Attached files

file filename
EX-32.1 - CERTIFICATION - Medifirst Solutions, Inc.f10q0617ex32i_medifirst.htm
EX-31.2 - CERTIFICATION - Medifirst Solutions, Inc.f10q0617ex31ii_medifirst.htm
EX-31.1 - CERTIFICATION - Medifirst Solutions, Inc.f10q0617ex31i_medifirst.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

  

FORM 10-Q

 

(Mark One)

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

 

For the quarterly period ended: June 30, 2017

 

OR

 

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

 

For the transition period from                     to                    

 

Commission File Number:

000-55465

 

MEDIFIRST SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

 

4400 Route 9 South, Suite 1000, Freehold NJ 07728

(Address of principal executive offices)

 

732-786-8044

(Issuer’s telephone number)

  

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

 

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 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 smaller reporting company. See definition 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  ☐ (check one) Smaller reporting company
      Emerging growth 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 7(a)(2)(B) of the Securities Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of August 21, 2017, there were 625,753,750 shares of Common Stock, $0.0001 par value, issued and outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

 

   Page 
     
PART I. FINANCIAL INFORMATION   
     
Item 1. Financial Statements.  1 
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.  31 
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk.  35 
     
Item 4. Controls and Procedures.  35 
     
PART II. OTHER INFORMATION    
     
Item 1. Legal Proceedings.  36 
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.  36 
     
Item 3. Defaults Upon Senior Securities.  36 
     
Item 4. Mine Safety Disclosures  36 
     
Item 5. Other Information.  36 
     
Item 6. Exhibits.  36 

 

 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

INDEX TO FINANCIAL STATEMENTS

 

Consolidated Balance Sheets as of December 31, 2016 and June 30, 2017 (unaudited)  3 
     
Consolidated Statements of Operations (unaudited) for the six months ended June 30, 2017 and 2016  4 
     
Consolidated Statement of Stockholders’ Equity (unaudited) for the six months ended June 30, 2017  5 
     
Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2017  10 
     
Notes to Unaudited Consolidated Financial Statements  11 

 

 1 

 

 

 

 

 

 

 

 

 

 

 

 

MEDIFIRST SOLUTIONS, INC.

 

  

CONSOLIDATED FINANCIAL STATEMENTS

 

  

FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016

 

 

 

 

 

 

 

 

 

 

 2 

 

 

Medifirst Solutions, Inc.

Consolidated Balance Sheets

June 30, 2017 and December 31, 2016

 

   June 30,
2017
   December 31,
2016
 
   (Unaudited)     
         
ASSETS
         
Current Assets:        
Cash  $231,333   $165,017 
Inventory   28,590    14,023 
Prepaid items   -    15,720 
Loans Receivable from Investor   256,250      
Interest Receivable   2,521      
Total current assets   518,694    194,760 
           
Property, Plant and Equipment, net   1,551    1,871 
           
Other Assets          
Security Deposit   650    650 
Intangible Asset -License Agreement, net   123,752    137,502 
Total other assets   124,402    138,152 
           
Total Assets  $644,647   $334,783 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY 
           
Liabilities          
Accounts payable and accrued expenses  $39,798   $75,368 
Accrued expenses - officer’s compensation   425,152    405,197 
Due to related party   8,921    8,921 
Loans payable - stockholders   15,055    10,555 
Note Payable for license agreement   -    150,000 
Convertible notes payable   575,099    391,653 
Derivative Liabilities   60,348    144,792 
Total current liabilities   1,124,373    1,186,486 
           
Commitments & Contingencies (Note 8)   -    - 
           
Stockholders’ Equity:          
Series A preferred stock, $0.0001 par value; 1,000,000 shares authorized, 500,000  and ’50,000 shares issued and outstanding, respectively   50    5 
Series B convertible preferred stock, $0.0001 par value; 50,000 shares authorized, 8,000 and 26,100 shares issued and outstanding, respectively   1    3 
Common stock, $0.0001 par value; 1,500,000,000 shares authorized, 600,468,629 and 225,847,976 shares issued and outstanding, respectively   60,049    22,586 
Additional paid in capital   2,710,900    1,232,996 
Accumulated deficit   (3,250,726)   (2,107,293)
Total Stockholders’ Equity   (479,726)   (851,703)
           
Total Liabilities & Stockholders’ Equity  $644,647   $334,783 

 

 3 

 

 

Medifirst Solutions, Inc.

Consolidated Statements of Operations

For the Six Months Ended June 30, 2017 and 2016

(Unaudited)

 

  

For the Three Months Ended

June 30,

   For the Six Months Ended
June 30,
 
   2017   2016   2017   2016 
                 
Product sales, net   -    -    9,995    - 
    -    -    9,995    - 
Cost of goods sold   -    -    353    - 
Gross income   -    -    9,642    - 
                     
Expenses:                    
Officer’s compensation   25,000    25,000    50,000    50,000 
Advertising and promotion   6,085    18,298    25,882    19,921 
Computer and internet   2,436    68    2,642    188 
Consulting fees   73,900    14,045    263,200    34,843 
Professional fees   50,055    36,335    174,320    60,895 
Rent   3,822    2,022    7,644    4,093 
Travel   2,676    896    9,181    1,156 
Lab testing   8,175    32,400    8,175    32,400 
Dues and subscriptions   1,181    8,731    2,264    10,279 
Other   19,523    13,265    44,866    21,088 
    192,853    151,060    588,174    234,863 
                     
Net loss from Operations before other income, expenses   (192,853)   (151,060)   (578,532)   (234,863)
                     
Other income and (expense)                    
Interest expense   (184,117)   (86,254)   (275,151)   (278,069)
Interest income   2,521    1,356    2,521    2,523 
Change in fair value -derivatives   72,714    204,139    (292,271)   143,976 
                     
Net loss before provision for income tax  $(301,735)  $(31,819)  $(1,143,433)  $(366,433)
                     
Provision for income taxes   -    -    -    - 
                     
Net Loss  $(301,735)  $(31,819)  $(1,143,433)  $(366,433)
                     
Loss per common share - Basic and fully diluted  $(0.001)  $(0.001)  $(0.003)  $(0.008)
                     
Weighted average number of shares outstanding - Basic and fully diluted   

486,728,968

    44,698,004    408,230,218    43,256,072 

 

 4 

 

 

Medifirst Solutions, Inc.

Consolidated Statement of Stockholders’ Equity

For the Six Months Ended June 30, 2017

 

                           Additional       Total 
   Common Stock   Preferred Class A   Preferred Class B   Paid in   Accumulated   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Equity 
Balance January 1, 2016   35,101,750    3,510    50,000    5            310,183    (969,609)   (655,911)
                                              
Issuance of common shares upon partial conversion of note at $0.00275 per share   1,095,036    110                        2,901         3,011 
Issuance of common shares upon partial conversion of note at $0.00275 per share   1,285,560    129                        3,406         3,535 
Issuance of common shares upon partial conversion of note at $0.003355 per share   906,533    91                        2,950         3,041 
Issuance of common shares upon partial conversion of note at $0.00275 per share   1,500,000    150                        600         750 
Issuance of Series B Preferred shares as part consideration for license agreement                       25,000    3              3 
Issuance of common shares upon conversion of 3,400 shares of Series B Preferred Stock   1,700,000    170             (3,400)   (1)   (170)        (1)
Additional paid in capital from derivative liability on debt conversion                               10,152        10,152 
Issuance of Series B Preferred shares as payment for inventory                     10,000    1    49,999         50,000 
Issuance of common shares upon conversion of 3,400 shares of Series B Preferred Stock   1,700,000   $170              (3,400)  $0   $(170)        0 
Issuance of common shares upon partial conversion of note at $.0033 per share   1,584,873   $158                       $5,072         5,230 
Issuance of common shares upon partial conversion of note at $.0033 per share   2,194,200   $219                       $7,021         7,240 
Issuance of common shares upon partial conversion of note at $.0044 per share   2,000,000   $200                       $8,600         8,800 
Issuance of common shares upon conversion of 3,900 shares of Series B Preferred Stock   1,950,000   $195              (3,900)  $(0)  $(195)        (0)

 

 5 

 

 

Medifirst Solutions, Inc.

Consolidated Statement of Stockholders’ Equity

For the Six Months Ended June 30, 2017

 

                           Additional       Total  
   Common Stock   Preferred Class A   Preferred Class B   Paid in   Accumulated   Stockholders’  
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Equity  
Issuance of common shares to extend due date of a note payable at par value per share   300,000   $30                                              30  
Issuance of Series B Preferred shares as consideration for trademark purchase                       4,000   $0   $19,999          19,999  
Issuance of common shares upon partial conversion of note at $.0029 per share   2,500,000   $250                       $7,038          7,288  
Issuance of common shares upon partial conversion of note at $.0038 per share   783,062   $78                       $2,980          3,058  
Issuance of common shares upon conversion of 2,200 shares of Series B Preferred Stock   1,100,000   $110              (2,200)  $(0)  $(110)         (0 ) 
Issuance of common shares upon partial conversion of note at $.0036 per share   768,026   $77                       $2,723          2,800  
Issuance of common shares upon partial conversion of note at $.0028 per share   853,643   $85                       $2,315          2,400  
Issuance of common shares for services $0.01 per share   500,000   $50                       $4,950          5,000  
Additional paid in capital from derivative liability on debt conversion                                $42,092          42,092  
Issuance of common shares upon partial conversion of note at $.002915 per share   1,356,747    136                        3,664          3,800  
Issuance of common shares upon partial conversion of note at $..002915 per share   2,500,000    250                        7,038          7,288  
Issuance of common shares upon partial conversion of note at $.0029 per share   2,213,714    221                        6,199          6,420  
Issuance of common shares upon partial conversion of note at $..002915 per share   3,193,941    319                        8,621          8,940  
Issuance of common shares upon partial conversion of note at $..002915 per share   3,180,000    318                        8,952          9,270  
Issuance of common shares upon partial conversion of note at $.0029 per share   2,995,816    300                        8,388          8,688  
Issuance of common shares upon partial conversion of note at $.002915 per share   3,352,874    335                        9,040          9,375  
Issuance of common shares upon partial conversion of note at $..002915 per share   1,194,500    119                        3,360          3,480  
Issuance of common shares upon partial conversion of note at $..00352 per share   3,333,073    333                        10,902          11,235  
Issuance of common shares upon partial conversion of note at $.0039 per share   2,693,624    269                        10,181          10,450  
Issuance of common shares upon partial conversion of note at $.003465 per share   2,886,003    289                        9,711          10,000  
Issuance of common shares upon partial conversion of note at $.0029 per share   2,226,772    223                        5,777          6,000  
Issuance of common shares upon conversion of note payable at $.0005 per share   2,400,000    240                        960          1,200  
Issuance of common shares for services $.0092 per share   4,000,000    400                        36,400          36,800  
Issuance of common shares for services $.0092 per share   3,000,000    300                        27,300          27,600  
Issuance of common shares for services $.0083 per share   2,000,000    200                        16,400          16,600  
Issuance of common shares for services $.00083 per share   2,000,000    200                        16,400          16,600  

 

 6 

 

 

Medifirst Solutions, Inc.

Consolidated Statement of Stockholders’ Equity

For the Six Months Ended June 30, 2017

 

                           Additional       Total 
   Common Stock   Preferred Class A   Preferred Class B   Paid in   Accumulated   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Equity 
Issuance of common shares for services $.0078 per share   500,000    50                        3,850         3,900 
Issuance of common shares for services $.0065 per share   2,000,000    200                        12,800         13,000 
Issuance of common shares upon conversion of note payable at $.001 per share   3,000,000    300                        2,700         3,000 
Issuance of common shares upon conversion of note payable at $.0028 per share   2,516,666    251                        6,997         7,248 
Additional paid in capital from derivative liability on debt conversion                                 99,387         99,387 
Issuance of common shares upon partial conversion of note at $.0025   5,000,000    500                        12,000         12,500 
Issuance of common shares upon partial conversion of note at $.0033   3,696,081    370                        12,130         12,500 
Issuance of common shares upon partial conversion of note at $.0022   5,705,841    571                        11,929         12,500 
Issuance of common shares upon partial conversion of note at $.002   5,750,000    575                        10,925         11,500 
Issuance of common shares upon partial conversion of note at $.0018   5,251,122    525                        9,032         9,557 
Issuance of common shares upon partial conversion of note at $.0015   6,666,667    667                        9,333         10,000 
Issuance of common shares upon partial conversion of note at $.0016   6,436,527    644                        9,356         10,000 
Issuance of common shares upon partial conversion of note at $.0017   6,679,822    668                        10,354         11,022 
Issuance of common shares upon partial conversion of note at $.0015   8,000,000    800                        11,200         12,000 
Issuance of common shares upon partial conversion of note at $.0017   7,955,721    796                        12,331         13,127 
Issuance of common shares upon partial conversion of note at $.0016   6,451,139    645                        9,355         10,000 
Issuance of common shares upon partial conversion of note at $.0012   3,231,334    323                        3,677         4,000 
Issuance of common shares for services $.0052 per share   2,000,000    200                        10,200         10,400 
Issuance of common shares for services $.0045 per share   3,500,000    350                        15,400         15,750 
Issuance of common shares for services $.0054 per share   3,000,000    300                        15,900         16,200 
Issuance of common shares for services $.0035 per share   2,000,000    200                        6,800         7,000 
Issuance of common shares for services $.0035 per share   1,000,000    100                        3,400         3,500 
Issuance of common shares for services $.0036 per share   7,900,000    790                        27,650         28,440 
Issuance of common shares for services $.0052 per share   2,000,000    200                        10,200         10,400 
Issuance of common shares for services $.005 per share   4,000,000    400                        19,600         20,000 
Issuance of common shares for services $.0036 per share   5,000,000    500                        17,500         18,000 
Issuance of common shares for services $.0032 per share   6,500,000    650                        20,150         20,800 
Issuance of common shares upon final conversion of note at $.0013   7,757,309    777                        9,224         10,001 
Additional paid in capital from derivative liability on debt conversion                                 155,150         155,150 
Additional paid in capital from conversion of accrued interest on notes                                 2,836         2,836 
Net Loss                                      (1,137,684)   (1,137,684)
Balance - December 31, 2016   225,847,976    22,586    50,000    5    26,100    3    1,232,996    (2,107,293)   (851,702)

 

 7 

 

 

Medifirst Solutions, Inc.

Consolidated Statement of Stockholders’ Equity

For the Six Months Ended June 30, 2017

 

                           Additional       Total 
   Common Stock   Preferred Class A   Preferred Class B   Paid in   Accumulated   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Equity 
Issuance of common shares upon conversion of note at $.0014   9,421,629    942                        12,013         12,955 
Issuance of common shares upon conversion of note at $.0014   10,221,272    1,022                        13,032         14,054 
Issuance of common shares upon conversion of note at $.0005   4,940,180    494                        1,976         2,470 
Issuance of common shares upon conversion of note at $.0001   5,000,000    500                        -         500 
Issuance of common shares upon conversion of note at $.0014   23,489,690    2,349                        29,949         32,298 
Issuance of common shares upon conversion of note at $.0001   6,000,000    600                        -         600 
Issuance of common shares upon conversion of note at $.0001   6,000,000    600                        -         600 
Issuance of common shares upon conversion of note at $.0014   23,489,687    2,349                        29,949         32,298 
Issuance of common shares upon conversion of note at $.0001   5,000,000    500                        -         500 
Issuance of common shares upon conversion of note at $.0028   18,935,250    1,894                        50,178         52,072 
Issuance of common shares for services $.0028 per share   2,000,000    200                        5,400         5,600 
Issuance of common shares for services $.0054 per share   4,000,000    400                        21,200         21,600 
Issuance of common shares for services $.0054 per share   3,000,000    300                        15,900         16,200 
Issuance of common shares for services $.0060 per share   3,100,000    310                        18,290         18,600 
Issuance of common shares for services $.0066 per share   5,000,000    500                        32,500         33,000 
Issuance of common shares for services $.0057 per share   8,000,000    800                        44,800         45,600 
Issuance of common shares for services $.0094 per share   5,000,000    500                        46,500         47,000 
Issuance of common shares for services $.0094 per share   5,000,000    500                        46,500         47,000 
Issuance of common shares for services $.0063 per share   4,000,000    400                        24,800         25,200 
Issuance of common shares for services $.0052 per share   1,000,000    100                        5,100         5,200 
Issuance of common shares for services $.0034 per share   2,000,000    200                        6,600         6,800 
Issuance of common shares for services $.0052 per share   900,000    90                        4,590         4,680 
Issuance of common shares upon conversion of 18,100 shares of Series B Preferred Stock   9,050,000    905              (18,100)   (2)   (903)        (0)
Additional paid in capital from derivative liability on debt conversion                                 171,439         171,439 
Adjustment for note conversion                                 (3,576)        (3,576)
Net Loss                                      (841,698)   (841,698)
Balance - March 31, 2017   390,395,684    39,042    50,000    5    8,000    1    1,809,234    (2,948,991)   (1,100,710)

 

 8 

 

 

Medifirst Solutions, Inc.

Consolidated Statement of Stockholders’ Equity

For the Six Months Ended June 30, 2017

 

                           Additional       Total 
   Common Stock   Preferred Class A   Preferred Class B   Paid in   Accumulated   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Equity 
Issuance of common shares upon conversion of note at $.00264   20,346,617    2,035                        51,680         53,715 
Issuance of common shares upon conversion of note at $.00276   18,115,942    1,812                        48,188         50,000 
Issuance of common shares upon conversion of note at $.00287   17,391,305    1,739                        48,261         50,000 
Issuance of common shares upon conversion of note at $.002145   25,414,951    2,542                        51,974         54,515 
Issuance of common shares upon conversion of note at $.001155   14,882,095    1,488                        15,701         17,189 
Issuance of common shares upon conversion of note at $.0012075   20,703,934    2,070                        22,930         25,000 
Issuance of common shares upon conversion of note at $.0011499   28,604,348    2,860                        30,035         32,895 
Issuance of common shares upon conversion of note at $.00115   8,741,026    874                        9,178         10,052 
Issuance of common shares upon conversion of note at $.0001   5,600,000    560                        -         560 
Issuance of common shares upon conversion of note at $.0022   17,272,727    1,727                        167,259         168,986 
Issuance of common shares for services at $.0028 per share   12,000,000    1,200                        32,400         33,600 
Issuance of common shares for services at $.0028 per share   9,000,000    900                        24,300         25,200 
Issuance of common shares for services at $.0026 per share   2,000,000    200                        5,000         5,200 
Issuance of common shares for services at $.0026 per share   5,000,000    500                        12,500         13,000 
Issuance of common shares for services at $.0022 per share   5,000,000    500                        10,500         11,000 
Issuance of of 450,000 shares of Series A Preferred Stock             450,000    45              -         45 
Additional paid in capital from derivative liability on debt conversion                                 371,761         371,761 
Net Loss                                      (301,735)   (301,735)
Balance - June 30, 2017   600,468,629    60,049    500,000    50    8,000    1    2,710,900    (3,250,726)   (479,726)

 

 9 

 

 

Medifirst Solutions, Inc.

Consolidated Statement of Cash Flows

For the Six Months Ended June 30, 2017 and 2016

(Unaudited)

 

   2017   2016 
         
Cash flows from operating activities:        
Net loss  $(1,143,433)  $(366,433)
Adjustments to reconcile net loss to net cash used by operating activities:          
Depreciation & amortization expense   14,070    5,568 
Stock Based Compensation   364,525    5,030 
Change in assets and liabilities          
Accrued Interest Receivable   (2,521)   (2,523)
Accounts payable and accrued expenses   31,999   23,018 

Change in fair value - derivatives

   

292,271

   161,961 
Amortization of debt discount & other financing costs   

247,002

      
Stockholder’s loan   -    (1,321)
Prepaid expenses   15,720    - 
Inventory   (14,567)   - 
Net cash used by operating activities   (194,934)   (174,700)
           
Cash flows from investing activities:          
Purchase of equipment   -    - 
Net cash used by investing activities   -    - 
           
Cash flows from financing activities:          
Proceeds from stockholder loan   5,000    - 
Proceeds from sale of Convertible notes payable   256,250    212,750 
Net cash provided by financing activities   

261,250

    212,750 
           
Net increase (decrease) in cash   66,316    38,050 
Cash at beginning of period   165,017    156,958 
Cash at end of period  $231,333   $195,008 
           
Supplemental cash flow information:          
Cash paid during the period for:          
Interest  $-   $- 
Income taxes  $750   $500 
           
Non-cash investing and financing activities:          
Common stock issued for note interest and note conversions  $630,259   $47,154 
Accounts Payable exchanged for promissory note  $15,000   $- 
Preferred stock issued for debt settlement and license agreement  $-   $70,001 

 

 10 

 

 

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

June 30, 2017

 

Note 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization

 

Medifirst Solutions, Inc. (“MSI” or the “Company”) was incorporated in Nevada in November 2010. The Company has not generated significant sales to date. The Company intends to have a diverse product line of consumer products. Since inception, the Company has been engaged in business planning activities, including researching the industry, identifying target markets for the Company’s products, developing the Company’s models and financial forecasts, performing due diligence regarding potential geographic locations most suitable for establishing the Company’s offices and identifying future sources of capital. At the present time, the Company is building products and affiliations in and related to the cosmetic healthcare industry.

 

In July 2016, Medifirst, in response to its Premarket Notification 510(k) submission for “The Time Machine” Series Laser, received clearance from the U.S. Food and Drug Administration (“FDA”) to market its infrared Time Machine TTML-8102000 Laser Thermal Therapeutic Device. The Company is actively putting together a sales and distribution team to offer our lasers in the US and foreign markets.

 

Pursuant to a sale and purchase agreement dated August 19, 2015 between the Company and the Company’s president, the Company acquired 100% of the equity interests in Medical Lasers Manufacturer, Inc. (“MLM”) with the total purchase price of 20,000 shares of the Company’s common stock at $0.001 per share (or $20). The fair value of the acquired entity was $20.

 

The transaction was considered as a business acquisition and accordingly the acquisition method of accounting has been applied. MLM had no assets at the date of the business combination.

 

The Consolidated financial statements include the accounts of MSI and its only wholly owned subsidiary, MLM. All material intercompany balances and transactions have been eliminated in consolidation.

 

The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s current technology.

 

 11 

 

 

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

June 30, 2017

 

Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the consolidated financial position of the Company as of June 30, 2017, the consolidated results of its operations for the three-month and six-month periods ended June 30, 2017 and 2016, the consolidated change in stockholders’ equity for the six-month period ended June 30, 2017 and the consolidated cash flows for the six-month periods ended June 30, 2017 and 2016. The results of operations for the six-month period ended June 30, 2017 are not necessarily indicative of the operating results for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K for the year then ended.

 

Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity.

 

Revenue Recognition

 

In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:

 

Revenue is recognized at the time the product is delivered or services are performed. Provision for sales returns are estimated based on the Company’s historical return experience. Revenue is presented net of returns.

 

Accounts Receivable

 

The Company extends credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers, maintaining an allowance for potential credit losses. Accounts receivable is reported net of the allowance for doubtful accounts. The allowance is based on management’s estimate of the amount of receivables that will actually be collected. The Company has not recorded an allowance for doubtful accounts as of June 30, 2017 or December 31, 2016.

 

Inventory

 

Inventory consists of finished goods and is stated at the lower of cost (first-in, first-out) or market value. Finished goods inventory includes hand held laser devices and their carrying cases.

 

Notes receivable (Investor)

 

In May 2017 the company entered into a securities purchase agreement with an investor (as more fully described in Note 5 below). As part of that agreement, the company issued convertible 8% notes payable to the investor in the amounts of $131,250, $131,250, $125,000 and $125,000. Two of these notes will close subsequent to June 30, 2017 and are secured by fully collaterlized promissory notes issued by the Investor to the Company in the amounts of $131,250 and $125,00 ( also know as the “back-end notes”). These notes bear interest at the rate of 8% per annum.

 

Equipment

 

Equipment, consisting of computer equipment, is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, of five years.

 

Long-Lived Assets

 

The Company reviews long-lived assets, such as equipment, for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds the estimated future cash flows, an impairment loss will be recorded by the amount the carrying value exceeds the fair value of the asset.

 

 

 12 

 

 

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

June 30, 2017

 

Intangible Asset- Licensing Agreement

 

On March 8th 2016 (with an effective date of October 1, 2015), the company, through it’s sole wholly-owned subsidiary (“Licensee”), entered into a Product and Know-How License Agreement (“Agreement”) with a Florida Corporation (“Licensor”) which is owned by a related party - the son of the Company’s CEO. The license provides with respect to the Technology, Licensor hereby grants to Licensee an irrevocable, nontransferable, royalty-bearing license, with a right of sublicense (the “License”), throughout the Territory in the Field of Use, whether or not under the Licensed Patent, to:

 

use or submit or deliver the Technology and/or any Product to any regulatory body throughout the Territory for purposes of obtaining approval to make, Sell, offer for Sale, import, export and distribute the Technology or Products; and

 

use or copy the Technology and/or any Product; and

 

market, make, have made, Sell, offer for Sale, import and distribute Products; and

 

sublicense the Technology; and

 

prepare, or have prepared on its behalf, modifications, enhancements and/or derivative works of the Technology.

 

In connection with the license granted, Licensor hereby grants to Licensee a license to the Licensed Patents, whether now existing or hereafter acquired.

 

The consideration for the licensing agreement consisted of the issuance of 25,000 Series B Preferred stock shares to the Licensor (at par) plus a $150,000 promissory note issued by the Company to the licensor. During the quarter-ended June 30, 2017, the $150,000 promissory note plus $18,986 in accrued interest was fully satisfied through the issuance of 17,272,727 shares of the Company’s common stock.The last part of the consideration in this license agreement is the royalty payments which have not taken effect yet since they are based on sales for which the company has had only minimum thus far.

 

The licensing agreement is for a ten year period effective from October 1, 2015. The cost of the licensing agreement is being amortized over it’s ten-year period and charged to income on a straight-line basis.

 

Debt Issue Costs and Debt Discount

 

The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized over the life of the debt to interest expense. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts are immediately expensed. Beginning in 2015, the Company adopted ASU 2015-03: Simplifying the Presentation of Debt Issuance Costs and has reflected the deferred financing costs as a direct reduction of the related debt (See table included in Note 5 to Consolidated Financial Statements).

 

Original Issue Discount

 

For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.

 

Derivative Liabilities

 

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. The Company assessed its securities for purposes of determining the proper accounting treatment and valuation as set forth in the Statement of Financial Accounting Standard ASC 820–10–35–37 Fair Value in Financial Instruments; Statement of Financial Accounting Standard ASC 815 Accounting for Derivative Instruments and Hedging Activities; and Emerging Issues Task Force (“EITF”) Issue No. 00–19 and EITF 07–05.

 

 13 

 

 

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

June 30, 2017

 

In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

 

Once the derivative liabilities are determined, they are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

 

Use of Estimates

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the condensed consolidated balance sheets and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

Financial Instruments

 

The carrying amounts reported in the balance sheets for cash, accounts receivable, accounts payable, and other accrued liabilities approximate their fair values.

 

Segment Information

 

The Company follows Accounting Standards Codification (“ASC”) 280, “Segment Reporting”. The Company currently operates in a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

 

Net Income (Loss) Per Common Share

 

The Company calculates net income (loss) per share based on the authoritative guidance. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods in which the Company incurs losses, common stock equivalents, if any, are not considered, as their effect would be anti-dilutive.

 

Income Taxes

 

The Company utilizes the accrual method of accounting for income taxes. Under the accrual method, deferred tax assets and liabilities are determined based on the differences between the financial reporting basis and the tax basis of the assets and liabilities, and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.

 

The Company recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount recognized in the financial statements is the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. The Company did not have any unrecognized tax benefits as of June 30, 2017, and does not expect this to change significantly over the next 12 months.

 

 14 

 

 

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

June 30, 2017

 

Stock-Based Compensation

 

The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value on the issuance date.

 

Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At June 30, 2017, the Company had $231,333 in cash equivalents.

 

Recent Pronouncements

 

In May 2014, FASB and IASB issued a new joint revenue recognition standard that supersedes nearly all GAAP guidance on revenue recognition. The core principle of the standard is that revenue recognition should depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new standard is effective for the Company to annual reporting periods beginning after December 15, 2017 (that is, a public organization is required to apply the new revenue standard beginning in the first interim period within the year of adoption). Additionally, the Board decided to permit public organizations to adopt the new revenue standard early, but not before the original public organization effective date (that is, annual periods beginning after December 15, 2016). A public organization should apply the new revenue standard to all interim reporting periods within the year of adoption.The Company has evaluated the impact of this ASU on the consolidated financial statements and has determined, at this time, the ASU’s implementation would not have a material impact on revenue recognition. See below - Accounting Standards Update 2016-10 - Revenue from Contracts with Customers (Topic 606) Identifying Performance Obligations and Licensing.

 

On January 05, 2016, the FASB completed its Classification and Measurement of Financial Instruments project by issuing ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance improves certain aspects of recognition, measurement, presentation and disclosure of financial instruments. For public business entities, the new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not believe the impact of its pending adoption of this ASU on the Company’s consolidated financial statements will be material.

 

In November 2015, FASB issued ASU 2015-17 - Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes which simplifies the presentation of deferred income taxes. For public business entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not believe the impact of its pending adoption of this ASU on the Company’s consolidated financial statements will be material.

 

In March 2016, the FASB issued Accounting Standards Update 2016-09 Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. The Board is issuing this Update as part of its Simplification Initiative. The objective of the Simplification Initiative is to identify, evaluate, and improve areas of generally accepted accounting principles (GAAP) for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. The areas for simplification in this Update were identified through outreach for the Simplification Initiative, pre-agenda research for the Private Company Council, and the August 2014 Post-Implementation Review Report on FASB Statement No. 123(R), Share-Based Payment. The Company is currently evaluating the impact of this ASU on the consolidated financial statements.

 

 15 

 

 

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

June 30, 2017

 

In April 2016, the FASB issued Accounting Standards Update 2016-10 - Revenue from Contracts with Customers (Topic 606) Identifying Performance Obligations and Licensing. The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: 1. Identify the contract(s) with a customer. 2. Identify the performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations in the contract. 5. Recognize revenue when (or as) the entity satisfies a performance obligation. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The Company is currently evaluating the impact of this ASU on the consolidated financial statements. 

 

Note 2. PROPERTY, PLANT AND EQUIPMENT (NET)

 

Equipment is recorded at cost and consisted of the following at June 30, 2017 and December 31, 2016:

 

   March 31,
2017
   December 31,
2016
 
Computer equipment  $8,956   $8,956 
Less: accumulated depreciation   (7,405)   (7,085)
           
   $1,551   $1,871 

 

Depreciation expense was $320 and $568, for the six months ended June 30, 2017 and 2016 respectively.

 

Note 3. DUE TO RELATED PARTY

 

The Company was indebted to a related party through common management in the amount of $8,921 at June 30, 2017 and December 31, 2016, respectively. The loan bears no interest and is payable on demand. See Note 10 for additional related party transactions.

 

Note 4. LOANS PAYABLE - STOCKHOLDERS

 

During the periods ended June 30, 2017 and 2016 a stockholder of the Company advanced the Company $-0- and $-0- respectively. The loan has a balance of $15,055 at June 30, 2017 and a balance of $8,955 as of December 31, 2016. The loan bears no interest and is payable on demand.

 

In December 2012, the Company issued a promissory note to a stockholder in the amount of $5,000 with interest at 10% per annum. Principal and interest were due and payable on June 2, 2013. In April 2014, the note was amended to provide the note holder with the option to convert the note to the Company’s common stock at $0.0001 per share. Subsequently, in 2014, in a private transactions, the note holder transferred $2,500 of note principal to third parties and the new holders converted their holdings into 2,500,000 shares of the Company’s common stock. During 2015, the original note holder transferred an additional $2,400 of note principal to third parties who converted their holdings into 2,400,000 shares of the Company’s common stock. At June 30, 2017 and December 31, 2016, the loan had balance was $100 and $100, respectively.

 

At June 30, 2017 and December 31, 2016, the Company was indebted to a stockholder in the amount of $1,000 and $1,500, respectively. The loan has an interest rate of 26.7%. In February 2017 the note was sold to another investor and that noteholder converted $500 in principal into 5,000,000 shares of common stock. Principal and accrued interest were due and payable on January 1, 2014.

 

In February 2016, the Company issued a promissory note to a stockholder in the amount of $7,000 with interest at the rate of 6% per annum. On September 6, 2016 the note holder converted the entire principal balance and accrued interest into common stock and therefore at June 30, 2017 there is no principal balance remaining on the note.

 

 16 

 

 

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

June 30, 2017

 

Note 5. CONVERTIBLE NOTES PAYABLE

 

Note Payable-BS

 

In March 2011, the Company issued $800 aggregate principal amount of 6% convertible notes due in January 2012. Interest on the notes accrue at the rate of 6% per annum and are payable when the notes mature. The notes matured prior to conversion but have not been repaid. Interest continues to accrue at the rate of 6% per annum.

 

The holder of one of the notes converted $110 of note principal into 1,100,000 shares of common stock as follows:

 

Date of Conversion  Principal Amount Converted   Conversion Rate   Shares Received 
June 2013  $70   $0.0001    700,000 
August 2013  $40   $0.0001    400,000 

 

In August 2013, in a private transaction, the same note holder transferred $330 of the remaining note principal plus $55 in accrued interest to a third party.

 

In August 2013, in a private transaction, the new note holder transferred $5 of the remaining note principal to a third party who then converted the note into 50,000 shares of common stock.

 

In September 2013, the new note holder converted $100 of note principal into 1,000,000 shares of common stock.

 

In September 2013, in a private transaction, the new note holder transferred $35 of the remaining note principal to a third party who then converted the note into 350,000 shares of common stock.

 

In November and December 2013, the new note holder converted an additional $90 of note principal into 900,000 shares of common stock as follows:

 

Date of Conversion  Principal Amount Converted   Conversion Rate   Shares Received 
November 2013  $40   $0.0001    400,000 
December 2013  $50   $0.0001    500,000 

 

 17 

 

 

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

June 30, 2017

 

In March and April 2014, the new note holder converted an additional $90 of note principal into 900,000 shares of common stock as follows:

 

Date of Conversion  Principal Amount Converted   Conversion Rate   Shares Received 
March 2014  $50   $0.0001    500,000 
April 2014  $40   $0.0001    400,000 

 

Subsequent to these conversions there remains $125 in note principal outstanding at June 30, 2017.

 

Note Payable-SF

 

In July 2013, the holder of the second note converted $240 of note principal into 400,000 shares of the Company’s common stock at $0.0006 per share. At June 30, 2017 and December 31 2016, the note had a remaining principal balance of $60 and $60, respectively.

 

At any time on or after the maturity date, the holders of the notes, have the option of converting any of the unpaid principal and interest into the Company’s common stock. The notes plus any accrued but unpaid interest are convertible at the rate of $0.0001 per share at the time of conversion up to a maximum of 9.99% of the then issued and outstanding common stock.

 

Note Payable-RK

 

In May 2012, the Company issued a $25,000 6% per annum note that matured in November 2012. In December 2012 the note was amended to be a convertible note. Interest on the note accrues interest at 6% per annum and is payable when the note matures.

 

The holder of the $25,000 note had the option of converting it at any time prior to maturity. The note plus any accrued but unpaid interest were convertible at the rate of $0.001 per share at the time of conversion up to a maximum of 9.99% of the then issued and outstanding common stock.

 

The holder of the note converted $1,010 of note principal into 1,010,000 shares of common stock as follows:

 

Date of Conversion  Principal Amount Converted   Conversion Rate   Shares Received 
December 2012  $150   $0.001   $150,000 
January 2013  $660   $0.001   $660,000 
March 2013  $200   $0.001   $200,000 

 

 18 

 

 

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

June 30, 2017

 

In July 2013, the Company retired $14,000 of note principal in payment for consulting services provided to the note holder.