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QUINT MEDIA INC. - 10-K - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

June 13, 2014

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this annual report on Form 10-K.

Liquidity and Capital Resources

Our financial condition at February 28, 2014 and February 28, 2013 for the respective items are summarized below.

We have suffered recurring losses from inception. Our ability to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our directors and shareholders, the continued issuance of equity to new or existing shareholders, and our ability to achieve and maintain profitable operations.

Working Deficit February 28, February 28, 2014 2013 Current Assets $ 17,885$ 535,119 Current Liabilities 970,083 724,110 Working Deficit $ (952,198 )$ (188,991 )



From February 28, 2013 to February 28, 2014, our working deficit increased by approximately $763,207, cash on hand decreased $499,527, mainly due to the acquisition and development of the SlickX and Flawsome assets and the development of Exley, cash payments totaling $152,300 and cash used to fund our operations of approximately $372,227.

Cash Flows

February 28, February 28, 2014 2013 Cash used in operating activities $ (372,227 )$ (637,621 ) Cash (used in) provided by investing activities (152,300 ) 891,965 Cash provided by financing activities 25,000 -



Net increase (decrease) in cash and cash equivalents $ (499,527 )$ 254,344

Cash Used in Operating Activities

Our cash used in operating activities for the year ended February 28, 2014, compared to our cash used in operating activities for the year ended February 28, 2013, decreased $265,394, mainly due to the cessation of the pharmaceutical business that was operating in the prior year.

Cash (Used in) Provided By Investing Activities

Our cash used by financing activities for the year ended February 28, 2014 was $152,300, due to the acquisition of SlickX and Flawsome assets for cash of $50,000 and $102,300. Our cash provided in financing activities of $891,965 for the year ended February 28, 2013 was a result of the sale of an investment from discontinued operations.

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Cash Provided By Financing Activities

Our cash provided by financing activities for the year ended February 28, 2014 was $25,000, compared to none for the year ended February 28, 2013. During the year ended February 28, 2014, we received $150,000 from the issuance of two short-term promissory notes, repaid $200,000 of short-term promissory notes and sold 375,000 shares of common stock for cash of $75,000.

Cash Requirements

We estimate our operating expenses, excluding stock based compensation and amortization expense, and working capital requirements for the next 12 months to be as follows: Expense Amount Bank charges and interest $ 5,000 Filing fees 10,000 Investor relations 120,000 Legal and accounting fees 220,000 Licenses and permits 50,000 Marketing expense 150,000 Insurance expense 100,000 Personnel and consulting expense 500,000 Transfer agent fees 10,000



Other general & administrative expense 95,000 Total

$ 1,260,000



Our management does not believe that our current capital resources will be adequate to continue operating our company and maintaining our business strategy for more than 12 months. Accordingly, we will have to raise additional capital in the near future to meet our working capital requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.

Results of Operations Operating Expenses



During the year ended February 28, 2014, we incurred operating expenses totaling $534,230 compared with $323,486 for the year ended February 28, 2013. The increase of $210,744 in operating expenses is attributable to an increase of $113,034 in professional fees, $52,093 in website operations expense, $17,440 in amortization of capitalized website development costs and $28,177 in general and administrative expenses.

Net Loss

During the year February 28, 2014, we realized net loss from continuing operations of $565,922 compared with a net loss from continuing operations of $369,314 for the year ended February 28, 2013. The $196,608 increase in net loss is attributable to a $210,744 increase in operating expenses, partially offset by a $14,112 decrease in interest expense. We realized a loss of $191,481 from discontinued operations related to the pharmaceutical business during the year ended February 28, 2014, compared to income from discontinued operations of $53,376 during the year ended February 28, 2013.

Going Concern

Our financial statements and information for the period ended February 28, 2014 have been prepared by our management on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We have decided not to focus on the pharmaceutical industry and we are looking to divest our pharmaceutical assets. We have generated limited revenues to date and a net loss of $757,403 for the year ended February 28, 2014 and a cumulative deficit of $3,324,667 at February 28, 2014. We cannot provide any assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional funds through the sale of debt and/or equity.

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On February 28, 2014, we had cash and cash equivalents of $12,957. Our management does not believe that our current capital resources will be adequate to continue operating our company and maintaining our business strategy for more than 12 months. If we are unable to raise additional capital in the near future, we expect that we will need to curtail operations, liquidate any assets that we might own, seek additional capital on less favorable terms and/or pursue other remedial measures. Our financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Future Financing

We will require additional financing to fund our planned operations. We currently do not have committed sources of additional financing and may not be able to obtain additional financing particularly, if the volatile conditions of the stock and financial markets, and more particularly the market for early development stage company stocks persist.

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to further delay or further scale down some or all of our activities or perhaps even cease the operations of the business.

Since inception we have funded our operations primarily through equity and debt financings and we expect that we will continue to fund our operations through the equity and debt financing, either alone or through strategic alliances. If we are able to raise additional financing by issuing equity securities, our existing stockholders' ownership will be diluted. Obtaining commercial or other loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his, her, or its investment in our common stock. Further, we may continue to be unprofitable.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.


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Source: Edgar Glimpses


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