development, operations, and administrative cost over the next 12 months will be required. Planned expenditures are approximately $220,000 for 2014. In April 2014, the Company entered into stock subscription agreements with two investors for them to purchase up to $121,500 of common stock at a price of $0.30 per share. As such, the Company is funded through September 2014 and are in negotiations with  other investors to take the Company through 2014. Management will adjust any salaries and expenditures based on the need for successful continuous operations. If plans to obtain further financing prove to be insufficient to fund operations, continued viability could be at risk. These factors raise substantial doubt about the Company's ability to continue as a going concern.



-8-





Nu-Med Plus, Inc.

(A Development Stage Company)

Notes to the Financial Statements


NOTE 4 - FIXED ASSETS


Fixed assets and related accumulated depreciation consisted of the following at March 31, 2014, and December 31, 2013:

 

March 31, 2014

 

December 31, 2013

 

 

 

 

 

 

Equipment

$                   48,273

 

$                      48,273

 

Accumulated depreciation

(6,763)

 

(5,031)

 

 

 

 

 

 

     Total Fixed Assets

$                    41,510

 

$                      43,242

 


Depreciation expense for the three-months ended March 31, 2014 and 2013, was $1,732 and $699, respectively.


NOTE 5 - PREFERRED STOCK


On October 19, 2011, the Company filed Articles of Incorporation with the State of Utah so as to authorize 10,000,000 shares of preferred stock having a par value of $0.001 per share. No preferred shares are issued or outstanding at March 31, 2014.


NOTE 6 - COMMON STOCK


On October 19, 2011, the company filed Articles of Incorporation with the State of Utah so as to authorize 90,000,000 shares of common stock having a par value of $0.001 per share. Immediately after authorization, 13,000,000 shares of the common stock were issued, at par, to Company's founding members. This issuance also resulted in the recognition of a $13,000 stock subscription receivable as of December 31, 2011.


On June 30, 2012, the $13,000 stock subscription was relieved, in full, in exchange for 2012 compensation paid to the Company's three founding members.


On January 19, 2012, the Company initiated a private placement through which it received gross proceeds of $87,563 for the issuance, on April 18, 2012, of 5,843,500 common shares valued at $0.015 per share. Stock issuance costs incurred in connection with this private placement totaled $3,006.


On April 18, 2012, the Company also issued 7,860,512 common shares valued at $0.015 per share for a total value of $117,908 to consultants and contractors for future services to be provided from the date of issuance through April 1, 2016.


On October 2, 2012, the Company received $1,500 for 100,000 common shares valued at $0.015 per share, issued November 15, 2012.


On September 2, 2013, the Company issued 3,000,000 common shares valued at $0.015 per share for a total value of $45,000 to a consultant, as compensation, for prior services.


On October 28, 2013, the Company issued 168,334 common shares valued at $0.30 per share for a total value of $50,500 in exchange for a $50,000 note payable and for $500 in accrued interest.



-9-





Nu-Med Plus, Inc.

(A Development Stage Company)

Notes to the Financial Statements


NOTE 6 - COMMON STOCK (Continued)


In November and December of 2013, the Company received $40,300 for a Stock Subscription Payable. In January and February of 2014, the Company received $38,400 for a Stock Subscription Payable. The Stock Subscription Payable was relieved in February 2014 by the issuance of 262,333 shares of common stock at a value of $0.30 per share.


On January 7, 2014, the Company issued 1,800,000 common shares valued at $0.30 per share for a total value of $540,000 to a consultant, as compensation, for current and future services to be provided from the date of issuance through January 7, 2015.


NOTE 7 - COMMITMENTS AND CONTINGENCIES


Operating Lease Obligations


The Company leases office space for which it incurred lease payments, on a month to month basis, beginning in February of 2012 for $1,000 per month. The Company also had a one year lease on lab space beginning April 1, 2012 and ending March 31, 2013, with a monthly lease payment of $388. Pursuant to the lease agreement, at the end of one year, the term is month to month at the same rate of $388 per month.


NOTE 8 - RELATED PARTY TRANSACTIONS


Contributed Services


During the three-months ended March 31, 2014 and 2013, the Company officers contributed services to the Company in the amount of $3,624 and $0, respectively. The Company officers received no compensation and have no expectation of compensation for these services, either now or in the future, and waive their rights to any such compensation.  


Compensation of Officers


In October of 2011, 13,000,000 shares of common stock were issued to the Company's three founding members. The issuance resulted in the recognition of a $13,000 stock subscription receivable as of December 31, 2011. On June 30, 2012, the $13,000 stock subscription was relieved, in full, in exchange for 2012 compensation paid to these founding members.


Additionally, for 2012 the Company agreed to compensate its Chief Executive Officer $3,600 per month. Beginning in January 2013 the Company agreed to compensate its CEO $3,550 per month.


NOTE 9 - LOAN PAYABLE


The Company received proceeds from a loan in the amount of $1,700 during 2011. This loan was due upon demand, had no stated interest rate, and was retired, in full, by payment in the second quarter of 2012. No interest was paid or recognized, during the year, due to the immateriality of such interest.




-10-





Nu-Med Plus, Inc.

(A Development Stage Company)

Notes to the Financial Statements


NOTE 9 - LOAN PAYABLE (Continued)


The Company received, during the year ended December 31, 2013, additional proceeds from a loan in the amount of $91,600. The Lender agreed to loan the Company up to $10,000 per month effective September 2012, for up to one year. This loan was memorialized in writing on September 30, 2013. The loan is considered to be a demand note, with a maturity 30 days from the receipt of demand and the holder may not make demand for payment until six month from the date thereof. On December 31, 2013, the Company accrued additional interest on this note, at a rate of 8.0% in the amount of $8,321 for the year. The total loan balance and accrued interest is $130,100 and $8,727 respectively. The note contains a conversion option. The conversion price is one share for each $0.01 of principal and accrued but unpaid interest of the note subject to a beneficial ownership limitation. That limitation prevents the holder from owning more than 4.9% of the number of shares of the common stock outstanding after conversion. If the holder's ownership has not previously been reduced to less than 4.9% of the number of shares outstanding, then the limitation shall be 9.9%.


On September 4, 2013 the Company entered into an agreement with a shareholder wherein shareholder would provide financing to the Company for two months at $25,000 per month. The note is due six months from the date it is presented and surrendered to the Company and bears an interest rate of 8% per annum. In September and October 2013, the Company received two $25,000 loans for a total of $50,000, and on  October 28, 2013, the outstanding balance of $50,000 along with accrued interest of $500 was converted into common stock at a value of $0.30 per share.


On November 14, 2012, the Company issued a $100,000 convertible promissory note to a consultant as compensation for services provided and to be provided during the period April, 1, 2012, through March 31, 2013. This note is due on demand, bears annual interest at 5.5%, and is convertible into shares of common stock at a conversion price to be agreed upon immediately prior to conversion. On September 27, 2013, the Company amended the note to include the conversion price which is one share for each $0.01 of principle and accrued but unpaid interest of the note. Of the original $100,000, $75,000 had been expensed as part of the professional/consulting fees on the statement of operations during the year ended December 31, 2012, and the remaining $25,000 was expensed ratably using the straight-line method over the last three months in the service period. On March 31, 2014, the Company has accrued additional interest on this note in the amount of $1,356 for the quarter ended March 31, 2014. As of March 31, 2014, the company accrued interest on this note in the total amount of $10,985.


The Company has evaluated these convertible under the provisions of ASC Topic 815 and has concluded that neither of the convertible contains an embedded derivative requiring bifurcation from the host contract. Therefore, we have accounted for the conversion features of these instruments in accordance with ASC Topic 470. Accordingly, we have recognized the value of beneficial conversion features in these instruments as the difference between the conversion price and the fair value of the Company’s common stock on the date of the transaction.  As a result the Company has recognized debt discounts resulting from these beneficial conversion features amounting to $50,000 and $65,050, respectively, for the November 14, 2012 and September 27, 2013 notes.  The value of these discounts is to be accreted to the loans over the remaining contractual lives of the loans.  Accretion recognized as additional interest expense during the periods ended March 31, 2014 and December 31, 2013 was $30,716 and $84,334, respectively. The ending value of the debt discount as of March 31, 2014 and December 31, 2013 was $0 and $30,716, respectively.


NOTE 10 - SUBSEQUENT EVENTS


The company has evaluated subsequent events in accordance with ASC topic 855 and has identified the following subsequent events:



-11-





Nu-Med Plus, Inc.

(A Development Stage Company)

Notes to the Financial Statements


NOTE 10 - SUBSEQUENT EVENTS (Continued)


In April 2014, the Company entered into stock subscription agreements with two investors for them to purchase up to $121,500 of common stock at a price of $0.30 per share. The total cash proceeds to date from these agreements are $29,000.





-12-





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


Special Note Regarding Forward-Looking Statements


Certain statements in this Report constitute “forward-looking statements.”  Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, among others, uncertainties relating to general economic and business conditions; industry trends; changes in demand for our products and services; uncertainties relating to customer plans and commitments and the timing of orders received from customers; announcements or changes in our pricing policies or that of our competitors; unanticipated delays in the development, market acceptance or installation of our products and services; changes in government regulations; availability of management and other key personnel; availability, terms and deployment of capital; relationships with third-party equipment suppliers; and worldwide political stability and economic growth. The words “believe,” “expect,” “anticipate,” “intend” and “plan” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.


Critical Accounting Policies and Estimates


The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and accompanying notes.  Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.  

 

The Company’s accounting policies are more fully described in Note 2 of the audited financial statements in our recently filed Form 10-K.  As discussed in Note 2, the preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about the future events that affect the amounts reported in the financial statements and the accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.  Actual differences could differ from these estimates under different assumptions or conditions.  The Company believes that the following addresses the Company’s most critical accounting policies.


We recognize revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB 104”).  Under SAB 104, revenue is recognized at the point of passage to the customer of title and risk of loss, when there is persuasive evidence of an arrangement, the sales price is determinable, and collection of the resulting receivable is reasonably assured.


Our policy for our allowance for doubtful accounts is maintained to provide for losses arising from customers’ inability to make required payments.  If there is deterioration of our customers’ credit worthiness and/or there is an increase in the length of time that the receivables are past due greater than the historical assumptions used, additional allowances may be required.


We account for income taxes in accordance with FASC 740-20, “Accounting for Income Taxes”.   Under FASC 740-20, deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets will be reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized.



-13-







BUSINESS OVERVIEW


NU-MED PLUS, INC., a Utah corporation (“NU-MED” or the “Company”) was incorporated in October 2011 in the state of Utah as an early stage, emerging growth company, to develop, manufacture and market new technologies in the medical device field.  NU-MED’s immediate focus is on the creation of a Nitric Oxide powder formulation along with a bedside Nitric Oxide generator and a mobile rechargeable device to deliver Nitric Oxide gas. NU-MED is headquartered in Salt Lake City, Utah.  


Business


The mission of NU-MED is to design, develop, and market technologies in the medical device field. Our technologies will focus on market niches in high growth trend areas.  We hope each developed technology will fill a current need in medical procedures by improving upon an existing technology or device, or by designing a device to serve a need that is clearly defined and acknowledged by medical professionals.


NU-MED intends to become a medical device company principally engaged in the design, innovation, development, enhancement and commercialization of beginning, early, and selective later-stage quality medical devices. Our immediate focus is on the creation of a Nitric Oxide powder formulation, a hospital bedside Nitric Oxide (“NO”) generator and a mobile rechargeable device to deliver Nitric Oxide gas to offer solutions to hospitals, health systems and the medical community throughout the world.


Prior to the founding of NU-MED PLUS, our core team Jeff Robins, William Moon,  and Dr. Craig Morrison investigated researched and worked on initial formulations of a conceptual product to convert Nitric Oxide from a proprietary formulation to a gas used to in the medical field. Based on our team’s backgrounds in the field of mechanical engineering, chemistry and medicine it was determined a potential niche market existed and the conceptual proprietary product could possibly be created.  From this initial research and some initial testing, our team believed we could create a mechanical device that could deliver Nitric Oxide to medical patients and use a new formulation of Nitric Oxide that, when combined with the new delivery device, could be accomplished in a more economical method than those currently in existence.  Recognizing the experimental nature of the intended product and the time and money commitments to get such a product to market, the team spent almost a year working on various initial equipment and formulizations before determining they could not proceed further without some additional capital.  From this realization of the need for capital, NU-MED was incorporated and an initial private placement was completed to raise some capital to create a small lab and purchase equipment, including chemicals to start working on testing the theories of the founding team. Even with almost a year of working on the proposed product and formulation, NU-MED recognizes the difficulty in developing a medical product and that other companies could expend far more resources on a similar solution and beat NU-MED to the market.  Investors in NU-MED face tremendous risk and would be betting on current management and its development staff which have not had prior success in developing and marketing medical products.  Although management believes they are developing a unique and economical solution for Nitric Oxide delivery, management acknowledges they have not developed medical products before and all of their prior development work has been for other companies and this will be the first time management and their team have tried to do so without the support of a large organization and such organizations funding capabilities.  Additionally, because of the lack of funding, several of the team members, including our the person assisting in helping to formulate a powder Nitric Oxide, Tom Tait, are acting as consultants to NU-MED as they continue to work for other organizations that have the ability to pay them a salary.  NU-MED has verified that all consultants, such as Tom Tait, are permitted to work on NU-MED’s project without violating other employment commitments.  Even with the ability to work on NU-MED’s project, NU-MED’s management team and consultants are not full time as they devote part of the time to other projects that have the ability to continue to pay salaries.  


The core of the product embodiment is the kinetically controlled release of nitric oxide from a chemical reaction. The mechanical means to deliver a metered dose to a patient is of secondary concern and will be addressed once the nitric oxide generation has been optimized. A research laboratory, completed in July 2012, has been equipped with



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the appropriate safety measures (negative pressure fume hood), nitric oxide analyzer, and standard lab ware to assess chemical reactions that produce nitric oxide. The initial goal is developing a kinetic control and be able to complete testing to optimize the process. Initial efforts are focusing on a proprietary mixture that will show the requisite parameters for generating nitric oxide in a controlled manner.  Once this stage of development is complete, we will move forward with additional development of the delivery system. The optimization may take an unknown direction that will necessitate changes in the anticipated design of the mechanical delivery apparatus.  Additionally, unforeseen delays, such as obtaining needed chemicals, which we experienced in September and October of 2012, can hamper development timelines.  Management believes it will take some time before a product will be finalized and testing completed.  Until a final product is completed and testing done, no assurance can be given we will be able to complete the product or achieve the costs savings for the patient.


LIQUIDITY AND CAPITAL RESOURCES


At March 31, 2014, we had assets of $501,517 with current assets of $322,950 and liabilities of $257,458. Our current assets consisted primarily of prepaid expenses in the amount of $315,200 and cash of only $7,750.  We currently do not have the cash to pay ongoing expenses and have had to rely on loans from shareholders to cover expenses. Without additional capital, we will not be able to stay in business and move our business plan forward.  We anticipate, based on our preliminary budgets, that we will need $120,000 in additional financing for the next twelve months to cover just our corporate overhead and need another $100,000 to cover ongoing product development. In April 2014, we entered into a stock subscription agreements with two investors for them to purchase up to $121,500 of common stock at a price of $0.30 per share.  The total proceeds received from the subscription agreement total $29,000 with the balance to be paid over the next three months. Since we will not have a commercial product in the next twelve months, we will have to rely on outside funding to support our operations and product development and testing efforts.  Given the financial state of NU-MED, we will not be able to seek traditional bank financing and have to rely on private stock sales as we did in 2012 as well as potential loans from investors and shareholders.  At this time, we have no commitments from any party to help fund our operations and if we are unable to raise additional capital, we will be force to shut operations until such capital can be raised or go out of business.  At this time, we cannot say the full costs to bring our proposed product to market or the timing of such commercialization.  Given the nature of our product being in the medical field, testing is very expensive and we would need more capital prior to completing the testing phase.  Any refinement or modification of the product after the prototype is developed would also require additional capital.  At this time, we will have to continue to rely on outside capital and a budget that may require adjustment as we move further in the product development phase.


RESULTS OF OPERATIONS


For the three months ended March 31, 2014, we had no revenues and expense associated with our operations of $178,988 resulted in a net loss of $213,625 compared to a net loss of $82,658 for the three months ended March 31, 2013.  The increase in net loss was the result of increased interest expense of $34,639 for the quarter ended March 31, 2014 and an increase of professional and consulting fees which increased to $139,161 for the quarter ended March 31, 2014. On January 7, 2014, the Company issued 1,800,000 common shares valued at $0.30 per share for a total value of $540,000 to a consultant, as compensation, for current and future services to be provided from the date of issuance through January 7, 2015.  Although our losses increased, we were able to rely on the use of our stock to pay consultants which helped preserve our limited cash. We anticipate losses to continue for the foreseeable future and for the losses to increase as we hire personnel and move into the development phase of our operation.  We will be dependent on outside capital to support operations for the foreseeable future and at this time do not have any commitments for additional capital.  We do not anticipate any revenue for the foreseeable future as our products are still in the development stage.


Off-Balance Sheet Arrangements.


The Company does not have any off-balance sheet arrangements and it is not anticipated that the Company will enter into any off-balance sheet arrangements.




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Forward-looking Statements


Our Company and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this Quarterly Report and other filings with the Securities and Exchange Commission and in reports to our Company’s stockholders. Management believes that all statements that express expectations and projections with respect to future matters, as well as from developments beyond our Company’s control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and business performance. There can be no assurance, however, that management’s expectations will necessarily come to pass. Factors that may affect forward- looking statements include a wide range of factors that could materially affect future developments and performance, including the following:


Changes in Company-wide strategies, which may result in changes in the types or mix of businesses in which our Company is involved or chooses to invest; changes in U.S., global or regional economic conditions, changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, which may impede our Company’s access to, or increase the cost of, external financing for our operations and investments; increased competitive pressures, both domestically and internationally, legal and regulatory developments, such as regulatory actions affecting environmental activities, the imposition by foreign countries of trade restrictions and changes in international tax laws or currency controls; adverse weather conditions or natural disasters, such as hurricanes and earthquakes, labor disputes, which may lead to increased costs or disruption of operations.


This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.


NA-Smaller Reporting Company


Item 4.  Controls and Procedures.


Evaluation of Disclosure Controls and Procedures


Our management, with the participation of our CEO and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our CEO and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our CEO and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure.

 


Changes in internal control over financial reporting


There have been no changes in internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.


PART II - OTHER INFORMATION


ITEM 1.  Legal Proceedings


None




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


Recent Sales of Unregistered Securities


On January 7, 2014, the Company issued 1,800,000 common shares valued at $0.30 per share for a total value of $540,000 to a consultant, as compensation, for current and future services to be provided from the date of issuance through January 7, 2015.


In April 2014, we entered into a stock subscription agreements with two investors for them to purchase up to $121,500 of common stock at a price of $0.30 per share.  The total proceeds received from the subscription agreement total $29,000 with the balance to be paid over the next three months.


Use of Proceeds of Registered Securities


None; not applicable.


Purchases of Equity Securities by Us and Affiliated Purchasers


During the three months ended March 31, 2014, we have not purchased any equity securities nor have any officers or directors of the Company.


ITEM 3.  Defaults Upon Senior Securities


We are not aware of any defaults upon senior securities.


ITEM 4.  Mine Safety Disclosure


NA- The Company has no mining activities.


ITEM 5.  Other Information.


On November 14, 2012, the Company issued a $100,000 convertible promissory note to SCS as compensation for services provided and to be provided during the period April, 1, 2012, through March 31, 2013. This note is due on demand, bears annual interest at 5.5%, and was convertible into shares of common stock at a conversion price to be agreed upon immediately prior to conversion. On September 27, 2013, the Company amended the note to include the conversion price which is one share for each $0.01 of principle and accrued but unpaid interest of the note. On December 31, 2013, the Company has accrued additional interest on this note in the amount of $5,500 for the year ended December 31, 2013. As of March 31, 2014, the Company accrued interest on this note in the total amount of $10,985.


ITEM 6.  Exhibits


a) Index of Exhibits:


Exhibit Table #

Title of Document

Location


3 (i)

Articles of Incorporation

Incorporated by reference*


3 (ii)

Bylaws

Incorporated by reference*


10

Stock Purchase Agreement

This Filing


10.1

Amended Consulting Contract – SCS

Incorporated by reference**




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11

Computation of loss per share

Notes to financial statements


31

Rule 13a-14(a)/15d-14a(a) Certification – CEO & CFO

This filing


32

Section 1350 Certification – CEO & CFO

This filing


101.INS

 XBRL Instance


101.XSD 

XBRL Schema


101.CAL

 XBRL Calculation


101.DEF

 XBRL Definition


101.LAB

XBRL Label


101.PRE

XBRL Presentation



*The exhibits were filed with the original Form 10 filed by NU-MED on December 10, 2012, file number 000-54808.

**The exhibit was filed on Form 8-K dated January 7, 2014.



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SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


NU-MED PLUS, INC.,

(Registrant)



May 13, 2014

By:  /s/ Jeffrey L. Robins

Jeffrey L. Robins, CEO, Principal Executive


May 13, 2014

By: /s/ Jeffrey L. Robins

       Jeffrey L. Robins, Principal Accounting Officer




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