UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-Q





(Mark One)





x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended September 30, 2010




or




o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from _____________ to ______________





Commission File Number 333-152-439








HEALTHMED SERVICES LTD.


(Exact name of registrant as specified in its charter)





Nevada
N/A(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)1250 Oakmead, Suite 210, Sunnyvale, California
94085(Address of principal executive offices)
(Zip Code)





866-428-5689


(Registrant’s telephone number, including area code)




N/A


(Former name, former address and former fiscal year, if changed since last report)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x YES    o NO





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





Large accelerated filer
o
Accelerated filer
oNon-accelerated filer
o (Do not check if a smaller reporting company)
Smaller reporting company
x







1








Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act   x YES    o NO





APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS





Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. o YES    o NO





APPLICABLE ONLY TO CORPORATE ISSUERS





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





182,100,000 common shares issued and outstanding as of December 3, 2010.










































2








PART I - FINANCIAL INFORMATION





Item 1.   Financial Statements.





These financial statements have been prepared by Healthmed Services Ltd. without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted in accordance with such SEC rules and regulations. In the opinion of management, the accompanying statements contain all adjustments necessary to present fairly the financial position of our company as of September 30, 2010, and our results of operations, and our cash flows for the three month and nine month periods ended September 30, 2010.





The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and the notes thereto filed as a part of our company’s Form 10-K.







































3








Healthmed Services Ltd


(A Development Stage Company)


September 30, 2010





IndexBalance Sheets (unaudited)
5Statements of Operations (unaudited)
6Statements of Cash Flows (unaudited)
7Notes to the Financial Statements (unaudited)
8-9
































4








HealthmedServices Ltd.


(A Development Stage Company)


Balance Sheets


(Unaudited)





September 30,


December 31,2010


2009ASSETSCurrent AssetsCash

$
–


$
8,073Total Assets

$
–


$
8,073LIABILITIES AND STOCKHOLDERS’EQUITY (DEFICIT)Current LiabilitiesAccounts payable and accrued liabilities

$
20,984


$
–Note payable


227,324



–Note payable – related party


375,000



–Total Liabilities


623,308



–Stockholders’ Equity (Deficit)Common Stock, 750,000,000 shares authorized, $0.001 par value,182,100,000 shares issued and outstanding


182,100



182,100Additional Paid-in Capital


12,750



12,750Deficit Accumulated During the Development Stage


(818,158
)


(186,777
)Total Stockholders’ Equity (Deficit)


(623,308
)


8,073Total Liabilities and Stockholders’ Equity (Deficit)

$
–


$
8,073























(The accompanying notes are an integral part of these financial statements)


5








Healthmed Services Ltd.


(A Development Stage Company)


Statements of Operations


(Unaudited)





Three months ended

September 30,


Nine months ended

September 30,


Period from

September 14,

2000

(Inception)

to September 30,2010

$



2009

$



2010

$



2009

$



2010

$ExpensesGeneral and administrative


5,772



683



8,824



6,344



42,295Professional fees


18,811



2,680



30,057



9,580



86,336Consulting fees


–



–



–



–



97,027Software development costs


292,500



–



592,500



–



592,500Net Loss


(317,083
)


(3,363
)


(631,381
)


(15,924
)


(818,158
)Net Loss Per Share – Basic and Diluted


(0.00
)


(0.00
)


(0.00
)


(0.00
)Weighted Average Shares Outstanding – Basic and Diluted


182,100,000



182,100,000



182,100,000



182,100,000









































(The accompanying notes are an integral part of these financial statements)




6








Healthmed Services Ltd.


(A Development Stage Company)


Statements of Cash Flows


(Unaudited)





Nine months ended

September 30,


September 14,

2000

(Inception)To September 30,2010

$


2009

$


2010

$Operating ActivitiesNet loss


(631,381
)


(15,924
)


(818,158
)Changes in operating assets and liabilities:Accounts payable and accrued liabilities


20,984



–



20,984Net Cash Used in Operating Activities


(610,397
)


(15,924
)


(797,174
)Financing ActivitiesProceeds from contributed capital


–



15,000



70,000Proceeds from sale of common stock


–



–



124,850Borrowings on debt


227,324



–



227,324Borrowings on debt – related party


375,000



–



375,000Cash Provided by Financing Activities


602,324



15,000



797,174Net Decrease in Cash


(8,073
)


(924
)


–Cash, Beginning of Period


8,073



2,906



–Cash, End of Period


–



1,982



–























(The accompanying notes are an integral part of these financial statements)




7








HealthmedServices Ltd.


(A Development Stage Company)


Notes to the Unaudited Financial Statements


(September 30, 2010)






NOTE 1.  GENERAL ORGANIZATION AND BUSINESS





Healthmed Services, Ltd. (The “Company”) was incorporated on September 14, 2000 as Telemax Communications, Inc, in Nevada. On July 14, 2003 the Company changed its name to Healthmed Services, Ltd. The Company has no operations and in accordance with Accounting Standards Codification Topic 915 is considered to be in the development stage.





NOTE 2. GOING CONCERN





The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in the notes to the financial statements, the Company has no established source of revenue. This raises substantial doubt about the Company’s ability to continue as a going concern. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.





The Company’s activities to date have been supported by equity financing. The Company has sustained losses in all previous reporting periods with an inception to date loss of $818,158. Management continues to seek funding from the Company’s shareholders and other qualified investors to pursue the Company’s business plan. In the alternative, the Company may be amenable to a sale, merger or other acquisition, in the event such transaction is deemed by management to be in the best interests of the shareholders.





NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES





Accounting Basis





The accompanying unaudited interim consolidated financial statements of Healthmed Services, Ltd., have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein.





Capitalized Software Costs





Software development costs have been expensed in accordance with ASC Topic 985-20, Software (formerly known as SFAS No. 86, Accounting for the Cost of Computer Software to be Sold, Leased, or Otherwise Marketed), which specifies that costs incurred internally in researching and developing a computer software product should be charged to expense until technological feasibility has been established for the product. Technological feasibility is established when we have a detailed design of the software and when research and development activities on the underlying device, if applicable, are completed. Once technological feasibility is established, all software costs







8








should be capitalized until the product is available for general release to customers. As of September 30, 2010, the Company’s software development has not reached technological feasibility, as high-risk development issues have not been fully resolved through coding or testing. During the nine months ended September 30, 2010, the Company expensed $592,500 related to software development.





Stock Split





On May 7, 2010, the Company executed a 1 for 30 forward stock split of its authorized and issued and outstanding shares of common stock.  As a result, the Company’s authorized capital increased from 25,000,000 shares of common stock with a par value of $0.001 to 750,000,000 shares of common stock with a par value of $0.001.  The number of issued and outstanding shares of common stock increased from 6,070,000 to 182,100,000. The statement of stockholders equity retroactively reflects the impact of this split.





New Accounting Pronouncements





The Company has evaluated all recently issued pronouncements and does not believe that there are any new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.





NOTE 4. NOTE PAYABLE





During the nine months ended September 30, 2010, the Company received loans totaling $227,324 and is, currently, in the process of negotiating the terms of those loans. During the period ended September 30, 2010, no interest was recorded on for these loans.





NOTE 5. NOTE PAYABLE – RELATED PARTY





During the nine months ended September 30, 2010, the Company received a loan totaling $375,000 from a shareholder. This loan accrues annual interest at a rate of 6% and matures on June 30, 2011. In the event of a default, that interest rate increases to 10%.





NOTE 6. SUBSEQUENT EVENTS





The Company entered into an oral agreement with Team TFZR (“TFZR”) for the development of the Company’s Virtual Vantage software and the neural communication software. The Company has paid to TFZR  $592,500 for the development of that software up to September 30, 2010 and an additional $100,000 subsequently.





The Company has attempted to (i) document the provisions of that agreement in writing and (ii) obtain from TFRZ documentation and information the Company requires to market that software. The Company and TFZR have not been able to resolve certain recently developed issues regarding the development of the software. Specifically, TFZR now demands significant additional consideration to provide the Company with that documentation and other information. Although the Company and its attorneys believe that, although oral, that agreement with TFZR is valid, the Company will not be able to market that software until TFZR finalizes and delivers that documentation and other information. Considering the impasse between the Company and TFZR, the Company may be required to acquire other software or similar property to utilize in the operation of its business.











9








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





FORWARD-LOOKING STATEMENTS





This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.





Our unaudited financial statements are stated in United States dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly 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, but are not limited to, those discussed below and elsewhere in this quarterly report.





In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common stock" refer to the common shares in our capital stock.





As used in this quarterly report, the terms "we", "us", "our", "our company," “the Company” and “Healthmed” mean Healthmed Services Ltd., unless otherwise stated.





General Overview





We were incorporated in the State of Nevada on September 14, 2000 with the name Telemax Communications, Inc. On July 14, 2003, we changed our name to Healthmed Services, Ltd. We are a development stage company and have not yet generated or realized any revenues from our business operations. We have never been bankrupt, under the control of a receiver or similar proceedings with respect to ourselves.





Our offices are currently located at 1250 Oakmead, Suite 210, Sunnyvale, California 94085. Our telephone number is 866-428-5689.





Our primary business objective is to use communications technology to provide individuals, companies and health-provider organizations with hardware and software solutions that will better the healthcare industry.





The Company entered into an oral agreement with Team TFZR (“TFZR”) for the development of the Company’s Virtual Vantage software and the neural communication software. The Company has paid to TFZR approximately $592,500 for the development of that software up to September 30, 2010 and an additional $100,000 subsequently.






10








The Company has attempted to (i) document the provisions of that agreement in writing and (ii) obtain from TFRZ documentation and information the Company requires to market that software. The Company and TFZR have not been able to resolve certain recently developed issues regarding the development of the software. Specifically, TFZR now demands significant additional consideration to provide the Company with that documentation and other information. Although the Company and its attorneys believe that, although oral, that agreement with TFZR is valid, the Company will not be able to market that software until TFZR finalizes and delivers that documentation and other information. Given the impasse between the Company and TFZR, the Company may be required to acquire other software or similar property to utilize in the operation of its business.




Results of Operations




Revenue




We have not earned any revenues since our inception, and we do not anticipate earning revenues in the upcoming quarter.





Expenses





Expenses for the three months and nine months ended September 30, 2010, increased $313,720 and $616,087, as compared to the comparative periods in 2009, respectively, as a result of software development costs of $292,500 and $592,500 incurred during the three and nine month periods ended September 30, 2010.





Equity Compensation





We currently do not have any stock option or equity compensation plans or arrangements.





Liquidity and Financial Condition




Working Capital





At


AtSeptember 30,


December 31,


Increase/2010


2009


DecreaseCurrent Assets

$
-


$
8,073


$
(8,073)Current Liabilities


623,308


-



(623,308)Working Capital

$
(623,308)


$
8,073


$
(615,235)





Cash Flows





Nine months


Nine monthsEnded


EndedSeptember 30,


September 30,2010


2009Net Cash (Used) by Operating Activities

$
(328,073)


$
(15,924)Net Cash Provided by Investing Activities

-


-Net Cash Provided by Financing Activities


375,000



15,000Net Increase in Cash During the Period

$
(8,073)


$
(924)





11








We estimate that we will spend approximately $500,000 on general and administrative expenses; $800,000 on software development costs; $25,000 on website development; and $50,000 on travel over the next 12 months.





We will require additional funds to fund our budgeted expenses over the next 12 months. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the ownership of our equity securities. 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 or her investment in our common stock. Further, we may continue to be unprofitable. We need to raise additional funds in the immediate future in order to proceed with our budgeted expenses.





We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way.





Future Financings





We will require additional financing in order to enable us to proceed with our plan of operations, as specified above, of approximately $1,375,000 over the next 12 months to pay for our ongoing expenses. These expenses include general and administrative, website and travel expenses. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we will require additional financing in order to continue operations and to repay our liabilities. There is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations or to repay our liabilities.





We anticipate continuing to rely on sales of our common stock in order to continue to fund our business operations. Issuances of additional shares of our common stock will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.





We presently do not have any arrangements for additional financing for the expansion of our plan of operations, and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of operations.





Subsequent Events





The Company entered into an oral agreement with Team TFZR (“TFZR”) for the development of the Company’s Virtual Vantage software and the neural communication software. The Company has paid to TFZR approximately $592,500 for the development of that software up to September 30, 2010 and a further $100,000 subsequently.





The Company has attempted to (i) document the provisions of that agreement in writing and (ii) obtain from TFRZ documentation and information the Company requires to market that software. The Company and TFZR have not been able to resolve certain recently developed issues regarding the development of the software. Specifically, TFZR now demands significant additional consideration to provide the Company with that documentation and other information. Although the Company and its attorneys believe that, although oral, that agreement with TFZR is valid, the Company will not be able to market that software until TFZR finalizes and delivers that documentation and other information. Given the impasse between the Company and TFZR, the Company may be required to acquire other software or similar property to utilize in the operation of its business.






12








Going Concern





The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in the notes to the financial statements, the Company has no established source of revenue. This raises substantial doubt about the Company’s ability to continue as a going concern. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.





The Company’s activities to date have been supported by equity financing. It has sustained losses in all previous reporting periods with an inception to date loss of $818,158. Management continues to seek funding from the Company’s shareholders and other qualified investors to pursue the Company’s business plan. In the alternative, the Company may be amenable to a sale, merger or other acquisition, in the event such transaction is deemed by management to be in the best interests of the shareholders.





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 stockholders.




Item 3.   Quantitative Disclosures About Market Risks.





As a “smaller reporting company”, we are not required to provide the information required by this Item.





Item 4.   Controls and Procedures.





Management’s Report on Disclosure Controls and Procedures





We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (who is acting as our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.





As of September 30, 2010, the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (who is acting as our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (who is acting as our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report, due to a lack of segregation of duties and an over-reliance on consultants involved in the accounting and financial reporting process.





Changes in Internal Control over Financial Reporting





There have been no changes in our internal controls over financial reporting that occurred during our quarter ended September 30, 2010 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.








13








PART II - OTHER INFORMATION





Item 1.   Legal Proceedings.





We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.





Item 1A.   Risk Factors.





As a “smaller reporting company”, we are not required to provide the information required by this item.





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





None.




Item 3.   Defaults Upon Senior Securities.





None.





Item 4.   [Removed and Reserved]





Item 5.   Other Information





None.





Item 6.   Exhibits.





Exhibits required by Item 601 of Regulation S-K





ExhibitNumber

Description(3)

Articles of Incorporation and By-laws3.1

Articles of Incorporation (incorporated by reference from our Registration Statement on Form S-1 filed on July 21, 2008)3.2

Certificate of Amendment (incorporated by reference from our Registration Statement on Form S-1 filed on July 21, 2008)3.3

Bylaws (incorporated by reference from our Registration Statement on Form S-1 filed on July 21, 2008)
   14
   (31)

Rule 13a-14(d)/15d-14(d) Certifications31.1*

Section 302 Certification of Principal Executive Officer.31.2*

Section 302 Certification of Principal Accounting Officer and Principal Financial Officer.(32)

Section 1350 Certifications32.1*

Section 906 Certification of Principal Executive Officer.32.2*

Section 906 Certification of Principal Accounting Officer and Principal Financial Officer.





* Filed herewith

































15








SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) 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.





HEALTHMED SERVICES LTD.(Registrant)Dated:  December 20, 2010
/s/ William MorlandWiliam MorlandPresident






Dated: December 20, 2010
/s/Dale PaisleyDale PaisleyCFO(Principal Accounting Officer)





























16