Attached files
| file | filename |
|---|---|
| EX-32 - EX-32 - iHealthcare, Inc. | ex32.htm |
| EX-31 - EX-31 - iHealthcare, Inc. | ex31.htm |
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 February 28, 2018
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: 000-55378
iHealthcare, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 47-3002847 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 3901 NW 28th Street, 2nd Floor, Miami, FL | 33142 | |
| (Address of principal executive offices) | (Zip Code) | |
N/A
(Former name if changed since last report)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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. [X]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 (Section 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). [X]Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer ☐ (Do not check if a smaller reporting company) | ||
| 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 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No
State the number of shares outstanding of each of the issuer’s classes of common equity, as of May 1, 2018: 1,086,080 shares of common stock, and 100,000 shares of series A Preferred Stock.
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TABLE OF CONTENTS
IHEALTHCARE, INC.
INDEX
PART I-FINANCIAL INFORMATION
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PART I-FINANCIAL INFORMATION
| ITEM 1 | FINANCIAL STATEMENTS |
IHEALTHCARE, INC.
(UNAUDITED)
|
As of February 28, 2018 |
As of November 30, 2017 | ||||
| ASSETS | |||||
| Current Assets | |||||
| Cash | $ | 157 | $ | 198 | |
| Inventory | - | 285 | |||
| Loan to Related Party | - | 2,536 | |||
| TOTAL ASSETS | $ | 157 | $ | 3,019 | |
| LIABILITIES & STOCKHOLDERS’ DEFICIT | |||||
| Current Liabilities | |||||
| Accrued expenses | $ | 7,203 | $ | 9,465 | |
| Due to related party | 43,519 | 30,743 | |||
| Total Current Liabilities | 50,722 | 40,208 | |||
| TOTAL LIABILITIES | 50,722 | 40,208 | |||
| Stockholders’ Deficit | |||||
| Series A Preferred stock ($.0001 par value, 1,500,000 shares authorized; none issued and outstanding) | - | - | |||
| Series B Preferred stock ($.0001 par value, 5,000,000 shares authorized; none issued and outstanding) | - | - | |||
| Common stock ($.0001 par value 143,500,000 shares authorized and 1,086,080 outstanding as of February 28, 2018 and November 30, 2017, respectively) | 109 | 109 | |||
| Subscription receivable | - | (5,500) | |||
| Additional paid in capital | 65,109 | 65,109 | |||
| Accumulated deficit | (115,783) | (96,907) | |||
| Total Stockholders’ Deficit | (50,565) | (37,189) | |||
| TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT | $ | 157 | $ | 3,019 | |
|
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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iHealthcare, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Month Ended February 28, 2018 |
Three Months Ended February 28, 2017 |
|||||
| Revenues | $ | 420 | $ | 545 | ||
| Cost of Goods Sold | 592 | 285 | ||||
| Gross Profit (Loss) | $ | (172) | $ | 260 | ||
| Operating Expenses | ||||||
| Organization and Related Expenses | $ | 7,586 | $ | 853 | ||
| Professional fees | 11,118 | 16,700 | ||||
| Total operating expenses | 18,704 | 17,553 | ||||
| Net loss | $ | (18,876) | $ | (17,293) | ||
| Basic and Diluted net loss per common share | $ | (0.02) | $ | (0.02) | ||
| Weighted average number of common shares outstanding - Basic and Diluted | 1,086,080 | 1,018,550 |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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iHealthcare, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
For the Three Months Ended February 28, 2018 |
For the Three Months Ended February 28, 2017 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||
| Net loss | $ | (18,876) | $ | (17,293) | |
| Adjustment to reconcile net loss to net cash used in operating activities: | |||||
| Write off of subscription receivable | 5,500 | - | |||
| Write off of inventory purchases | 285 | - | |||
| Changes in current assets and liabilities: | |||||
| Increase in accrued expenses | 3,325 | 1,525 | |||
| Net cash used in operating activities | $ | (9,766) | $ | (15,768) | |
| CASH FLOW FROM INVESTING ACTIVITIES: | |||||
| Overpayment accounted for as loan to related party | $ | (500) | $ | (1,941) | |
| Repayment from loan to related party | 3,036 | - | |||
| Net cash provided by (used in) investing activities | $ | 2,536 | $ | (1,941) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||
| Proceeds from related party loans | 9,709 | 7,643 | |||
| Payments made on related party loans | (2,520) | (4,901) | |||
| Proceeds from the sale of common shares | - | 19,875 | |||
| Net cash provided by Financing Activities | $ | 7,189 | $ | 22,617 | |
| Increase (Decrease) in cash | (41) | 4,908 | |||
| Beginning cash balance | 198 | 33 | |||
| Ending cash balance | $ | 157 | $ | 4,941 | |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||||
| Interest paid | $ | - | $ | - | |
| Income taxes paid | $ | - | $ | - | |
| SUPPLEMENTAL DISCLOSURES OF NON-CASH INFORMATION: | |||||
| Expenses paid by related party on behalf of the Company | $ | 5,587 | $ | 1,919 |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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IHEALTHCARE, INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2018
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
iHealthcare Inc. (formerly Opulent Acquisition, Inc.) (the Company) was incorporated under the laws of the State of Delaware on November 25, 2014. The Company intended to serve as a vehicle to affect an asset acquisition, merger, exchange of capital stock or other business combination with a domestic or foreign business. The Company elected November 30th as its year end.
On October 25, 2017, the Company entered into an agreement with John Cook for the term of thirty-six months. Under the terms of the agreement John Cook will act as a part time consultant for iHealthcare, Inc. His role shall pertain to assisting the Company with obtaining and structuring institutional financing from various commercial banks, investment banking firms, private equity firms and related financial and business issues. John Cook shall be compensated for his part time assistance as a consultant through a combination of cash and stock incentives. Compensation for Mr. Cook will occur under four phases, with the first three to occur within 365 days of the execution of the agreement, and the fourth to occur subsequently. Upon the first phase, and upon the acquisition by the Company, Mr. Cook will receive 5.0% equity in the Company. In the second phase Mr. Cook will receive 1.666% equity in the Company for the second and third acquisitions, and 1.668% equity upon acquisition of the fourth entity. In the third phase, Mr. Cook will receive 2.00% equity for each of the fifth through ninth acquisitions. If, at any point within the first 365 days, the Company’s gross revenue reaches $58,500,000 or more, then phases one, two and three shall be deemed to be vested not withstanding that nine acquisitions have occurred. Phase four shall occur if the Company’s revenue, at any point, should exceed $200,000,000 there shall be an additional 5.0% equity issued to Mr. Cook. Phase one, two and three rewards shall be Series B Preferred stock, whereas Phase four will be a new class of preferred stock. Mr. Cook shall also be paid cash compensation on all acquisitions and receive a Single Percentage Lehman of 6% for the first $1,000,000, 5% for the second, 4% for the third, 3% for the fourth and 2% thereafter for every million. In addition to all other compensation, Mr. Cook shall be paid a bonus of an additional 2% of all cash components of any acquisition which has occurred, which shall be payable three years from the execution of the agreement, or upon termination of the agreement. As of February 28, 2018, no acquisitions have occurred and no compensation has been paid pursuant to this agreement.
On November 20, 2017, iHealthcare, Inc., incorporated Empower IHCC, Inc., a Florida Company, herein referred to as, “Empower IHCC.” Empower IHCC has conducted no business activity to date. iHealthcare, Inc., intends to use the entity for potential, future, unidentified acquisitions. iHealthcare, Inc., owns 50% of Empower IHCC, Inc., and Empower H.I.S., LLC, a Florida Limited Liability Company, owns the remaining 50% of the Company. Empower H.I.S., LLC is not a related party to iHealthcare, Inc., and does not share any of the same officers, or directors as iHealthcare , Inc. Per the aforementioned ASC 808 does not apply since the entity, is setup as a wholly owned subsidiary and ASC 323 would not apply since there is no consideration paid as of February 28, 2018.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principals of Consolidation
These financial statements include the accounts of the Company’s wholly owned subsidiary iHealthcare, all material intercompany balances and transactions have been eliminated.
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Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These unaudited consolidated financial statements should be read in conjunction with the financial statements for the year ended November 30, 2017 and notes thereto.
The results of operations for the three months period ended February 28, 2018 are not necessarily indicative of the results for the full fiscal year.
Inventories
Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out ("FIFO") method, and are valued at the lower of cost or market value. This valuation requires iHealthcare, Inc. to make judgments, based on currently-available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. During the three months ended February 28, 2018, $285 of inventory was written off and expensed to cost of goods sold.
Revenue Recognition
The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The transition to AS 606 revenue recognition guidelines will not have a material effect on the Company’s revenue recognition accounting.
NOTE 3 - GOING CONCERN
The Company’s unaudited interim consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.
The Company demonstrates adverse conditions that raise substantial doubt about the Company's ability to continue as a going concern for one year following the issuance of these financial statements. These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency, negative cash flow from operating activities, and other adverse key financial ratios.
The Company has not established any significant source of revenue to cover its operating costs. Management plans to fund operating expenses with related party contributions to capital. There is no assurance that management's plan will be successful.
The unaudited interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
NOTE 4 - RELATED-PARTY TRANSACTIONS
Due to related party
Unisource Discovery, Inc., is a related party and is controlled by our Chief Executive Officer, Noel Mijares. Unisource Discovery advanced the Company $9,709 to pay operating expenses and was repaid $750 . The total amount owed by the Company to Unisource Discovery is $8, 959 at February 28, 2018. This is listed as due to related party in the balance sheet. The loan is unsecured, noninterest-bearing and is payable on demand.
The Subpoena Company is a related party and is controlled by our CEO. During the year ended November 30, 2017 The Subpoena Company paid $3,376 in expenses on behalf of the Company. During the three months ended February 28, 2018, The Subpoena Company paid an additional $3,750 in expenses on behalf of the Company and the Company repaid The Subpoena Company $1,770. The total amount owed by the Company to The Subpoena Company is $5,356. This loan is listed as due to related party in the balance sheet and is unsecured, noninterest-bearing and is payable on demand.
At November 30, 2017, the Company owed $27,367 to its CEO for payment of expenses on behalf of the Company. During the three months ended February 28, 2018, the CEO paid expenses on behalf of the Company totaling $1,837. The total amount owed by the Company to its CEO is $29,204. This loan is listed as due to related party in the balance sheet and is unsecured, noninterest-bearing and is payable on demand.
Loan to related party
During the three months ended February 28, 2018 the Company advanced $500 and Unisource Discovery Inc. repaid the Company $3,036 for full payment of amounts owed by the related party.
Subscription Receivable
As a result of the merger in 2016, a subscription receivable was contributed by the principal shareholders in the amount of $34,980. The Company has collected $21,980 from the subscription receivable and converted advances of $7,500 due to the Company’s CEO as of November 30, 2016. The balance as of November 30, 2017, $5,500, was deemed uncollectible and written off to general and administrative expenses on February 28, 2018.
Office Space
Our office space is located at 3901 NW 28th Street, 2nd Floor, Miami, FL 33142. This space is provided to the Company rent free by Noel Mijares, who leases the office space on his personal behalf.
NOTE 5 – SUBSEQUENT EVENTS
Subsequent to February 28, 2018, a related party, The Subpoena Company, paid expenses on behalf of the Company totaling $5,548 and our CEO paid expenses on behalf of the Company totaling $1,300.
On April 25, 2018 the Board of Directors approved to and subsequently issued Noel Mijares 62,500 shares of series A Preferred Stock. That same day the Board of Directors also approved to and subsequently issued David Bingaman 37,500 shares of series A Preferred Stock.
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| ITEM 2 | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
FORWARD LOOKING STATEMENTS
This Quarterly Report of iHealthcare, Inc. on Form 10-Q contains forward-looking statements, particularly those identified with the words, “anticipates,” “believes,” “expects,” “plans,” “intends,” “objectives,” and similar expressions. These statements reflect management's best judgment based on factors known at the time of such statements. The reader may find discussions containing such forward-looking statements in the material set forth under “Management's Discussion and Analysis of Financial Condition and Results of Operations,” generally, and specifically therein under the captions “Liquidity and Capital Resources” as well as elsewhere in this Quarterly Report on Form 10-Q. Actual events or results may differ materially from those discussed herein. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guarantee, or warranty is to be inferred from those forward-looking statements.
The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our financial statements.
While we believe that the historical experience, current trends and other factors considered support the preparation of our financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.
PLAN OF OPERATION
At present our primary business activities consist of, and revolve around, the sale of the UDT Cup which is a urinalysis device used for drug screening. Our sales of the UDT Cup have resulted in our current sole revenue stream. We will continue to pursue the sale of the UDT Cup as our primary business objective.
RESULTS OF OPERATIONS
For the three months ended February 28, 2018 and February 28, 2017:
We had revenues in the three month period ending February 28, 2018 of $420 and $545 for the three month period ending February 28, 2017. All of our revenues to date have been a result of sales of the UDT Cup.
Our operating expenses totaled $18,704 for the three months ended February 28, 2018 and $17,553 for the three months ended February 28, 2017. Our operating expenses consisted primarily of professional fees for both periods. The variance in operating expenses is due to the fact that we incurred greater consulting fees for the three months ended February 28, 2018. Our net loss for the three months ended February 28, 2018 was $18,876 and was $17,293 for the three months ended February 28, 2017.
LIQUIDITY AND CAPITAL RESOURCES
We have no internal sources of liquidity at this time.
Our only external sources of liquidity at this time are from funds contributed by our officers/directors.
There is no assurance our officers and directors will be willing to or able to fund our operations for any duration of time. There is also no assurance we will be able to secure additional sources of funding. Our ability to to continue to operate is a going concern.
We have no known demands or commitments and are not aware of any events or uncertainties as of February 28, 2018 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.
We had no material commitments for capital expenditures as of February 28, 2018 and November 30, 2017.
As of February 28, 2018, we had total assets of $157 consisting of cash. As of February 28, 2018 we had current liabilities of $50,722.
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OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
| ITEM 3 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
ITEM 4 |
|
Evaluation of Disclosure Controls and Procedures
The Company’s Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15 (f) and 15d-15(f)) as of February 28, 2018 , have concluded that as of such date the Company’s disclosure controls and procedures were inadequate and ineffective in their design to provide reasonable assurance that material information relating to the Company would be made known to such officer on a timely basis.
For a full discussion of our internal control over financial reporting, please refer to Item 9A, “Controls and Procedures”, in our 2017 Annual Report on Form 10-K.
Changes in Internal Controls over Financial Reporting
There have been no changes in the Company’s internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the three months ended February 28, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II-OTHER INFORMATION
| ITEM 1 | LEGAL PROCEEDINGS |
There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.
| ITEM 1A | RISK FACTORS |
As a “smaller reporting company” defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
| ITEM 2 | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
None.
| ITEM 3 | DEFAULTS UPON SENIOR SECURITIES |
None.
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| ITEM 4 | MINE SAFETY DISCLOSURES |
Not applicable.
| ITEM 5 | OTHER INFORMATION |
None.
| ITEM 6 | EXHIBITS |
| (a) | Exhibits required by Item 601 of Regulation S-K. |
| Exhibit No. | Description | |
| 3.1 | Restated Certificate of Incorporation. (1) | |
| 3.2 | By-laws. (1) | |
| 10.1 | Merger Agreement. (1) | |
| 10.2 | Distribution Agreement with ILS (1) | |
| 31 | Certification of the Company’s Chief Executive and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s report on Form 10-Q for the quarter ended February 28, 2018. (2) | |
| 32 | Certification of the Company’s Chief Executive and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2) | |
| 101.INS | XBRL Instance Document (3) | |
| 101.SCH | XBRL Taxonomy Extension Schema (3) | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase (3) | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase (3) | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase (3) | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase (3) | |
____________________
| (1) | Filed as an exhibit to the Company's Form 8-K/A filed on September 8, 2016. |
| (2) | Filed herewith. |
| (3) | Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability. |
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
iHealthcare, Inc.
(Registrant)
By: /s/ Noel Mijares
Chief Executive Officer
Dated: May 1, 2018
By: /s/ David A. Bingaman
David A. Bingaman, Chief Financial Officer
Dated: May 1, 2018
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