Attached files
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EX-32.1 - CERTIFICATION - Medico International Inc. | mddt_ex321.htm |
EX-31.1 - CERTIFICATION - Medico International Inc. | mddt_ex311.htm |
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 |
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| For the quarterly period ended September 30, 2017 |
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or | |
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¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the transition period from ______________ to ______________ |
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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.) |
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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) | ||||||||||||||||||||
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___________________________________________________________________ | ||||||||||||||||||||
(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 | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | x | |||||||||
| 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. ¨ | ||||||||||||||||||||
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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 | ||||||||||||||||||||
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Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. | ||||||||||||||||||||
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3,697,000 common shares issued and outstanding as of December 3, 2018 |
FORM 10-Q
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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PART I - FINANCIAL INFORMATION
MEDICO INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
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| September 30, 2017 |
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| December 31, 2016 |
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| (Unaudited) |
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ASSETS |
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Current Assets |
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Prepaid expenses and deposits |
| $ | - |
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| $ | 250 |
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Assets from discontinued operations |
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| - |
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| 2,077,131 |
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Total Current Assets |
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| - |
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| 2,077,381 |
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TOTAL ASSETS |
| $ | - |
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| $ | 2,077,381 |
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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Current Liabilities |
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Accounts payable |
| $ | 34,233 |
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| $ | 17,123 |
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Due to related parties |
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| 418,736 |
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| 406,947 |
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Liabilities from discontinued operations |
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| - |
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| 1,913,095 |
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Total Current Liabilities |
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| 452,969 |
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| 2,337,165 |
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TOTAL LIABILITIES |
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| 452,969 |
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| 2,337,165 |
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STOCKHOLDERS’ DEFICIT |
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Common stock, $0.001 par value; 500,000,000 shares authorized, 3,697,000 shares issued and outstanding |
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| 3,697 |
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| 3,697 |
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Additional paid-in capital |
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| 867,424 |
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| 867,424 |
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Accumulated deficit |
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| (1,324,090 | ) |
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| (1,161,700 | ) |
Accumulated other comprehensive gain |
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| - |
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| 30,795 |
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TOTAL STOCKHOLDERS' DEFICIT |
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| (452,969 | ) |
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| (259,784 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT |
| $ | - |
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| $ | 2,077,381 |
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See the notes to the unaudited consolidated financial statements
3 |
Table of Contents |
MEDICO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
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| Three Months Ended |
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| Nine Months Ended |
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| September 30, |
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| September 30, |
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| 2017 |
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| 2016 |
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| 2016 |
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REVENUE |
| $ | - |
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| $ | - |
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| $ | - |
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| $ | - |
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OPERATING EXPENSES |
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General and administrative |
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| 947 |
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| 196 |
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| 3,777 |
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| 292 |
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Professional fees |
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| 2,209 |
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| 20,920 |
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| 30,514 |
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| 94,844 |
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Total Operating Expenses |
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| 3,156 |
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| 21,116 |
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| 34,291 |
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| 95,136 |
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INCOME (LOSS) FROM OPERATIONS |
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| (3,156 | ) |
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| (21,116 | ) |
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| (34,291 | ) |
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| (95,136 | ) |
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OTHER INCOME/(EXPENSE) |
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Forgiveness of accounts payable |
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| 5,142 |
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| 5,142 |
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| - |
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| 5,142 |
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| - |
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| 5,142 |
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| - |
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INCOME (LOSS) BEFORE INCOME TAXES |
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| 1,986 |
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| (21,116 | ) |
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| (29,149 | ) |
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| (95,136 | ) |
Provision for income taxes |
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| - |
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| - |
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| - |
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| - |
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INCOME (LOSS) FROM CONTINUING OPERATION |
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| 1,986 |
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| (21,116 | ) |
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| (29,149 | ) |
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| (95,136 | ) |
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DISCONTINUED OPERATIONS |
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Loss from discontinued operations |
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| - |
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| (152,893 | ) |
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| (55,803 | ) |
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| (307,481 | ) |
Loss on disposal of subsidiaries |
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| - |
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| - |
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| (77,438 | ) |
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| - |
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LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX BENEFITS |
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| - |
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| (152,893 | ) |
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| (133,241 | ) |
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| (307,481 | ) |
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NET INCOME (LOSS) |
| $ | 1,986 |
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| $ | (174,009 | ) |
| $ | (162,390 | ) |
| $ | (402,617 | ) |
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OTHER COMPREHENSIVE INCOME (LOSS) |
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Foreign currency translation adjustments |
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| - |
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| (7,081 | ) |
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| 37,086 |
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| 30,462 |
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TOTAL COMPREHENSIVE INCOME (LOSS) |
| $ | 1,986 |
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| $ | (181,090 | ) |
| $ | (125,304 | ) |
| $ | (372,155 | ) |
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Basic and Diluted Earnings (Loss) per Common Share |
| $ | 0.00 |
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| $ | (0.05 | ) |
| $ | (0.04 | ) |
| $ | (0.11 | ) |
Basic and Diluted Weighted Average Common Shares Outstanding |
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| 3,697,000 |
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| 3,697,000 |
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| 3,697,000 |
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| 3,628,318 |
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See the notes to the unaudited consolidated financial statements
4 |
Table of Contents |
MEDICO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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| Nine Months Ended |
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| September 30, |
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| 2016 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss from continuing operations |
| $ | (29,149 | ) |
| $ | (95,136 | ) |
Net loss from discontinuing operations |
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| (133,241 | ) |
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| (307,481 | ) |
Adjustments to reconcile net loss to net cash from operating activities: |
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Loss on disposal of subsidiaries |
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| 77,438 |
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| - |
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Forgiveness of accounts payable |
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| (5,142 | ) |
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| - |
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Changes in operating assets and liabilities: |
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Accounts payable |
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| 22,252 |
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| 6,848 |
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Changes in operating assets and liabilities of discontinued operations |
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| 378,033 |
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| 277,019 |
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Net cash provided by (used in) operating activities |
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| 310,191 |
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| (118,750 | ) |
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CASH FLOWS USED BY INVESTING ACTIVITIES |
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Sales of investment in subsidiary |
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| (359,066 | ) |
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| - |
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Net cash used in investing activities |
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| (359,066 | ) |
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| - |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Issuance of shares |
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| - |
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| 697,000 |
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Loans from related parties |
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| 11,789 |
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| 357,154 |
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Waive of loans from the disposed subsidiary |
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| (965,866 | ) |
Net cash provided by financing activities |
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| 11,789 |
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| 88,288 |
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Effects on changes in foreign exchange rate |
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| 37,086 |
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| 30,462 |
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Net change in cash and cash equivalents |
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| - |
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| - |
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Cash and cash equivalents - beginning of period |
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| - |
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| - |
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Cash and cash equivalents - end of period |
| $ | - |
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| $ | - |
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Supplemental Cash Flow Disclosures |
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Cash paid for interest |
| $ | - |
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| $ | - |
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Cash paid for income taxes |
| $ | - |
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| $ | - |
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See the notes to the unaudited consolidated financial statements
5 |
Table of Contents |
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 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 nine months ended September 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 through June 5, 2017 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.
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Table of Contents |
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. |
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ii) | Equity at historical rates. |
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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
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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Table of Contents |
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 September 30, 2017, the Company has an accumulated deficit of $1,324,090 since inception and has a working capital deficiency of $452,969.
Management's plans include raising capital through the equity markets to fund operations and eventually, generating profit through its business; 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 nine months ended September 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 Income (Loss) to present this business in discontinued operations.
8 |
Table of Contents |
The following table shows the results of operations of Smile More Holdings for the three and nine months ended September 30, 2017 and 2016 which are included in the loss from discontinued operations:
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| September 30, |
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| 2017 |
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| 2016 |
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Dental Service Revenue, net |
| $ | 1,330,804 |
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| $ | 1,761,664 |
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Cost of Services |
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| 864,375 |
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| 1,399,846 |
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Gross profit |
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| 466,429 |
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| 361,818 |
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General and administrative |
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| 107,197 |
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| 97,181 |
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Professional fees |
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| 1,894 |
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| 44,539 |
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Rental |
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| 219,162 |
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| 184,640 |
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Staff costs |
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| 135,270 |
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| 20,583 |
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Depreciation |
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| 36,883 |
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| 48,435 |
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Operating loss |
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| (33,977 | ) |
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| (33,560 | ) |
Other income |
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| 93,439 |
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| 26,984 |
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Interest expense |
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| (5,747 | ) |
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| (2,042 | ) |
Income benefit |
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| (1,316 | ) |
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| - |
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Loss from discontinued operations, net of tax |
| $ | 52,399 |
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| $ | (8,618 | ) |
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| Nine Months Ended |
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| September 30, |
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| 2017 |
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| 2016 |
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Dental Service Revenue, net |
| $ | 3,065,719 |
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| $ | 3,135,218 |
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Cost of Services |
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| 2,057,063 |
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| 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 | ) |
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 |
|
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The following table summarizes the carrying amounts of the assets and liabilities from discontinued operations,
|
| September 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 nine months ended September 30, 2017, the Company received a net amount of $11,789 as advances and loans from various officers for the operating expenses of the Company. As of September 30, 2017 and December 31, 2016, the Company was obligated to its officers for unsecured, non-interest bearing demand loans with balances totaling $418,736 and $406,947, respectively.
Note 6: Subsequent Events
Management has evaluated subsequent events through the date these consolidated financial statements were available to be issued. Based on our evaluation no other material events have occurred that require disclosure.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) 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 September 30, 2017 compared to three months ended September 30, 2016.
|
| Three months ended September 30, 2017 |
|
| Three months ended September 30, 2016 |
| ||
Revenue |
| $ | - |
|
| $ | - |
|
Operating expenses |
| $ | 3,156 |
|
| $ | 21,116 |
|
Net income (loss) |
| $ | 1,986 |
|
| $ | (174,009 | ) |
We did not generate revenues during the three months ended September 30, 2017 and 2016.
Our operating expenses, for the three months ended September 30, 2017 were $3,156 compared to $34,291 for the same period in 2016. The decrease in operating expenses was primarily as a result of a decrease in professional fees.
We incurred a net income of $1,986 and a net loss of $162,390 for the three months ended September 30, 2017 and September 30, 2016, respectively.
Nine months ended September 30, 2017 compared to nine months ended September 30, 2016.
|
| Nine months ended September 30, 2017 |
|
| Nine months ended September 30, 2016 |
| ||
Revenue |
| $ | - |
|
| $ | - |
|
Operating expenses |
| $ | 34,291 |
|
| $ | 95,136 |
|
Net loss |
| $ | (162,390 | ) |
| $ | (402,617 | ) |
We did not generate revenues during the nine months ended September 30, 2017 and 2016.
Our operating expenses, for the nine months ended September 30, 2017 were $34,291 compared to $95,136 for the same period in 2016. The decrease in operating expenses was primarily as a result of a decrease in professional fees.
We incurred a net loss of $162,390 and $402,617 for the nine months ended September 30, 2017 and 2016, respectively.
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Liquidity and Capital Resources
The following table provides selected financial data about our company as of September 30, 2017 and December 31, 2016, respectively.
Working Capital
|
| As at September 30, 2017 |
|
| As at December 31, 2016 |
| ||
Cash |
| $ | - |
|
| $ | 250 |
|
Total current assets |
| $ | - |
|
| $ | 2,077,381 |
|
Total current liabilities |
| $ | 452,969 |
|
| $ | 2,337,165 |
|
Working capital (deficit) |
| $ | (452,969 | ) |
| $ | (259,784 | ) |
Cash Flows
|
| Nine Months ended September 30, 2017 |
|
| Nine Months ended September 30, 2016 |
| ||
Net cash provided by (used in) operating activities |
| $ | 310,191 |
|
| $ | (118,750 | ) |
Net cash used in investing activities |
| $ | (359,066 | ) |
| $ | - |
|
Net cash provided by financing activities |
| $ | 11,789 |
|
| $ | 88,288 |
|
Change in cash |
| $ | - |
|
| $ | - |
|
As at September 30, 2017 our company’s cash balance was $0 and total assets were $0. As at December 31, 2016, our Company’s cash balance was $0 and total assets were $2,077,381.
As at September 30, 2017, our company had total liabilities of $452,969, compared with total liabilities of $2,337,165 as at December 31, 2016.
As at September 30, 2017, our company had working capital deficiency of $452,969 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 nine months ended September 30, 2017, our company generated $310,191 in cash from operating activities, compared to $118,750 cash used in operating activities during the nine months ended September 30, 2016. The cash provided from operating activities for the nine months ended September 30, 2017 was attributed to a change in assets and liabilities from discontinued operations.
Cash Flow from Investing Activities
During the nine months ended September 30, 2017 our company used $359,066 for sales of investment in subsidiaries in investing activities compared to $0 used in investing activities during the nine months ended September 30, 2016.
Cash Flow from Financing Activities
During the nine months ended September 30, 2017 our company received $11,789 from financing activities compared to $88.288 received from financing activities during the nine months ended September 30, 2016. The cash flow for financing activities for the nine months ended September 30, 2017, was a result of loans from related parties of $10,389.
The report of our auditors on our audited 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 financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.
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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.
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.
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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 May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers (“Topic 606”). Topic 606 removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The guidance in this update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. In August 2015, ASU 2015-14 was issued which delayed the effective date for public entities to reporting periods beginning after December 15, 2017. Early adoption is not permitted.
Management has reviewed the impact of the accounting pronouncement on our financial statements. Management has reviewed the new standards, which consists of: (i) identifying contracts with customers; (ii) identifying performance obligations; (iii) determining the transaction price, (iv) allocating transaction prices to the performances met in the contract, and (v) recognizing revenue when our company satisfies its performance obligation. Based on management’s review of ASU 2014-09, our company determined the pronouncement will have no significant impact on our financial statements and financial statement disclosure. The determination was based on our company’s future strategic business plans, which involve disposing of all revenue generating activities prior to the inception of the new accounting pronouncement.
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.
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 September 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 three-month period ended September 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 quarter ended September 30, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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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.
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.
None.
16 |
Table of Contents |
Exhibit Number |
| Description |
(31) |
| Rule 13a-14 (d)/15d-14d) Certifications |
| ||
(32) |
| Section 1350 Certifications |
| ||
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.
17 |
Table of Contents |
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: December 14, 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) |
|
18 |