UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended January 31, 2017

 

OR

 

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

 

For the transition period from ____________________ to ____________________.

 

Commission file number: 000-27211

 

MEDICAL INNOVATION HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Colorado		84-1469319
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

5805 State Bridge Rd, Suite G-328, Duluth, GA 30097

(Address of principal executive offices)

 

(909) 522-4414

(Registrant’s telephone number, including area code)

 

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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.

 

Yes

[X]

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

[X]

No

[  ]

 

Indicate by check mark whether the registrant is a large accelerated file, 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	[  ]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes

[  ]

No

[X]

 

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

 

As of April 7, 2017, there were 38,755,022  shares (post-reverse split 1-for-10) of the registrant’s common stock issued and outstanding.

 

 

 

Table of Contents

 

		PART I - FINANCIAL INFORMATION
Item 1.		Financial Statements (Unaudited)		3
		Consolidated Balance Sheets - January 31, 2017 and April 30, 2016 (Audited)		3
		Consolidated Statements of Operations – Three and Nine Months Ended January 31, 2017		4
		Consolidated Statements of Cash Flows – Three and Nine Months Ended January 31, 2017		5
		Notes to Consolidated Financial Statements		6
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		15
		PART II - OTHER INFORMATION
Item 1.		Legal Proceedings		16
Item 1A.		Risk Factors		16
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		16
Item 3.		Defaults Upon Senior Securities		16
Item 4.		Mine Safety Disclosures		16
Item 5.		Other Information		16
Item 6.		Exhibits		16
SIGNATURES				17

 

 

PART I. - FINANCIAL INFORMATION

 

ITEM 1. Financial Statements (Unaudited)

 

MEDICAL INNOVATION HOLDINGS, INC. AND SUBSIDIARY

Consolidated Balance Sheets

 

		January 31, 2017				April 30, 2016
		(Un-Audited)				(Audited)
ASSETS
Cash		$	33,857			$	1,600
Total current assets			33,857				1,600
TOTAL ASSETS		$	33,857			$	1,600
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Accounts payable and accrued expenses		$	592,974			$	203,643
Notes payable			276,125				441,930
Short term debt			-				18,100
Related Parties - short-term borrowings from shareholders			0				0
Total current liabilities			869,099				663,673
Preferred stock, 50 Series A (par value $0.001) and 100 Series B authorized (no par value), 30 and 0, and 30 and 0 issued and outstanding on January 31, 2017 and April 30, 2016, respectively			-				-
Common stock, $0.0001 par value, 500,000,000 common shares authorized, 38,755,022 and 37,209,022 issued and outstanding on January 31, 2017 and April 30, 2016, respectively			3,875				3,721
Additional paid-in capital			440,898				(3,721	)
Accumulated deficit			(1,280,015	)			(662,073	)
Total stockholders’ deficit			(835,242	)			(662,073	)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)		$	33,857			$	1,600

 

The accompanying notes are an integral part of these unaudited financial statements

 

 

MEDICAL INNOVATION HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statement of Operations

(Unaudited)

 

		For the Three months ended January 31, 2017				For the Nine Months ended January 31, 2017
Operating expenses:
General and administrative expenses		$	(314,060	)		$	(617,942	)
Total operating expenses
Loss from operations		$	(314,060	)		$	(617,942	)
Income taxes			-				-
Net Loss		$	(314,060	)		$	(617,942	)
Net loss per common share:
Basic		$	.01			$	.02
Diluted		$	.01			$	.02
Weighted average number of shares outstanding:
Basic			38,587,522				37,982,022
Diluted			38,587,522				37,982,022

 

The accompanying notes are an integral part of these unaudited financial statements

 

 

MEDICAL INNOVATION HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statement of Cash Flows

(Unaudited)

 

		For Nine Months Ended
		January 31, 2017
OPERATING ACTIVITIES
Net loss attributable to common stockholders		$	(617,942	)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Changes in:
Accounts payable and accrued liabilities			389,331
Stock issued for services			149,310
Notes payable and short term debt			(165,805	)
Net cash (used in) operating activities			(245,106	)
INVESTING ACTIVITIES
Net cash (used in) investing activities			-
FINANCING ACTIVITIES
Decrease in Notes Payable and short term debt			(18,100	)
Issuance of Common Stock			295,463
Due to Shareholders			-
Net cash provided by financing activities			277,363
NET CHANGE IN CASH			32,257
CASH, Beginning of period			1,600
CASH, Ending of period		$	33,857
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Interest Paid		$	0
Income Taxes Paid		$	0

 

The accompanying notes are an integral part of these unaudited financial statements

 

 

MEDICAL INNOVATION HOLDINGS, INC. AND SUBSIDIARY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2017

(Unaudited)

 

NOTE 1 - INTRODUCTION

 

On April 29, 2016, Medina International Holdings, Inc. (the “Company”) entered into an Acquisition and Purchase Agreement with Medical Innovation Holdings, a Joint Venture (“MedHold”) effective April 29, 2016, whereby all of the assets of MedHold were acquired by the Company. In conjunction therewith, 35,100,000 shares (post-reverse split 1-for-10) were issued. Since the owners of MedHold now own approximately 94% of Medina, this transaction was accounted for as a reverse acquisition of Medina by MedHold resulting in a recapitalization of Medhold. Accordingly, the financial statements presented herein do not contain comparisons to the prior fiscal year, as operations began April 29, 2016.

 

Prior to the acquisition, Medina went through a restructuring and divesture. For details, please see the 8-K/A filed by Medina on June 6, 2016.

 

The Company is establishing a nationwide, state-by-state, multi-disciplinary medical specialist provider/practice network, staffed by 16 types of Physician Specialists. These Physician Specialists will provide virtual medical consultations to the potential millions of rural patients who are chronically underserved. This will be accomplished via a seamless, comprehensive, sophisticated end-to-end virtual medicine program.

 

On August 9, 2016 the Company announced that it had set up a subsidiary, 3Point Care, to provide services critical to the Company for the administration, scheduling, claims processing, technical support as well as delivering medical and health related services. The subsidiary is in the development stage. 

 

On or about June 24, 2016, the Company proposed a reverse split of the common stock issued and outstanding on a one new share for ten old shares basis, with fractional shares being rounded up to the next whole share, and sought authorization to change the Company’s name to Medical Innovation Holdings, Inc. (note these actions required an amendment to the Articles of Incorporation and required the approval of the Financial Industry Regulatory Authority (“FINRA”), which was granted). The majority shareholders approved both proposals and a Schedule 14C Information Statement was filed on August 8, 2016. The stock split and name change were effective September 15, 2016, and as such, the numbers reflected in the unaudited financial statements are post-split figures; all per share data has been retroactively restated.

 

Going Concern

 

The accompanying financial statements have been prepared in conformity with GAAP in the United States, which contemplates continuation of the Company as a going concern. The Company is a development stage enterprise and has limited operations as of January 31, 2017. On January 31, 2017, the Company had an accumulated deficit of $1,280,015.

 

Management is devoting considerable effort to establish a business as discussed above. Management has taken various steps in that direction and it believes that its actions will allow the Company to continue its operations through the next fiscal year.

 

The future success of the Company is likely dependent on its ability to attain additional capital to develop its proposed products and ultimately, upon its ability to attain future profitable operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will obtain positive cash flow.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

 

Presentation of Interim Information

 

In the opinion of the management of the Company, the accompanying unaudited financial statements include all normal adjustments considered necessary to present fairly the financial position and operating results of the Company for the period presented. The financial statements and notes are presented as permitted by Form 10-Q, and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2016. It is management’s opinion that when the interim financial statements are read in conjunction with the April 30, 2016 Annual Report on Form 10-K, the disclosures are adequate to make the information presented not misleading. Interim results are not necessarily indicative of results for a full year or any future period. The accompanying consolidated financial statements of Medical Innovation Holdings, Inc. and its subsidiaries were prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the assets, liabilities, revenues, and expenses of subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

 

 

Use of Estimates

 

The preparation of our consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but are not limited to;

 

1)	Revenue recognition;
2)	Allowance for doubtful accounts;
3)	Inventory costs;
4)	Asset impairments;
5)	Depreciable lives of assets;
6)	Income tax reserves and valuation allowances;
7)	Fair value of stock options;
8)	Allocation of direct and indirect cost of sales; and
9)	Contingent liabilities.

 

Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require judgment. We base our estimates on historical experience, available market information, appropriate valuation methodologies, and on various other assumptions that we believe to be reasonable. We evaluate and update our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluation, when necessary. Actual results could differ materially from these estimates.

 

Revenue Recognition

 

Revenue Recognition is recognized when earned. The Company’s revenue recognition policies are in compliance with SEC Staff Accounting Bulletin (SAB) 104. Sales revenue is recognized at the date services are rendered and no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied, are recorded as unearned revenue.

 

Cash and Cash Equivalents

 

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents. The Company maintains its cash in bank deposit accounts that does not exceed federally insured limits. The Company has not experienced any losses in such accounts.

 

Accounts Receivable

 

The Company reviews its accounts receivables accounts periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary.

 

Advertising costs

 

Advertising costs are expensed as incurred. The Company recorded no advertisement costs in the three and nine months ended January 31, 2017.

 

 

Inventory

 

We carry our inventories at the lower of their cost or market value. Cost is determined using first-in, first-out (“FIFO”) method. Market is determined based on net realizable value. We also provide due consideration to obsolescence, excess quantities, and other factors in evaluating net realizable value.

 

Fixed Assets

 

Capital assets are stated at cost. Equipment consists of medical equipment and related assets. Depreciation of fixed assets is provided using the straight-line method over the estimated useful lives (3-7 years) of the assets. Expenditures for maintenance and repairs are charged to expense as incurred.

 

Property and Equipment		No. of Years
Medical Equipment		7 years
Telemedicine Equipment		3 years
Computers		3 years
Furniture		5 years
Office Equipment		5 years
Office Phone		3 years

 

Long Lived Assets

 

The Company adopted Statement of Financial Accounting Standard No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”), now codified in ASC 350,which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” and the accounting and reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations for a Disposal of a Segment of a Business.” The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with ASC 350. ASC 350 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced.

 

Income Taxes

 

The Company uses the liability method of accounting for income taxes under which deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the accounting bases and the tax bases of the Company’s assets and liabilities. Any deferred tax assets and liabilities are computed using enacted tax rates in effect for the year in which the temporary differences are expected to reverse.

 

GAAP generally requires that recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income.

 

Issuance of Shares for Service

 

The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.

 

Foreign Currency Translations and Hedging

 

The Company will be exposed to foreign currency fluctuations due to international trade. Management does not intend to enter into forward exchange contracts or any derivative financial investments for trading purposes. There is no present international trade and as such management does not currently hedge foreign currency exposure.

 

 

Basic and Diluted Net Loss per Share

 

Net loss per share is calculated in accordance with FASB ASC 105. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

 

Products and Services, Geographic Areas and Major Customers

 

The Company intends to establish a nationwide, state-by-state, multi-disciplinary medical specialist provider/practice network, staffed by 16 types of Physician Specialists. These specialist Physicians will provide virtual medical consultations to the potential millions of rural patients who are chronically underserved. This will be accomplished via a seamless, comprehensive, sophisticated end-to-end virtual medicine program.

 

Recently issued accounting pronouncements

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB deferred the effective date of the revenue recognition guidance to reporting periods beginning after December 15, 2017. Early adoption is permitted for reporting periods beginning after December 15, 2016. We are continuing to evaluate our method of adoption and the impact this ASU, and related amendments and interpretations, will have on our consolidated financial statements (“CFS”).

 

In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), which requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company does not expect that the adoption of this standard will have a material effect on the Company’s CFS.

 

In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes”. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not anticipate the adoption of this ASU will have a significant impact on its CFS.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its CFS.

 

In March 2016, the FASB issued an ASU amending the accounting for stock-based compensation and requiring excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than equity. This guidance also requires excess tax benefits to be presented as an operating activity on the statement of cash flows and allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of the ASU; however, we expect the ASU will have a material impact on our CFS.

 

As of January 31, 2017, there are no recently issued accounting standards not yet adopted that would have a material effect on the Company’s financial statements to have a material impact on the Company’s CFS.

 

 

NOTE 3 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses consisted of the following as of January, 31, 2017 and April 30, 2016.

 

		January, 31, 2017				April 30, 2016
						(Audited)
Audit fee		$				$	1,500
Transfer agent							1,621
Attorney fees			200,522				200,522
Officers			134,400
Amount due for consultant BBVI, LLC			254,500
Other			3,552
Total		$	592,974			$	203,643

 

NOTE 4 - NOTES PAYABLE

 

Notes payable consisted of the following as of January 31, 2017 and April 30, 2016.

 

		January 31, 2017				April 30, 2016
						(Audited)
Syndicated Equity, Inc.		$	256,025			$	256,025
C. S. Seshadri			20,000				185,905
Total		$	276,025			$	441,930

 

The Company retained a Note payable of $256,025. The Note was issued on June 18, 2015 and was due in one month at 1%. The Note carries a default interest rate of 18% and is convertible at 60% of the Volume Weighted Average Price for 5 days prior to conversion. This note is currently in default. The Company evaluated and recorded beneficial conversion on this note in prior years’ financial statements.

 

The Seshadri note was agreed to be settled with a payment of $20,000. Prior to the settlement the note carried interest and was convertible into the Company’s common stock.

 

NOTE 5 - EMPLOYMENT AGREEMENT

 

As of January 31, 2017 there are no employment agreements with any management personal. However, on April 1, 2016 the Company entered into a memorandum of understanding with its CEO that includes a tentative salary of $144,000 per annum based upon certain conditions and other provisions. However, as of the date of this report, no definitive agreement has been signed.

 

NOTE 6 - PREFERRED STOCK

 

As of January 31, 2017 the Company had 30 shares of convertible preferred stock outstanding. Each preferred stock is convertible in to 1% of the outstanding common shares at the date of conversion. At January 31, 2017 the preferred shares were convertible into approximately 11.4 million shares of common stock.

 

NOTE 7 - PENDING LITIGATION

 

Under a contract, the Company had liabilities due to a former law firm of $140,000 (see note 3 above). The law firm has filed suit against multiple defendants, including the company, and has been awarded a judgment against the parties to collect its fees, including costs. The Company intends to attempt to settle this matter. 

 

 

NOTE 8 - CONTRACTUAL OBLIGATIONS

 

As part of the acquisition on April 29, 2016, Medical Innovation Holdings, Inc. (the “Company”) assumed a consulting agreement that was entered into on February 20, 2016 by MedHold JV, which obligates MedHold JV to pay BBV International Consulting, LLC (“BBVI”) $30,000 per month through February 19, 2019 for strategic and corporate planning. The agreement was ratified by the Company’s Board of Directors effective May 1, 2016. No material relationship exists between BBVI and its representatives and any officers or directors of the Company. During the three and nine months ended January 31, 2017, the Company expensed $90,000 and $270,000, respectively, on consulting fees.

 

NOTE 9 - SHORT-TERM DEBT

 

As of January, 31, 2017 and April 30, 2016, short term debt consisted of the following:

 

		January 31, 2017				April 30, 2016
Short-Term Debt
Borrowings from stockholders		$	—			$	18,100

 

The short-term debts do not carry interest and are payable on demand.

 

NOTE 10 - STOCKHOLDERS’ EQUITY

 

335,000 and 1,546,022 common shares (post-reverse split 1-for-10) were issued during the three-month and nine month period ended January 31, 2017 for $202,572 and $444,773 respectively through a private placement to unrelated parties under Rule 506 of Regulation D. Of the 38,755,022 shares outstanding at January 31, 2017, 1,546,000 have been subscribed and paid for, but have not yet been issued. During the three month period ended January 31,2017 100,000 shares were issued to a consultant for worked performed. The valuation of those shares was $149,310.

 

NOTE 11 - SUBSEQUENT EVENTS

 

The Company announced that it has entered into a Letter of Intent (“LOI”) on January 14, 2017 and issued an 8-K subsequent to January 31, 2017, which is incorporated by reference herein, with a Florida-based nutraceutical company (“NEWCO”). Under the agreement, MIHI will acquire 100% of the assets of NEWCO in a cash and stock transaction yet to be valued, but estimated to be between $2.5-$3.5 million. NEWCO will provide a proprietary product line with specialized formulations along with trademarked product names. Also with the acquisition, the Company will receive a robust customer base, existing staff and management, and certain marketing material designed to promote NEWCO’s product line.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with our unaudited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward-looking statements.,

 

The independent registered public accounting firm’s report on the Company’s financial statements as of April 30, 2016, and for each of the years in the two-year period then ended, includes a “going concern” explanatory paragraph, that describes substantial doubt about the Company’s ability to continue as a going concern.

 

On April 29, 2016, Medina International Holdings, Inc. (the “Company”) entered into an Acquisition and Purchase Agreement with Medical Innovation Holdings, a Joint Venture (“MedHold”) effective April 29, 2016, whereby all of the assets of MedHold were acquired by the Company. In conjunction therewith, 35,100,000 shares (post-reverse split 1-for-10) were issued. Since the owners of MedHold now own approximately 94% of Medina, this transaction was accounted for as a reverse acquisition of Medina by MedHold resulting in a recapitalization of Medhold. Accordingly, the financial statements presented herein do not contain comparisons to the prior fiscal year, as operations with MedHold have only been ongoing since April 29, 2016.

 

Prior to the acquisition, Medina went through a restructuring and divesture. For details, please see 8-K/A filed by Medina on June 6, 2016. On or about June 24, 2016, the Company proposed a reverse split of the common stock issued and outstanding on a one new share for ten old shares basis, with fractional shares being rounded up to the next whole share, and sought authorization to change the Company’s name to Medical Innovation Holdings, Inc. (note these actions require an amendment to the Articles of Incorporation and require the approval of the Financial Industry Regulatory Authority (“FINRA”)). The majority shareholders approved both proposals and a Schedule 14C Information Statement was filed on August 8, 2016. The stock split and name change were effective September 15, 2016, and as such, the numbers reflected herein are retroactively restated as post-split figures.

 

The Company is establishing a nationwide, state-by-state, multi-disciplinary medical specialist provider/practice network, staffed by 16 types of Physician Specialists. These Physician Specialists will provide virtual medical consultations to the potential millions of rural patients who are chronically underserved. This will be accomplished via a seamless, comprehensive, sophisticated end-to-end virtual medicine program.

 

On August 9, 2016 the Company announced that it set up a subsidiary, 3Point Care, to serve as our Management Service Organization (MSO) to manage all Healthcare Operations of the Company. This subsidiary will provide services to the Company for the administration, scheduling, claims processing, technical support as well as delivering medical and health related services.

 

The Company announced on January 14, 2017 that it has entered into a Letter of Intent (“LOI”) with a Florida-based nutraceutical company (“NEWCO”) and issued an 8-K, which is incorporated by reference herein. Under the agreement, MIHI will acquire 100% of the assets of NEWCO in a cash and stock transaction yet to be valued, but estimated to be between $2.5-$3.5 million. NEWCO will provide a proprietary product line with specialized formulations along with trademarked product names. Along with the acquisition, the Company will access a robust customer base, existing staff and management, and established marketing material designed to promote NEWCO’s product line.

 

Our securities are currently not liquid. There are limited market makers in our securities and it is not anticipated that any market will develop for our securities until such time as we successfully implement our business plan of providing virtual medical consultations to a rural patient population base.

 

RESULTS OF OPERATIONS

 

For the Three Months Ended January 31, 2017, there is no comparison as MedHold did not exist prior to April 29, 2016.

 

The Company recognized no revenues during the three months ended January 31, 2017.

 

 

During the three months ended January 31, 2017, we incurred general and administrative expenses of $314,060, which expenses were mainly due to the ongoing costs of reorganization.

 

During the three months ended January 31, 2017, the Company recognized a net loss of $314,060 due to the general and administrative expenses.

 

For the Nine Months Ended January 31, 2017, there is no comparison as MedHold did not exist prior to April 29, 2016.

 

The Company recognized no revenues during the Nine Months ended January 31, 2017.

 

During the Nine Months ended January 31, 2017, we incurred general and administrative expenses of $617,942, which expenses were mainly due to the ongoing costs of reorganization.

 

During the Nine Months ended January 31, 2017, the Company recognized a net loss of $617,942 due to the general and administrative expenses.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of January 31, 2017, the Company had $33,857 cash on hand. The Company’s total current liabilities were $869,09 as of January 31, 2017, which was mainly accounts payable and accrued expenses of $592,974, and notes payable of $276,125. At January 31, 2017, the Company’s current liabilities exceeded current assets by $835,242.

 

The Company received $0 in operating activities, but used $245,106 in operating activities for the nine-month period ended January 31, 2017.

 

The Company did not have any investment activities during the three or Nine Months ended January 31, 2017.

 

During the three- and nine-month periods ended January 31, 2017, the Company received $202,572 and $444,773 in financing from activities including the issuance of 335,000 and 1,546,022 shares of common stock at $0.20 per share  pursuant to a private placement under Rule 506 of Regulation D.

 

The Company has an accumulated deficit, as of January 31, 2017, of $1,280,015 compared to $662,073 as of April 30, 2016, an increase in the deficit of $617,942 in the nine-month period.

 

Going Concern

 

The Company’s auditors issued a “going concern” statement as part of their opinion in the Audit Report for the year ended April 30, 2016 and for each of the years in the two-year period then ended, including a “going concern” explanatory paragraph, that describes substantial doubt about the Company’s ability of the Company to continue as a “going concern.”

 

Short Term

 

On a short-term basis, we do not generate revenues sufficient to cover operations. Based on prior history, we will continue to have insufficient revenue to satisfy current and recurring liabilities as we continue to develop our operations. For short term needs we will be dependent on receipt, if any, of offering proceeds.

 

Need for Additional Financing

 

We do not have capital sufficient to meet our cash needs. We will have to seek loans or equity placements to cover such cash needs. No commitments to provide additional funds have been made by our management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to us to allow it to cover our expenses as they may be incurred.

 

There is no assurance that the Company will be profitable, the Company may not be able to successfully develop, manage or market its products and services, the Company may not be able to attract or retain qualified executives and personnel, the Company’s products and services may become obsolete, government regulation may hinder the Company’s business, additional dilution in outstanding stock ownership may be incurred due to the issuance of more shares, warrants and stock options, or the exercise of warrants and stock options, and other risks inherent in the Company’s businesses.

 

 

The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed by the Company and any Current Reports on Form 8-K filed by the Company.

 

Contractual Obligations and Other Commercial Commitments

 

The Company does not have sufficient capital to meet its cash needs, including the costs of compliance with the continuing reporting requirements of the Securities Exchange Act of 1934. Management will have to seek loans or equity placements to cover such cash needs and cover outstanding payables. Lack of existing capital may be a sufficient impediment to prevent the Company from accomplishing its goal of expanding operations. There is no assurance that the Company will be able to carry out our business. No commitments to provide additional funds have been made by the Company’s management or other shareholders. Accordingly, there can be no assurance that any additional funds will be available to the Company to cover its expenses as they are incurred.

 

Irrespective of whether the Company’s cash assets prove to be inadequate to meet its operational needs, the management might seek to compensate providers of services by issuances of stock in lieu of cash.

 

Off-Balance Sheet Arrangements

 

In accordance with the definition under SEC rules, the following qualify as off-balance sheet arrangements:

 

	a)	Any obligation under certain guarantees or contracts;
	b)	A retained or contingent interest in assets transferred to an unconsolidated entity or similar entity or similar arrangement that serves as credit, liquidity, or market risk support to that entity for such assets;
	c)	Any obligation under certain derivative instruments; and
	d)	Any obligation under a material variable interest held by the registrant in an unconsolidated entity that provides financing, liquidity, market risk, or credit risk support to the registrant, or engages in leasing, hedging, or research and development services with the registrant.

 

The following will address each of the above items pertaining to the Company.

 

As of January 31, 2017, we do not have any obligation under certain guarantees or contracts as defined above.

 

As of January 31, 2017, we do not have any retained or contingent interest in assets as defined above.

 

As of January 31, 2017, we do not hold derivative financial instruments.

 

Accounting for Derivative Instrument and Hedging Activities, as amended.

 

As of January 31, 2017, we did not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities (“SPEs”), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of January 31, 2017 and April 30, 2016, we were not involved in any unconsolidated SPE transactions.

 

Dividends

 

The Company has not declared or paid any cash dividend on its common stock and does not anticipate paying dividends for the foreseeable future.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not Applicable.

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosures Controls and Procedures

 

We have adopted and maintained disclosure controls and procedures (as such term is defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC’s rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.

 

As required by SEC Rule 15d-15(b), our Chief Executive Officer carried out an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. Based on the foregoing evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are not effective in timely alerting them to material information required to be included in our periodic SEC filings and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure as a result of the deficiency in our internal control over financial reporting discussed below.

 

Management’s assessment of the effectiveness of the small business issuer’s internal control over financial reporting is as of the quarter ended January 31, 2017. We believe that internal control over financial reporting is not effective because of the small size of the business. We have not identified any current, material weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations.

 

There was no change in our internal control over financial reporting that occurred during the quarter ended January 31, 2017, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

The Company assumed liabilities due to a former law firm of $140,000. The law firm has filed suit against the Company and other guarantors to collect its fees, including costs. The Company is presently attempting to settle this matter.

 

ITEM 1A. RISK FACTORS.

 

None.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

During the three and nine months ended January 31, 2017, the Company sold 335,000 and 1,546,022 shares (post-reverse split 1-for-10) respectively of common stock for $202,572 and $444,773 at $0.20 per share . The securities were sold pursuant to exemptions from registration under Rule 506 of Regulation D of the Securities Act of 1933. Of the 38,755,022 shares outstanding at January 31, 2017, 1,546,000 have been subscribed and paid for, but have not yet been issued. During the three-month period ended January 31, 2017 100,000 shares were issued to a consultant for worked performed. The valuation of those shares was $149,310.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

None.

 

ITEM 5 OTHER INFORMATION.

 

None.

 

ITEM 6. EXHIBITS.

 

Exhibits. The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.

 

	Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
	Exhibit 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
	Exhibit 32.1 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act
	Exhibit 32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
	101.INS		XBRL Instance Document (1)
	101.SCH		XBRL Taxonomy Extension Schema Document (1)
	101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document (1)
	101.DEF		XBRL Taxonomy Extension Definition Linkbase Document (1)
	101.LAB		XBRL Taxonomy Extension Label Linkbase Document (1)
	101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document (1)
	(1) Pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

 

 

SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		MEDICAL INNOVATION HOLDINGS, INC.
		(Registrant)
Dated: April 12, 2017	By:	/s/ Arturo Sanchez
		Arturo “Jake” Sanchez,
		Chief Executive Officer
		(Principal Executive Officer)
Dated: April 12, 2017	By:	/s/ Lawrence Litowitz
		Lawrence Litowitz,
		Interim Chief Financial Officer
		(Principal Accounting Officer)