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Thursday, March 12, 2015 1:40:34 PM
HAVE YOU READ THE FILINGS?
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When the MigraPure Advanced Migraine Relief shows sustained growth, we plan to develop additional marketing assets promotion of the product in other targeted medical markets and selected retail venues.
Phase Two Rollout: Retail Drugstores. Upon the successful completion of the Phase One Rollout, PuraMed plans to begin the process of working closely with major drug chains to sell MigraPure Advance Migraine Relief in stores across the nation with the goal of self-sustainability and revenue generation.
Phase Three Rollout: Further Retail Outlets. A few months after completing the phase two rollout for its migraine remedy, PuraMed plans to launch phase three which will consist of working to expand the retail placement of its migraine product in approximately an additional 21,000 targeted retail outlets including mass merchandisers such as Wal-Mart and Target, food store chains such as SuperValu, Kroger and Safeway, and additional well-known regional drugstores.
PuraMed has selected these targeted retailers according to various material criteria, including cost of entry, geography, demographics and consumer preference.
After achieving material initial distribution for PuraMed products, PuraMed plans to initiate a comprehensive and ongoing promotional campaign directed toward consumer groups it has identified from its product rollouts. The objective of its promotional campaign is to build consumer awareness and develop a consumer-based demand for MigraPure throughout the United States. The scope of the Company's brand building effort is expected to span all of the following major advertising venues:
Trade Advertising - Consisting of retail POS (point-of-sale) materials, coupon redemption programs, in-store promotional video, pharmaceutical trade magazines like Pharmacy Times, and Mass Market Retailer, key primary care and medical journals, articles in consumer-focused magazines like Headwise a publication of the National Headache Foundation, 2015 attendance at the NACDS (National Association of Chain Drug Stores) Trade Show and other industry events. In addition, MigraPure, is expected to be featured in several key primary care and medical journals.
Medical Conferences and Meetings - A key component of the marketing effort will be directed at educating medical professionals including physicians, pharmacists, clinicians, practitioners, nurse practitioners and physician assistants.
Medical Spokespersons - The Company is working to identify and utilize medical spokespersons to promote MigraPure Advanced Migraine Relief. They will include board certified specialists with a special interest in the diagnosis, treatment, prevention and cure of headache.
Consumer Advertising - PMBS plans to allocate monies to create media assets that can be leveraged on several media venues and used in several markets. This may include video, print and electronic advertising that will be scheduled based on selected marketing criteria, goals and funding.
Product Sampling - The Company has developed a retail box and a two-count, fold-over, sample pack sufficient to treat one migraine headache. These items are used to provide samples to headache specialists, primary care practitioners, veterans, and interested consumers from its social marketing and eCommerce efforts.
Special Programs - The Company has implemented a special program for active-duty servicemen and women and returning Veterans. The Company is currently working with Honoring Our Troops, Operation Gratitude, and Operation Troop Aid to distribute its current product, MigraPure.
Studies show that veterans returning from active duty combat zones experience migraines more often than civilians. One study indicates that soldiers have two to four times the incidence of migraine than the general population. Returning veterans are also at greater risk of suffering from post-traumatic stress disorder (PTSD). Since commonly prescribed medications for PTSD are not compatible with the prescription medications normally used for migraine, these veterans are forced to choose to treat one condition or the other.
MigraPure has no known or reported drug interactions of this type, making it a safer choice for veterans suffering with migraine and PTSD.
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In response to this, the Company has been and plans to continue providing veterans and members of the armed forces with a free sample of MigraPure. MigraPure is among the top four items requested in the America Cares Project care packages that were delivered by Honoring Our Troops to US military personnel serving in Afghanistan.
Web Presence and Social Marketing - The Company currently maintains a corporate website at www.puramedbioscience.com and a product website at www.lipigesic.com, which will transition to www.migrapure.com at the time of the re-launch. The Company plans to maintain the lipigesic.com and other URLs, but redirect visitors to a landing page declaring the change and funnel them to the informational pages and ecommerce site.
E-mail campaigns to targeted audience to promote MigraPure are planned for implementation during the second quarter of 2015.
The Company plans to hire a dedicated social media content manager to direct and implement an active social marketing campaign utilizing Facebook and Twitter and eventually other social media platforms. In addition to providing product information, this program is designed as a tool to direct consumers to retail locations and special promotions.[/color]
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Recent Filings
Date Form Title
Nov 19, 2014 10-Q Quarterly Report
Summary - Full Filing at EDGAR Online(1mb)
Oct 14, 2014 10-K Annual Report
Summary - Full Filing at EDGAR Online(2mb)
Oct 10, 2014 8-K Material Modification to Rights of Security Holders, Amendments to Articl
Summary - Full Filing at EDGAR Online(6mb)
Aug 26, 2014 8-K Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Submissi
Summary - Full Filing at EDGAR Online(33kb)
Jul 11, 2014 8-K Unregistered Sale of Equity Securities, Material Modification to Rights o
Summary - Full Filing at EDGAR Online(1mb)
Jun 2, 2014 8-K Change in Directors or Principal Officers, Financial Statements and Exhib
Summary - Full Filing at EDGAR Online(31kb)
May 20, 2014 10-Q Quarterly Report
Summary - Full Filing at EDGAR Online(1mb)
May 12, 2014 8-K Entry into a Material Definitive Agreement, Creation of a Direct Financia
Summary - Full Filing at EDGAR Online(394kb)
Apr 30, 2014 8-K Entry into a Material Definitive Agreement, Creation of a Direct Financia
Summary - Full Filing at EDGAR Online(258kb)
Apr 22, 2014 8-K Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Submissi
Summary - Full Filing at EDGAR Online(259kb)
Mar 19, 2014 8-K Unregistered Sale of Equity Securities, Change in Directors or Principal
Summary - Full Filing at EDGAR Online(24kb)
Feb 19, 2014 10-Q Quarterly Report
Summary - Full Filing at EDGAR Online(1mb)
NOV- Form 10-Q for PURAMED BIOSCIENCE INC.
19-Nov-2014
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company's financial condition and plan of operations should be read and considered along with its condensed financial statements and related notes included in this Quarterly Report on Form 10-Q. Various statements have been made in this Quarterly Report on Form 10-Q that may constitute "forward-looking statements." Forward-looking statements may also be made in the Company's other reports filed with or furnished to the SEC and in other documents. In addition, from time to time, the Company, through its management, may make oral forward-looking statements. Forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from such statements. The words "believe," "expect," "anticipate," "optimistic," "intend," "plan," "aim," "will," "may," "should," "could," "would," "likely" and similar expressions are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements, except as required by law.
Background
PuraMed BioScience?, Inc. ("PuraMed", "PMBS" or the "Company") was incorporated in Minnesota on May 9, 2006, as a wholly-owned subsidiary of Wind Energy America, Inc. (formerly "Dotronix, Inc.") for the purpose of engaging in the business of developing and marketing non-prescription over-the-counter healthcare products to remedy various ailments.
In late 2006, PuraMed's former parent company decided to spin off its PuraMed subsidiary and related healthcare products business. Accordingly, on April 12, 2007, Wind Energy America, Inc. affected a spin-off of PuraMed to shareholders of Wind Energy America, Inc. on a pro rata dividend basis of one common share of PuraMed for each five common shares of Wind Energy America, Inc. Since April 12, 2007, the effective date of the spin-off, PuraMed and Wind Energy America, Inc. have operated separately, with the respective managements, businesses, assets and capital structures being completely independent from each other.
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Detailed information regarding this spin-off of PuraMed from Wind Energy America, Inc. (formerly Dotronix, Inc.) is contained in a Current Report on Form 8-K and exhibit thereto which were filed with the US Securities and Exchange Commission (the "SEC") on April 10, 2007, and can be readily accessed at the SEC website www.sec.gov or the Company's corporate website at http://www.puramedbioscience.com/sec-filings/.
On October 7, 2014, the Financial Industry Regulatory Authority (FINRA) effected in the marketplace (i) the change in the Company's domicile from Minnesota to Nevada and (ii) a 1-for-40 reverse stock split.
Overview of Business
The Company is engaged in the business of developing and marketing a line of non-prescription medicinal or healthcare products to be marketed through various independent and retail channels. The Company plans on re-launching its flagship product, LipiGesic ? under the MigraPure ? brand and trademark. The Company has recently completed the product development and design packaging for the product and has created other intellectual assets to promote a successful re-launch.
In addition to MigraPure, PuraMed BioScience has created an enhanced formulation for the relief of seizure-related headaches, which could become part of the PuraMed product line.
The Company entered the Over-The-Counter (OTC) healthcare products marketplace in December 2009, by employing "direct to consumer" marketing for the Company's migraine remedy. The Company is currently undergoing concerted efforts to re-enter the food and drug mass marketplace.
The Company is also investigating several strategic alliances that could enable the Company to co-market and build market share of complementary products.
MigraPure? Advanced Migraine Relief (Clinically tested as LipiGesic? M)
MigraPure's patented feverfew and ginger gel provides relief for acute migraine and migraine-like headaches including sinus and hangover headaches. PuraMed believes that the specific formulation of these active ingredients is unique and proprietary. Clinical trial data and anecdotal evidence shows the sublingual formulation provides relief from these severe migraine headaches within minutes.
The Company hopes to capture a material segment of the migraine headache remedy market as a natural alternative to prescription and OTC migraine medications that may be less effective and induce severe and unpleasant side effects. The Company believes that Americans spend in excess of $6 billion annually on headache pain relievers, and that over half of sufferers of migraine headaches rely exclusively on non-prescription medications.
The Company believes that at least 50 million Americans suffer from chronic migraine headaches with over 20 million of them having "severe" migraine conditions. Therefore migraine headaches constitute a severe and disabling condition for millions of people. The Company further believes that the economic burden alone to the US economy is in excess of $50 billion annually.
MigraPureis is available as a non-prescription remedy, provides a side effect profile similar to placebo, and has a significantly lower cost compared to more expensive prescription migraine drugs.
Future PuraMed BioScience? Products
The Company intends to complete development of additional non-prescription hemp-based products. The Company intends to launch these commercially over the next couple years after establishing a solid market for MigraPure, the Company's flagship migraine formulation. Areas to be addressed include general pain, anxiety / depression (post-traumatic stress disorder) and other inflammatory disease states.
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Sublingual Delivery System
MigraPure Advanced Migraine Relief is a non-prescription, liquid-gel medication that absorbs under-the tongue. This method of delivery is known as "sublingual." This form of delivery allows the active ingredients to reach the bloodstream without a substantial degradation of efficacy. Unlike the majority of pills and other oral medications which must be absorbed through the digestive track after being processed through the liver, PuraMed products are placed and absorbed directly under the tongue. Advantages of sublingual dispensing of drugs and medications include faster acting absorption for quick relief, improved efficacy, less stomach upset, and fewer side effects.
PuraMed has secured reliable contract manufacturers to produce and package PuraMed products in easy-to-use, sublingual dispensers. These selected contractors are experienced in the production and packaging of this type of dispenser. PuraMed believes that its benchmark use of sublingual dispensers should distinguish its products favorably in comparison to most competing OTC products now in the marketplace.
Regulation of PuraMed Products
Unlike prescription drugs or medications, non-prescription healthcare remedies such as PuraMed products do not require FDA approval prior to entering the market. They are nonetheless subject to substantial FDA and other federal regulations governing their use, labeling, advertising, manufacturing and ingredients. PuraMed believes that its current and proposed development, formulation, marketing and other practices and procedures will comply fully with all governmental regulations applicable to PuraMed products.
Business Structure
PuraMed intends to function primarily as a research and development, marketing and sales organization. Product manufacturing, packaging, product fulfillment and other operations intend to be outsourced to experienced and reliable third parties through contracts monitored and controlled by PuraMed. PuraMed believes this structure hopefully reduces significantly the production costs and manufacturing time related to making the product commercially available.
Product Manufacturing
Production and packaging of PuraMed products intends to be outsourced to various contract manufacturers known by PuraMed's management from prior substantial business and contract dealings. Due to the business and contacts developed by PuraMed management over the past years with leading contract manufacturers, PuraMed is convinced it can obtain professional and timely production, packaging and delivery of all PuraMed products.
The Company outsources four main components of the Company's production process to third-party vendors. The process begins with the sourcing of raw materials, manufacturing of the liquid-gel medicine, testing and quality assurance of the product itself by Hillestad Pharmaceuticals (http://www.hillestadlabs.com/) in Woodruff, WI. Hillestad Pharmaceuticals is an FDA licensed prescription drug manufacturer.
The Company sources all of its packaging needs including the box, box inserts, and 6-pack retail display trays to Proteus Packaging (http://proteuspackaging.com/about-proteus) in Franklin, WI.
The final packaging process is completed by the Unette Corporation (http://www.unette.com/index.html) in Randolph, NJ. This includes the filling of the 3-ml applicator with the liquid-gel medication, the packing of the retail boxes, and the packaging of the master cases.
The Company uses Great Lakes Fulfillment (http://glfulfillment.com) in Lewiston, ME for all of its e-commerce and retail distribution needs.
[14]
Clinical Trials
Conducting clinical trials is a very important component the Company's marketing plan. With the Company's goal to get medical professionals to review, endorse, and recommend its product, clinical evidence to support the products' claims is a prerequisite. The Company has and intends to continue to attend medical trade shows that attract medical professions such as doctors, nurses, and pharmacists to present the Company's clinical research regarding the Company's MigraPure Advanced Migraine Relief formula, which was clinically tested as LipiGesic? M.
The outcome of the Company's first clinical study was extremely favorable. After 2 hours post-dose (the clinical trial standard), 64% of migraines treated with the MigraPure formula were reduced to mild or no pain. The study concludes that, "sublingual (under-the-tongue) delivery of feverfew/ginger appears safe and effective as a first-line abortive treatment for a population of migraineurs who frequently experience mild headache prior to the onset of moderate to severe headache. It appears to be well tolerated and has no known contraindications with other acute migraine treatments for migraine."
As a result of the success and the statistical significance of the Company's first clinical study, the manuscript was accepted for publication in the July/August 2011 edition of the top-ranked, peer-reviewed, medical journal Headache, The Journal of Head and Face Pain.
The results of these finding were also reanalyzed. The consensus was that given a larger study, the results could have produced even greater success. The authors of the reanalysis stated that MigraPure (f/k/a LipiGesic M) has a robust efficacy.
The clinical trial also spawned a third article published in Drugs, a medical journal. It was the only OTC medication that was listed as an "Advancement" in the treatment of migraine.
The Company expects the results of the clinical trial to provide it with numerous marketing and promotional opportunities that positively impact the re-launch of MigraPure, Advanced Migraine Relief.
The Company's second clinical study focused specifically on children and adolescents. The preliminary data from that study Suggests that MigraPure could provide an excellent treatment option for many young sufferers.
There are an estimated 10 million migraine sufferers that find themselves in this demographic in the United States. Children and adolescents that suffer with migraines have limited treatment options as many of the traditional prescription remedies have adverse side effects and are not recommended for use with children and adolescents.
Sales and Marketing
PuraMed intends to concentrate its efforts on the Company's initial product re-launch of MigraPure product. After the Company has reached a level of sales that will sustain the product, an additional product offerings the launch of a second product will result. All of the Company's additional product offerings will follow the same three-phase process to market as MigraPure:
Phase One Rollout: Direct Response and Sampling. The re-entry of MigraPure Advanced Migraine Relief into the marketplace will commence with direct-response campaigns to targeted medical populations; distribution through selected retail outlets, natural products stores and independent pharmacies; a military sampling program and an internet marketing campaign that includes organic as well as PPC efforts. In addition to the proposed marketing strategies to build awareness and product purchase, PuraMed is expected to implement a strong customer service program to retain loyal customers.
MigraPure's re-entry will include a re-packaging effort that should enhance the brand's appeal to the public. Other products in the MigraPure product line are planned and underway.
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When the MigraPure Advanced Migraine Relief shows sustained growth, we plan to develop additional marketing assets promotion of the product in other targeted medical markets and selected retail venues.
Phase Two Rollout: Retail Drugstores. Upon the successful completion of the Phase One Rollout, PuraMed plans to begin the process of working closely with major drug chains to sell MigraPure Advance Migraine Relief in stores across the nation with the goal of self-sustainability and revenue generation.
Phase Three Rollout: Further Retail Outlets. A few months after completing the phase two rollout for its migraine remedy, PuraMed plans to launch phase three which will consist of working to expand the retail placement of its migraine product in approximately an additional 21,000 targeted retail outlets including mass merchandisers such as Wal-Mart and Target, food store chains such as SuperValu, Kroger and Safeway, and additional well-known regional drugstores.
PuraMed has selected these targeted retailers according to various material criteria, including cost of entry, geography, demographics and consumer preference.
After achieving material initial distribution for PuraMed products, PuraMed plans to initiate a comprehensive and ongoing promotional campaign directed toward consumer groups it has identified from its product rollouts. The objective of its promotional campaign is to build consumer awareness and develop a consumer-based demand for MigraPure throughout the United States. The scope of the Company's brand building effort is expected to span all of the following major advertising venues:
Trade Advertising - Consisting of retail POS (point-of-sale) materials, coupon redemption programs, in-store promotional video, pharmaceutical trade magazines like Pharmacy Times, and Mass Market Retailer, key primary care and medical journals, articles in consumer-focused magazines like Headwise a publication of the National Headache Foundation, 2015 attendance at the NACDS (National Association of Chain Drug Stores) Trade Show and other industry events. In addition, MigraPure, is expected to be featured in several key primary care and medical journals.
Medical Conferences and Meetings - A key component of the marketing effort will be directed at educating medical professionals including physicians, pharmacists, clinicians, practitioners, nurse practitioners and physician assistants.
Medical Spokespersons - The Company is working to identify and utilize medical spokespersons to promote MigraPure Advanced Migraine Relief. They will include board certified specialists with a special interest in the diagnosis, treatment, prevention and cure of headache.
Consumer Advertising - PMBS plans to allocate monies to create media assets that can be leveraged on several media venues and used in several markets. This may include video, print and electronic advertising that will be scheduled based on selected marketing criteria, goals and funding.
Product Sampling - The Company has developed a retail box and a two-count, fold-over, sample pack sufficient to treat one migraine headache. These items are used to provide samples to headache specialists, primary care practitioners, veterans, and interested consumers from its social marketing and eCommerce efforts.
Special Programs - The Company has implemented a special program for active-duty servicemen and women and returning Veterans. The Company is currently working with Honoring Our Troops, Operation Gratitude, and Operation Troop Aid to distribute its current product, MigraPure.
Studies show that veterans returning from active duty combat zones experience migraines more often than civilians. One study indicates that soldiers have two to four times the incidence of migraine than the general population. Returning veterans are also at greater risk of suffering from post-traumatic stress disorder (PTSD). Since commonly prescribed medications for PTSD are not compatible with the prescription medications normally used for migraine, these veterans are forced to choose to treat one condition or the other.
MigraPure has no known or reported drug interactions of this type, making it a safer choice for veterans suffering with migraine and PTSD.
[16]
In response to this, the Company has been and plans to continue providing veterans and members of the armed forces with a free sample of MigraPure. MigraPure is among the top four items requested in the America Cares Project care packages that were delivered by Honoring Our Troops to US military personnel serving in Afghanistan.
Web Presence and Social Marketing - The Company currently maintains a corporate website at www.puramedbioscience.com and a product website at www.lipigesic.com, which will transition to www.migrapure.com at the time of the re-launch. The Company plans to maintain the lipigesic.com and other URLs, but redirect visitors to a landing page declaring the change and funnel them to the informational pages and ecommerce site.
E-mail campaigns to targeted audience to promote MigraPure are planned for implementation during the second quarter of 2015.
The Company plans to hire a dedicated social media content manager to direct and implement an active social marketing campaign utilizing Facebook and Twitter and eventually other social media platforms. In addition to providing product information, this program is designed as a tool to direct consumers to retail locations and special promotions.
Competition
The non-prescription healthcare market in which PuraMed is engaged is intensely competitive and PuraMed will face the same challenges as other start-up and established OTC drug companies within their respective product classes. Virtually all direct competitors to the PuraMed product line have substantially greater financial, personnel, development, marketing and other resources than those possessed by PuraMed, which places PuraMed at a definite competitive disadvantage. Main competitors of PuraMed will have substantially larger sales volumes than PuraMed expects to realize, and also greater business diversification in most cases.
PuraMed also must compete with numerous small companies selling products into the same mainstream marketing channels targeted by PuraMed. PuraMed also expects to encounter additional competitors emerging from time to time.
PuraMed believes that the principal competitive factors in its industry include quality and pricing of products, product effectiveness, customer preferences, brand awareness, and marketing and distribution networks. There is no assurance PuraMed will be able to compete successfully against current or future competitors or that the competitive pressures faced by PuraMed will not harm its business materially.
Intellectual Property
PuraMed owns and asserts proprietary intellectual property rights regarding its various products, including a patent, trademarks, formulation technology, ingredients and product delivery procedures or methods. The future growth and success of the Company will depend in large part upon its ability to protect its trademarks, trade names and trade secrets. In addition to applying for certain product patents, PuraMed will rely upon trade secrets, proprietary know-how, and continuing development and innovation to compete in its OTC marketplace. Although no claims or threats of product or patent infringement have arisen regarding PuraMed or its products, there is no assurance PuraMed will be able to protect its intellectual property effectively and any failure to do so would be harmful to PuraMed.
[17]
Employees and Facilities
As of November 4, 2014, PuraMed has three employees including its two executive officers, and an office manager. PuraMed anticipates hiring one or more experienced sales and marketing personnel to support the upcoming commercial launch of MigraPure within the next 12 months.
Corporate Contact Data
The address of the Company in suburban Wausau, Wisconsin, is 1326 Schofield Avenue, P.O. Box 677, Schofield, WI 54476; the Companys' telephone number is
(715) 359-6373 and the Company's corporate and product website addresses are www.puramedbioscience.com and www.lipigesic.com, respectively.
Results of Operations
Revenues
Revenues consist of wholesale and website sales of the MigraPure migraine product. The wholesale revenue is reduced by coop advertising costs incurred to obtain product placement at large retail drugstores.
Cost of Sales
Cost of sales consists of merchant fees, material, packaging, freight costs and product placement expenses that exceed revenue for the units sold.
Operating Expenses
Selling, general and administrative expenses consist primarily of payroll taxes, health insurance, facility rent and administrative overhead costs.
Amortization and depreciation expenses consist primarily of depreciation of assets and amortization of the Company's LipiGesic? trademark and intellectual property received during its spin-off from the parent company in April 2007.
Marketing and advertising expense include payments for public relations, stock promotion and advertising consistent with the commercialization of products.
Professional fees consist of audit, legal, transfer agent, consulting, commission and directors fees.
Salaries include payments to the office manager.
Officers' salaries include payroll to the Chief Executive Officer and Chief Operating Officer.
Other Income Expense
Other Income Expense consists of interest expense and gain/loss on derivative liability.
Comparison of Operations for Three Months Ended September 30, 2014 and 2013
Revenue
Net revenue for the three months ended September 30, 2014 was $3,636 compared to $0 for the three months ended September 30, 2013. The revenue increased due to internet sales.
[18]
Cost of Sales
Cost of sales for the three months ended September 3, 2014 was $4,932, compared to $26,603 for the three months ended September 30, 2013. Cost of sales decreased due to the absence of obsolete inventory write offs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $23,774 and $43,226 for the three months ended September 30, 2014 and 2013, respectively. The decrease is primarily attributed to the decrease in cost of our product liability insurance policy.
Amortization and Depreciation
Amortization and depreciation expenses for the three months ended September 30, 2014 and 2013 were $3,513 compared to $14,440, respectively. The decrease was due to certain intangible assets becoming fully amortized in 2014.
Professional Fees
Professional fees for the three months ended September 30, 2014 were $48,897 compared to $107,930 for the three months ended September 30, 2013. The decrease was attributed to the reduction in legal fees incurred.
Marketing and Advertising Expense
Marketing and advertising expense for the three months ended September 30, 2014 was $9,770 compared to $22,900 for the three months ended September 30, 2013. The decrease in the expenses was due to a reduction in the marketing and advertising expenditures.
Salaries
Salaries for the three months ended September 30, 2014 were $5,874, compared to $7,436 for the three months ended September 30, 2013. The decrease was due to the decrease in hours worked by the Office Manager during this time period.
Officers' Salaries
Officers' salaries for the three months ended September 30, 2014 and 2013 were $42,314 and $60,923, respectively. The decrease in salaries is attributed to the resignation of the Company's Chief Operating Officer in May of 2014, and a decrease in hours worked by the new Chief Operating Officer.
Interest Expense
Interest expense for the three months ended September 30, 2014 and 2013 was $431,930 and $125,999, respectively. The increase in the expense is attributed to an increase in the number of notes outstanding.
Loss on Derivative Liability
The loss on derivative liability for the three months ended September 30, 2014 and 2013 was $255,281 and $293,171, respectively. The loss on derivative liability is the difference in value using the lattice model for the warrants between the date issued and the quarter ended September 30, 2014 and 2013.
Net Loss
Net loss for the three months ended September 30, 2014 was $822,649 compared to $702,718 for the three months ended September 30, 2013. The increase in the loss for 2014 was due primarily to higher interest costs associated with convertible debt.
[19]
Financial Condition, Liquidity and Capital Resources
As of September 30, 2014, the Company had cash of $28,120 and negative working capital of $5,628,766.
PuraMed intends to raise the funds needed to implement the Company's plan of operation through both private sales of debt and equity securities. There is no assurance, however, that the Company will be successful in raising the necessary capital to implement the Company's business plan, either through debt or equity sources.
Business Strategy
PuraMed's business strategy going forward is to re-launch its flagship migraine product LipiGesic M using the name and branded image MigraPure?. The Company plans to begin the promotion of MigraPure with a strong online presence and sampling program that will build awareness and acceptance of the general population and in selected markets. The goal of the re-launch is to drive sales . . .
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When the MigraPure Advanced Migraine Relief shows sustained growth, we plan to develop additional marketing assets promotion of the product in other targeted medical markets and selected retail venues.
Phase Two Rollout: Retail Drugstores. Upon the successful completion of the Phase One Rollout, PuraMed plans to begin the process of working closely with major drug chains to sell MigraPure Advance Migraine Relief in stores across the nation with the goal of self-sustainability and revenue generation.
Phase Three Rollout: Further Retail Outlets. A few months after completing the phase two rollout for its migraine remedy, PuraMed plans to launch phase three which will consist of working to expand the retail placement of its migraine product in approximately an additional 21,000 targeted retail outlets including mass merchandisers such as Wal-Mart and Target, food store chains such as SuperValu, Kroger and Safeway, and additional well-known regional drugstores.
PuraMed has selected these targeted retailers according to various material criteria, including cost of entry, geography, demographics and consumer preference.
After achieving material initial distribution for PuraMed products, PuraMed plans to initiate a comprehensive and ongoing promotional campaign directed toward consumer groups it has identified from its product rollouts. The objective of its promotional campaign is to build consumer awareness and develop a consumer-based demand for MigraPure throughout the United States. The scope of the Company's brand building effort is expected to span all of the following major advertising venues:
Trade Advertising - Consisting of retail POS (point-of-sale) materials, coupon redemption programs, in-store promotional video, pharmaceutical trade magazines like Pharmacy Times, and Mass Market Retailer, key primary care and medical journals, articles in consumer-focused magazines like Headwise a publication of the National Headache Foundation, 2015 attendance at the NACDS (National Association of Chain Drug Stores) Trade Show and other industry events. In addition, MigraPure, is expected to be featured in several key primary care and medical journals.
Medical Conferences and Meetings - A key component of the marketing effort will be directed at educating medical professionals including physicians, pharmacists, clinicians, practitioners, nurse practitioners and physician assistants.
Medical Spokespersons - The Company is working to identify and utilize medical spokespersons to promote MigraPure Advanced Migraine Relief. They will include board certified specialists with a special interest in the diagnosis, treatment, prevention and cure of headache.
Consumer Advertising - PMBS plans to allocate monies to create media assets that can be leveraged on several media venues and used in several markets. This may include video, print and electronic advertising that will be scheduled based on selected marketing criteria, goals and funding.
Product Sampling - The Company has developed a retail box and a two-count, fold-over, sample pack sufficient to treat one migraine headache. These items are used to provide samples to headache specialists, primary care practitioners, veterans, and interested consumers from its social marketing and eCommerce efforts.
Special Programs - The Company has implemented a special program for active-duty servicemen and women and returning Veterans. The Company is currently working with Honoring Our Troops, Operation Gratitude, and Operation Troop Aid to distribute its current product, MigraPure.
Studies show that veterans returning from active duty combat zones experience migraines more often than civilians. One study indicates that soldiers have two to four times the incidence of migraine than the general population. Returning veterans are also at greater risk of suffering from post-traumatic stress disorder (PTSD). Since commonly prescribed medications for PTSD are not compatible with the prescription medications normally used for migraine, these veterans are forced to choose to treat one condition or the other.
MigraPure has no known or reported drug interactions of this type, making it a safer choice for veterans suffering with migraine and PTSD.
[16]
In response to this, the Company has been and plans to continue providing veterans and members of the armed forces with a free sample of MigraPure. MigraPure is among the top four items requested in the America Cares Project care packages that were delivered by Honoring Our Troops to US military personnel serving in Afghanistan.
Web Presence and Social Marketing - The Company currently maintains a corporate website at www.puramedbioscience.com and a product website at www.lipigesic.com, which will transition to www.migrapure.com at the time of the re-launch. The Company plans to maintain the lipigesic.com and other URLs, but redirect visitors to a landing page declaring the change and funnel them to the informational pages and ecommerce site.
E-mail campaigns to targeted audience to promote MigraPure are planned for implementation during the second quarter of 2015.
The Company plans to hire a dedicated social media content manager to direct and implement an active social marketing campaign utilizing Facebook and Twitter and eventually other social media platforms. In addition to providing product information, this program is designed as a tool to direct consumers to retail locations and special promotions.[/color]
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Recent Filings
Date Form Title
Nov 19, 2014 10-Q Quarterly Report
Summary - Full Filing at EDGAR Online(1mb)
Oct 14, 2014 10-K Annual Report
Summary - Full Filing at EDGAR Online(2mb)
Oct 10, 2014 8-K Material Modification to Rights of Security Holders, Amendments to Articl
Summary - Full Filing at EDGAR Online(6mb)
Aug 26, 2014 8-K Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Submissi
Summary - Full Filing at EDGAR Online(33kb)
Jul 11, 2014 8-K Unregistered Sale of Equity Securities, Material Modification to Rights o
Summary - Full Filing at EDGAR Online(1mb)
Jun 2, 2014 8-K Change in Directors or Principal Officers, Financial Statements and Exhib
Summary - Full Filing at EDGAR Online(31kb)
May 20, 2014 10-Q Quarterly Report
Summary - Full Filing at EDGAR Online(1mb)
May 12, 2014 8-K Entry into a Material Definitive Agreement, Creation of a Direct Financia
Summary - Full Filing at EDGAR Online(394kb)
Apr 30, 2014 8-K Entry into a Material Definitive Agreement, Creation of a Direct Financia
Summary - Full Filing at EDGAR Online(258kb)
Apr 22, 2014 8-K Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Submissi
Summary - Full Filing at EDGAR Online(259kb)
Mar 19, 2014 8-K Unregistered Sale of Equity Securities, Change in Directors or Principal
Summary - Full Filing at EDGAR Online(24kb)
Feb 19, 2014 10-Q Quarterly Report
Summary - Full Filing at EDGAR Online(1mb)
NOV- Form 10-Q for PURAMED BIOSCIENCE INC.
19-Nov-2014
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company's financial condition and plan of operations should be read and considered along with its condensed financial statements and related notes included in this Quarterly Report on Form 10-Q. Various statements have been made in this Quarterly Report on Form 10-Q that may constitute "forward-looking statements." Forward-looking statements may also be made in the Company's other reports filed with or furnished to the SEC and in other documents. In addition, from time to time, the Company, through its management, may make oral forward-looking statements. Forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from such statements. The words "believe," "expect," "anticipate," "optimistic," "intend," "plan," "aim," "will," "may," "should," "could," "would," "likely" and similar expressions are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements, except as required by law.
Background
PuraMed BioScience?, Inc. ("PuraMed", "PMBS" or the "Company") was incorporated in Minnesota on May 9, 2006, as a wholly-owned subsidiary of Wind Energy America, Inc. (formerly "Dotronix, Inc.") for the purpose of engaging in the business of developing and marketing non-prescription over-the-counter healthcare products to remedy various ailments.
In late 2006, PuraMed's former parent company decided to spin off its PuraMed subsidiary and related healthcare products business. Accordingly, on April 12, 2007, Wind Energy America, Inc. affected a spin-off of PuraMed to shareholders of Wind Energy America, Inc. on a pro rata dividend basis of one common share of PuraMed for each five common shares of Wind Energy America, Inc. Since April 12, 2007, the effective date of the spin-off, PuraMed and Wind Energy America, Inc. have operated separately, with the respective managements, businesses, assets and capital structures being completely independent from each other.
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Detailed information regarding this spin-off of PuraMed from Wind Energy America, Inc. (formerly Dotronix, Inc.) is contained in a Current Report on Form 8-K and exhibit thereto which were filed with the US Securities and Exchange Commission (the "SEC") on April 10, 2007, and can be readily accessed at the SEC website www.sec.gov or the Company's corporate website at http://www.puramedbioscience.com/sec-filings/.
On October 7, 2014, the Financial Industry Regulatory Authority (FINRA) effected in the marketplace (i) the change in the Company's domicile from Minnesota to Nevada and (ii) a 1-for-40 reverse stock split.
Overview of Business
The Company is engaged in the business of developing and marketing a line of non-prescription medicinal or healthcare products to be marketed through various independent and retail channels. The Company plans on re-launching its flagship product, LipiGesic ? under the MigraPure ? brand and trademark. The Company has recently completed the product development and design packaging for the product and has created other intellectual assets to promote a successful re-launch.
In addition to MigraPure, PuraMed BioScience has created an enhanced formulation for the relief of seizure-related headaches, which could become part of the PuraMed product line.
The Company entered the Over-The-Counter (OTC) healthcare products marketplace in December 2009, by employing "direct to consumer" marketing for the Company's migraine remedy. The Company is currently undergoing concerted efforts to re-enter the food and drug mass marketplace.
The Company is also investigating several strategic alliances that could enable the Company to co-market and build market share of complementary products.
MigraPure? Advanced Migraine Relief (Clinically tested as LipiGesic? M)
MigraPure's patented feverfew and ginger gel provides relief for acute migraine and migraine-like headaches including sinus and hangover headaches. PuraMed believes that the specific formulation of these active ingredients is unique and proprietary. Clinical trial data and anecdotal evidence shows the sublingual formulation provides relief from these severe migraine headaches within minutes.
The Company hopes to capture a material segment of the migraine headache remedy market as a natural alternative to prescription and OTC migraine medications that may be less effective and induce severe and unpleasant side effects. The Company believes that Americans spend in excess of $6 billion annually on headache pain relievers, and that over half of sufferers of migraine headaches rely exclusively on non-prescription medications.
The Company believes that at least 50 million Americans suffer from chronic migraine headaches with over 20 million of them having "severe" migraine conditions. Therefore migraine headaches constitute a severe and disabling condition for millions of people. The Company further believes that the economic burden alone to the US economy is in excess of $50 billion annually.
MigraPureis is available as a non-prescription remedy, provides a side effect profile similar to placebo, and has a significantly lower cost compared to more expensive prescription migraine drugs.
Future PuraMed BioScience? Products
The Company intends to complete development of additional non-prescription hemp-based products. The Company intends to launch these commercially over the next couple years after establishing a solid market for MigraPure, the Company's flagship migraine formulation. Areas to be addressed include general pain, anxiety / depression (post-traumatic stress disorder) and other inflammatory disease states.
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Sublingual Delivery System
MigraPure Advanced Migraine Relief is a non-prescription, liquid-gel medication that absorbs under-the tongue. This method of delivery is known as "sublingual." This form of delivery allows the active ingredients to reach the bloodstream without a substantial degradation of efficacy. Unlike the majority of pills and other oral medications which must be absorbed through the digestive track after being processed through the liver, PuraMed products are placed and absorbed directly under the tongue. Advantages of sublingual dispensing of drugs and medications include faster acting absorption for quick relief, improved efficacy, less stomach upset, and fewer side effects.
PuraMed has secured reliable contract manufacturers to produce and package PuraMed products in easy-to-use, sublingual dispensers. These selected contractors are experienced in the production and packaging of this type of dispenser. PuraMed believes that its benchmark use of sublingual dispensers should distinguish its products favorably in comparison to most competing OTC products now in the marketplace.
Regulation of PuraMed Products
Unlike prescription drugs or medications, non-prescription healthcare remedies such as PuraMed products do not require FDA approval prior to entering the market. They are nonetheless subject to substantial FDA and other federal regulations governing their use, labeling, advertising, manufacturing and ingredients. PuraMed believes that its current and proposed development, formulation, marketing and other practices and procedures will comply fully with all governmental regulations applicable to PuraMed products.
Business Structure
PuraMed intends to function primarily as a research and development, marketing and sales organization. Product manufacturing, packaging, product fulfillment and other operations intend to be outsourced to experienced and reliable third parties through contracts monitored and controlled by PuraMed. PuraMed believes this structure hopefully reduces significantly the production costs and manufacturing time related to making the product commercially available.
Product Manufacturing
Production and packaging of PuraMed products intends to be outsourced to various contract manufacturers known by PuraMed's management from prior substantial business and contract dealings. Due to the business and contacts developed by PuraMed management over the past years with leading contract manufacturers, PuraMed is convinced it can obtain professional and timely production, packaging and delivery of all PuraMed products.
The Company outsources four main components of the Company's production process to third-party vendors. The process begins with the sourcing of raw materials, manufacturing of the liquid-gel medicine, testing and quality assurance of the product itself by Hillestad Pharmaceuticals (http://www.hillestadlabs.com/) in Woodruff, WI. Hillestad Pharmaceuticals is an FDA licensed prescription drug manufacturer.
The Company sources all of its packaging needs including the box, box inserts, and 6-pack retail display trays to Proteus Packaging (http://proteuspackaging.com/about-proteus) in Franklin, WI.
The final packaging process is completed by the Unette Corporation (http://www.unette.com/index.html) in Randolph, NJ. This includes the filling of the 3-ml applicator with the liquid-gel medication, the packing of the retail boxes, and the packaging of the master cases.
The Company uses Great Lakes Fulfillment (http://glfulfillment.com) in Lewiston, ME for all of its e-commerce and retail distribution needs.
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Clinical Trials
Conducting clinical trials is a very important component the Company's marketing plan. With the Company's goal to get medical professionals to review, endorse, and recommend its product, clinical evidence to support the products' claims is a prerequisite. The Company has and intends to continue to attend medical trade shows that attract medical professions such as doctors, nurses, and pharmacists to present the Company's clinical research regarding the Company's MigraPure Advanced Migraine Relief formula, which was clinically tested as LipiGesic? M.
The outcome of the Company's first clinical study was extremely favorable. After 2 hours post-dose (the clinical trial standard), 64% of migraines treated with the MigraPure formula were reduced to mild or no pain. The study concludes that, "sublingual (under-the-tongue) delivery of feverfew/ginger appears safe and effective as a first-line abortive treatment for a population of migraineurs who frequently experience mild headache prior to the onset of moderate to severe headache. It appears to be well tolerated and has no known contraindications with other acute migraine treatments for migraine."
As a result of the success and the statistical significance of the Company's first clinical study, the manuscript was accepted for publication in the July/August 2011 edition of the top-ranked, peer-reviewed, medical journal Headache, The Journal of Head and Face Pain.
The results of these finding were also reanalyzed. The consensus was that given a larger study, the results could have produced even greater success. The authors of the reanalysis stated that MigraPure (f/k/a LipiGesic M) has a robust efficacy.
The clinical trial also spawned a third article published in Drugs, a medical journal. It was the only OTC medication that was listed as an "Advancement" in the treatment of migraine.
The Company expects the results of the clinical trial to provide it with numerous marketing and promotional opportunities that positively impact the re-launch of MigraPure, Advanced Migraine Relief.
The Company's second clinical study focused specifically on children and adolescents. The preliminary data from that study Suggests that MigraPure could provide an excellent treatment option for many young sufferers.
There are an estimated 10 million migraine sufferers that find themselves in this demographic in the United States. Children and adolescents that suffer with migraines have limited treatment options as many of the traditional prescription remedies have adverse side effects and are not recommended for use with children and adolescents.
Sales and Marketing
PuraMed intends to concentrate its efforts on the Company's initial product re-launch of MigraPure product. After the Company has reached a level of sales that will sustain the product, an additional product offerings the launch of a second product will result. All of the Company's additional product offerings will follow the same three-phase process to market as MigraPure:
Phase One Rollout: Direct Response and Sampling. The re-entry of MigraPure Advanced Migraine Relief into the marketplace will commence with direct-response campaigns to targeted medical populations; distribution through selected retail outlets, natural products stores and independent pharmacies; a military sampling program and an internet marketing campaign that includes organic as well as PPC efforts. In addition to the proposed marketing strategies to build awareness and product purchase, PuraMed is expected to implement a strong customer service program to retain loyal customers.
MigraPure's re-entry will include a re-packaging effort that should enhance the brand's appeal to the public. Other products in the MigraPure product line are planned and underway.
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When the MigraPure Advanced Migraine Relief shows sustained growth, we plan to develop additional marketing assets promotion of the product in other targeted medical markets and selected retail venues.
Phase Two Rollout: Retail Drugstores. Upon the successful completion of the Phase One Rollout, PuraMed plans to begin the process of working closely with major drug chains to sell MigraPure Advance Migraine Relief in stores across the nation with the goal of self-sustainability and revenue generation.
Phase Three Rollout: Further Retail Outlets. A few months after completing the phase two rollout for its migraine remedy, PuraMed plans to launch phase three which will consist of working to expand the retail placement of its migraine product in approximately an additional 21,000 targeted retail outlets including mass merchandisers such as Wal-Mart and Target, food store chains such as SuperValu, Kroger and Safeway, and additional well-known regional drugstores.
PuraMed has selected these targeted retailers according to various material criteria, including cost of entry, geography, demographics and consumer preference.
After achieving material initial distribution for PuraMed products, PuraMed plans to initiate a comprehensive and ongoing promotional campaign directed toward consumer groups it has identified from its product rollouts. The objective of its promotional campaign is to build consumer awareness and develop a consumer-based demand for MigraPure throughout the United States. The scope of the Company's brand building effort is expected to span all of the following major advertising venues:
Trade Advertising - Consisting of retail POS (point-of-sale) materials, coupon redemption programs, in-store promotional video, pharmaceutical trade magazines like Pharmacy Times, and Mass Market Retailer, key primary care and medical journals, articles in consumer-focused magazines like Headwise a publication of the National Headache Foundation, 2015 attendance at the NACDS (National Association of Chain Drug Stores) Trade Show and other industry events. In addition, MigraPure, is expected to be featured in several key primary care and medical journals.
Medical Conferences and Meetings - A key component of the marketing effort will be directed at educating medical professionals including physicians, pharmacists, clinicians, practitioners, nurse practitioners and physician assistants.
Medical Spokespersons - The Company is working to identify and utilize medical spokespersons to promote MigraPure Advanced Migraine Relief. They will include board certified specialists with a special interest in the diagnosis, treatment, prevention and cure of headache.
Consumer Advertising - PMBS plans to allocate monies to create media assets that can be leveraged on several media venues and used in several markets. This may include video, print and electronic advertising that will be scheduled based on selected marketing criteria, goals and funding.
Product Sampling - The Company has developed a retail box and a two-count, fold-over, sample pack sufficient to treat one migraine headache. These items are used to provide samples to headache specialists, primary care practitioners, veterans, and interested consumers from its social marketing and eCommerce efforts.
Special Programs - The Company has implemented a special program for active-duty servicemen and women and returning Veterans. The Company is currently working with Honoring Our Troops, Operation Gratitude, and Operation Troop Aid to distribute its current product, MigraPure.
Studies show that veterans returning from active duty combat zones experience migraines more often than civilians. One study indicates that soldiers have two to four times the incidence of migraine than the general population. Returning veterans are also at greater risk of suffering from post-traumatic stress disorder (PTSD). Since commonly prescribed medications for PTSD are not compatible with the prescription medications normally used for migraine, these veterans are forced to choose to treat one condition or the other.
MigraPure has no known or reported drug interactions of this type, making it a safer choice for veterans suffering with migraine and PTSD.
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In response to this, the Company has been and plans to continue providing veterans and members of the armed forces with a free sample of MigraPure. MigraPure is among the top four items requested in the America Cares Project care packages that were delivered by Honoring Our Troops to US military personnel serving in Afghanistan.
Web Presence and Social Marketing - The Company currently maintains a corporate website at www.puramedbioscience.com and a product website at www.lipigesic.com, which will transition to www.migrapure.com at the time of the re-launch. The Company plans to maintain the lipigesic.com and other URLs, but redirect visitors to a landing page declaring the change and funnel them to the informational pages and ecommerce site.
E-mail campaigns to targeted audience to promote MigraPure are planned for implementation during the second quarter of 2015.
The Company plans to hire a dedicated social media content manager to direct and implement an active social marketing campaign utilizing Facebook and Twitter and eventually other social media platforms. In addition to providing product information, this program is designed as a tool to direct consumers to retail locations and special promotions.
Competition
The non-prescription healthcare market in which PuraMed is engaged is intensely competitive and PuraMed will face the same challenges as other start-up and established OTC drug companies within their respective product classes. Virtually all direct competitors to the PuraMed product line have substantially greater financial, personnel, development, marketing and other resources than those possessed by PuraMed, which places PuraMed at a definite competitive disadvantage. Main competitors of PuraMed will have substantially larger sales volumes than PuraMed expects to realize, and also greater business diversification in most cases.
PuraMed also must compete with numerous small companies selling products into the same mainstream marketing channels targeted by PuraMed. PuraMed also expects to encounter additional competitors emerging from time to time.
PuraMed believes that the principal competitive factors in its industry include quality and pricing of products, product effectiveness, customer preferences, brand awareness, and marketing and distribution networks. There is no assurance PuraMed will be able to compete successfully against current or future competitors or that the competitive pressures faced by PuraMed will not harm its business materially.
Intellectual Property
PuraMed owns and asserts proprietary intellectual property rights regarding its various products, including a patent, trademarks, formulation technology, ingredients and product delivery procedures or methods. The future growth and success of the Company will depend in large part upon its ability to protect its trademarks, trade names and trade secrets. In addition to applying for certain product patents, PuraMed will rely upon trade secrets, proprietary know-how, and continuing development and innovation to compete in its OTC marketplace. Although no claims or threats of product or patent infringement have arisen regarding PuraMed or its products, there is no assurance PuraMed will be able to protect its intellectual property effectively and any failure to do so would be harmful to PuraMed.
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Employees and Facilities
As of November 4, 2014, PuraMed has three employees including its two executive officers, and an office manager. PuraMed anticipates hiring one or more experienced sales and marketing personnel to support the upcoming commercial launch of MigraPure within the next 12 months.
Corporate Contact Data
The address of the Company in suburban Wausau, Wisconsin, is 1326 Schofield Avenue, P.O. Box 677, Schofield, WI 54476; the Companys' telephone number is
(715) 359-6373 and the Company's corporate and product website addresses are www.puramedbioscience.com and www.lipigesic.com, respectively.
Results of Operations
Revenues
Revenues consist of wholesale and website sales of the MigraPure migraine product. The wholesale revenue is reduced by coop advertising costs incurred to obtain product placement at large retail drugstores.
Cost of Sales
Cost of sales consists of merchant fees, material, packaging, freight costs and product placement expenses that exceed revenue for the units sold.
Operating Expenses
Selling, general and administrative expenses consist primarily of payroll taxes, health insurance, facility rent and administrative overhead costs.
Amortization and depreciation expenses consist primarily of depreciation of assets and amortization of the Company's LipiGesic? trademark and intellectual property received during its spin-off from the parent company in April 2007.
Marketing and advertising expense include payments for public relations, stock promotion and advertising consistent with the commercialization of products.
Professional fees consist of audit, legal, transfer agent, consulting, commission and directors fees.
Salaries include payments to the office manager.
Officers' salaries include payroll to the Chief Executive Officer and Chief Operating Officer.
Other Income Expense
Other Income Expense consists of interest expense and gain/loss on derivative liability.
Comparison of Operations for Three Months Ended September 30, 2014 and 2013
Revenue
Net revenue for the three months ended September 30, 2014 was $3,636 compared to $0 for the three months ended September 30, 2013. The revenue increased due to internet sales.
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Cost of Sales
Cost of sales for the three months ended September 3, 2014 was $4,932, compared to $26,603 for the three months ended September 30, 2013. Cost of sales decreased due to the absence of obsolete inventory write offs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $23,774 and $43,226 for the three months ended September 30, 2014 and 2013, respectively. The decrease is primarily attributed to the decrease in cost of our product liability insurance policy.
Amortization and Depreciation
Amortization and depreciation expenses for the three months ended September 30, 2014 and 2013 were $3,513 compared to $14,440, respectively. The decrease was due to certain intangible assets becoming fully amortized in 2014.
Professional Fees
Professional fees for the three months ended September 30, 2014 were $48,897 compared to $107,930 for the three months ended September 30, 2013. The decrease was attributed to the reduction in legal fees incurred.
Marketing and Advertising Expense
Marketing and advertising expense for the three months ended September 30, 2014 was $9,770 compared to $22,900 for the three months ended September 30, 2013. The decrease in the expenses was due to a reduction in the marketing and advertising expenditures.
Salaries
Salaries for the three months ended September 30, 2014 were $5,874, compared to $7,436 for the three months ended September 30, 2013. The decrease was due to the decrease in hours worked by the Office Manager during this time period.
Officers' Salaries
Officers' salaries for the three months ended September 30, 2014 and 2013 were $42,314 and $60,923, respectively. The decrease in salaries is attributed to the resignation of the Company's Chief Operating Officer in May of 2014, and a decrease in hours worked by the new Chief Operating Officer.
Interest Expense
Interest expense for the three months ended September 30, 2014 and 2013 was $431,930 and $125,999, respectively. The increase in the expense is attributed to an increase in the number of notes outstanding.
Loss on Derivative Liability
The loss on derivative liability for the three months ended September 30, 2014 and 2013 was $255,281 and $293,171, respectively. The loss on derivative liability is the difference in value using the lattice model for the warrants between the date issued and the quarter ended September 30, 2014 and 2013.
Net Loss
Net loss for the three months ended September 30, 2014 was $822,649 compared to $702,718 for the three months ended September 30, 2013. The increase in the loss for 2014 was due primarily to higher interest costs associated with convertible debt.
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Financial Condition, Liquidity and Capital Resources
As of September 30, 2014, the Company had cash of $28,120 and negative working capital of $5,628,766.
PuraMed intends to raise the funds needed to implement the Company's plan of operation through both private sales of debt and equity securities. There is no assurance, however, that the Company will be successful in raising the necessary capital to implement the Company's business plan, either through debt or equity sources.
Business Strategy
PuraMed's business strategy going forward is to re-launch its flagship migraine product LipiGesic M using the name and branded image MigraPure?. The Company plans to begin the promotion of MigraPure with a strong online presence and sampling program that will build awareness and acceptance of the general population and in selected markets. The goal of the re-launch is to drive sales . . .
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