10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _________

Commission File No. 000-55114

CANFIELD MEDICAL SUPPLY, INC.

(Name of registrant in its charter)

Colorado	34-1720075
(State or other jurisdiction of incorporation or formation)	(I.R.S. employer identification number)

4120 Boardman-Canfield Road, Canfield, Ohio 44406

(Address of principal executive offices)

(330) 533-1914

(Registrant's telephone number, including area code) 

Not Applicable

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

¨ Yes   ☒  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

☐  Yes   ☒  No

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

Large accelerated filer  ☐	Accelerated filer  ☐
Non-accelerated filer    ☐ (Do not check if a smaller reporting company) Emerging growth company  ☐	Smaller reporting company  ☒

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   ☒  No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.  As of August 18, 2017, there were 11,277,200 shares of Common Stock issued and outstanding.

CANFIELD MEDICAL SUPPLY, INC.

FORM 10-Q

TABLE OF CONTENTS

PART I.  FINANCIAL INFORMATION		Page
Item 1.	Financial Statements	3
	Condensed Balance Sheets (Unaudited)	3
	Condensed Statements of Operations (Unaudited)	4
	Condensed Statements of Cash Flows (Unaudited)	5
	Notes to Condensed Financial Statements (Unaudited)	6-11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	14
Item 4.	Controls and Procedures	14
PART II.  OTHER INFORMATION		15
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Mine Safety Disclosures	15
Item 5.	Other Information	15
Item 6.	Exhibits	15
	Signatures	16

2

PART I—FINANCIAL INFORMATION

Item 1.  Financial Statements.

CANFIELD MEDICAL SUPPLY, INC.

CONDENSED BALANCE SHEETS

(Unaudited)

	June 30,			December 31,
ASSETS	2017			2016
Current Assets
Cash	$	9,559		$	61,659
Accounts receivable		182,904			206,254
Inventory		37,562			25,231
Total Current Assets		230,025			293,144
Equipment, net of accumulated depreciation of $94,417 and$76,197		60,989			62,190
Total Assets	$	291,014		$	355,334
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued liabilities	$	200,330		$	209,069
Line of credit		66,255			70,373
Current portion of long-term debt		11,106			10,918
Total Current Liabilities		277,691			290,360
Long-term debt		19,704			25,305
Total Liabilities		297,395			315,665
Stockholders' Equity (Deficit)
Preferred stock, no par value; 5,000,000 shares authorized; no shares		-			-
issued and outstanding
Common stock, no par value; 100,000,000 shares authorized;
11,277,200 (June  30, 2017) and 10,927,200 (Dec. 31, 2016) shares
issued and outstanding		243,515			208,515
Accumulated deficit		(249,896	)		(168,846	)
Total Stockholders' Equity (Deficit)		(6,381	)		39,669
Total Liabilities and Stockholders' Equity (Deficit)	$	291,014		$	355,334

The accompanying footnotes are an integral part of these condensed unaudited financial statements.

3

CANFIELD MEDICAL SUPPLY, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months			Three months			Six months			Six months
	ended			ended			ended			ended
	June 30, 2017			June 30,2016			June 30, 2017			June 30, 2016
Sales (net of returns)	$	210,572		$	199,985		$	420,632		$	459,638
Cost of goods sold		88,849			108,804			194,370			235,114
Gross profit		121,723			91,181			226,262			224,524
Operating expenses:
Salaries and wages		79,009			70,144			161,544			139,138
Professional fees		4,695			10,759			31,900			19,459
Depreciation		23,830			12,783			37,299			23,156
Other selling, general and administrative		35,775			30,986			78,345			64,469
Total operating expenses		143,309			124,672			309,088			246,222
Loss from operations		(21,586	)		(33,491	)		(82,826	)		(21,698	)
Other income (expense):
Interest expense		(192	)		(863	)		(2,474	)		(1,898	)
Gain on sale of fixed assets		2,646			1,106			4,250			2,427
Total other income (expense)		2,454			243			1,776			529
Loss before provision for income taxes		(19,132	)		(33,248	)		(81,050	)		(21,169	)
Provision for income taxes		-			-			-			-
Net loss	$	(19,132	)	$	(33,248	)	$	(81,050	)	$	(21,169	)
Net loss per share (basic and fully diluted)	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.00	)
Weighted average number of common shares outstanding		11,277,200			10,527,200			11,257,863			10,312,914

The accompanying footnotes are an integral part of these condensed unaudited financial statements.

4

CANFIELD MEDICAL SUPPLY, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six months ended			Six months ended
	June 30,			June 30,
	2017			2016
Cash Flows From Operating Activities:
Net loss	$	(81,050	)	$	(21,169	)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
Gain on sale of fixed assets		(4,250	)		(2,427	)
Depreciation		37,299			23,156
Decrease in accounts receivable		23,350			24,439
(Increase) in inventory		(12,331	)		(5,329	)
(Decrease) in accounts payable and accrued liabilities		(8,739	)		(7,394	)
Net cash provided by (used for) operating activities		(45,721	)		11,276
Cash Flows From Investing Activities:
Proceeds from sale of fixed assets		6,218			3,046
Purchases of fixed assets		(38,066	)		(27,468	)
Net cash (used for) investing activities		(31,848	)		(24,422	)
Cash Flows From Financing Activities:
Net payments on line of credit		(4,118	)		(3,250	)
Payments on long-term debt		(5,413	)		(3,770	)
Proceeds from sales of common stock.		35,000			50,000
Net cash provided by financing activities		25,469			42,980
Net Increase (Decrease) in Cash		(52,100	)		29,834
Cash At The Beginning Of The Period		61,659			7,343
Cash At The End Of The Period	$	9,559		$	37,177
Schedule Of Non-Cash Investing And Financing Activities	$	-		$	-
Supplemental Disclosure
Cash paid for interest	$	(2,474	)	$	(1,898	)
Cash paid for income taxes	$	-		$	-

The accompanying footnotes are an integral part of these condensed unaudited financial statements.

5

CANFIELD MEDICAL SUPPLY, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2017 and 2016 (Unaudited)

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Canfield Medical Supply, Inc. (the “Company”), was incorporated in the State of Ohio on June 3, 1992, and changed domicile to Colorado on April 18, 2012. The Company is in the business of home health services, primarily the selling of durable medical equipment and medical supplies to the public, nursing homes, hospitals, and other end users.

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the six months ended June 30, 2017 and 2016 have been made.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2016 audited financial statements.  The results of operations for the periods ended June 30, 2017 and 2016 are not necessarily indicative of the operating results for the full year.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

Accounts receivable

The majority of the Company’s revenues are received from Medicare, Medicaid, and private insurance companies.  As such, the Company records revenues at allowable amounts, net of estimated allowances and discounts based on contracted prices and historical collection rates.  The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At June 30, 2017 and December 31, 2016, the Company has determined that no allowance for doubtful accounts is necessary.

Property and equipment

Property and equipment are recorded at cost and depreciated under straight line methods over each item's estimated useful life.

6

CANFIELD MEDICAL SUPPLY, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2017 and 2016 (Unaudited)

NOTE 1.  ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

 Inventory

The Company carries inventory of durable medical equipment and medical supplies for resale.  Inventory is accounted for on a first–in first-out basis.

Revenue recognition

The Company’s primary source of revenue is reimbursement from Medicare, Medicaid, and private insurance companies for the sale of medical equipment and supplies to patients. Revenue from product sales is recognized subsequent to a patient (customer) ordering a product at an agreed-upon price, and when delivery has occurred and collectability is reasonably assured. A purchase arrangement is evidenced by a written order, with delivery considered as made after physical customer acceptance. Although rare, defective products may be returned, with other return issues considered on a case-by-case basis. Services, such as periodic scheduled deliveries, are contracted in writing, and generally billed monthly. Any service revenue earned by the Company for services, such as safety and set up consulting or claims processing, is recorded after the service is performed. Rental of durable home medical equipment is evidenced by written contract, with revenue recognized when rent is earned.

Advertising costs

Advertising costs are expensed as incurred. The Company had advertising costs during the six months ended June 30, 2017 and 2016 of $4,391 and $2,520 respectively.

Income tax

The Company accounts for income taxes pursuant to ASC 740. Under ASC 740, deferred taxes are provided for using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

7

CANFIELD MEDICAL SUPPLY, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2017 and 2016 (Unaudited)

NOTE 1.  ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Net income (loss) per share

The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.

There were no potentially dilutive debt or equity instruments issued or outstanding during the six months ended June 30, 2017 or 2016.

Financial instruments

The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheets, approximates fair value.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents.  The Company places its cash and cash equivalents at well-known financial institutions, where at times, such balances may exceed FDIC insurance limits.

The Company receives a significant amount of its revenues in reimbursements from Medicare and Medicaid through competitive bidding processes.  There is no guarantee that the Company will continue to be selected as a winning contract supplier under future bidding rounds.

8

CANFIELD MEDICAL SUPPLY, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2017 and 2016 (Unaudited)

NOTE 1.  ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Long-lived assets

In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.

Products and services, geographic areas and major customers

The Company’s business of medical supply sales constitutes one operating segment. All revenues each year were domestic and to external customers.

NOTE 2.  EQUIPMENT

Fixed assets are comprised of office equipment, vehicles, and the wheelchair and hospital bed rental pool, which consists of wheelchairs and hospital beds rented to customers over the shorter of the 13-month rental period mandated by Medicaid and Medicare, or the period over which the customer requires use of the wheelchair or hospital bed.  At the end of the use period, the wheelchair or hospital bed is either returned to the pool to be rented to another customer, or title of the chair or bed is transferred to the customer.  Depreciation is computed over the estimated useful life of the assets, ranging from 13 months to 7 years, on the straight-line basis.  Depreciation expense for the six months ended June 30, 2017 and 2016 was $37,299 and $23,156, respectively.  Accumulated depreciation totaled $94,417 and $76,197 at June 30, 2017 and December 31, 2016, respectively.

NOTE 3.  LINE OF CREDIT

At June 30, 2017 and December 31, 2016, the Company owed a bank $66,255 and $70,373 respectively, under a revolving line of credit. The line of credit is secured by all Company assets, is capped at $100,000, is due on demand, and bears interest at variable rates approximating 4% on average. Interest expense under the line of credit approximated $1,500 during each of the six months ended June 30, 2017 and 2016.  During the six months ended June 30, 2017 and 2016, the Company made principal payments of $4,118 and $3,250, respectively.

9

CANFIELD MEDICAL SUPPLY, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2017 and 2016 (Unaudited)

NOTE 4.  LONG-TERM DEBT

Long-term debt consists of the following, each of which is an automobile loan collateralized by the underlying financed vehicle:

	June 30, 2017			December 31, 2016
3.53% installment note payable $352 monthly, including interest, through July 2019	$	8,481		$	10,426
3.79% installment note payable $299 monthly, including
interest, through July 2021		13,534			15,052
2.99% installment note payable $350 monthly, including interest, through August 2019		8,795			10,745
		30,810			36,223
Less principal due within one year		(11,106	)		(10,918	)
TOTAL LONG-TERM DEBT	$	19,704		$	25,305

10

CANFIELD MEDICAL SUPPLY, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2017 and 2016 (Unaudited)

NOTE 5.  COMMON STOCK

On January 10, 2017 the Company issued 350,000 shares of its common stock at $.10 per share for total proceeds of $35,000 to an unaffiliated individual.

NOTE 6.  LEASE COMMITMENTS

The Company rents office space under a non-cancellable lease through June 2020 with monthly payments of approximately $2,291 plus costs.

Lease expense incurred for each of the six months ended June 30, 2017 and 2016 was approximately $13,750. Subsequent to June 30, 2017, future minimum payments under the lease total approximately $82,500 including:  2017 (balance) $13,750, 2018 - $27,500, 2019 - $27,500, and 2020 - $13,750.

NOTE 7.  GOING CONCERN

The Company has suffered losses from operations and has working capital and stockholders’ equity deficits. In all likelihood, the Company will be required to make significant future expenditures in connection with marketing efforts along with general administrative expenses. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan of selling medical supplies on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.

NOTE 8.  SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date these financial statements were available to be issued and determined that there are no reportable subsequent events.

11

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

The following discussion and analysis should be read in conjunction with the Condensed Financial Statements (unaudited) and Notes to Condensed Financial Statements (unaudited) filed herein.

BUSINESS OVERVIEW

We primarily provide services to the rehabilitation market, which consists primarily of home medical equipment and supplies.  More than 50% of our revenues are derived from the sale and rental of durable home medical equipment including such items as wheeled walkers, manual and power wheelchairs, hospital beds, ramps, bedside commodes, and miscellaneous bathroom equipment.  The balance of our revenue is from the sale of various home medical supplies including diabetic testing, incontinence, ostomy, wound care, and catheter care.  Our emphasis is on helping patients with mobility-related limitations, but our overall business is aimed at helping patients remain in their homes instead of having to go to hospitals, rehab centers, and other similar facilities.  Most of the equipment and supplies that we sell are prescribed by a physician as part of an overall care plan.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2017 AS COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2016.

Revenues for the three months ended June 30, 2017 were $210,572 as compared to the revenues of $199,985 for the three months ended June 30, 2016.  The 5% increase in sales is due to an increasing trend in powerchair sales, which are relatively higher-priced with larger profit margins as compared to our other medical equipment and supplies.

Cost of goods sold for the three months ended June 30, 2017 were $88,849 as compared to cost of goods sold for the three months ended June 30, 2016 of $108,804.  The 18% decrease in the latest three months is primarily due to the fact that in September 2016 we were able to sign a new contract with Nestle at a Tier 4 pricing level which is approximately 10% below the Tier 3 pricing level we were on before.  Nestle supplies our enteral nutrition products which represent over 30% of our business. 

Operating expenses for the three months ended June 30, 2017 were $143,309 as compared to $124,672 for the three months ended June 30, 2016.  The 15% increase is due to the $8,865 increase in salaries and wages attributable to pay raises and the hiring of a sales representative during the third quarter of 2016, and the $11,047 increase in depreciation.

The net loss for the three months ended June 30, 2017 was $19,132 as compared to a net loss of $33,248 for the three months ended June 30, 2016.  The reasons for the $14,116 improvement in the amount of the loss include the fact that the sales increased by $10,587 while the cost of good sold dropped by $19,955.  This was offset somewhat by the $18,637 increase in operating expenses.

12

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2017 AS COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2016.

Revenues for the six months ended June 30, 2017 were $420,632 as compared to the revenues of $459,638 for the six months ended June 30, 2016.  The 9% decrease in sales is primarily due to the facts that approximately ten patients receiving nutritional supplements passed away during the first six months of 2017 and they rented two fewer power chairs during the first six months of 2017 compared to the corresponding period in 2016.

Cost of goods sold for the six months ended June 30, 2017 were $194,370 as compared to cost of goods sold for the six months ended June 30, 2016 of $235,114.  The 17% decrease in the latest six month period was due to the decrease in the sales volume and the decrease in cost of enteral nutrition products discussed above.

Operating expenses for the six months ended June 30, 2017 were $309,088 as compared to $246,222 for the six months ended June 30, 2016.  The 25% increase is due to the $22,406 increase in salaries and wages attributable to pay raises and the hiring of a sales representative during the third quarter of 2016, the $12,441 increase in professional fees incurred during the latest six months for the audit of our December 31, 2016 financial statements and Form 10-K filing, and the $13,876 increase in other general and administrative expenses comprised primarily of our new website development and outsourcing of our billing collections.

The net loss for the six months ended June 30, 2017 was $81,050 as compared to a net loss of $21,169 for the six months ended June 30, 2016.  The reason for the increased loss in the first six months of 2017 was primarily the $62,866 increase in operating expenses discussed above.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2017, we had negative working capital of ($47,666) compared to working capital of $2,784 as of December 31, 2016.

Net cash (used for) operating activities during the six months ended June 30, 2017 was ($45,721) as compared to net cash provided by operating activities in the six months ended June 30, 2016 of $11,276.  The primary reason for the change in cash used for operating activities was the increase in the net loss from $21,169 in the six months ended June 30, 2016 to a net loss of $81,050 in the latest six month period as discussed previously. 

Net cash used for investing activities during the six months ended June 30, 2017 was ($31,848), which represented ($38,066) used for the purchase of equipment offset by $6,218 in proceeds received from the sale of equipment.  In comparison, during the six months ended June 30, 2016, the Company used ($24,422), which represented ($27,468) used for the purchase of equipment offset by $3,046 in proceeds received from the sale of equipment.

Net cash provided by financing activities during the six months ended June 30, 2017 was $25,469 as compared to $42,980 provided by financing activities in the six months ended June 30, 2016.  The Company sold shares of its common stock during the six months ended June 30, 2017 and 2016 to raise $35,000 and $50,000, respectively, to help pay for the costs associated with being a public company.  Minimal payments towards the Company’s line of credit and notes payable were also made during each of the six month periods ended June 30, 2017 and 2016.

13

CONTRACTUAL OBLIGATIONS

None.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements (as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk. 

Not applicable.

Item 4.  Controls and Procedures.

(a)  Evaluation of Disclosure Controls and Procedures.

Our Chief Executive Officer and Principal Financial Officer have evaluated the effectiveness of the design and operations of our disclosure controls and procedures as of the end of the period covered by this quarterly report, and have concluded that our disclosure controls and procedures are adequate.

(b)  Changes in Internal Control over Financial Reporting.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

14

PART II – OTHER INFORMATION

Item 1.    Legal Proceedings.

None.

Item 1A.  Risk Factors.

Not applicable.

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

None.

Item 3.    Defaults Upon Senior Securities.

None.

Item 4.    Mine Safety Disclosures.

Not applicable.

Item 5.    Other Information.

None.

Item 6.    Exhibits.

(a)  Exhibits required by Item 601 of Regulation S-K.

Exhibits Description

31.1 Certification of CEO and Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) - Filed herewith electronically

31.2 Certification of CFO and Principal Financial and Accounting Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) - Filed herewith electronically

32.1 Certification of CEO and Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically

32.2 Certification of CFO and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically

101 XBRL Exhibits

15

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.

		CANFIELD MEDICAL SUPPLY, INC.
Date:  August 18, 2017	By:	/s/ Michael J. West
		Michael J. West, President and CEO (Principal Executive Officer)
Date:  August 18, 2017	By:	/s/ Stephen H. West
		Stephen H. West, CFO (Principal Financial Officer and Principal Accounting Officer)

16

EX-31

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael J. West, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Canfield Medical Supply, 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 of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer 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 control over financial reporting (as defined in the 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 is made known to us by others within the registrant, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control 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 officer and I have disclosed, based on our most recent evaluation of internal control 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 control 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 control over financial reporting.

Date:  August 18, 2017

/s/ Michael J. West

Michael J. West

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen H. West, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Canfield Medical Supply, 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 annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer 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 control over financial reporting (as defined in the 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 is made known to us by others within the registrant, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control 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 officer and I have disclosed, based on our most recent evaluation of internal control 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 control 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 control over financial reporting.

Date:  August 18, 2017

/s/ Stephen H. West

Stephen H. West

Chief Financial Officer

(Principal Financial Officer and

Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Form 10-Q of Canfield Medical Supply, Inc., a company duly formed under the laws of Colorado (the "Company"), for the quarter ended June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Michael J. West, President (Chief Executive Officer) of the Company, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; 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:  August 18, 2017	/s/ Michael J. West
	Michael J. West Chief Executive Officer (Principal Executive Officer)

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to Canfield Medical Supply, Inc. and will be retained by Canfield Medical Supply, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

 PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Form 10-Q of Canfield Medical Supply, Inc., a company duly formed under the laws of Colorado (the "Company"), for the quarter ended June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Stephen H. West, Chief Financial Officer of the Company, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; 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:  August 18, 2017	/s/ Stephen H. West
	Stephen H. West Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) (Principal Executive Officer)

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to Canfield Medical Supply, Inc. and will be retained by Canfield Medical Supply, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 18, 2017
Document And Entity Information
Entity Registrant Name	CANFIELD MEDICAL SUPPLY, INC.
Entity Central Index Key	0001553788
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		11,277,200
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2017

XML

CONDENSED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current Assets
Cash	$ 9,559	$ 61,659
Accounts receivable	182,904	206,254
Inventory	37,562	25,231
Total Current Assets	230,025	293,144
Equipment, net of accumulated depreciation of $94,417 and $76,197	60,989	62,190
Total Assets	291,014	355,334
Current Liabilities
Accounts payable and accrued liabilities	200,330	209,069
Line of credit	66,255	70,373
Current portion of long-term debt	11,106	10,918
Total Current Liabilities	277,691	290,360
Long-term debt	19,704	25,305
Total Liabilities	297,395	315,665
Stockholders' Equity
Preferred stock, no par value; 5,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, no par value; 100,000,000 shares authorized;11,277,200 (June 30, 2017) and 10,927,200 (Dec. 31, 2016) shares issued and outstanding	243,515	208,515
Accumulated deficit	(249,896)	(168,846)
Total Stockholders' Equity (Deficit)	(6,381)	39,669
Total Liabilities and Stockholders' Equity (Deficit)	$ 291,014	$ 355,334

XML

CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, no par value	$ 0	$ 0
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0
Common stock, no par value	$ 0	$ 0
Common stock, authorized shares	100,000,000	100,000,000
Common stock, issued shares	11,277,200	10,927,200
Common stock, outstanding shares	11,277,200	10,927,200
Accumulated depreciation	$ 94,417	$ 76,197

XML

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Sales (net of returns)	$ 210,572	$ 199,985	$ 420,632	$ 459,638
Cost of goods sold	88,849	108,804	194,370	235,114
Gross profit	121,723	91,181	226,262	224,524
Operating expenses:
Salaries and wages	79,009	70,144	161,544	139,138
Professional fees	4,695	10,759	31,900	19,459
Depreciation	23,830	12,783	37,299	23,156
Other selling, general and administrative	35,775	30,986	78,345	64,469
Total operating expenses	143,309	124,672	309,088	246,222
Loss from operations	(21,586)	(33,491)	(82,826)	(21,698)
Other income (expense):
Interest expense	(192)	(863)	(2,474)	(1,898)
Gain on sale of fixed assets	2,646	1,106	4,250	2,427
Total other income (expense)	2,454	243	1,776	529
Loss before provision for income taxes	(19,132)	(33,248)	(81,050)	(21,169)
Provision for income tax	0	0	0	0
Net loss	$ (19,132)	$ (33,248)	$ (81,050)	$ (21,169)
Net loss per share (basic and fully diluted)	$ (0.00)	$ (0.00)	$ (0.01)	$ (0.00)
Weighted average number of common shares outstanding	11,277,200	10,527,200	11,257,863	10,312,914

XML

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash Flows From Operating Activities:
Net loss	$ (81,050)	$ (21,169)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
Gain on sale of fixed assets	(4,250)	(2,427)
Depreciation	37,299	23,156
Decrease in accounts receivable	23,350	24,439
(Increase) in inventory	(12,331)	(5,329)
(Decrease) in accounts payable and accrued liabilities	(8,739)	(7,394)
Net cash provided by (used for) operating activities	(45,721)	11,276
Cash Flows From Investing Activities:
Proceeds from sale of fixed assets	6,218	3,046
Purchase of fixed assets	(38,066)	(27,468)
Net cash (used for) investing activities	(31,848)	(24,422)
Cash Flows From Financing Activities:
Payments on line of credit	(4,118)	(3,250)
Payments on long-term debt	(5,413)	(3,770)
Proceeds from sales of common stock, net	35,000	50,000
Net cash provided by financing activities	25,469	42,980
Net Increase (Decrease) in Cash	(52,100)	29,834
Cash At The Beginning Of The Period	61,659	7,343
Cash At The End Of The Period	9,559	37,177
Supplemental Disclosure
Cash paid for interest	(2,474)	(1,898)
Cash paid for income taxes	$ 0	$ 0

XML

ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Canfield Medical Supply, Inc. (the “Company”), was incorporated in the State of Ohio on June 3, 1992, and changed domicile to Colorado on April 18, 2012. The Company is in the business of home health services, primarily the selling of durable medical equipment and medical supplies to the public, nursing homes, hospitals, and other end users.

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the six months ended June 30, 2017 and 2016 have been made.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2016 audited financial statements.  The results of operations for the periods ended June 30, 2017 and 2016 are not necessarily indicative of the operating results for the full year.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

Accounts receivable

The majority of the Company’s revenues are received from Medicare, Medicaid, and private insurance companies.  As such, the Company records revenues at allowable amounts, net of estimated allowances and discounts based on contracted prices and historical collection rates.  The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At June 30, 2017 and December 31, 2016, the Company has determined that no allowance for doubtful accounts is necessary.

Property and equipment

Property and equipment are recorded at cost and depreciated under straight line methods over each item's estimated useful life.

 Inventory

The Company carries inventory of durable medical equipment and medical supplies for resale.  Inventory is accounted for on a first–in first-out basis.

Revenue recognition

The Company’s primary source of revenue is reimbursement from Medicare, Medicaid, and private insurance companies for the sale of medical equipment and supplies to patients. Revenue from product sales is recognized subsequent to a patient (customer) ordering a product at an agreed-upon price, and when delivery has occurred and collectability is reasonably assured. A purchase arrangement is evidenced by a written order, with delivery considered as made after physical customer acceptance. Although rare, defective products may be returned, with other return issues considered on a case-by-case basis. Services, such as periodic scheduled deliveries, are contracted in writing, and generally billed monthly. Any service revenue earned by the Company for services, such as safety and set up consulting or claims processing, is recorded after the service is performed. Rental of durable home medical equipment is evidenced by written contract, with revenue recognized when rent is earned.

Advertising costs

Advertising costs are expensed as incurred. The Company had advertising costs during the six months ended June 30, 2017 and 2016 of $4,391 and $2,520 respectively.

Income tax

The Company accounts for income taxes pursuant to ASC 740. Under ASC 740, deferred taxes are provided for using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 

Net income (loss) per share

The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.

There were no potentially dilutive debt or equity instruments issued or outstanding during the six months ended June 30, 2017 or 2016. 

Financial instruments 

The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheets, approximates fair value. 

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents.  The Company places its cash and cash equivalents at well-known financial institutions, where at times, such balances may exceed FDIC insurance limits.

The Company receives a significant amount of its revenues in reimbursements from Medicare and Medicaid through competitive bidding processes.  There is no guarantee that the Company will continue to be selected as a winning contract supplier under future bidding rounds.

Long-lived assets

In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value. 

Products and services, geographic areas and major customers

The Company’s business of medical supply sales constitutes one operating segment. All revenues each year were domestic and to external customers.

XML

EQUIPMENT

6 Months Ended

Jun. 30, 2017

Property, Plant and Equipment [Abstract]

EQUIPMENT

NOTE 2.  EQUIPMENT

Fixed assets are comprised of office equipment, vehicles, and the wheelchair and hospital bed rental pool, which consists of wheelchairs and hospital beds rented to customers over the shorter of the 13-month rental period mandated by Medicaid and Medicare, or the period over which the customer requires use of the wheelchair or hospital bed.  At the end of the use period, the wheelchair or hospital bed is either returned to the pool to be rented to another customer, or title of the chair or bed is transferred to the customer.  Depreciation is computed over the estimated useful life of the assets, ranging from 13 months to 7 years, on the straight-line basis.  Depreciation expense for the six months ended June 30, 2017 and 2016 was $37,299 and $23,156, respectively.  Accumulated depreciation totaled $94,417 and $76,197 at June 30, 2017 and December 31, 2016, respectively.

XML

LINE OF CREDIT

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

LINE OF CREDIT

NOTE 3.  LINE OF CREDIT

At June 30, 2017 and December 31, 2016, the Company owed a bank $66,255 and $70,373 respectively, under a revolving line of credit. The line of credit is secured by all Company assets, is capped at $100,000, is due on demand, and bears interest at variable rates approximating 4% on average. Interest expense under the line of credit approximated $1,500 during each of the six months ended June 30, 2017 and 2016.  During the six months ended June 30, 2017 and 2016, the Company made principal payments of $4,118 and $3,250, respectively.

XML

LONG-TERM DEBT

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

LONG-TERM DEBT

NOTE 4.  LONG-TERM DEBT

Long-term debt consists of the following, each of which is an automobile loan collateralized by the underlying financed vehicle:

	June 30, 2017			December 31, 2016
3.53% installment note payable $352 monthly, including interest, through July 2019	$	8,481		$	10,426
3.79% installment note payable $299 monthly, including
interest, through July 2021		13,534			15,052
2.99% installment note payable $350 monthly, including interest, through August 2019		8,795			10,745
		30,810			36,223
Less principal due within one year		(11,106	)		(10,918	)
TOTAL LONG-TERM DEBT	$	19,704		$	25,305

XML

COMMON STOCK

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

COMMON STOCK

NOTE 5.  COMMON STOCK

On January 10, 2017 the Company issued 350,000 shares of its common stock at $.10 per share for total proceeds of $35,000 to an unaffiliated individual.

XML

LEASE COMMITMENTS

6 Months Ended

Jun. 30, 2017

Leases [Abstract]

LEASE COMMITMENTS

NOTE 6.  LEASE COMMITMENTS

The Company rents office space under a non-cancellable lease through June 2020 with monthly payments of approximately $2,291 plus costs.

Lease expense incurred for each of the six months ended June 30, 2017 and 2016 was approximately $13,750. Subsequent to June 30, 2017, future minimum payments under the lease total approximately $82,500 including:  2017 (balance) $13,750, 2018 - $27,500, 2019 - $27,500, and 2020 - $13,750.

XML

GOING CONCERN

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GOING CONCERN

NOTE 7.  GOING CONCERN

The Company has suffered losses from operations and has working capital and stockholders’ equity deficits. In all likelihood, the Company will be required to make significant future expenditures in connection with marketing efforts along with general administrative expenses. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan of selling medical supplies on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.

XML

SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 8.  SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date these financial statements were available to be issued and determined that there are no reportable subsequent events.

XML

ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

Accounts receivable

Accounts receivable

The majority of the Company’s revenues are received from Medicare, Medicaid, and private insurance companies.  As such, the Company records revenues at allowable amounts, net of estimated allowances and discounts based on contracted prices and historical collection rates.  The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At June 30, 2017 and December 31, 2016, the Company has determined that no allowance for doubtful accounts is necessary.

Property and equipment

Property and equipment

Property and equipment are recorded at cost and depreciated under straight line methods over each item's estimated useful life.

Inventory

 Inventory

The Company carries inventory of durable medical equipment and medical supplies for resale.  Inventory is accounted for on a first–in first-out basis.

Revenue recognition

Revenue recognition

The Company’s primary source of revenue is reimbursement from Medicare, Medicaid, and private insurance companies for the sale of medical equipment and supplies to patients. Revenue from product sales is recognized subsequent to a patient (customer) ordering a product at an agreed-upon price, and when delivery has occurred and collectability is reasonably assured. A purchase arrangement is evidenced by a written order, with delivery considered as made after physical customer acceptance. Although rare, defective products may be returned, with other return issues considered on a case-by-case basis. Services, such as periodic scheduled deliveries, are contracted in writing, and generally billed monthly. Any service revenue earned by the Company for services, such as safety and set up consulting or claims processing, is recorded after the service is performed. Rental of durable home medical equipment is evidenced by written contract, with revenue recognized when rent is earned.

Advertising costs

Advertising costs

Advertising costs are expensed as incurred. The Company had advertising costs during the six months ended June 30, 2017 and 2016 of $4,391 and $2,520 respectively.

Income tax

Income tax

The Company accounts for income taxes pursuant to ASC 740. Under ASC 740, deferred taxes are provided for using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net income (loss) per share

Net income (loss) per share

The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.

There were no potentially dilutive debt or equity instruments issued or outstanding during the six months ended June 30, 2017 or 2016.

Financial Instruments

Financial instruments

The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheets, approximates fair value.

Concentrations

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents.  The Company places its cash and cash equivalents at well-known financial institutions, where at times, such balances may exceed FDIC insurance limits.

The Company receives a significant amount of its revenues in reimbursements from Medicare and Medicaid through competitive bidding processes.  There is no guarantee that the Company will continue to be selected as a winning contract supplier under future bidding rounds.

Long-Lived Assets

Long-lived assets

In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.

Products and services, geographic areas and major customers

Products and services, geographic areas and major customers

The Company’s business of medical supply sales constitutes one operating segment. All revenues each year were domestic and to external customers.

XML

LONG-TERM DEBT (Tables)

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Schedule of Long Term Debt

Long-term debt consists of the following, each of which is an automobile loan collateralized by the underlying financed vehicle:

	June 30, 2017			December 31, 2016
3.53% installment note payable $352 monthly, including interest, through July 2019	$	8,481		$	10,426
3.79% installment note payable $299 monthly, including
interest, through July 2021		13,534			15,052
2.99% installment note payable $350 monthly, including interest, through August 2019		8,795			10,745
		30,810			36,223
Less principal due within one year		(11,106	)		(10,918	)
TOTAL LONG-TERM DEBT	$	19,704		$	25,305

XML

ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Accounting Policies [Abstract]
Allowance for doubtful accounts	$ 0		$ 0
Advertising cost	$ 4,391	$ 2,520

XML

EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Depreciation	$ 23,830	$ 12,783	$ 37,299	$ 23,156
Accumulated depreciation	$ 94,417		$ 94,417		$ 76,197

XML

LINE OF CREDIT (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Debt Disclosure [Abstract]
Revolving line credit	$ 66,255		$ 70,373
Interest expense	1,500	$ 1,500
Principal payments	$ 4,118	$ 3,250

XML

LONG-TERM DEBT (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Long Term Gross	$ 30,810	$ 36,223
Less principal due within one year	(11,106)	(10,918)
Total Long Term debt	19,704	25,305
Long-term Debt One [Member]
Note Payable, monthly installment	352
Long Term Gross	8,481	10,426
Long-term Debt Two [Member]
Note Payable, monthly installment	299
Long Term Gross	13,534	15,052
Long-term Debt Three [Member]
Note Payable, monthly installment	350
Long Term Gross	$ 8,795	$ 10,745

XML

COMMON STOCK (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Accounting Policies [Abstract]
Proceeds from sales of common stock	$ 35,000	$ 50,000
Number of shares sold for proceeds	350,000
Share price per share	$ .10

XML

LEASE COMMITMENTS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Leases [Abstract]
Office space approximate monthly payment	$ 2,291
Lease expense on all leases	13,750	$ 13,750
Future minimum payments 2017 (remaining)	13,750
Future minimum payments 2018	27,500
Future minimum payments 2019	27,500
Future minimum payments 2020	13,750
Future minimum payments total	$ 82,500