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

July 21, 2014

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this 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 quarterly report on Form 10-Q.

Liquidity and Capital Resources

Our financial condition at May 31, 2014 and February 28, 2014 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 Capital Deficit

May 31, February 28, 2014 2014 Current Assets $ 8,946$ 17,885 Current Liabilities 1,036,780 970,083 Working Capital Deficit $ (1,027,834 )$ (952,198 )



From February 28, 2014 to May 31, 2014, our working capital deficit increased by approximately $75,636, mainly due to the use of $79,100 in cash for operations on a net loss of $93,076, partially offset by proceeds of $75,000 from a short-term note.

Cash Flows May 31, May 31, 2014 2013 Cash used in operating activities $ (79,100 )$ (37,491 ) Cash used in investing activities - (75,000 ) Cash provided by financing activities 75,000 (200,000 ) Net decrease in cash and cash equivalents $ (4,100 )$ (312,491 )



Cash Used in Operating Activities

Our cash used in operating activities for the three months ended May 31, 2014, compared to our cash used in operating activities for the three months ended May 31, 2013, increased $41,609, mainly due to the ramp up of the digital media business.

Cash Used in Provided By Investing Activities

Our cash used by investing activities for the three months ended May 31, 2014 was $0, compared to $75,000 for the three months ended May 31, 2013 from the acquisition of SlickX (now Exley) assets and the capitalization of website development costs.

Cash Provided By Financing Activities

Our cash provided by financing activities for the three months ended May 31, 2014 was $75,000, compared to ($200,000) for the three months ended May 31, 2013, both a result of the issuance of short-term promissory notes.

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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 three months ended May 31, 2014, we incurred expenses totaling $84,325 compared with $70,148 for the three months ended May 31, 2013. The increase of $14,177 in operating expenses is attributable to an increase of $17,440 in amortization of capitalized website development costs.

Net Loss

During the three months ended May 31, 2014, we realized net loss from continuing operations of $93,076 compared with a net loss from continuing operations of $79,167 for the three months ended May 31, 2013. The $13,909 increase in net loss is mainly attributable to an increase of $17,440 in amortization of capitalized website development costs.

Going Concern

Our unaudited financial statements and information for the period ended May 31, 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 generated limited revenues to date and a net loss of $93,076 for the three months ended May 31, 2014 and a cumulative deficit of $3,417,743 at May 31, 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 May 31, 2014, we had cash and cash equivalents of $8,857. On July 15, 2014, we received proceeds of $100,000 from the issuance of a promissory note bearing interest at 7% per annum and due March 31, 2015. 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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