U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM
For the quarterly period ended
For the transition period from _____ to _____
Commission File No.
| (Exact Name of Registrant in its Charter) | |||
| (State or Other Jurisdiction of incorporation or organization) | (I.R.S. Employer I.D. No.) | ||
|
|
|||
|
(Address of Principal Executive Offices)
|
|||
| Issuer’s Telephone Number: |
|||
| (Registrant's telephone number, including area code) | |||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| None | None | Not Applicable |
Indicate by check mark whether the Registrant (1)
has filed all reports required to be filed by Sections 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.
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files.)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check One)
Large accelerated filer ☐ Accelerated
filer ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act) Yes ☐
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date:
November 23, 2022
Common Voting Stock:
HEALTHTECH SOLUTIONS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 2022
TABLE OF CONTENTS
| Part I. Financial Information | Page No. | |
| Item 1. | Financial Statements (unaudited): | F-1 |
| Consolidated Balance Sheets (Unaudited) – September 30, 2022 and December 31, 2021 | F-1 | |
| Consolidated Statements of Operations (Unaudited) - for the Three and Nine Months Ended September 30, 2022 and 2021 | F-2 | |
| Consolidated Statement of Changes in Stockholders' Equity (Deficit) (Unaudited) for the Three and Nine Months Ended September 30, 2022 and 2021 | F-3 | |
| Statements of Cash Flows (Unaudited) – for the Nine Months Ended September 30, 2022 and 2021 | F-4 | |
| Notes to Consolidated Financial Statements (Unaudited) | F-5 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 1 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 3 |
| Item 4. | Controls and Procedures | 3 |
| Part II. Other Information | ||
| Item 1. | Legal Proceedings | 4 |
| Item 1A. | Risk Factors | 4 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 4 |
| Item 3. | Defaults Upon Senior Securities | 4 |
| Item 4. | Mine Safety Disclosures | 5 |
| Item 5. | Other Information | 5 |
| Item 6. | Exhibits | 5 |
| Signatures | 5 | |
| HEALTHTECH SOLUTIONS INC. |
| CONSOLIDATED BALANCE SHEETS |
| (Unaudited) |
September 30, 2022 | December 31, 2021 | |||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Loan receivable | ||||||||
| Other receivable | ||||||||
| Total Current Assets | ||||||||
| Long Term Assets: | ||||||||
| Investment in and advance to non-consolidated affiliate | ||||||||
| Fixed Assets acquired net of accumulated depreciation | ||||||||
| Intangible assets net of accumulated amortization | ||||||||
| Total Long Term Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Loans from non-affiliated parties | ||||||||
| Loans from shareholders | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders' Equity (Deficit): | ||||||||
| Series A preferred stock, $ par value, authorized, and issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | ||||||||
| Common stock, $ par value, shares authorized, issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Stockholders' Equity (Deficit) Attributable to the Company: | ( | ) | ( | ) | ||||
| Non controlling Interest | ( | ) | ||||||
| Total Stockholders' Equity (Deficit) | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders' Equity (Deficit) | $ | $ | ||||||
| See notes to consolidated financial statements. | ||||||||
| F-1 |
| HEALTHTECH SOLUTIONS INC. |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited) |
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of Goods | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||
| General and administrative | ||||||||||||||||
| General and administrative-related party | ||||||||||||||||
| Research and development | ||||||||||||||||
| Research and development – related party | ||||||||||||||||
| Depreciation & Amortization | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Loss from Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Expenses (Income): | ||||||||||||||||
| Interest expense | ( | ) | ||||||||||||||
| Change in fair value of derivative liabilities | ( | ) | ||||||||||||||
| Total Other Expenses | ( | ) | ||||||||||||||
| Loss before provision for income tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income tax | ||||||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss attributable to non-controlling interest | $ | ( | ) | ( | ) | $ | ( | ) | ( | ) | ||||||
| Net Loss attributable to Controlling Interest | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per common share | ||||||||||||||||
| Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| See notes to consolidated financial statements. | ||||||||||||||||
| F-2 |
| HEALTHTECH SOLUTIONS INC. | ||||||||||||||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIENCY) EQUITY | ||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||
| Common Stock | Series A Preferred Stock | Series C Preferred Stock | ||||||||||||||||||||||||||||||||||||||
Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | Additional Paid-In Capital | Accumulated (Deficit) | Non-Controlling Interest | Total Stockholders' Equity (Deficit) | |||||||||||||||||||||||||||||||
| Balance at December 31, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||||||
| Capital contributions | ||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2021 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock | ||||||||||||||||||||||||||||||||||||||||
| Issuance of Series C Preferred for acquisition of Varian | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Non controlling interest associated with acquisition of Varian | ||||||||||||||||||||||||||||||||||||||||
| Conversion of Series A Preferred into common stock | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Conversion of Debentures into common stock | ||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance at June 30, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance at September 30, 2021 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2022 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2022 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for services | ||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for non-controlling interest | ( | |||||||||||||||||||||||||||||||||||||||
| Issuance of stock options | ||||||||||||||||||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance at September 30, 2022 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| See notes to consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||||
| F-3 |
| HEALTHTECH SOLUTIONS INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
| For the Nine Months Ended | ||||||||
| September 30, 2022 | September 30, 2021 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to Reconcile Net Loss to Net Cash used in operating activities: | ||||||||
| Amortization expense | ||||||||
| Depreciation expense | ||||||||
| Amortization of discount on convertible debenture | ||||||||
| Non-cash compensation | ||||||||
| Non-cash stock option expense | ||||||||
| Stock compensation expense | ||||||||
| Inventory reserve | ||||||||
| Allowance for bad debt | ||||||||
| Non-cash interest expense | ||||||||
| Change in fair value of derivative liabilities | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Prepaid commissions | ( | ) | ||||||
| Inventory | ( | ) | ||||||
| Accounts receivable | ( | ) | ||||||
| Other payable | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Cash paid for purchase of Varian, net of cash acquired | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds of loans from shareholders | ||||||||
| Proceeds from convertible debenture | ||||||||
| Settlement of loan from shareholder | ( | ) | ||||||
| Loans from non-affiliated parties | ||||||||
| Capital contributions | ||||||||
| Issuance of common stock | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Acquired noncontrolling interest in business acquisition | $ | $ | ||||||
Acquisition of noncontrolling interest for issuance of common stock | $ | $ | ||||||
| Issuance of Series C preferred shares related to business acquisition | $ | $ | ||||||
| See notes to consolidated financial statements. | ||||||||
| F-4 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Healthtech Solutions, Inc. (“Healthtech Solutions” or the “Company”) was incorporated in Utah on October 18, 1985. Since November 16, 2020, when the Company acquired all of the outstanding capital stock of Medi-Scan Inc., Healthtech Solutions has been pursuing a business plan in which the Company will acquire and/or invest in cutting edge healthcare technology in the medical device, biopharma and pharmaceutical fields. The goal will be to nurture these early stage ventures with financial support and administrative and technological assistance until their respective medical solutions are ready to enter the market. At the present time, the Company’s portfolio consists of three subsidiaries: 81.25% of Medi-Scan, Inc., 100% of RevHeart, Inc. and 70% of Healthtech Wound Care, Inc.
Acquisition of Medi-Scan Inc.
Medi-Scan Inc. (“Medi-Scan”) was organized in the State of Florida on September 25, 2018. In December 2018, Medi-Scan acquired a portfolio of intellectual property relating to medical imaging. Since December 2018, Medi-Scan has been engaged in developing practical applications for the medical imaging technology as well as related medical technology. In 2020 Medi-Scan applied for two patents based on its technology.
On November 12, 2020,
As a result of the Share Exchange, the Medi-Scan shareholders become the majority shareholders and had control of Healthtech Solutions. On November 12, 2020, when the Share Exchange Agreement was executed, the three members of the Healthtech Solutions Board of Directors were also the three managing members of Medi-Scan, entities under their control owned a majority of the outstanding capital stock of Medi-Scan, and an entity under the control of one of them owned a majority of the outstanding capital stock of Healthtech Solutions. Therefore, the Share Exchange was accounted for as a business combination of entities under common control in accordance with ASC 805-50-30-5. Accordingly, the assets and liabilities of Medi-Scan are presented at their carrying values as of the date of the Share Exchange.
Organization of RevHeart, Inc.
Healthtech Solutions organized RevHeart, Inc. in March 2021. RevHeart is focused on novel approaches to correct cardiac rhythm abnormalities using electromagnetic waveforms in an innovative approach called entrainment. Entrainment, which is currently used in treating tachycardia (rapid heartbeat), works by linking the patient’s abnormal heart rhythm together with a normal heart rhythm, and gently encouraging the abnormal rhythm to revert to a more normal rhythm. As part of these efforts, RevHeart is developing software technology that compares a healthy heart rhythm electronic signal with a damaged heart’s signal, and subsequently derives an electronic signal representing the potentially curative waveform.
Acquisition of Wound Care Business
In January 2022 Healthtech Solutions
organized Healthtech Wound Care, Inc. (“HWC”), which then acquired the business carried on by Predictive Biotech, Inc. (“PBI”)
relating to of the development of novel wound care products for acute and chronic wounds. PBI transferred all of its assets related to
that business to HWC in exchange for 30% of the equity in HWC, a commitment by HLTT to pay $
| F-5 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
Acquisition of Wound Care Business (continued)
HWC’s plan is to use the business acquired from PBI as the foundation for HWC’s program of identifying and developing a pipeline of human cell and tissue product (HCT/Ps) candidates that we believe have novel mechanisms of action and immediate clinical potential in accordance with applicable federal regulations.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2022, and the results of operations and cash flows for the periods presented. The results of operations for the nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Form 10-K for the year ended December 31, 2021, filed with the SEC on April 15, 2022.
The accompanying consolidated financial statements reflect the accounts of Healthtech Solutions, Inc. and its subsidiaries, Medi-Scan, RevHeart and Healthtech Wound Care, All significant inter-company accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ from those estimates. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.
Concentrations of Credit Risk
We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.
| F-6 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Inventory
Inventory consists of direct labor, raw material, production equipment,
and overhead and are stated at the lower of cost or net realizable value, less an allowance for obsolete inventory of $
Revenue Recognition
Under ASC 606, Revenue from Contracts with Customers, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step model prescribed under Accounting Standards Update (“ASU”) 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.
The Company generally deems its performance obligations under the terms of a contract to be satisfied when control of the product is transferred to the customer and treatment using the product is commenced. The Company’s payment terms are typically 60 days from the date of treatment using the product sold. Provisions for certain rebates, sales incentives, trade promotions, coupons, product returns, discounts to customers and governmental clawback provisions are accounted for as variable consideration and recorded as a reduction in revenue.
Product discounts granted are based on the terms of arrangements with direct, indirect and other market participants, as well as market conditions, including consideration of competitor pricing. Rebates are estimated based on contractual terms, historical experience, patient outcomes, trend analysis and projected market conditions in the markets served. A significant portion of the liability related to rebates is from the sale of the Company's products within the U.S., primarily the Managed Care, Medicare and Medicaid programs. The Company evaluates market conditions for products or groups of products primarily through the analysis of wholesaler and other third-party sell-through and market research data, as well as internally generated information.
Promotional programs, such as product listing allowances and cooperative advertising arrangements, are recorded in the same period as related sales. Continuing promotional programs include coupons and volume-based sales incentive programs. Volume-based incentive programs are based on the estimated sales volumes for the incentive period and are recorded as products are sold. These arrangements are evaluated to determine the appropriate amounts to be deferred or recorded as a reduction of revenue.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are stated at their net realizable value. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management's judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable, and current economic conditions. The determination of the collectability of amounts due requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer account, and the financial condition of the Company’s customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole.
| F-7 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Software Development Costs
In accordance with ASC 985-20, the Company expenses software development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products. Software development costs also include costs to develop software to be used solely to meet internal needs and cloud-based applications used to deliver our services. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed, and the software will be used to perform the function intended. Capitalization ends, and amortization begins when the product is available for general release to customers.
Research and Development
Research and development costs are expensed when incurred. Research and development costs include costs of research, engineering, and technical activities to develop a new product or service or make significant improvement to an existing product or manufacturing process. Research and development costs also include pre-approval regulatory and clinical trial expenses.
Intangible Assets
The Company reviews goodwill and intangible assets with indefinite lives for impairment according to the provisions of ASC Topic 350: "Intangibles - Goodwill and Other" at least annually and when events or changes in circumstances indicate the carrying amount may not be recoverable. The Company measures recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the carrying value of the assets are not recoverable, the impairment recognized is measured as the amount by which the carrying value of the asset exceeds its fair value. Management has determined that no impairment exists as of September 30, 2022.
Convertible Instruments
The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815, Derivatives and Hedging Activities.
Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of this note transaction and the effective conversion price embedded in this note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.
The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.
| F-8 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The Company follows the provisions of FASB ASC 718 requiring employee equity awards to be accounted for under the fair value method. Accordingly, share-based compensation is measured at grant date, based on the fair value of the award and recognized over its vesting period. No equity instruments were granted to employees during the nine months ending September 30, 2022 and no compensation expense is required to be recognized under provisions of ASC 718 with respect to employees.
Fair Value of Financial Instruments
The Company follows ASC 825-10-50-10 with respect to disclosures about fair value of its financial instruments and ASC 820-10-35-37 to measure the fair value of its financial instruments. ASC 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
| · | Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| · | Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| · | Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.
Financial assets and liabilities of the Company primarily consist of cash, prepaid expenses, accounts payable and accrued liabilities, other payables and convertible debentures. As of June 30, 2022, the carrying values of these financial instruments (other than convertible debentures) approximated their fair values due to the short-term nature of these instruments.
See: Note 10, "Derivative Financial Instruments", for fair value disclosures regarding the convertible debentures issued by the Company in November 2020 and exchanged for Common Stock on May 6, 2021. The derivative liability is classified as a Level 3 liability and is the only financial liability measure at fair value on a recurring basis.
There were no transfers between level 1, level 2 or level 3 measurements during the nine months ending September 30, 2022.
The Company calculates earnings per share (“EPS”) as required by ASC 260, Earnings Per Share. Basic EPS is calculated by dividing the net income available to common stockholders by the weighted average number of common shares outstanding for the period, excluding common stock equivalents. Diluted EPS is computed by dividing the net income available to common stockholders by the weighted average number of common shares outstanding for the period, plus the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. For periods with a net loss, the dilutive common stock equivalents are excluded from the diluted EPS calculation. For purposes of this calculation, common stock subject to repurchase by the Company, options, and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive.
| F-9 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
The Company follows ASC Topic 740, Income Taxes, which requires the recognition of deferred income taxes for the differences between the basis of assets and liabilities for financial statements and income tax purposes. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.
Deferred tax assets are also recognized for operating losses and for tax credit carryforwards. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740-10-30 requires income tax positions to meet a more-likely-than-not
recognition threshold to be recognized in the financial statements. Under ASC 740-10-30, tax positions that previously failed to meet
the more-likely-than-not threshold should be recognized in the first subsequent financial reporting period in which that threshold is
met. Under ASC 740-10-40, previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized
in the first subsequent financial reporting period in which that threshold is no longer met. The Company had
The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities or the deferred tax asset valuation allowance.
Recently Adopted Accounting Standards
The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any recently issued pronouncements to have an impact on its results of operations or financial position.
NOTE 3 – GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company
has generated limited revenue since inception, and had an accumulated deficit of $
Management anticipates that the Company will be dependent, for the near future, on additional investment capital or debt to fund operating expenses until its planned operations generate sufficient revenue to offset the Company’s expenses. Management, therefore, is actively pursuing sources of investment capital, including both investment into Healthtech Solutions and investment into one or more of its subsidiaries. At present, the Company has received no firm commitment of investment capital. The Company is financing its current operations, therefore, by means of loans from its shareholders and a third party. None of these parties, however, has any contractual or other commitment to continue to lend money to the Company.
| F-10 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
NOTE 4 – INTANGIBLE ASSETS
The Company’s intangible assets as of September 30, 2022 consisted
of two patents pending that were acquired by Healthtech Wound Care, Inc. on January 31, 2022 and valued on that date at $
The Company’s intangible assets during the three and nine months
ended September 30, 2021 consisted of the intellectual property relating to medical imaging contributed to Medi-Scan in 2018 as a capital
contribution. The intangible assets were amortized over three years. Amortization expense relating to the intangible assets totaled $
NOTE 5 – INVESTMENT IN AND ADVANCE TO NON-CONSOLIDATED SUBSIDIARY
On May 7, 2021 the Company acquired ownership of Varian Biopharmaceuticals, Inc. (“Varian”) from its original shareholders (the “Varian Shareholders”) in exchange for .184 shares of Series C Preferred Stock issued by Healthtech Solutions. The Company determined that the fair value of the Series C Preferred Stock was equal to the amount of cash acquired in the transaction plus the amount of debt in excess of that cash that was assumed, and allocated the fair value accordingly between the assets acquired and the liabilities assumed.
The parties subsequently agreed that the relationship between Healthtech Solutions and Varian was not achieving its intended results. Therefore, on November 9, 2021, the Company entered into a Share Exchange Agreement (the "SEA") with the Varian Shareholders. in order to unwind its acquisition of Varian. Pursuant to the SEA, (a) the Varian Shareholders returned to Healthtech all of the outstanding shares of Healthtech Series C Preferred Stock and (b) Healthtech caused all of the outstanding shares of Varian common stock to be returned to the Varian Shareholders. Immediate subsequently, Varian issued to Healthtech Varian shares that represent 5.5% of the outstanding shares of Varian.
The Company has valued its 5.5% interest in Varian at $
NOTE 6 – ACQUISITION OF WOUND CARE BUSINESS
On January 31, 2022, pursuant to the Asset Purchase Agreement dated
January 18, 2022 among the Company and its newly-organized subsidiary, Healthtech Wound Care, Inc. (“HWC”), Predictive Technology
Group, Inc. (“PTG”) and its subsidiary, Predictive Biotech, Inc. (“Biotech”), HWC acquired the assets of Biotech
that were related to Biotech’s wound care business and entered into an Operations Agreement with Biotech and PTG containing terms
of their future relationship. The Company received from PTG three year options to purchase Biotech and/or Cellsure, LLC, another subsidiary
of PTG, each for a purchase price of $
In consideration of the transfer of its wound care business to
HWC, HWC issued preferred shares to Biotech and the Company paid Biotech and PTG $
The Company accounted for the acquisition as a business combination.
The Company determined that the consideration for the business was the sum of $
| F-11 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
NOTE 6 – ACQUISITION OF WOUND CARE BUSINESS (Continued)
| Consideration | ||||
| Cash paid | $ | |||
| Assets Acquired | ||||
| Equipment | $ | |||
| Patents Pending | ||||
| Prepaid Commissions | ||||
| Net assets acquired | $ | |||
NOTE 7 – RELATED PARTIES
David Rubin was a managing member of Medi-Scan commencing in May
2020 and served as Chairman and CEO of Healthtech Solutions from September 2020 through July 19, 2021. In May 2020 David Rubin, through
his personal holding company, Storm Funding LLC, agreed to contribute $
On May 4, 2021 the Company entered into an Advisory Agreement with
Kleinfeld Legal Services P.A., which is owned by Denis Kleinfeld. Mr. Kleinfeld was, until April 24, 2021, a member of the Company's Board
of Directors. Pursuant to the Advisory Agreement, Kleinfeld Legal Services P.A. agreed to provide legal and advisory services to Medi-Scan
Inc. during the two years ended May 4, 2023. In consideration of the services, the Company agreed to pay Kleinfeld Legal Services a $
On September 13, 2022, HLTT and Medi-Scan Inc. entered into a Share
Exchange Agreement with Denis Kleinfeld, Kleinfeld Legal Services PA (“KLS”), and four entities that owned minority shares
in Medi-Scan, Inc.: DAK 2017 Trust Resolution, Jaclene Kleinfeld Trust, DYBIM, LLC and Doncaster Holdings, LLC (the “Medi-Scan Shareholders”).
During the nine months ending September 30, 2022, the Company borrowed
$
| F-12 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
NOTE 8 – SHAREHOLDERS EQUITY
Authorized Capital Stock
The following table sets forth information, as of September 30, 2022, regarding the classes of capital stock that are authorized by the Articles of Incorporation of Healthtech Solutions, Inc.
| Class | Shares Authorized | Shares Outstanding | ||||||
| Common Stock, $.001 par value | ||||||||
| Series A Preferred Stock, $.001 par value | ||||||||
| Undesignated Preferred Stock, $.001 par value | ||||||||
Series A Preferred Stock. The Series
A Preferred Stock was authorized on November 16, 2020.
Undesignated Preferred Stock. The Board of Directors has authority, without shareholder approval and by resolution of the Board of Directors, to amend the Corporation's Articles of Incorporation to divide the class of undesignated Preferred Stock into series, to designate each such series by a distinguishing letter, number or title so as to distinguish the shares thereof from the shares of all other series and classes, and to fix and determine the following relative rights and preferences of the shares of each series so established.
Issuance of Common Stock
On September 6, 2022, the Company issued a total of shares of common stock to three individuals as compensation for consulting services rendered. The shares were valued at the previous market closing price of $ per share.
On September 13, 2022, the Company
issued shares
of common stock to two entities. The shares were issued (a) in satisfaction of an account payable of $
Grant of Stock Options
On September 6, 2022, the Company granted three-year options for
million common shares, exercisable at $
per share, to the shareholders who provided loans to HLTT during the preceding 12 months. The options vested immediately. The grant
was made in compensation for the loans. The aggregate fair value of the options was determined to be $
Below are the assumptions applied in determining the fair value of the options:
| Stock option assumptions | ||||
| Risk-free interest rate | % per annum | |||
| Expected dividend yield | ||||
| Expected volatility | % per annum | |||
| Expected life of options (in years) | years |
Capital Contributions
Medi-Scan's founders contributed to the Company $
| F-13 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
NOTE 9 – EXCHANGEABLE NOTES AND CONVERTIBLE DEBENTURES
In August and September of 2020,
On May 6, 2021, by agreement with the holders of the 7% Convertible Debentures,
the Company issued
NOTE 10 – DERIVATIVE FINANCIAL INSTRUMENTS
The Company determined that the conversion feature of the
The fair value of the derivatives embedded in the
At March 31, 2021, the Company marked to market
the fair value of the nine derivatives and determined a fair value of $
At May 6, 2021, just prior to settlement, the Company marked-to-market
the fair value of the nine derivatives and determined a fair value of $
| F-14 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
NOTE 10 – DERIVATIVE FINANCIAL INSTRUMENTS (Continued)
A summary of changes in Convertible Debentures for the period ending June 30, 2021 was as follows:
| Balance at December 31, 2020 | $ | |||
| Issuance in February 2021 | $ | |||
| Change in fair value | ( | ) | ||
| Balance at March 31, 2021 | $ | |||
| Change in fair value | ||||
| Settlement upon exchange for Common Stock | ( | ) | ||
| Balance at June 30, 2021 |
NOTE 11 – INCOME TAX
The provision (benefit) for income taxes consisted of the following for the nine month periods ended September 30, 2022 and 2021:
September 30, 2022 | September 30, 2021 | |||||||
| U.S. federal statutory rate | % | % | ||||||
| State tax, net of federal benefit | % | % | ||||||
| Change in valuation allowance | ( | %) | ( | %) | ||||
| Net deferred tax assets | ||||||||
The following table reconciles the effective income tax rates with the statutory rates for the nine month periods ended September 30, 2022 and 2021:
| U.S. federal statutory rate | % | |||
| State tax, net of federal benefit | % | |||
| Change in valuation allowance | % | |||
| Effective income tax rate | % |
Deferred tax assets are comprised of the following:
|
September 30, 2022 |
December 31, 2021 | |||||||
| Net operating loss carryforwards | $ | $ | ||||||
| Valuation allowance | ( |
) | ( |
) | ||||
| Net deferred tax assets | $ | |||||||
| F-15 |
HEALTHTECH SOLUTIONS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
NOTE 11 – INCOME TAX (Continued)
At September 30, 2022, the Company had approximately $
The Company assesses the likelihood that deferred tax assets will be realized. To the extent that realization is not likely, a valuation allowance is established. Based upon the Company’s losses since inception, management believes that it is more likely than not that future benefit of the deferred tax asset will not be realized principally due to the continuing losses from operations and the change of ownership limitations and has therefore established a full valuation allowance.
The tax years ending December 31, 2020 and 2021 remain open to examination by the taxing authorities.
NOTE 12 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company’s management has performed subsequent events procedures through the date these financial statements were issued and determined that there are no reportable subsequent events.
* * * *
| F-16 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
At the end of January 2022 we acquired from Predictive Biotech, Inc. all of the assets related to its business of developing and producing wound care treatments, including a placental membrane allograft designed to act as a covering or barrier for the protection of burns and non-healing wounds such as diabetic foot ulcers. Since acquiring those assets in our newly organized subsidiary, Healthtech Wound Care, Inc. (“HWC”), we have focused our immediate attention on achieving the regulatory approvals necessary for HWC to bring its allografts to market and initiating the marketing of our allografts. $1,391,194 (i.e. 96%) of the $1,448,596 that we devoted to research and development during the first nine months of 2022 was attributable to efforts of HWC to complete and test a market-ready version of its allograft.
Sales of our wound care allografts commenced in September 2022, as we delivered allografts to five customers for an aggregate purchase price, net of discounts, of $776,221. Payments for the sales did not commence until October, so we recorded accounts receivable from the sales of $720,777, representing the net sales revenue less an allowance for doubtful accounts of $55,444. After recording $51,834 in cost of goods sold (i.e. proportionate allocation to the products sold of the direct costs attributable to their production), we recorded gross profit of $720,175 for the three and nine months ended September 30, 2022. We expect that in future periods our gross margin ratio will be lower than the ratio we recorded in the periods ended September 30, 2022.
The cost of our operations is primarily classified as general and administrative, which totaled $1,113,908 (including $82,500 payable to related parties) during the quarter ended September 30, 2022 and $1,844,649 (Including $172,500 payable to related parties) during the nine months ended September 30, 2022. These expenses primarily involve insurance premiums, office expenses, legal and accounting expenses, compensation of consultants, and other expenses incurred in developing Healthtech Solutions into a viable incubator of development stage medical companies. In total, our operating expenses for the three and nine months ended September 30, 2022 were $1,569,308 and $3,350,452, respectively, resulting in net loss of $844,921 for the three months ended September 30, 2022 and $2,626,066 for the nine months ended September 30, 2022.
We expect that the manufacture and sale of allografts by HWC will become profitable in the foreseeable future. Our business plan, however, contemplates a breadth of operations in addition to wound care treatments. For that reason, our research and development expenses will rise significantly if we obtain the capital resources necessary to fully implement our business plan. In particular, expansion of the operations of HWC to include additional product lines and the effort to bring MediScan’s and RevHeart’s technology to market will require several million dollars of capital expense. For that reason, we cannot predict when we will achieve company-wide profitability.
Our loss from operations during the first nine months of 2021 was $2,973,242, the largest portion of which was related to the market value of common stock that we granted to attract management, research and development expertise and other individuals qualified to aid our projects. Of the $2,973,242 in operating expenses incurred during the nine months ended September 30, 2021, stock compensation represented $1,029,028 of the expense.
In the fall of 2020, prior to the reverse merger of Healthtech Solutions into MediScan, MediScan sold 7% Convertible Debentures to obtain capital. In connection with the reverse merger, the MediScan debentures were exchanged for 7% Convertible Debentures issued by Healthtech Solutions. Healthtech Solutions then sold additional Debentures, with the result that by during the first nine months of 2021 the greater portion of our net loss reflected “other expenses” related to the convertible debentures. In particular, during the six months ended June 30,2021, we incurred items of Other Expenses that added $3,300,879 to our net loss, specifically:
| · | $367,144 in interest expense due to accretion of the debenture discount; and | ||
| · | A loss of $2,933,735 due to an increase in the fair value of derivative liabilities, related to the 7% Convertible Debentures. |
We accounted for our convertible debt in accordance with ASC 815, Derivatives and Hedging as the conversion feature embedded in the convertible debentures could have resulted in the debenture principal and related accrued interest being converted to a variable number of our common shares. The conversion feature on these debentures was variable and based on trailing market prices. It therefore contained an embedded derivative. The fair value of the conversion feature was calculated when the debentures were issued, and we recorded a debenture discount and derivative liability for the calculated value. We recognized interest expense for accretion of the debenture discount over the term of the note. The conversion liability was valued at the end of the reporting period and resulted in income for the reduction in fair value. Among the reasons why we negotiated a cancellation of the Debentures in exchange for common stock was that the volatile price of our stock meant that the gain or loss realized due to the Debentures could often be material to our results.
| 1 |
After taking Other Expenses into account, Healthtech Solutions realized a net loss of $844,921 ($0.01 per share) in the three months ended September 30, 2022. However, 30% of HWC and 18.75% of Medi-Scan were owned by minority investors during that period. Therefore, $105,398 of the net loss contributed by HWC and $3,448 of the net loss contributed by Medi-Scan during the three months ended September 30, 2022 were attributable to those minority interests. These are recorded on our Statement of Operations as “net loss attributable to non-controlling interest.” The remainder, the “net loss attributable to controlling interest”, was $736,075 for the three months ended September 30, 2022.
For the same reason, $448,473 of the net loss realized during the nine months ended September 30, 2022 was attributed to the minority interests, leaving a net loss of $2,177,592 attributable to the controlling interest.
For the three and nine months ended September 30, 2021, the net loss attributable to controlling interest was $1,201,764 and $6,269,511, respectively.
Liquidity and Capital Resources
Our company is designed to function as an incubator for development stage medical technology enterprises. During 2021 and 2020 our statements of cash flows reflected that design: in each year we raised capital from the sale of securities and used approximately the amount of cash raised to fund medical research. Our administrative expenses, albeit representing a large portion of our loss in each year, were primarily paid for by issuance of common stock.
During the first nine months of 2022 we modified the funding process. For the funds needed to sustain our operations in the first nine months of 2022, particularly the funds required by HWC to complete development of its allografts and bring them to market, we relied on loans from shareholders and from non-affiliated parties. During those nine months, we borrowed $1,024,631 from shareholders and $1,146,000 from non-affiliated parties.
In the first quarter of 2022, from the loans received from shareholders and non-affiliated parties, we advanced $349,432 to Predictive Biotech, Inc. and its parent as a prepayment of future commissions pursuant to the terms under which we purchased their wound care business. We also reclassified to prepaid commissions a loan of $168,000 that we made to Predictive Biotech, Inc. in December 2021. (Because two of our five customers during the third quarter of 2022 are commissionable to Predictive Biotech, Inc., we amortized $116,000 of the prepaid commissions in that quarter.) The remainder of the loan proceeds funded the net cash that we used in our operating activities during the first nine months of 2022.
In the first nine months of 2021, our sources and uses of funds differed somewhat from the first nine months of 2022. We entered 2021 with $128,996 in the bank (proceeds from the sale of convertible debentures). We added to that $1,792,500 proceeds from the sale of our common stock, $50,000 in debenture proceeds and $121,084 in proceeds of the initial loans from shareholders. That combination enabled us to fund the $1,570,582 that we used in operating activities and the $437,055 that we contributed to the operations of Varian while it was our subsidiary.
At December 31, 2021 Healthtech Solutions had a working capital deficit of $757,563. During the first nine months of 2022, we increased the working capital deficit by $1,970,294 to $2,727,857. The increase in the working capital deficit occurred primarily because we borrowed funds on a short-term basis and used the funds to pay our present expenses and prepay future expenses.
We expect HWC’s wound care business to become profitable during the fourth quarter of 2022, which will alleviate some of the cash flow burden of that business. That revenue, occurring shortly after our acquisition of the wound care business, will likely be the exception to the norm for our portfolio companies. Our business plan contemplates that, to attract exciting additions to our portfolio, we will offer most the several million dollars of financing that is necessary to bring a medical technology to a stage where its sponsor can function independently. Since our ambition is to sustain a portfolio of such enterprises, our near term capital requirements (near term being the two to three years before we can anticipate initial returns on most of our investments) will be tens of millions of dollars.
| 2 |
Note 3 to our consolidated financial statements discloses that the financial condition of Healthtech Solutions raises substantial doubt as to the Company's ability to continue as a going concern. Management intends to pursue one or more offerings of securities in order to obtain the funds that will be necessary for successful implementation of our business plan. At present, however, no commitments for future funding have been received.
Application of Critical Accounting Policies
In preparing our financial statements we are required to formulate working policies regarding valuation of our assets and liabilities and to develop estimates of those values. In our preparation of the financial statements for the three and nine month periods ended September 30, 2022, there were three estimates made which were (a) subject to a high degree of uncertainty and (b) material to our results. These were:
| ● | Our determination to record $60,000 as the fair value of the 5.5% interest in Varian Biopharmaceuticals, Inc. that we received in November 2021. This determination was based on the financial condition of Varian Biopharmaceuticals at that time and the absence of objective criteria for attributing fair value to its technology. The fair value of Varian Biopharmaceuticals is included in the item on our Balance Sheets titled “Investment in and advance to non-consolidated affiliate.” | ||
| ● | Our determination to record an allowance of $257,432 with respect to the book value of the $517,432 prepaid commission that we advanced to Predictive Technology Group, Inc. (“PTG”) in connection with our purchase of the wound care business carried on by PTG’s subsidiary, Predictive Biotech, Inc. (See: Note 6 to the Consolidated Financial Statements.) Our determination was based on the fact that the prepaid commissions will be earned by PTG only as a result of sales to three specific customers and the fact that at the time of the acquisition Predictive Biotech, Inc. did not have a marketable product. | ||
| ● | Our determination to record an allowance for bad debt totaling five percent of the gross revenue from sales of allografts. The determination was based on industry norms, as we have experienced only one month of sales. |
Impact of Accounting Pronouncements
There were no recent accounting pronouncements that have or will have a material effect on the Corporation’s financial position or results of operations.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. As of September 30, 2022, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures have the following material weaknesses:
| 3 |
● Substantial portions of our accounting functions are outsourced, thus reducing the ability of senior management to supervise those functions.
● The relatively small number of our employees who are responsible for accounting functions prevents us from segregating duties within our internal control system.
● Our internal financial staff lack expertise in identifying and addressing complex accounting issues under U.S. Generally Accepted Accounting Principles.
● We have not developed sufficient documentation concerning our existing financial processes, risk assessment and internal controls.
Based on his evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s system of disclosure controls and procedures was not effective as of September 30, 2022 for the purposes described in this paragraph.
Changes in Internal Controls. There was no change in internal control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act or 1934) identified in connection with the evaluation described above that occurred during Healthtech Solutions' third fiscal quarter that has materially affected or is reasonably likely to materially affect Healthtech Solutions' internal control over financial reporting.
PART II - OTHER INFORMATION
| Item 1. | Legal Proceedings |
| None. | |
| Item 1A | Risk Factors |
| There has been no change from the risk factors described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021. | |
| Item 2 | Unregistered Sale of Securities and Use of Proceeds |
| (a) Unregistered sales of equity securities | |
|
On September 6, 2022 the Company issued 500,000 shares of common stock to three individuals in compensation for consulting services provided to the Company. The shares were valued at $.20 per share. The shares were issued in a private offering to investors who were acquiring the shares for their own accounts. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) of the Securities Act.
On September 13, 2022 the Company issued a total of 2,500,000 shares of common stock to two entities. The shares were issued in satisfaction of payment due for consulting services rendered and in exchange for 19.99% of the outstanding capital stock of Medi-Scan, Inc. The shares were valued at $.19 per share. The shares were issued in a private offering to investors that were acquiring the shares for their own accounts. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) of the Securities Act.
Except as noted above, there were no unregistered sales of equity securities by the Company during the third quarter of fiscal year 2022, other than those reported in Current Reports on Form 8-K. | |
| (c) Purchases of equity securities | |
| The Company did not repurchase any of its equity securities that were registered under Section 12 of the Securities Exchange Act during the third quarter of fiscal year 2022. | |
| Item 3. | Defaults Upon Senior Securities. |
| None. |
| 4 |
| Item 4. | Mine Safety Disclosures. |
| Not Applicable. | |
| Item 5. | Other Information. |
| None. | |
| Item 6. | Exhibits | |
| 31-a | Rule 13a-14(a) Certification of CEO and CFO | |
| 32-a | Rule 13a-14(b) Certification of CEO and CFO | |
| 101.INS | Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document | |
| 101.SCH | Inline XBRL Schema | |
| 101.CAL | Inline XBRL Calculation | |
| 101.DEF | Inline XBRL Definition | |
| 101.LAB | Inline XBRL Label | |
| 101.PRE | Inline XBRL Presentation | |
| 104 | Cover page formatted as Inline XBRL and contained in Exhibit 101 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| HEALTHTECH SOLUTIONS, INC. | |
| Date: November 23, 2022 | By: /s/ Manuel Iglesias Manuel Iglesias, Chief Executive, Financial and Accounting Officer |
| 5 |
EXHIBIT 31-a: Rule 13a-14(a) Certification of CEO and CFO
I, Manuel Iglesias, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Healthtech Solutions, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
| Date: November 23, 2022 | /s/ Manuel Iglesias |
| Manuel Iglesias, Chief Executive and Financial Officer |
EXHIBIT 32-a: Rule 13a-14(b) Certification of CEO and CFO
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Healthtech Solutions, Inc. (the “Company”) certifies that:
1. The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: November 23, 2022 | /s/ Manuel Iglesias |
| Manuel Iglesias, Chief Executive and Financial Officer |
Cover - shares |
9 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Nov. 23, 2022 |
|
| Cover [Abstract] | ||
| Document Type | 10-Q | |
| Amendment Flag | false | |
| Document Quarterly Report | true | |
| Document Transition Report | false | |
| Document Period End Date | Sep. 30, 2022 | |
| Document Fiscal Period Focus | Q3 | |
| Document Fiscal Year Focus | 2022 | |
| Current Fiscal Year End Date | --12-31 | |
| Entity File Number | 0-51012 | |
| Entity Registrant Name | HEALTHTECH SOLUTIONS, INC./UT | |
| Entity Central Index Key | 0001307624 | |
| Entity Tax Identification Number | 84-2528660 | |
| Entity Incorporation, State or Country Code | UT | |
| Entity Address, Address Line One | 181 Dante Avenue | |
| Entity Address, City or Town | Tuckahoe | |
| Entity Address, State or Province | NY | |
| Entity Address, Postal Zip Code | 10707 | |
| City Area Code | 844 | |
| Local Phone Number | 926-3399 | |
| Entity Current Reporting Status | Yes | |
| Entity Interactive Data Current | Yes | |
| Entity Filer Category | Non-accelerated Filer | |
| Entity Small Business | false | |
| Entity Emerging Growth Company | false | |
| Entity Shell Company | false | |
| Entity Common Stock, Shares Outstanding | 69,965,933 |
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Common stock, par value per share | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 200,000,000 | 200,000,000 |
| Common stock, shares issued | 69,965,933 | 69,965,933 |
| Common stock, shares outstanding | 69,965,933 | 69,965,933 |
| Series A Preferred Stock [Member] | ||
| Series A Preferred Stock, par value per share | $ 0.001 | $ 0.001 |
| Series A Preferred Stock,shares authorized | 2,000,000 | 2,000,000 |
| Series A Preferred Stock, shares issued | 110,520 | 156,837 |
| Series A Preferred Stock,shares outstanding | 110,520 | 156,837 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Income Statement [Abstract] | ||||
| Revenue | $ 776,221 | $ 776,221 | ||
| Cost of Goods | 51,834 | 51,834 | ||
| Gross Profit | 724,387 | 724,387 | ||
| Operating Expenses: | ||||
| General and administrative | 1,031,408 | 938,052 | 1,672,149 | 1,870,403 |
| General and administrative-related party | 82,500 | 92,500 | 172,500 | 426,049 |
| Research and development | 415,947 | 150,130 | 1,394,596 | 346,864 |
| Research and development – related party | 18,000 | 18,000 | 54,000 | 304,000 |
| Depreciation & Amortization | 21,453 | 6,482 | 57,207 | 25,926 |
| Total Operating Expenses | 1,569,308 | 1,205,164 | 3,350,452 | 2,973,242 |
| Loss from Operations | (844,921) | (1,205,164) | (2,626,066) | (2,973,242) |
| Other Expenses (Income): | ||||
| Interest expense | (367,144) | |||
| Change in fair value of derivative liabilities | (2,933,735) | |||
| Total Other Expenses | (3,300,879) | |||
| Loss before provision for income tax | (844,921) | (1,205,164) | (2,626,066) | (6,274,121) |
| Provision for income tax | ||||
| Net Loss | (844,921) | (1,205,164) | (2,626,066) | (6,274,121) |
| Net loss attributable to non-controlling interest | (108,846) | (3,400) | (448,472) | (4,610) |
| Net Loss attributable to Controlling Interest | $ (736,075) | $ (1,201,764) | $ (2,177,592) | $ (6,269,511) |
| Loss per common share | ||||
| Basic | $ (0.01) | $ (0.04) | $ (0.04) | $ (0.31) |
| Weighted average shares outstanding | ||||
| Basic | 67,334,064 | 29,145,933 | 67,089,094 | 19,932,187 |
ORGANIZATION AND NATURE OF BUSINESS |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Accounting Policies [Abstract] | |
| ORGANIZATION AND NATURE OF BUSINESS | NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Healthtech Solutions, Inc. (“Healthtech Solutions” or the “Company”) was incorporated in Utah on October 18, 1985. Since November 16, 2020, when the Company acquired all of the outstanding capital stock of Medi-Scan Inc., Healthtech Solutions has been pursuing a business plan in which the Company will acquire and/or invest in cutting edge healthcare technology in the medical device, biopharma and pharmaceutical fields. The goal will be to nurture these early stage ventures with financial support and administrative and technological assistance until their respective medical solutions are ready to enter the market. At the present time, the Company’s portfolio consists of three subsidiaries: 81.25% of Medi-Scan, Inc., 100% of RevHeart, Inc. and 70% of Healthtech Wound Care, Inc.
Acquisition of Medi-Scan Inc.
Medi-Scan Inc. (“Medi-Scan”) was organized in the State of Florida on September 25, 2018. In December 2018, Medi-Scan acquired a portfolio of intellectual property relating to medical imaging. Since December 2018, Medi-Scan has been engaged in developing practical applications for the medical imaging technology as well as related medical technology. In 2020 Medi-Scan applied for two patents based on its technology.
On November 12, 2020, Healthtech Solutions entered into an exchange agreement with Medi-Scan and all of the shareholders of Medi-Scan, pursuant to which the shareholders of Medi-Scan agreed to transfer all of the issued and outstanding stock of Medi-Scan to Healthtech Solutions, and Healthtech Solutions agreed to issue to the shareholders of Medi-Scan, Inc. 156,837 shares of its Series A Preferred Stock, which at that time represented 97% of the equity in Healthtech Solutions. The exchange of equity (the "Share Exchange") was completed on November 16, 2020.
As a result of the Share Exchange, the Medi-Scan shareholders become the majority shareholders and had control of Healthtech Solutions. On November 12, 2020, when the Share Exchange Agreement was executed, the three members of the Healthtech Solutions Board of Directors were also the three managing members of Medi-Scan, entities under their control owned a majority of the outstanding capital stock of Medi-Scan, and an entity under the control of one of them owned a majority of the outstanding capital stock of Healthtech Solutions. Therefore, the Share Exchange was accounted for as a business combination of entities under common control in accordance with ASC 805-50-30-5. Accordingly, the assets and liabilities of Medi-Scan are presented at their carrying values as of the date of the Share Exchange.
Organization of RevHeart, Inc.
Healthtech Solutions organized RevHeart, Inc. in March 2021. RevHeart is focused on novel approaches to correct cardiac rhythm abnormalities using electromagnetic waveforms in an innovative approach called entrainment. Entrainment, which is currently used in treating tachycardia (rapid heartbeat), works by linking the patient’s abnormal heart rhythm together with a normal heart rhythm, and gently encouraging the abnormal rhythm to revert to a more normal rhythm. As part of these efforts, RevHeart is developing software technology that compares a healthy heart rhythm electronic signal with a damaged heart’s signal, and subsequently derives an electronic signal representing the potentially curative waveform. Acquisition of Wound Care Business
In January 2022 Healthtech Solutions organized Healthtech Wound Care, Inc. (“HWC”), which then acquired the business carried on by Predictive Biotech, Inc. (“PBI”) relating to of the development of novel wound care products for acute and chronic wounds. PBI transferred all of its assets related to that business to HWC in exchange for 30% of the equity in HWC, a commitment by HLTT to pay $517,432 to PBI and its parent as prepaid commissions, and the conditional commitment by Healthtech Solutions to provide up to $3.5 million in funding for development of HWC’s business. HWC’s plan is to use the business acquired from PBI as the foundation for HWC’s program of identifying and developing a pipeline of human cell and tissue product (HCT/Ps) candidates that we believe have novel mechanisms of action and immediate clinical potential in accordance with applicable federal regulations. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||
| Accounting Policies [Abstract] | ||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2022, and the results of operations and cash flows for the periods presented. The results of operations for the nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Form 10-K for the year ended December 31, 2021, filed with the SEC on April 15, 2022.
The accompanying consolidated financial statements reflect the accounts of Healthtech Solutions, Inc. and its subsidiaries, Medi-Scan, RevHeart and Healthtech Wound Care, All significant inter-company accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ from those estimates. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.
Concentrations of Credit Risk
We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.
Inventory
Inventory consists of direct labor, raw material, production equipment, and overhead and are stated at the lower of cost or net realizable value, less an allowance for obsolete inventory of $22,178. Cost is determined using an average costing methodology, which approximates cost under the first-in, first-out (“FIFO”) method. The allowance for obsolete inventory was based on industry standards and will be adjusted to reflect the Company’s experience as it develops. The Company regularly monitors inventory quantities on hand and records write-downs for excess and obsolete inventories based primarily on the Company’s estimated forecast of product demand and production requirements. Such write-downs establish a new cost basis of accounting for the related inventory.
Revenue Recognition
Under ASC 606, Revenue from Contracts with Customers, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step model prescribed under Accounting Standards Update (“ASU”) 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.
The Company generally deems its performance obligations under the terms of a contract to be satisfied when control of the product is transferred to the customer and treatment using the product is commenced. The Company’s payment terms are typically 60 days from the date of treatment using the product sold. Provisions for certain rebates, sales incentives, trade promotions, coupons, product returns, discounts to customers and governmental clawback provisions are accounted for as variable consideration and recorded as a reduction in revenue.
Product discounts granted are based on the terms of arrangements with direct, indirect and other market participants, as well as market conditions, including consideration of competitor pricing. Rebates are estimated based on contractual terms, historical experience, patient outcomes, trend analysis and projected market conditions in the markets served. A significant portion of the liability related to rebates is from the sale of the Company's products within the U.S., primarily the Managed Care, Medicare and Medicaid programs. The Company evaluates market conditions for products or groups of products primarily through the analysis of wholesaler and other third-party sell-through and market research data, as well as internally generated information. Promotional programs, such as product listing allowances and cooperative advertising arrangements, are recorded in the same period as related sales. Continuing promotional programs include coupons and volume-based sales incentive programs. Volume-based incentive programs are based on the estimated sales volumes for the incentive period and are recorded as products are sold. These arrangements are evaluated to determine the appropriate amounts to be deferred or recorded as a reduction of revenue. Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are stated at their net realizable value. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management's judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable, and current economic conditions. The determination of the collectability of amounts due requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer account, and the financial condition of the Company’s customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole.
Software Development Costs
In accordance with ASC 985-20, the Company expenses software development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products. Software development costs also include costs to develop software to be used solely to meet internal needs and cloud-based applications used to deliver our services. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed, and the software will be used to perform the function intended. Capitalization ends, and amortization begins when the product is available for general release to customers.
Research and Development
Research and development costs are expensed when incurred. Research and development costs include costs of research, engineering, and technical activities to develop a new product or service or make significant improvement to an existing product or manufacturing process. Research and development costs also include pre-approval regulatory and clinical trial expenses.
Intangible Assets
The Company reviews goodwill and intangible assets with indefinite lives for impairment according to the provisions of ASC Topic 350: "Intangibles - Goodwill and Other" at least annually and when events or changes in circumstances indicate the carrying amount may not be recoverable. The Company measures recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the carrying value of the assets are not recoverable, the impairment recognized is measured as the amount by which the carrying value of the asset exceeds its fair value. Management has determined that no impairment exists as of September 30, 2022.
Convertible Instruments
The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815, Derivatives and Hedging Activities.
Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of this note transaction and the effective conversion price embedded in this note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.
The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.
The Company follows the provisions of FASB ASC 718 requiring employee equity awards to be accounted for under the fair value method. Accordingly, share-based compensation is measured at grant date, based on the fair value of the award and recognized over its vesting period. No equity instruments were granted to employees during the nine months ending September 30, 2022 and no compensation expense is required to be recognized under provisions of ASC 718 with respect to employees.
Fair Value of Financial Instruments
The Company follows ASC 825-10-50-10 with respect to disclosures about fair value of its financial instruments and ASC 820-10-35-37 to measure the fair value of its financial instruments. ASC 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.
Financial assets and liabilities of the Company primarily consist of cash, prepaid expenses, accounts payable and accrued liabilities, other payables and convertible debentures. As of June 30, 2022, the carrying values of these financial instruments (other than convertible debentures) approximated their fair values due to the short-term nature of these instruments.
See: Note 10, "Derivative Financial Instruments", for fair value disclosures regarding the convertible debentures issued by the Company in November 2020 and exchanged for Common Stock on May 6, 2021. The derivative liability is classified as a Level 3 liability and is the only financial liability measure at fair value on a recurring basis.
There were no transfers between level 1, level 2 or level 3 measurements during the nine months ending September 30, 2022.
The Company calculates earnings per share (“EPS”) as required by ASC 260, Earnings Per Share. Basic EPS is calculated by dividing the net income available to common stockholders by the weighted average number of common shares outstanding for the period, excluding common stock equivalents. Diluted EPS is computed by dividing the net income available to common stockholders by the weighted average number of common shares outstanding for the period, plus the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. For periods with a net loss, the dilutive common stock equivalents are excluded from the diluted EPS calculation. For purposes of this calculation, common stock subject to repurchase by the Company, options, and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive.
Income Taxes The Company follows ASC Topic 740, Income Taxes, which requires the recognition of deferred income taxes for the differences between the basis of assets and liabilities for financial statements and income tax purposes. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.
Deferred tax assets are also recognized for operating losses and for tax credit carryforwards. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740-10-30 requires income tax positions to meet a more-likely-than-not recognition threshold to be recognized in the financial statements. Under ASC 740-10-30, tax positions that previously failed to meet the more-likely-than-not threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Under ASC 740-10-40, previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company had no material uncertain tax positions as of September 30, 2022 or December 31, 2021.
The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities or the deferred tax asset valuation allowance.
Recently Adopted Accounting Standards
The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any recently issued pronouncements to have an impact on its results of operations or financial position.
|
GOING CONCERN |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN | NOTE 3 – GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has generated limited revenue since inception, and had an accumulated deficit of $12,662,603 as of September 30, 2022. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these uncertainties.
Management anticipates that the Company will be dependent, for the near future, on additional investment capital or debt to fund operating expenses until its planned operations generate sufficient revenue to offset the Company’s expenses. Management, therefore, is actively pursuing sources of investment capital, including both investment into Healthtech Solutions and investment into one or more of its subsidiaries. At present, the Company has received no firm commitment of investment capital. The Company is financing its current operations, therefore, by means of loans from its shareholders and a third party. None of these parties, however, has any contractual or other commitment to continue to lend money to the Company. |
INTANGIBLE ASSETS |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| INTANGIBLE ASSETS | NOTE 4 – INTANGIBLE ASSETS
The Company’s intangible assets as of September 30, 2022 consisted of two patents pending that were acquired by Healthtech Wound Care, Inc. on January 31, 2022 and valued on that date at $137,432. The two patents pending are being amortized over a period of three years. Amortization expense relating to the patents pending totaled $26,667 for the three months and $30,540 for the nine months ended September 30, 2022.
The Company’s intangible assets during the three and nine months ended September 30, 2021 consisted of the intellectual property relating to medical imaging contributed to Medi-Scan in 2018 as a capital contribution. The intangible assets were amortized over three years. Amortization expense relating to the intangible assets totaled $0 in the quarter and nine months ended September 30, 2022, and $6,482 in the three months and $25,926 in the nine months ended September 30, 2021.
|
INVESTMENT IN AND ADVANCE TO NON-CONSOLIDATED SUBSIDIARY |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Investment In And Advance To Non-consolidated Subsidiary | |
| INVESTMENT IN AND ADVANCE TO NON-CONSOLIDATED SUBSIDIARY | NOTE 5 – INVESTMENT IN AND ADVANCE TO NON-CONSOLIDATED SUBSIDIARY
On May 7, 2021 the Company acquired ownership of Varian Biopharmaceuticals, Inc. (“Varian”) from its original shareholders (the “Varian Shareholders”) in exchange for .184 shares of Series C Preferred Stock issued by Healthtech Solutions. The Company determined that the fair value of the Series C Preferred Stock was equal to the amount of cash acquired in the transaction plus the amount of debt in excess of that cash that was assumed, and allocated the fair value accordingly between the assets acquired and the liabilities assumed.
The parties subsequently agreed that the relationship between Healthtech Solutions and Varian was not achieving its intended results. Therefore, on November 9, 2021, the Company entered into a Share Exchange Agreement (the "SEA") with the Varian Shareholders. in order to unwind its acquisition of Varian. Pursuant to the SEA, (a) the Varian Shareholders returned to Healthtech all of the outstanding shares of Healthtech Series C Preferred Stock and (b) Healthtech caused all of the outstanding shares of Varian common stock to be returned to the Varian Shareholders. Immediate subsequently, Varian issued to Healthtech Varian shares that represent 5.5% of the outstanding shares of Varian.
The Company has valued its 5.5% interest in Varian at $60,000, which represents 5.5% of the value of Varian on the Company’s books prior to the transfer pursuant to the SEA. That asset has been combined on the Company’s balance sheet with a $50,000 receivable from Varian provided for in the SEA, and the combination is classified as “investment in and advance to non-consolidated affiliate”
|
ACQUISITION OF WOUND CARE BUSINESS |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
| Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| ACQUISITION OF WOUND CARE BUSINESS | NOTE 6 – ACQUISITION OF WOUND CARE BUSINESS On January 31, 2022, pursuant to the Asset Purchase Agreement dated January 18, 2022 among the Company and its newly-organized subsidiary, Healthtech Wound Care, Inc. (“HWC”), Predictive Technology Group, Inc. (“PTG”) and its subsidiary, Predictive Biotech, Inc. (“Biotech”), HWC acquired the assets of Biotech that were related to Biotech’s wound care business and entered into an Operations Agreement with Biotech and PTG containing terms of their future relationship. The Company received from PTG three year options to purchase Biotech and/or Cellsure, LLC, another subsidiary of PTG, each for a purchase price of $10. During the three year term of the options, the Company will be entitled to exercise exclusive managerial control over the operations of Cellsure and over the operations of Biotech related to wound care. In consideration of the transfer of its wound care business to HWC, HWC issued preferred shares to Biotech and the Company paid Biotech and PTG $517,432. Until HWC achieves positive cash flow or $3.5 million in capital has been contributed to HWC, the preferred shares held by Biotech will represent 30% of HWC’s equity and voting power. The Operations Agreement commits the Company to provide working capital to HWC and Biotech for their wound care business until HWC achieves positive cash flow or the Company contributes $3.5 million or the Company determines that market conditions make it unlikely that HWC will be financially successful. The Company accounted for the acquisition as a business combination. The Company determined that the consideration for the business was the sum of $517,432 that the Company paid to PTG. No liabilities were assumed in connection with the acquisition. The assets acquired were recognized at their fair values as of the effective acquisition date, January 31, 2022, as determined by the Company’s management. The following table summarizes the fair values assigned to the assets acquired.
|
|||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTIES |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTIES | NOTE 7 – RELATED PARTIES David Rubin was a managing member of Medi-Scan commencing in May 2020 and served as Chairman and CEO of Healthtech Solutions from September 2020 through July 19, 2021. In May 2020 David Rubin, through his personal holding company, Storm Funding LLC, agreed to contribute $250,000 to Medi-Scan in exchange for a 25% equity interest in Medi-Scan. During January 2021 Mr. Rubin completed that commitment with a final contribution of $4,558. As of September 30, 2022, Mr. Rubin loaned (net of payments) $667,527 to the Company and contributed services of employees and expenses of Storm Funding LLC, a company owned by David Rubin, valued at (net of payments) $34,999. In the first nine months of 2022, Mr. Rubin and Storm Funding LLC loaned an additional $600,527 in cash and $13,078 in employee services to the Company. These loans of cash and services are included in Loans from Shareholders on the Company’s balance sheets. On May 4, 2021 the Company entered into an Advisory Agreement with Kleinfeld Legal Services P.A., which is owned by Denis Kleinfeld. Mr. Kleinfeld was, until April 24, 2021, a member of the Company's Board of Directors. Pursuant to the Advisory Agreement, Kleinfeld Legal Services P.A. agreed to provide legal and advisory services to Medi-Scan Inc. during the two years ended May 4, 2023. In consideration of the services, the Company agreed to pay Kleinfeld Legal Services a $100,000 signing fee plus a services fee of $150,000 per year. The Company also assigned to Kleinfeld Legal Services 19.9% of the capital stock of Medi-Scan, Inc. During the year ended December 31, 2021, the Company recorded expenses for advisory services from Kleinfeld Legal Services totaling $200,000. During the first nine months of 2022, the Company recorded expenses for advisory services from Kleinfeld Legal Services totaling $75,000. On September 13, 2022, HLTT and Medi-Scan Inc. entered into a Share Exchange Agreement with Denis Kleinfeld, Kleinfeld Legal Services PA (“KLS”), and four entities that owned minority shares in Medi-Scan, Inc.: DAK 2017 Trust Resolution, Jaclene Kleinfeld Trust, DYBIM, LLC and Doncaster Holdings, LLC (the “Medi-Scan Shareholders”). Pursuant to the SEA, the Medi-Scan Shareholders transferred to HLTT their 19.99% interest in Medi-Scan and HLTT issued 2,000,000 common shares to DYBIM and 500,000 common shares to Doncaster Holdings. HLTT agreed to pay $25,000 to KLS after HLTT raises an additional $1 million in capital. The Advisory Agreement between KLS and Medi-Scan was terminated. HLTT and Medi-Scan gave general releases to the other six parties and the other six parties gave general releases to HLTT and Medi-Scan, which included releases of the accrued liability to KLS under the Advisory Agreement. During the nine months ending September 30, 2022, the Company borrowed $1,024,631 from 3 of its shareholders. The loans are unsecured, payable on demand and bear no interest. The Board granted three year options for million common shares, exercisable at $ per share. The options were granted to the shareholders who have provided loans exceeding $1.5 million to HLTT during the past 12 months in compensation for the loans. |
SHAREHOLDERS EQUITY |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHAREHOLDERS EQUITY | NOTE 8 – SHAREHOLDERS EQUITY Authorized Capital Stock The following table sets forth information, as of September 30, 2022, regarding the classes of capital stock that are authorized by the Articles of Incorporation of Healthtech Solutions, Inc.
Series A Preferred Stock. The Series A Preferred Stock was authorized on November 16, 2020. When first authorized, each share of Series A Preferred Stock was convertible by the holder at any time into two thousand (2,000) shares of Common Stock and had voting rights equivalent to the voting rights of 2,000 shares of common stock. On November 12, 2021, after a vote of the Board of Directors, the Company’s shareholders and the holders of the outstanding Series A Preferred Stock voting as a class, Articles of Amendment of the Company’s Articles of Incorporation were filed which modified the terms of the Series A Preferred Stock such that each share of Series A Preferred Stock is now convertible by the holder into fifty (50) shares of Common Stock at any time after May 31, 2024 and entitles a stockholder to voting rights equivalent to those of 50 shares of Common Stock on all matters upon which stockholders are permitted to vote. In the event of our liquidation, dissolution or winding up, after payment of all creditors, holders of our Series A Preferred Stock are entitled to receive, ratably, a preferential payment of $.01 per share, then to share pro rate in the net assets available to stockholders on an as-converted basis. Undesignated Preferred Stock. The Board of Directors has authority, without shareholder approval and by resolution of the Board of Directors, to amend the Corporation's Articles of Incorporation to divide the class of undesignated Preferred Stock into series, to designate each such series by a distinguishing letter, number or title so as to distinguish the shares thereof from the shares of all other series and classes, and to fix and determine the following relative rights and preferences of the shares of each series so established.
Issuance of Common Stock
On September 6, 2022, the Company issued a total of shares of common stock to three individuals as compensation for consulting services rendered. The shares were valued at the previous market closing price of $ per share.
On September 13, 2022, the Company issued shares of common stock to two entities. The shares were issued (a) in satisfaction of an account payable of $187,500 and (b) in exchange for shares in the Company’s subsidiary Medi-Scan, Inc., representing 19.99% of the capital stock of Medi-Scan, Inc. The Company also agreed to pay $25,000 cash for the Medi-Scan shares at a future date. The Company shares issued in the transaction were valued at the previous market closing price of $.248 per share for an aggregate value of $620,000. On the Company’s financial statements, from the $645,000 purchase price, $187,00 was credited to the satisfaction of the account payable and the remaining $457,500 was applied to purchase of the Medi-Scan shares and shown as a reduction to non-controlling interest and additional equity of the Company.
Grant of Stock Options
On September 6, 2022, the Company granted three-year options for million common shares, exercisable at $ per share, to the shareholders who provided loans to HLTT during the preceding 12 months. The options vested immediately. The grant was made in compensation for the loans. The aggregate fair value of the options was determined to be $135,000 using the Black Scholes Model for option valuation.
Below are the assumptions applied in determining the fair value of the options:
Capital Contributions
Medi-Scan's founders contributed to the Company $0 during the three months and nine months ended September 30, 2022, and $0 during the three months ended September 30, 2021 and $4,558 during the nine months ended September 30, 2021. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EXCHANGEABLE NOTES AND CONVERTIBLE DEBENTURES |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Debt Disclosure [Abstract] | |
| EXCHANGEABLE NOTES AND CONVERTIBLE DEBENTURES | NOTE 9 – EXCHANGEABLE NOTES AND CONVERTIBLE DEBENTURES
In August and September of 2020, Medi-Scan issued four 7% Exchangeable Promissory Notes in the aggregate principal amount of $375,000. Principal and interest were payable on the Notes on January 31, 2021. The Notes provided that, in the event that Medi-Scan was acquired by a corporation whose common stock was registered with the SEC, the Notes would be automatically exchanged for 7% convertible debentures issued by that acquirer.
In November of 2020, by reason of the Share Exchange, the four 7% Exchangeable Promissory Notes were automatically exchanged for 7% Convertible Debentures issued by Healthtech Solutions in a principal amount of $381,505, which was equal to the principal of and accrued interest on the Notes. Then, during December of 2020, Healthtech Solutions issued four additional 7% Convertible Debentures in the aggregate principal amount of $250,000 in exchange for payment of cash in that amount. On February 4, 2021 an additional debenture was issued in the amount $50,000.
The 7% Convertible Debentures were convertible into common stock, at the holders’ option, at a 30% discount to the market price of the Company’s common stock. The Company determined that the conversion feature represented a derivative financial instrument embedded in the Debentures. The accounting treatment of derivative financial instruments requires that the Company record the fair value of that derivative financial instrument as a discount to the value of the Debentures as of the inception date of each Debenture. Accordingly, the Company recorded an aggregate initial discount of $349,202 for the fair value of the derivative liability at inception of each convertible debenture. During the year ending December 31, 2021, the Company amortized $27,303 and $351,202 as interest expense.
On May 6, 2021, by agreement with the holders of the 7% Convertible Debentures, the Company issued 3,507,164 shares of common shares in exchange for surrender of the convertible debentures.
|
DERIVATIVE FINANCIAL INSTRUMENTS |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||
| Investments, All Other Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 10 – DERIVATIVE FINANCIAL INSTRUMENTS
The Company determined that the conversion feature of the 7% Convertible Debentures represented an embedded derivative since the Debentures were convertible into a variable number of shares upon conversion. Accordingly, the Debentures are not considered to be conventional debt under ASC 815 and the embedded conversion feature was bifurcated from the debt host and accounted for as a derivative liability.
The fair value of the derivatives embedded in the 7% Convertible Debentures as of December 31, 2020 was determined using the Monte Carlo simulation method based on the following assumptions: (1) dividend yield of %, (2) expected volatility of %, (3) weighted average risk-free interest rate of %, (4) expected life until January 31, 2024, and (5) the quoted market price of the Company’s common stock at each valuation date.
At March 31, 2021, the Company marked to market the fair value of the nine derivatives and determined a fair value of $359,608. The Company recorded a gain resulting from change in fair value of debt derivatives by $7,215 for the three months ending March 31, 2021. At May 6, 2021, just prior to settlement, the Company marked-to-market the fair value of the nine derivatives and determined a fair value of $3,296,997. The Company recorded a loss from change in fair value of debt derivatives of $2,940,950 for the three months ended June 30, 2021. Upon the issuance of 3,507,164 shares of common stock (see Note 9), the balance of the derivative liability of $3,296,997 and the principal totaling $681,581 were reduced to $0. A summary of changes in Convertible Debentures for the period ending June 30, 2021 was as follows:
|
INCOME TAX |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAX | NOTE 11 – INCOME TAX
The provision (benefit) for income taxes consisted of the following for the nine month periods ended September 30, 2022 and 2021:
The following table reconciles the effective income tax rates with the statutory rates for the nine month periods ended September 30, 2022 and 2021:
Deferred tax assets are comprised of the following:
At September 30, 2022, the Company had approximately $12,662,603 of federal net operating losses that may be available to offset future taxable income. Through 2036, the amount and utilization of any future net operating loss carry-forwards may be subject to limitations set forth by the Internal Revenue Code. Based upon an analysis of the Company’s stock ownership activity through September 30, 2022, a change of ownership was deemed to have occurred in the 2020 fiscal year. This change of ownership created an annual limitation of substantially all of the Company’s net operating losses which are available through 2036.
The Company assesses the likelihood that deferred tax assets will be realized. To the extent that realization is not likely, a valuation allowance is established. Based upon the Company’s losses since inception, management believes that it is more likely than not that future benefit of the deferred tax asset will not be realized principally due to the continuing losses from operations and the change of ownership limitations and has therefore established a full valuation allowance.
The tax years ending December 31, 2020 and 2021 remain open to examination by the taxing authorities.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUBSEQUENT EVENTS |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company’s management has performed subsequent events procedures through the date these financial statements were issued and determined that there are no reportable subsequent events. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||
| Accounting Policies [Abstract] | ||||||||||
| Basis of Presentation and Consolidation | Basis of Presentation and Consolidation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2022, and the results of operations and cash flows for the periods presented. The results of operations for the nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Form 10-K for the year ended December 31, 2021, filed with the SEC on April 15, 2022.
The accompanying consolidated financial statements reflect the accounts of Healthtech Solutions, Inc. and its subsidiaries, Medi-Scan, RevHeart and Healthtech Wound Care, All significant inter-company accounts and transactions have been eliminated in consolidation.
|
|||||||||
| Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ from those estimates. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.
|
|||||||||
| Concentrations of Credit Risk | Concentrations of Credit Risk
We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.
|
|||||||||
| Inventory | Inventory
Inventory consists of direct labor, raw material, production equipment, and overhead and are stated at the lower of cost or net realizable value, less an allowance for obsolete inventory of $22,178. Cost is determined using an average costing methodology, which approximates cost under the first-in, first-out (“FIFO”) method. The allowance for obsolete inventory was based on industry standards and will be adjusted to reflect the Company’s experience as it develops. The Company regularly monitors inventory quantities on hand and records write-downs for excess and obsolete inventories based primarily on the Company’s estimated forecast of product demand and production requirements. Such write-downs establish a new cost basis of accounting for the related inventory.
|
|||||||||
| Revenue Recognition | Revenue Recognition
Under ASC 606, Revenue from Contracts with Customers, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step model prescribed under Accounting Standards Update (“ASU”) 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.
The Company generally deems its performance obligations under the terms of a contract to be satisfied when control of the product is transferred to the customer and treatment using the product is commenced. The Company’s payment terms are typically 60 days from the date of treatment using the product sold. Provisions for certain rebates, sales incentives, trade promotions, coupons, product returns, discounts to customers and governmental clawback provisions are accounted for as variable consideration and recorded as a reduction in revenue.
Product discounts granted are based on the terms of arrangements with direct, indirect and other market participants, as well as market conditions, including consideration of competitor pricing. Rebates are estimated based on contractual terms, historical experience, patient outcomes, trend analysis and projected market conditions in the markets served. A significant portion of the liability related to rebates is from the sale of the Company's products within the U.S., primarily the Managed Care, Medicare and Medicaid programs. The Company evaluates market conditions for products or groups of products primarily through the analysis of wholesaler and other third-party sell-through and market research data, as well as internally generated information. Promotional programs, such as product listing allowances and cooperative advertising arrangements, are recorded in the same period as related sales. Continuing promotional programs include coupons and volume-based sales incentive programs. Volume-based incentive programs are based on the estimated sales volumes for the incentive period and are recorded as products are sold. These arrangements are evaluated to determine the appropriate amounts to be deferred or recorded as a reduction of revenue. |
|||||||||
| Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are stated at their net realizable value. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management's judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable, and current economic conditions. The determination of the collectability of amounts due requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer account, and the financial condition of the Company’s customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole.
|
|||||||||
| Software Development Costs | Software Development Costs
In accordance with ASC 985-20, the Company expenses software development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products. Software development costs also include costs to develop software to be used solely to meet internal needs and cloud-based applications used to deliver our services. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed, and the software will be used to perform the function intended. Capitalization ends, and amortization begins when the product is available for general release to customers.
|
|||||||||
| Research and Development | Research and Development
Research and development costs are expensed when incurred. Research and development costs include costs of research, engineering, and technical activities to develop a new product or service or make significant improvement to an existing product or manufacturing process. Research and development costs also include pre-approval regulatory and clinical trial expenses.
|
|||||||||
| Intangible Assets | Intangible Assets
The Company reviews goodwill and intangible assets with indefinite lives for impairment according to the provisions of ASC Topic 350: "Intangibles - Goodwill and Other" at least annually and when events or changes in circumstances indicate the carrying amount may not be recoverable. The Company measures recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the carrying value of the assets are not recoverable, the impairment recognized is measured as the amount by which the carrying value of the asset exceeds its fair value. Management has determined that no impairment exists as of September 30, 2022.
|
|||||||||
| Convertible Instruments | Convertible Instruments
The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815, Derivatives and Hedging Activities.
Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of this note transaction and the effective conversion price embedded in this note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.
The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. |
|||||||||
| Share-Based Compensation |
The Company follows the provisions of FASB ASC 718 requiring employee equity awards to be accounted for under the fair value method. Accordingly, share-based compensation is measured at grant date, based on the fair value of the award and recognized over its vesting period. No equity instruments were granted to employees during the nine months ending September 30, 2022 and no compensation expense is required to be recognized under provisions of ASC 718 with respect to employees.
|
|||||||||
| Fair Value of Financial Instruments | Fair Value of Financial Instruments
The Company follows ASC 825-10-50-10 with respect to disclosures about fair value of its financial instruments and ASC 820-10-35-37 to measure the fair value of its financial instruments. ASC 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.
Financial assets and liabilities of the Company primarily consist of cash, prepaid expenses, accounts payable and accrued liabilities, other payables and convertible debentures. As of June 30, 2022, the carrying values of these financial instruments (other than convertible debentures) approximated their fair values due to the short-term nature of these instruments.
See: Note 10, "Derivative Financial Instruments", for fair value disclosures regarding the convertible debentures issued by the Company in November 2020 and exchanged for Common Stock on May 6, 2021. The derivative liability is classified as a Level 3 liability and is the only financial liability measure at fair value on a recurring basis.
There were no transfers between level 1, level 2 or level 3 measurements during the nine months ending September 30, 2022.
|
|||||||||
| Earnings Per Share |
The Company calculates earnings per share (“EPS”) as required by ASC 260, Earnings Per Share. Basic EPS is calculated by dividing the net income available to common stockholders by the weighted average number of common shares outstanding for the period, excluding common stock equivalents. Diluted EPS is computed by dividing the net income available to common stockholders by the weighted average number of common shares outstanding for the period, plus the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. For periods with a net loss, the dilutive common stock equivalents are excluded from the diluted EPS calculation. For purposes of this calculation, common stock subject to repurchase by the Company, options, and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive.
|
|||||||||
| Income Taxes | Income Taxes The Company follows ASC Topic 740, Income Taxes, which requires the recognition of deferred income taxes for the differences between the basis of assets and liabilities for financial statements and income tax purposes. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.
Deferred tax assets are also recognized for operating losses and for tax credit carryforwards. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740-10-30 requires income tax positions to meet a more-likely-than-not recognition threshold to be recognized in the financial statements. Under ASC 740-10-30, tax positions that previously failed to meet the more-likely-than-not threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Under ASC 740-10-40, previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company had no material uncertain tax positions as of September 30, 2022 or December 31, 2021.
The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities or the deferred tax asset valuation allowance.
|
|||||||||
| Recently Adopted Accounting Standards | Recently Adopted Accounting Standards
The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any recently issued pronouncements to have an impact on its results of operations or financial position.
|
ACQUISITION OF WOUND CARE BUSINESS (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
| Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of recognized identified assets acquired and liabilities assumed |
|
|||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS EQUITY (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Summary of shareholders equity |
|
|||||||||||||||||||||||||||||||||||||||||||||
| Schedule of stock option assumptions used |
|
|||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||
| Investments, All Other Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||
| Summary of changes in convertible debentures |
|
INCOME TAX (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of provision for income taxes |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of effective income tax rate reconciliation |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of deferred tax assets |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ORGANIZATION AND NATURE OF BUSINESS (Details Narrative) - USD ($) |
Nov. 12, 2020 |
Jan. 31, 2022 |
|---|---|---|
| Asset Purchase Agreement [Member] | ||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Acquisition paid | $ 517,432 | |
| Acquisition cash flow | $ 3,500,000 | |
| Exchange Agreement [Member] | ||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Agreement description | Healthtech Solutions entered into an exchange agreement with Medi-Scan and all of the shareholders of Medi-Scan, pursuant to which the shareholders of Medi-Scan agreed to transfer all of the issued and outstanding stock of Medi-Scan to Healthtech Solutions, and Healthtech Solutions agreed to issue to the shareholders of Medi-Scan, Inc. 156,837 shares of its Series A Preferred Stock, which at that time represented 97% of the equity in Healthtech Solutions. The exchange of equity (the "Share Exchange") was completed on November 16, 2020. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
| Accounting Policies [Abstract] | |||
| Allowance for obsolete inventory | $ 22,178 | ||
| Uncertain tax positions | $ 0 | $ 0 | |
GOING CONCERN (Details Narrative) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Accumulated deficit | $ 12,662,603 | $ 10,547,924 |
INTANGIBLE ASSETS (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Finite-Lived Intangible Assets [Line Items] | ||||
| Intangible assets | $ 137,432 | $ 137,432 | ||
| Amortization expense | 30,540 | $ 25,926 | ||
| Patents [Member] | ||||
| Finite-Lived Intangible Assets [Line Items] | ||||
| Amortization expense | 26,667 | 30,540 | ||
| Finite-Lived Intangible Assets [Member] | ||||
| Finite-Lived Intangible Assets [Line Items] | ||||
| Amortization expense | $ 0 | $ 6,482 | $ 0 | $ 25,926 |
INVESTMENT IN AND ADVANCE TO NON-CONSOLIDATED SUBSIDIARY (Details Narrative) - USD ($) |
May 07, 2021 |
Sep. 30, 2022 |
|---|---|---|
| Healthtech Solutions [Member] | Series C Preferred Shares [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Business acquisition exchange of shares | 29,737 | |
| Varian Biopharmaceutical Inc [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Fair market value | $ 60,000 | |
| Receivable | $ 50,000 |
ACQUISITION OF WOUND CARE BUSINESS (Details) - Predictive Technology Group [Member] |
Jan. 31, 2022
USD ($)
|
|---|---|
| Consideration | |
| Cash paid | $ 517,432 |
| Assets Acquired | |
| Equipment | 120,000 |
| Patents Pending | 137,432 |
| Prepaid Commissions | 260,000 |
| Net assets acquired | $ 517,432 |
ACQUISITION OF WOUND CARE BUSINESS (Details Narrative) - Asset Purchase Agreement [Member] |
1 Months Ended |
|---|---|
|
Jan. 31, 2022
USD ($)
| |
| Offsetting Assets [Line Items] | |
| Purchase price | $ 10 |
| Acquisition paid | 517,432 |
| Acquisition cash flow | 3,500,000 |
| Consideration of business | $ 517,432 |
SHAREHOLDERS EQUITY (Details) - shares |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|---|---|---|---|---|---|
| Common Stock [Member] | ||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
| Shares Authorized | 200,000,000 | |||||||
| Shares Outstanding | 69,965,933 | 66,965,933 | 66,965,933 | 66,965,933 | 29,145,933 | 29,145,933 | 9,701,269 | 9,701,269 |
| Preferred Stock Series A [Member] | ||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
| Shares Authorized | 156,937 | |||||||
| Shares Outstanding | 110,520 | 110,520 | 110,520 | 110,520 | 127,430 | 127,430 | 156,837 | 156,837 |
| Undesignated Preferred Stock $.001 Par Value [Member] | ||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
| Shares Authorized | 1,843,163 | |||||||
| Shares Outstanding | 0 |
SHAREHOLDERS EQUITY (Details 1) |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Equity [Abstract] | |
| Risk-free interest rate | 5.00% |
| Expected dividend yield | 0.00% |
| Expected volatility | 11.00% |
| Expected life of options (in years) | 3 years |
SHAREHOLDERS EQUITY (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | |||||
|---|---|---|---|---|---|---|---|
Sep. 13, 2022 |
Sep. 06, 2022 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Class of Stock [Line Items] | |||||||
| Issuance of common stock, value | $ 2,821,528 | ||||||
| Stock options granted | 15,000,000 | ||||||
| Stock options granted exercise price | $ 0.25 | ||||||
| Value of stock options granted | $ 135,000 | ||||||
| Capital Contributions | $ 0 | $ 0 | $ 0 | $ 4,558 | |||
| Two Entities [Member] | |||||||
| Class of Stock [Line Items] | |||||||
| Issuance of common stock, shares | 2,500,000 | ||||||
| Issuance of common stock, value | $ 620,000 | ||||||
| Medi Scan [Member] | |||||||
| Class of Stock [Line Items] | |||||||
| Issuance of common stock in satisfaction of account payable | $ 187,500 | ||||||
| Closing stock price | $ 0.248 | ||||||
| Purchase price | $ 645,000 | ||||||
| Three Individuals [Member] | |||||||
| Class of Stock [Line Items] | |||||||
| Issuance of common stock for compensation of consulting services rendered, shares | 500,000 | ||||||
| Share Price | $ 0.20 | ||||||
| Series A Preferred Stock [Member] | |||||||
| Class of Stock [Line Items] | |||||||
| Preferred stock, convertible, terms | When first authorized, each share of Series A Preferred Stock was convertible by the holder at any time into two thousand (2,000) shares of Common Stock and had voting rights equivalent to the voting rights of 2,000 shares of common stock. | ||||||
| Preferred stock voting rights | entitles a stockholder to voting rights equivalent to those of 50 shares of Common Stock on all matters upon which stockholders are permitted to vote. | ||||||
EXCHANGEABLE NOTES AND CONVERTIBLE DEBENTURES (Details Narrative) - USD ($) |
1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|---|---|
May 06, 2022 |
Nov. 30, 2020 |
Sep. 30, 2020 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
| Short-Term Debt [Line Items] | ||||||||
| Interest expenses | $ 367,144 | |||||||
| Convertible Notes Payable [Member] | ||||||||
| Short-Term Debt [Line Items] | ||||||||
| Exchangeable promissory note description | In November of 2020, by reason of the Share Exchange, the four 7% Exchangeable Promissory Notes were automatically exchanged for 7% Convertible Debentures issued by Healthtech Solutions in a principal amount of $381,505, which was equal to the principal of and accrued interest on the Notes. Then, during December of 2020, Healthtech Solutions issued four additional 7% Convertible Debentures in the aggregate principal amount of $250,000 in exchange for payment of cash in that amount. On February 4, 2021 an additional debenture was issued in the amount $50,000. | Medi-Scan issued four 7% Exchangeable Promissory Notes in the aggregate principal amount of $375,000. Principal and interest were payable on the Notes on January 31, 2021. | ||||||
| Common stock issued for settlement of convertible debentures | 3,507,164 | |||||||
| Convertible Notes Payable [Member] | Common Stock [Member] | ||||||||
| Short-Term Debt [Line Items] | ||||||||
| Convertible debenture conversion term | The 7% Convertible Debentures were convertible into common stock, at the holders’ option, at a 30% discount to the market price of the Company’s common stock. The Company determined that the conversion feature represented a derivative financial instrument embedded in the Debentures. The accounting treatment of derivative financial instruments requires that the Company record the fair value of that derivative financial instrument as a discount to the value of the Debentures as of the inception date of each Debenture. | |||||||
| Fair value of derivative liability | $ 349,202 | |||||||
| Amortized Interest expense | 27,303 | |||||||
| Interest expenses | $ 351,202 | |||||||
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Jun. 30, 2021 |
Mar. 31, 2021 |
|
| Investments, All Other Investments [Abstract] | ||
| Balance at beginning | $ 356,047 | $ 337,874 |
| Issuance | 25,388 | |
| Change in fair value | 2,940,950 | (7,215) |
| Settlement upon exchange for Common Stock | (3,296,997) | |
| Balance at ending | $ 0 | $ 356,047 |
INCOME TAX (Details) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| U.S. federal statutory rate | 21.00% | |
| State tax, net of federal benefit | 5.00% | |
| Change in valuation allowance | 26.00% | |
| Medi Scan [Member] | ||
| U.S. federal statutory rate | 21.00% | 21.00% |
| State tax, net of federal benefit | 5.00% | 5.00% |
| Change in valuation allowance | (26.00%) | (26.00%) |
| Net deferred tax assets | 0.00% | 0.00% |
INCOME TAX (Details 1) |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Income Tax Disclosure [Abstract] | |
| U.S. federal statutory rate | 21.00% |
| State tax, net of federal benefit | 5.00% |
| Change in valuation allowance | 26.00% |
| Effective income tax rate | 0.00% |
INCOME TAX (Details 2) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Income Tax Disclosure [Abstract] | ||
| Net operating loss carryforwards | $ 3,167,125 | $ 2,742,460 |
| Valuation allowance | (3,167,125) | (2,742,460) |
| Net deferred tax assets |
INCOME TAX (Details Narrative) |
9 Months Ended |
|---|---|
|
Sep. 30, 2022
USD ($)
| |
| Income Tax Disclosure [Abstract] | |
| Net operating loss carryforward | $ 12,662,603 |
| Operating loss carryforward limitations on use | Through 2036, the amount and utilization of any future net operating loss carry-forwards may be subject to limitations set forth by the Internal Revenue Code. |