Subsequent Events

3 Months Ended

Mar. 31, 2019

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

14. SUBSEQUENT EVENTS

In accordance with ASC Topic 855, "Subsequent Events", the Company evaluated subsequent events through June 12, 2019, the date these financial statements were available to be issued. During its evaluation, the following subsequent events were identified:

During 2019, the Company renegotiated the Tampa office lease and agreed to a three-year extension of the lease with no increase in payments. Effective July 1, 2019, the Company will adopt ASU 2016-02 "Leases" and will record a right of use asset and lease liability of $272,528 related to the lease.

The Huntington Beach lease has been extended during 2019 on a month to month basis at a monthly rate of $4,000.

Issuance of debt and warrants

Subsequent to the balance sheet date, the Company has issued $540,250 of convertible-promissory notes. All of the debt matures in 2020 and has a stated interest rate of 12% and is unsecured. Concurrent with the issuance of debt, the Company has issued 5,728,933 warrants at an average exercise price of $0.17. At the time of issuance, all warrants had a three or five year term.

New service contracts

In the latter part of May 2019, the Company entered into an agreement with Concentra Health Services, Inc. ("Concentra"), whereby, the Company was engaged by Concentra to serve as Concentra's preferred national sleep apnea services provider. Although the Agreement is not exclusive, the Company believes that Concentra has not entered into any similar type agreement with any other company. With approximately 700 occupational medicine facilities, nationwide, Concentra is the national leader in performing the required Department of Transportation (DOT) medical exams for commercial drivers accounting, annually, for approximately fifty percent (50%) of all DOT medical exams performed in the United States. Sleep apnea screening is a required component of all DOT medical exams.

Before the program can be launched, there are a significant number of operational actions, including systems programming, which must be completed by both the Company and Concentra. Following the execution of the Agreement, the Company immediately undertook the task of completing what was needed to be done for the program launch, which included jointly designing with Concentra an appropriate sleep apnea test "Referral Form" to the Company; purchasing additional I.T. equipment; creating and/or purchasing I.T. programs; expanding customer service/sales personnel; and, putting in place appropriate technical equipment so that each referring Concentra clinic can track, in real time on the Company's system, the status of each patient. The Company believes its portion of this integration will be completed shortly. While we do not know the status of Concentra's implementation, we would anticipate same to be similar to the Company's. The Company believes it will realize substantial new revenue immediately upon program launch.