UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

x		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 UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______________ to _______________

 

Commission File Number: 333-208050

 

MEDICO INTERNATIONAL INC.

(Exact name of registrant as specified in its charter)

 

Nevada

37-1793037

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

187 E. Warm Springs Road, Suite B273, Las Vegas, NV

89119

(Address of principal executive offices)

(Zip Code)

 

(732) 383-9118

(Registrant’s telephone number, including area code)

 

____________________________________________________________

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

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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 (§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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth 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)

Emerging growth company

x

 

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

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.¨ YES  ¨ NO

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

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

 

3,697,000 common shares issued and outstanding as of November 19, 2018

 

 

FORM 10-Q

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements		3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		15
Item 4.	Controls and Procedures		16
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings		17
Item 1A.	Risk Factors		17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		17
Item 3.	Defaults Upon Senior Securities		17
Item 4.	Mine Safety Disclosures		17
Item 5.	Other Information		17
Item 6.	Exhibits		18
SIGNATURES			19

 

2

  

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

MEDICO INTERNATIONAL INC.

 

CONSOLIDATED BALANCE SHEETS

 

		June 30, 2017				December 31, 2016
		(Unaudited)
ASSETS
Current Assets
Prepaid expenses and deposits		$	-			$	250
Assets from discontinued operations			-				2,077,131
Total Current Assets			-				2,077,381
TOTAL ASSETS		$	-			$	2,077,381
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable		$	37,619			$	17,123
Due to related parties			417,336				406,947
Liabilities from discontinued operations			-				1,913,095
Total Current Liabilities			454,955				2,337,165
TOTAL LIABILITIES			454,955				2,337,165
STOCKHOLDERS’ DEFICIT
Common stock, $0.001 par value; 500,000,000 shares authorized, 3,697,000 shares issued and outstanding			3,697				3,697
Additional paid-in capital			867,424				867,424
Accumulated deficit			(1,326,076	)			(1,161,700	)
Accumulated other comprehensive gain			-				30,795
TOTAL STOCKHOLDERS' DEFICIT			(454,955	)			(259,784	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	-			$	2,077,381

 

See the notes to the unaudited consolidated financial statements

 

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MEDICO INTERNATIONAL INC.

 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2017				2016				2017				2016
REVENUE		$	-			$	-			$	-			$	-
OPERATING EXPENSES
General and administrative			183				96				2,830				96
Professional fees			22,211				20,830				28,305				73,924
Total Operating Expenses			22,394				20,926				31,135				74,020
LOSS FROM OPERATIONS			(22,394	)			(20,926	)			(31,135	)			(74,020	)
LOSS BEFORE INCOME TAXES			(22,394	)			(20,926	)			(31,135	)			(74,020	)
Provision for income taxes			-				-				-				-
LOSS FROM CONTINUING OPERATION			(22,394	)			(20,926	)			(31,135	)			(74,020	)
DISCONTNUED OPERATIONS
Gain (Loss) from discontinued operations			52,399				(8,618	)			(55,803	)			(154,588	)
Loss on disposal of subsidiaries			(77,438	)			-				(77,438	)			-
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX BENEFITS			(25,039	)			(8,618	)			(133,241	)			(154,588	)
NET LOSS		$	(47,433	)		$	(29,544	)		$	(164,376	)		$	(228,608	)
OTHER COMPREHENSIVE GAIN (LOSS)
Foreign currency translation adjustments			37,587				3,779				37,086				37,543
TOTAL COMPREHENSIVE LOSS		$	(9,846	)		$	(25,765	)		$	(127,290	)		$	(191,065	)
Basic and Diluted Loss per Common Share		$	(0.02	)		$	(0.01	)		$	(0.04	)		$	(0.06	)
Basic and Diluted Weighted Average Common Shares Outstanding			3,000,000				3,697,000				3,697,000				3,593,599

 

See the notes to the unaudited consolidated financial statements

 

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MEDICO INTERNATIONAL INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

		Six Months Ended
		June 30,
		2017				2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(164,376	)		$	(228,608	)
Adjustments to reconcile net loss to net cash from operating activities:
Bad debt			6,566				-
Depreciation			216,279				250,411
Loss on disposal of subsidiaries			14,606				-
Changes in operating assets and liabilities:
Accounts receivable			(738,576	)			(200,444	)
Other receivables			-				69,000
Prepaid expenses and deposits			(10,604	)			(256,634	)
Inventory			117,357				(6,181	)
Accounts payable			532,370				23,445
Accrued and other payables			(71,957	)			25,888
Deferred revenue			(6,428	)			-
Net cash used in operating activities			(104,763	)			(323,123	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment			(22,647	)			(20,147	)
Sales of property and equipment			3,158				-
Sales of investment in subsidiary			(359,066	)			-
Net cash used in investing activities			(378,555	)			(20,147	)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of shares			-				697,000
Proceeds from loans payable			630,432				-
Repayment of loans payable			(70,047	)			-
Loans from related parties			10,389				-
Repayment of due to related parties			(179,072	)			(330,103	)
Repayment of capital lease obligations			(210,197	)			(101,718	)
Net cash provided by financing activities			181,505				265,179
Effects on changes in foreign exchange rate			14,059				(8,491	)
Net change in cash and cash equivalents			(287,754	)			(86,582	)
Cash and cash equivalents - beginning of period			287,754				316,603
Cash and cash equivalents - end of period		$	-			$	230,021
Supplemental Cash Flow Disclosures
Cash paid for interest		$	-			$	4,245
Cash paid for income taxes		$	-			$	-

 

See the notes to the unaudited consolidated financial statements

 

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MEDICO INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1: Nature of Operations

 

Medico International Inc. (the “Company” or “Medico”), a Nevada corporation, was formed by the owners and principals of Smile More Holdings Pte. Ltd., a Singaporean corporation (“Smile Central”), for the purpose of acting as the holding company for Smile Central and penetrating the U.S. financial markets. Smile Central owns six (6) dental clinics operating in Singapore. Smile Central’s operations were launched in January 2014 with three (3) clinics and in 2015, an additional two (2) clinics were opened. In 2016, one (1) additional dental clinic was opened.

 

On September 19, 2015, the Company issued a total of 3,000,000 shares of common stock pursuant to the Share Exchange Agreement entered into among Medico, Eminent Healthcare Pte. Ltd. and Multi Care Pte. Ltd. Pursuant to the Share Exchange Agreement, the Company agreed to issue 3,000,000 shares of its common stock in exchange for all of the issued and outstanding shares of capital stock of Smile Central, 30% of which was owned by Eminent Healthcare Pte. Ltd. and 70% of which was owned by Multi Care Pte. Ltd. The Company’s CFO, Liew Min Hin, owns 100% of Eminent Healthcare Pte. Ltd. The shares were issued pursuant to Section 4(2) of the Securities Act of 1993 (“Securities Act”) and are restricted shares as defined in the Securities Act.

 

On June 5, 2017, the Company sold of all of the issued and outstanding ordinary shares of the Company’s 100% wholly-owned subsidiary, Smile More Holdings Pte. Ltd., a Singaporean corporation. The Company is currently reviewing and revising its future business plans. To date, the Company has not yet identified its future business plans.

 

Financial Statements Presented

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X. 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, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the six months ended June 30, 2017, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 as filed with the Securities and Exchange Commission on June 19, 2017.

 

Certain reclassifications have been made to the prior period’s consolidated financial statements to conform to the current period’s presentation.

 

Note 2: Summary of Significant Accounting Policies

 

Basis of Presentation

 

The consolidated financial statements have been prepared in accordance with U.S. GAAP on the accrual basis of accounting. The consolidated financials consist of Medico International Inc. and its 7 subsidiaries, Smile Central Dental Group (the “Group”) consists of five entities under common control: Smile Central Dental Aljunied Ptd Ld.; Smile Central Dental Hougang Ptd Ltd.; Smile Central Dental Hougang Central Pte Ltd; Smile Central Dental Jurong Ptd Ltd.; Smile Central Dental Toa Payoh Ptd Ltd.; Smile More Holdings Ptd Ltd. and, Smile Central Dental Centre Pte Ltd. All significant inter-company accounts and transactions have been eliminated in consolidation.

 

6

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Functional Currency

 

The Company's functional currency is the Singapore Dollar and reporting currency is the U.S. dollar. All transactions initiated in Singapore Dollars are translated into U.S. dollars in accordance with Accounting Standards Codification (“ASC”) 830-30, "Translation of Financial Statements," as follows:

 

i)	Assets and liabilities at the rate of exchange in effect at the balance sheet date.
ii)	Equity at historical rates.
iii)	Revenue and expense items at the average rate of exchange prevailing during the period.

 

Adjustments arising from such translations are included in accumulated other comprehensive gain in stockholders’ deficit.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

 

Fair Value of Financial Instruments Estimates

 

The Company’s financial instruments including accounts receivable, accounts payable, accrued and other payables and due to related parties are carried at cost, which approximates fair value due to the short-term maturity of these instruments. The recorded value of the Company’s long-term debt approximates its fair value as it bears interest at a floating rate.

 

Concentrations of Credit Risk

 

Financial instruments that potentially subject the Company to a significant concentration of credit risk include cash. At times, the Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management monitors the credit rating and concentration of risk with these financial institutions on a continuing basis to mitigate risk.

 

Taxes Collected and Remitted to Governmental Authorities

 

The Company reports taxes collected from customers, which are primarily goods and service tax, on a net basis.

 

Revenue Recognition

 

Revenues are recognized when services are rendered, amounts are reliably measurable, and collectability is assured. Revenue is presented, net of goods and services tax, rebates and discounts.

 

Recent Accounting Pronouncements

 

In September 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The amendments in ASU No. 2017-13 amends the early adoption date option for certain companies related to the adoption of ASU No. 2014-09 and ASU No. 2016-02. Both of the below entities may still adopt using the public company adoption guidance in the related ASUs, as amended. The effective date is the same as the effective date and transition requirements for the amendments for ASU 2014-09 and ASU 2016-02.

 

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In May 2014, the FASB issued some accounting standards update which modifies the requirements for identifying, allocating, and recognizing revenue related to the achievement of performance conditions under contracts with customers. This update also requires additional disclosure related to the nature, amount, timing, and uncertainty of revenue that is recognized under contracts with customers. This guidance is effective for fiscal and interim periods beginning after December 15, 2017 and is required to be applied retrospectively to all revenue arrangements. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

  

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial statements.

 

Note 3: Going Concern

 

These consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future. As of June 30, 2017, the Company has an accumulated deficit of $1,326,076 since inception and has a working capital deficiency of $454,955.

 

On June 5, 2017, the Company sold of all of the issued and outstanding ordinary shares of the Company’s 100% wholly-owned subsidiary, Smile More Holdings Pte. Ltd., a Singaporean corporation.

 

Management's plans include raising capital through the equity markets to fund operations and eventually, generating profit through new business ventures, yet to be identified by management; however, there can be no assurance that the Company will be successful in such activities. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classifications of the liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Note 4: Disposal of Subsidiaries

 

On June 5, 2017, the Company closed the transactions under the Share Exchange Agreement (“ Share Exchange Agreement”) by and between the Company, Eminent Healthcare Pte. Ltd., a Singaporean corporation, Multi Care Pte. Ltd., a Singaporean corporation, and Targeted Solutions Global Limited, a United Kingdom Private limited company, for the sale of all of the issued and outstanding ordinary shares of the Company’s 100% wholly-owned subsidiary, Smile More Holdings Pte. Ltd., a Singaporean corporation (the “Stock Purchase”). Prior to the closing of the Stock Purchase, Eminent Healthcare Pte. Ltd. and Multi Care Pte. Ltd. were the Company’s majority shareholders. Liew Min Hin, the Company’s former Chief Financial Officer and former member of the Board of Directors, owns 100% of Eminent Healthcare Pte. Ltd., and is the father of Dr. Daniel Liew, the Company’s former Chief Executive Officer and former member of the Board of Directors.

 

Pursuant to the share exchange agreement, the Company transferred all of the subsidiary shares to the purchaser and released the Subsidiary from the intra-Company loan of $965,866.

 

During the six months ended June 30, 2017, the Company recorded a loss on disposal of $77,438. The Company has no continuing involvement in the operations of Smile More Holdings. The disposal of Smile more Holdings qualified as a discontinued operation of the Company and accordingly, the Company has excluded results of Smile More Holdings’ operations from its Statements of Operations and Comprehensive Loss to present this business in discontinued operations.

 

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The following table shows the results of operations of Smile More Holdings for the three and six months ended June 30, 2017 and 2016 which are included in the loss from discontinued operations:

 

		Three Months Ended
		June 30,
		2017				2016
Dental Service Revenue, net		$	1,330,804			$	1,761,664
Cost of Services			864,375				1,399,846
Gross profit			466,429				361,818
General and administrative			107,197				97,181
Professional fees			1,894				44,539
Rental			219,162				184,640
Staff costs			135,270				20,583
Depreciation			36,883				48,435
Operating loss			(33,977	)			(33,560	)
Other income			93,439				26,984
Interest expense			(5,747	)			(2,042	)
Income benefit			(1,316	)			-
Loss from discontinued operations, net of tax		$	52,399			$	(8,618	)

 

		Six Months Ended
		June 30,
		2017				2016
Dental Service Revenue, net		$	3,065,719			$	3,135,218
Cost of Services			2,057,063				2,595,566
Gross profit			1,008,656				539,652
General and administrative			259,937				132,726
Professional fees			28,154				88,118
Rental			429,677				375,755
Staff costs			334,347				49,536
Depreciation			94,294				92,392
Operating loss			(137,753	)			(198,875	)
Other income			95,164				48,532
Interest expense			(14,530	)			(4,245	)
Income benefit			1,316				-
Loss from discontinued operations, net of tax		$	(55,803	)		$	(154,588	)

 

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The following table shows the carrying amounts of the major classes of assets and liabilities associated with Smile More Holdings as of the June 5, 2017.

 

		June 5,
		2017
Cash and cash equivalents		$	359,066
Accounts receivable			1,175,394
Prepaid expenses and deposits			247,086
Supplies			100,177
Property and equipment, net			887,360
Accounts payable			(1,168,613	)
Accrued and other payables			(122,958	)
Due to related parties			(597,259	)
Loans payable			(565,938	)
Capital lease obligations			(168,996	)
Net assets and liabilities			145,319
Accumulated other comprehensive loss			(67,881	)
Loss on disposal		$	77,438

 

The following table summarizes the carrying amounts of the assets and liabilities from discontinued operations,

 

		June 30,				December 31,
		2017				2016
Assets held for sale
Cash and cash equivalents		$	-			$	287,754
Accounts receivable			-				416,658
Prepaid expenses and deposits			-				222,084
Inventory			-				113,229
Property and equipment, net			-				1,037,656
Total assets held for sale		$	-			$	2,077,381
Liabilities held for sale
Accounts payable		$	-			$	616,124
Accrued and other payables			-				186,894
Due to related parties			-				743,369
Deferred revenue			-				2,454
Capital lease obligations - current			-				187,171
Capital lease obligations			-				177,083
Total liabilities held for sale		$	-			$	1,913,095

  

Note 5: Related Party Transactions

 

In support of the Company's efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or directors. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances were considered temporary in nature and were not formalized by a promissory note.

 

During the six months ended June 30, 2017, the Company repaid a net amount of $179,072 to reduce advances and loans from various officers. As of June 30, 2017 and December 31, 2016, the Company was obligated to its officers for unsecured, non-interest bearing demand loans with balances totaling $417,336 and $406,947, respectively.

 

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

 

FORWARD LOOKING STATEMENTS

 

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our unaudited consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

 

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

 

As used in this quarterly report and unless otherwise indicated, the terms “we”, “us”, “our” and "Medico" mean Medico International Inc., and our wholly owned subsidiaries, Smile Central Dental Aljunied Ptd Ld.; Smile Central Dental Hougang Ptd Ltd.; Smile Central Dental Hougang Central Pte Ltd; Smile Central Dental Jurong Ptd Ltd.; Smile Central Dental Toa Payoh Ptd Ltd.; Smile More Holdings Ptd Ltd. and, Smile Central Dental Centre Pte Ltd., unless otherwise indicated.

 

General Overview

 

Medico International Inc. was incorporated in the State of Nevada on September 18, 2015. Our Company was formed and organized for the purposes of acting as the holding company for Smile More Holding Pte. Ltd., a private Singapore corporation (referred to herein as “Smile Central”) engaged in the dental industry. Due to continued consolidated losses experienced by our company as a result of the losses of Smile Central, our board of directors believed it was in the best interests of our company and our shareholders to dispose of Smile Central.

 

Our Company’s former majority shareholders, Eminent Healthcare Pte. Ltd. and Multi Care Pte. Ltd. (the “Majority Shareholders”), became shareholders of our Company in 2015 by exchanging all of the outstanding share capital of Smile Central (“Smile Shares”) for 3,000,000 shares of our Company’s common stock (the “Medico Shares”) and the Majority Shareholders desired to re-acquire the Smile Shares.

 

On June 5, 2017, we closed the transactions under the Share Exchange Agreement (“Share Exchange Agreement”) by and between our Company, Eminent Healthcare Pte. Ltd., a Singaporean corporation, Multi Care Pte. Ltd., a Singaporean corporation, and Targeted Solutions Global Limited, a United Kingdom Private limited company, for the sale of all of the issued and outstanding ordinary shares of our Company’s 100% wholly-owned subsidiary, Smile More Holdings Pte. Ltd., a Singaporean corporation (the “Stock Purchase”). Prior to the closing of the Stock Purchase, Eminent Healthcare Pte. Ltd. and Multi Care Pte. Ltd. were our Company’s majority shareholders. Liew Min Hin, our former Chief Financial Officer and former member of the Board of Directors, owns 100% of Eminent Healthcare Pte. Ltd., and is the father of Dr. Daniel Liew, our former Chief Executive Officer and former member of the Board of Directors.

 

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Pursuant to the Share Exchange Agreement, in consideration for transferring the Smile Shares to the Majority Shareholders and waiving the Intra-Company Loan, our Company received all of the rights, interests, claim and title in that certain US patent known as “Method for diagnosing malignancy in pelvic tumors”, US Patent No. 6,112,108 (the “Patent”), which Targeted Solutions Global Limited, a United Kingdom Private limited company (“TSG”) had the right and ability to deliver to our Company and in connection with the closing of the Share Exchange Agreement, Jiang Chun Yan was appointed as the CEO and sole member of our Company’s Board of Directors.

 

In addition, under the Share Exchange Agreement, TSG received from the Majority Shareholders the Medico Shares and the Majority Shareholders received $200,000 from TSG.

 

The effect of the transactions set forth in the Share Exchange Agreement is that commencing June 5, 2017 our Company will no longer own and operate dental clinics in Singapore but will focus its efforts in the area of cancer diagnostics tools in connection with the Patent.

 

We have not been subject to any bankruptcy, receivership or similar proceeding.

 

Results of Operations

 

Three months ended June 30, 2017 compared to three months ended June 30, 2016.

 

		Three months ended June 30, 2017				Three months ended June 30, 2016
Revenue		$	-			$	-
Operating expenses		$	22,394			$	20,926
Net loss		$	(47,434	)		$	(29,544	)

 

We did not generate revenues for the three months ended June 30, 2017 and 2016.

 

Our operating expenses, for the three months ended June 30, 2017 were $22,394 compared to $20,926 for the same period in 2016. The increase in operating expenses was primarily as a result of increased professional fees.

 

We incurred a net loss of $47,434 and $29,544 for the three months ended June 30, 2017 and 2016, respectively. The increase in net loss was due to loss on disposal of subsidiaries offset by a gain from discontinued operaitons.

 

Six months ended June 30, 2017 compared to six months ended June 30, 2016.

 

		Six months ended June 30, 2017				Six months ended June 30, 2016
Revenue		$	-			$	-
Operating expenses		$	31,135			$	74,020
Net loss		$	(164,376	)		$	(228,608	)

 

We did not generate revenues for the six months ended June 30, 2017 and June 30, 2016.

 

Our operating expenses, for the six months ended June 30, 2017 were $31,135 compared to $74,020 for the same period in 2016. The decrease in operating expenses was primarily as a result of a decreased professional fees.

 

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We incurred a net loss of $164,374 and $228,608 for the six months ended June 30, 2017 and June 30, 2016, respectively. The decrease in net loss was due to a disposal of subsidiaries offset by a decrease in loss from discontinued operations.

 

Liquidity and Capital Resources

 

The following table provides selected financial data about our Company as of June 30, 2017 and December 31, 2016, respectively.

 

Working Capital

 

		As at June 30, 2017				As at December 31, 2016
Cash			-				-
Total current assets		$	-			$	2,077,381
Total current liabilities		$	454,955			$	2,337,165
Working capital (deficit)		$	(454,955	)		$	(259,784	)

 

Cash Flows

 

		Six Months ended June 30, 2017				Six Months ended June 30, 2016
Net cash used in operating activities		$	(104,763	)		$	(323,123	)
Net cash used in investing activities		$	(378,555	)		$	(20,147	)
Net cash provided by financing activities		$	181,505			$	265,179
Decrease in cash		$	(287,754	)		$	(86,582	)

 

As at June 30, 2017 our Company’s cash balance was $Nil and total assets were $Nil. As at December 31, 2016, our Company’s cash balance was $Nil and total assets were $2,077,381. A decrease in total current assets was due to a disposal of subsidiaries.

 

As at June 30, 2017, our Company had total liabilities of $454,955, compared with total liabilities of $2,337,165 as at December 31, 2016. A decrease in total current liabilities was due to a disposal of subsidiaries.

 

As at June 30, 2017, our Company had working capital deficiency of $454,955 compared with working capital deficiency of $259,784 as at December 31, 2016. The increase in working capital deficiency was primarily attributed to the decrease in assets from discontinued operations and liabilities from discontinued operations.

 

Cash Flow from Operating Activities

 

During the six months ended June 30, 2017, our Company used $104,763 in cash from operating activities, compared to $323,123 cash used in operating activities during the six months ended June 30, 2016. The cash used from operating activities for the six months ended June 30, 2017 was attributed to a net loss of $164,376, bad debt expense of $6,566, depreciation of $216,279, and the loss on disposal of subsidiaries of $14,606. In addition, cash used from operating activities included the changes in the following accounts: accounts receivable of $738,576, prepaid expenses and deposits of $10,604, inventory of $117,357, accounts payable of $532,370, accrued and other payables of $71,957, and deferred revenue of $6,428.

 

Cash Flow Used in Investing Activities

 

During the six months ended June 30, 2017 our Company used $378,555 in investing activities compared to $20,147 used in investing activities during the six months ended June 30, 2016. Cash flow used in investing activities included: $22,647 purchase of property, plant and equipment, $359,066 sales of investment in subsidiary, offset by $3,158 sales of property, plant and equipment.

 

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Cash Flow from Financing Activities

 

During the six months ended June 30, 2017 our Company received $181,505 from financing activities compared to $265,179 received from financing activities during the six months ended June 30, 2016. The cash flow for financing activities for the six months ended June 30, 2017, was a result of proceeds from loans payable of $630,432, repayment of loans payable of $70,047, loans from related parties of $10,389, repayment of due to related parties of $179,072, and repayment of capital lease obligations of $210,197.

 

The report of our auditors on our audited consolidated financial statements for the fiscal year ended December 31, 2016, contains a going concern qualification as we have suffered losses since our inception. We have not attained profitable operations and are dependent upon obtaining financing to pursue our business operations. For these reasons, our auditors stated in their report on our audited consolidated financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, and capital expenditures or capital resources that are material to stockholders.

 

Critical Accounting Policies

 

Basis of Presentation

 

The consolidated financial statements have been prepared in accordance with U.S. GAAP on the accrual basis of accounting. The consolidated financials consist of Medico International Inc. and its 7 subsidiaries, Smile Central Dental Group (the “Group”) consists of five entities under common control: Smile Central Dental Aljunied Ptd Ld.; Smile Central Dental Hougang Ptd Ltd.; Smile Central Dental Hougang Central Pte Ltd; Smile Central Dental Jurong Ptd Ltd.; Smile Central Dental Toa Payoh Ptd Ltd.; Smile More Holdings Ptd Ltd. and, Smile Central Dental Centre Pte Ltd. All significant inter-company accounts and transactions have been eliminated in consolidation.

 

Functional Currency

 

Our Company's functional currency is the Singapore Dollar and reporting currency is the U.S. dollar. All transactions initiated in Singapore Dollars are translated into U.S. dollars in accordance with Accounting Standards Codification (“ASC”) 830-30, "Translation of Financial Statements," as follows:

 

i)	Assets and liabilities at the rate of exchange in effect at the balance sheet date.
ii)	Equity at historical rates.
iii)	Revenue and expense items at the average rate of exchange prevailing during the period.

 

Adjustments arising from such translations are included in accumulated other comprehensive gain in stockholders’ deficit.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

 

Fair Value of Financial Instruments Estimates

 

Our Company’s financial instruments including accounts receivable, accounts payable, accrued and other payables and due to related parties are carried at cost, which approximates fair value due to the short-term maturity of these instruments. The recorded value of our Company’s long-term debt approximates its fair value as it bears interest at a floating rate.

 

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Concentrations of Credit Risk

 

Financial instruments that potentially subject our Company to a significant concentration of credit risk include cash. At times, our Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management monitors the credit rating and concentration of risk with these financial institutions on a continuing basis to mitigate risk.

 

Taxes Collected and Remitted to Governmental Authorities

 

Our Company reports taxes collected from customers, which are primarily goods and service tax, on a net basis.

 

Revenue Recognition

 

Revenues are recognized when services are rendered, amounts are reliably measurable, and collectability is assured. Revenue is presented, net of goods and services tax, rebates and discounts.

 

Recent Accounting Pronouncements

 

In September 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The amendments in ASU No. 2017-13 amends the early adoption date option for certain companies related to the adoption of ASU No. 2014-09 and ASU No. 2016-02. Both of the below entities may still adopt using the public company adoption guidance in the related ASUs, as amended. The effective date is the same as the effective date and transition requirements for the amendments for ASU 2014-09 and ASU 2016-02.

 

In May 2014, the FASB issued some accounting standards update which modifies the requirements for identifying, allocating, and recognizing revenue related to the achievement of performance conditions under contracts with customers. This update also requires additional disclosure related to the nature, amount, timing, and uncertainty of revenue that is recognized under contracts with customers. This guidance is effective for fiscal and interim periods beginning after December 15, 2017 and is required to be applied retrospectively to all revenue arrangements. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

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Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2017. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the six-month period ended June 30, 2017, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting that occurred during the period ended June 30, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

 

Item 1A. Risk Factors

 

As a “smaller reporting company”, we are 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.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

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Item 6. Exhibits

 

Exhibit Number		Description
(31)		Rule 13a-14 (d)/15d-14d) Certifications
31.1*		Section 302 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
(32)		Section 1350 Certifications
32.1**		Section 906 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
101*		Interactive Data File
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

________ 

* Filed herewith.

** Furnished herewith.

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		MEDICO INTERNATIONAL INC.
		(Registrant)
Dated: November 19, 2018		/s/ Jiang Chun Yan
		Jiang Chun Yan
		Chief Executive Officer Chief Financial Officer and Director
		(Principal Executive Officer Principal Financial Officer and Principal Accounting Officer)

 

 

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