Attached files
| file | filename |
|---|---|
| EX-32.2 - CERTIFICATION - EMR Technology Solutions, Inc. | f10q0620ex32-2_emrtech.htm |
| EX-32.1 - CERTIFICATION - EMR Technology Solutions, Inc. | f10q0620ex32-1_emrtech.htm |
| EX-31.2 - CERTIFICATION - EMR Technology Solutions, Inc. | f10q0620ex31-2_emrtech.htm |
| EX-31.1 - CERTIFICATION - EMR Technology Solutions, Inc. | f10q0620ex31-1_emrtech.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2020
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 000-55715
EMR TECHNOLOGY SOLUTIONS INC.
(Exact name of registrant as specified in its charter)
| Nevada | 47-5482792 | |
(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
90 Washington Valley Road
Bedminster, NJ 07921
(Address of principal executive offices)
(908) 997-0617
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files. Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a 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 | ☒ |
| Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
As of August 21, 2020, there were 10,151,854 shares outstanding of the registrant’s common stock.
TABLE OF CONTENTS
| i |
PART I – FINANCIAL INFORMATION
EMR TECHNOLOGY SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2020 AND DECEMBER 31, 2019
| June 30, 2020 | December 31, 2019 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 74,991 | $ | 10,985 | ||||
| Accounts receivable, net | 19,846 | 17,118 | ||||||
| Prepaid Expenses | 2,840 | 3,240 | ||||||
| Total Current Assets | 97,677 | 31,343 | ||||||
| Other Assets: | ||||||||
| Security Deposit | 1,450 | 1,450 | ||||||
| Software, net | -- | 36,250 | ||||||
| Customer lists, net | 31,853 | 57,936 | ||||||
| Total OtherAssets | 33,303 | 95,636 | ||||||
| TOTAL ASSETS | $ | 130,980 | $ | 126,979 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY(DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 340,131 | $ | 383,035 | ||||
| Accrued expenses | 688,553 | 641,665 | ||||||
| Deferred revenue | 50,337 | 45,223 | ||||||
| Factor advance, net | 64,102 | 79,701 | ||||||
| PPP loan – current portion | 17,698 | -- | ||||||
| Promissory notes – current portion | 533,037 | 533,037 | ||||||
| Promissory notes – related party - current portion | 645,550 | 645,550 | ||||||
| Total Current Liabilities | 2,339,408 | 2,328,211 | ||||||
| Long Term Liabilities | ||||||||
| PPP Loan | 29,002 | -- | ||||||
| SBA Loan | 150,000 | -- | ||||||
| Total Long Term Liabilities | 179,002 | -- | ||||||
| TOTAL LIABILITIES | 2,518,410 | 2,328,211 | ||||||
| Commitments and Contingencies (See Note 4) | -- | -- | ||||||
| Stockholders’ Deficit: | ||||||||
| Common Stock, 70,000,000 shares authorized, $.001 par value, 10,151,854 and 10,151,854 shares issued and outstanding in 2020 and 2019, respectively | 10,152 | 10,152 | ||||||
| Additional paid in capital | 4,118,872 | 4,081,372 | ||||||
| Accumulated deficit | (6,516,454 | ) | (6,292,756 | ) | ||||
| Total stockholders’ deficit | (2,387,430 | ) | (2,201,232 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 130,980 | $ | 126,979 | ||||
The Notes to the Condensed Consolidated Unaudited Financial Statements are an integral part of these statements.
| 1 |
EMR TECHNOLOGY SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2020 AND JUNE 30, 2019
(UNAUDITED)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenues: | ||||||||||||||||
| Service revenues | $ | 17,715 | $ | 34,308 | $ | 51,510 | $ | 112,547 | ||||||||
| Contract revenues | 82,867 | 115,996 | 157,311 | 226,441 | ||||||||||||
| Total revenues | 100,582 | 150,304 | 208,821 | 338,988 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of revenues | 11,868 | 22,440 | 24,630 | 45,715 | ||||||||||||
| Selling, general, and administrative expense | 114,276 | 223,617 | 252,778 | 431,506 | ||||||||||||
| Amortization expense | 6,413 | 145,950 | 62,333 | 291,900 | ||||||||||||
| Total operating expenses | 132,557 | 392,007 | 339,741 | 769,121 | ||||||||||||
| Loss from operations | (31,975 | ) | (241,703 | ) | (130,920 | ) | (430,133 | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| EIDL Grant | 6,000 | -- | 6,000 | -- | ||||||||||||
| Interest expense (net) | (44,878 | ) | (31,000 | ) | (98,778 | ) | (69,507 | ) | ||||||||
| Total other income (expense) | (38,878 | ) | (31,000 | ) | (92,778 | ) | (69,507 | ) | ||||||||
| Loss before income taxes | (70,853 | ) | (272,703 | ) | (223,698 | ) | (499,640 | ) | ||||||||
| Provision for income taxes | -- | -- | -- | -- | ||||||||||||
| Net Loss | $ | (70,853 | ) | $ | (272,703 | ) | $ | (223,698 | ) | $ | (499,640 | ) | ||||
| Basic and diluted net loss per common share | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.05 | ) | ||||
| Weighted Average Number of Common Shares | 10,151,854 | 10,092,548 | 10,151,854 | 10,078,475 | ||||||||||||
The Notes to the Condensed Consolidated Unaudited Financial Statements are an integral part of these statements.
| 2 |
EMR TECHNOLOGY SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED
JUNE 30, 2020 AND JUNE 30, 2019
(UNAUDITED)
| Total | ||||||||||||||||||||
| Additional | Stockholders’ | |||||||||||||||||||
| Common Stock | Paid in | Accumulated | Equity | |||||||||||||||||
| Shares | Par Value | Capital | Deficit | (Deficit) | ||||||||||||||||
| Balance at March 31, 2019 (unaudited) | 10,064,354 | $ | 10,065 | $ | 4,034,162 | $ | (5,454,589 | ) | $ | (1,410,362 | ) | |||||||||
| Issuance of Common Stock for Director Fees | 50,000 | 50 | 26,977 | -- | 27,027 | |||||||||||||||
| Issuance of Common Stock for Employee services | 37,500 | 37 | 20,233 | -- | 20,270 | |||||||||||||||
| Net Loss | -- | -- | -- | (272,703 | ) | (272,703 | ) | |||||||||||||
| Balance at June 30, 2019 (unaudited) | 10,151,854 | $ | 10,152 | $ | 4,081,372 | $ | (5,727,292 | ) | $ | (1,635,768 | ) | |||||||||
| Balance at March 31, 2020 (unaudited) | 10,151,854 | $ | 10,152 | $ | 4,081,372 | $ | (6,445,601 | ) | $ | (2,354,077 | ) | |||||||||
| In kind contribution for CEO services | -- | -- | 37,500 | -- | 37,500 | |||||||||||||||
| Net Loss | -- | -- | -- | $ | (70,853 | ) | $ | (70,853 | ) | |||||||||||
| Balance at June 30, 2020 (unaudited) | 10,151,854 | $ | 10,152 | $ | 4,118,872 | $ | (6,516,454 | ) | $ | (2,387,430 | ) | |||||||||
The Notes to the Condensed Consolidated Unaudited Financial Statements are an integral part of these statements.
| 3 |
EMR TECHNOLOGY SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
FOR THE SIX MONTHS ENDED
JUNE 30, 2020 AND JUNE 30, 2019
(UNAUDITED)
| Total | ||||||||||||||||||||
| Additional | Stockholders’ | |||||||||||||||||||
| Common Stock | Paid in | Accumulated | Equity | |||||||||||||||||
| Shares | Par Value | Capital | Deficit | (Deficit) | ||||||||||||||||
| Balance at December 31, 2018 | 10,064,754 | $ | 10,065 | $ | 4,034,572 | $ | (5,227,652 | ) | $ | (1,183,015 | ) | |||||||||
| Cancellation of Common Stock | (400 | ) | -- | (410 | ) | -- | (410 | ) | ||||||||||||
| Issuance of Common Stock for Director Fees | 50,000 | 50 | 26,977 | -- | 27,027 | |||||||||||||||
| Issuance of Common Stock for Employee services | 37,500 | 37 | 20,233 | -- | 20,270 | |||||||||||||||
| Net Loss | -- | -- | -- | (499,640 | ) | (499,640 | ) | |||||||||||||
| Balance at June 30, 2019 (unaudited) | 10,151,854 | $ | 10,152 | $ | 4,081,372 | $ | (5,727,292 | ) | $ | (1,635,768 | ) | |||||||||
| Balance at December 31, 2019 | 10,151,854 | $ | 10,152 | $ | 4,081,372 | $ | (6,292,756 | ) | $ | (2,201,232 | ) | |||||||||
| In kind contribution for CEO services | -- | -- | 37,500 | -- | 37,500 | |||||||||||||||
| Net Loss | $ | (223,698 | ) | $ | (223,698 | ) | ||||||||||||||
| Balance at June 30, 2020 (unaudited) | 10,151,854 | $ | 10,152 | $ | 4,118,872 | $ | (6,516,454 | ) | $ | (2,387,430 | ) | |||||||||
The Notes to the Condensed Consolidated Unaudited Financial Statements are an integral part of these statements.
| 4 |
EMR TECHNOLOGY SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019
(UNAUDITED)
| For the Six Months ended June 30, 2020 | For the Six Months ended June 30, 2019 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net Loss | $ | (223,698 | ) | $ | (499,640 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Stock issued for services | -- | 47,297 | ||||||
| In kind contribution of services | 37,500 | -- | ||||||
| Amortization | 62,333 | 291,900 | ||||||
| Provision for (recovery of) bad debt | 2,357 | (1,000 | ) | |||||
| Amortization of debt discount | 28,489 | 24,513 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (5,085 | ) | 30,860 | |||||
| Accounts payable and accrued expenses | 3,984 | 136,413 | ||||||
| Prepaid expenses | 400 | 400 | ||||||
| Deferred revenue | 5,114 | (26,352 | ) | |||||
| Net Cash Provided by (Used in) Operating Activities | (88,606 | ) | 4,391 | |||||
| Cash Flows From Financing Activities: | ||||||||
| Proceeds from factoring advance | 76,818 | 95,000 | ||||||
| Repayment of factoring advance | (120,906 | ) | (104,090 | ) | ||||
| Proceeds from PPP Loan | 46,700 | -- | ||||||
| Proceeds from SBA Loan | 150,000 | -- | ||||||
| Payment for cancellation of shares | -- | (410 | ) | |||||
| Net Cash Provided by (Used in) Financing Activities | 152,612 | (9,500 | ) | |||||
| Net Change in Cash and cash equivalents | 64,006 | (5,109 | ) | |||||
| Cash and cash equivalents at Beginning of the Period | 10,985 | 9,120 | ||||||
| Cash and cash equivalents at End of the Period | $ | 74,991 | $ | 4,011 | ||||
| Supplemental cash flow information: | ||||||||
| Cash paid for interest | $ | 26,500 | $ | 30,750 | ||||
| Cash paid for taxes | $ | -- | $ | -- | ||||
| Non-Cash Investing & Financing Activities: | ||||||||
| Conversion of accounts payable into a promissory note | $ | -- | $ | 95,550 | ||||
The Notes to the Condensed Consolidated Unaudited Financial Statements are an integral part of these statements.
| 5 |
EMR TECHNOLOGY SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
(UNAUDITED)
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
| (A) | Basis of Presentation |
The accompanying condensed consolidated unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.
It is management’s opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statements’ presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.
The Company is a Nevada corporation formed on November 3, 2015. It was formed as a holding company whose principal activities consists of acquiring healthcare technology companies. Its fiscal year end is December 31. To date, the Company has financed and acquired four electronic medical records companies.
| (B) | Use of Estimates |
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include the allocation of purchase price to fair value of assets acquired, valuation of deferred taxes, allowance for bad debt, useful lives of intangible assets, and stock-based compensation.
| (C) | Cash and Cash Equivalents |
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At June 30, 2020 and December 31, 2019, the Company had no cash equivalents.
| (D) | Accounts Receivable |
Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts. Specific reserves are estimated by management based on certain assumptions and variables, including the customer’s financial condition, age of the customer’s receivables, and changes in payment histories. Accounts receivable are written off when management determines the likelihood of collection is remote. Interest is not charged on accounts receivable that are past due. The Company recorded an allowance for doubtful accounts of $2,357 and $942 as of June 30, 2020 and December 31, 2019, respectively.
| (E) | Principles of Consolidation |
The 2020 and 2019 consolidated financial statements include the operations of EMR Technology Solutions, Inc. (“EMR”), its wholly owned subsidiaries First Medical Solutions, Inc. (“FMS”), EMRgence, LLC (“EMRG”), Empower Technologies, Inc. (“ETI”), and Digital Medical Solutions, Inc. (“DMSI”). All significant intercompany accounts and transactions have been eliminated in consolidation.
| (F) | Income Taxes |
The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”).
Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The tax returns for the years ended December 31, 2019, 2018, and 2017 are subject to examination by the Internal Revenue Service.
| 6 |
| (G) | Furniture and Computer Equipment |
Office Furniture and Computer Equipment are capitalized at cost, net of accumulated depreciation. Depreciation is calculated by using the straight-line method over the estimated useful lives of the assets, which is five to seven years for all categories. Repairs and maintenance are charged to expense as incurred. Expenditures for betterments and renewals are capitalized. The cost of computer equipment and the related accumulated depreciation are removed from the accounts upon retirement or disposal with any resulting gain or loss being recorded in operations.
| Asset Category | Period | |
| Furniture and fixtures | 7 Years | |
| Computer equipment | 3 Years |
| (H) | Amortization and Impairment of Long-Lived Assets |
Amortization and Impairment of long-lived assets are non-cash expenses relating primarily to intangible assets. The Company accounts for long-lived assets in accordance with the provisions of FASB ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Software costs are amortized over three (3) years. Non-compete costs are amortized over three (3) years and Customer Lists are amortized over three (3) years. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As of June 30, 2020, and December 31, 2019, we have recorded impairments of $0 and $0, respectively. For the three months ended June 30, 2020 and June 30, 2019, amortization expense was $6,413 and $145,950, respectively. For the six months ended June 30, 2020 and June 30, 2019, amortization expense was $62,333 and $291,900, respectively.
| (I) | Fair Value Measurements and Fair Value of Financial Instruments |
The Company adopted FASB ASC Topic 820, Fair Value Measurements. ASC Topic 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
The Company did not identify any assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with ASC Topic 820 (F).
| (J) | Advertising |
Advertising costs are expensed as incurred. For the three and six months ended June 30, 2020 and June 30, 2019, the Company incurred $0 and $0, respectively.
| 7 |
| (K) | Business Segments |
The Company operates in one segment and therefore segment information is not presented.
| (L) | Revenue Recognition |
The Company accounts for revenue in accordance with Topic 606, which the Company adopted on January 1, 2018, using the modified retrospective method. The adoption of Topic 606 did not have a material impact on the timing or amounts of revenue recognized in our unaudited condensed consolidated financial statements and therefore did not have a material impact on our financial position, results of operations, equity or cash flows as of the adoption date or for the six months ended June 30, 2020. The Company did not recognize any cumulative-effect adjustment to retained earnings upon adoption as the impact was immaterial. Also, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.
Revenues are recognized when the Company satisfies a performance obligation by transferring control of the promised goods or services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration The Company expect to be entitled to in exchange for those goods or services. The Company also assesses our customer’s ability and intention to pay, which is based on a variety of factors including our customer’s historical payment experience and financial condition.
The Company derives revenue from the sale of software licenses when the products are installed and all required post implementation services are completed. The Company recognizes revenue from consulting services as the services are performed. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer under Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts with customers contain a single performance obligation to provide agreed-upon products or services. For contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. In accordance with Topic 606, we do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. The timing of our performance often differs from the timing of invoicing, which results in the recording of deferred revenue. Deferred revenue will be recognized when performance obligation is satisfied.
| (M) | Stock-Based Compensation |
The Company accounts for stock-based instruments issued to employees for services in accordance with ASC Topic 718. ASC Topic 718 requires the Company to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.
| (N) | Cost of Revenue |
Cost of revenue consists primarily of sub-contractor costs related to personnel who provide services to our customers, co-location costs, and other direct costs related to our services. Costs associated with the implementation of new customers are expensed as incurred.
| (O) | Basic and Diluted Net Loss Per Common Share |
In accordance with ASC 260-10, “Earnings Per Share”, basic net loss per common share is computed by dividing the net loss for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. As of June 30, 2020 and June 30, 2019, the Company has 1,165,036 and 955,038 shares of common stock issuable upon the conversion of notes payable and 90,000 and 90,000 shares of common stock issuable upon the exercise of options, respectively, that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive.
| 8 |
| (P) | Recent Accounting Pronouncements |
In February 2016, the FASB issued ASU 2016-02 “Leases,” which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted the new standard as of January 1, 2019 using a modified retrospective approach and did not restate comparative periods. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward the assessment of whether its contracts contain or are leases, classification of its leases and remaining lease terms. The Company also elected to combine its lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the condensed statements of operation on a straight-line basis over the lease term. Based on the Company’s leases as of December 31, 2018, the adoption of ASU 2016-02 on January 1, 2019 resulted in no material impact to our condensed consolidated financial statements.
Accounting standards-setting organizations frequently issue new or revised accounting rules. We regularly review all new pronouncements to determine their impact, if any, on our financial statements.
NOTE 2 – GOING CONCERN
The accompanying unaudited condensed 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. The Company sustained a net loss for the six months ended June 30, 2020. The Company also has a working capital deficit and an accumulated deficit at June 30, 2020. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company’s continuation as a going concern is dependent upon its ability to generate revenues and its ability to continue receiving investment capital to sustain its current level of operations.
Management plans to continue raising additional capital through private placements and is exploring additional avenues for future fund-raising through both public and private sources.
The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 3 – PROMISSORY NOTES, FACTOR ADVANCES, PPP LOANS, AND SBA LOANS
The $700,000 FMS Note to a related party has an interest rate of ten percent (10%) per annum for a period of two (2) years and fully amortizes during the third (3rd) year. The related party is the Company’s Chief Technology Officer. The note can be converted at any time, at the option of the holder, into shares of the Company’s stock at a conversion price of $1.00 per share. On October 31, 2016, the holder of the FMS Note converted $200,000 of the note for 200,000 shares of common stock. The Company has recorded loss on conversion of debt of $72,000. On November 15, 2017, the Board of Directors approved an amendment to the FMS Note changing the conversion provision from $3.00 per share to $1.00 per share. On December 31, 2017, the holder of the FMS Note converted $25,000 of interest due for 25,000 shares of common stock. On June 30, 2018, September 30, 2018, and December 31, 2018, the holder of the FMS Note converted $33,038 of interest due for each period to additional principal on the FMS Note accruing at six percent (6.0%) annual interest. On December 31, 2018, the FMS Note was amended to change the beginning repayment period from June 30, 2019 to September 30, 2019 for 3 quarterly installments thereafter. The payments due on September 30, 2019, December 31, 2019, and March 31, 2020 were not paid and the noteholder has not notified the Company of any event of default.
The Company issued a three (3) year convertible promissory note (the “EMRG Note”) for two hundred thousand dollars ($200,000). The EMRG Note has an interest rate of eight percent (8%) per annum for a period of one (1) years and fully amortizes during the next two (2) years. The note is secured with a pledge of forty percent (40%) of the membership interests acquired. The note can be converted at any time, at the option of the holder, into shares of the Company’s stock at a conversion price of $3 per share. On December 29, 2017, the EMRG Note was amended to change the beginning repayment period from December 31, 2017 to June 30, 2018 for $50,000 and 7 equal quarterly installments of $25,000 each thereafter and the interest rate was increased from 6% to 8% annually. On June 30, 2018, the EMRG Note was amended to change the beginning repayment period from June 30, 2018 to October 1, 2018 for $100,000 and 4 equal quarterly installments of $25,000 each thereafter. On September 30, 2018, the EMRG Note was amended to change the beginning repayment period from June 30, 2018 to January 1, 2019 for $125,000 and 3 equal quarterly installments of $25,000 each thereafter. Effective January 1, 2019, the EMRG Note was amended to change the beginning repayment period from January 1, 2019 to June 30, 2019 for $125,000 and 2 equal quarterly installments of $37,500 each thereafter. On June 30, 2019, the EMRG Note was amended to change the principal payment of $200,000 and accrued interest to October 31, 2019. The payments due on October 31, 2019 were not paid and the noteholder has not notified the Company of any event of default.
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The Company issued a three (3) year unsecured convertible promissory note (the “ETI Note”) for one hundred fifty thousand dollars ($150,000). The ETI Note has an interest rate of six percent (6%) per annum for a period of two (2) years and fully amortizes during the third (3rd) year. The note can be converted at any time, at the option of the holder, into shares of the Company’s stock at a conversion price of $3 per share. Effective June 30, 2019, the ETI Note was amended to change the beginning repayment period from June 30, 2019 to September 30, 2019 for $37,500 and 3 equal quarterly installments of $37,500 each thereafter. On June 30, 2019, the Board of Directors approved an amendment to the ETI Note changing the conversion provision from $3.00 per share to $1.00 per share. On June 30, 2019, the ETI Note was amended to change the beginning repayment period to September 30, 2019 for $75,000 and 2 quarterly installments of $37,500 thereafter. The payments due on September 30, 2019, December 31, 2019, and March 31, 2020 were not paid and the noteholder has not notified the Company of any event of default.
The Company issued a three (3) year unsecured convertible promissory note (the “DMSI Note”) for two hundred fifty thousand dollars ($250,000). The DMSI Note has an interest rate of six percent (6%) per annum for a period of one (1) year and fully amortizes during the next two (2) years. The note can be converted at any time, at the option of the holder, into shares of the Company’s stock at a conversion price of $1.00 per share. On December 20, 2017, the Agreement was amended to remove the purchase price adjustment for EBITDA. On December 20, 2017, the Note was amended to change the interest only period from one year to two years, changing the beginning of principal payments from December 31, 2017 to December 31, 2018 and to increase the annual interest rate from 6% to 8% commencing January 1, 2018. On December 22, 2017, the Board of Directors approved an amendment to the Note changing the conversion provision from $3.00 per share to $1.00 per share. On December 29, 2017, the Board of Directors approved the request by the holder of the DMSI Note to convert $50,000 principal of the DMSI Note into 50,000 shares of the Company’s common stock. On December 31, 2018, the DMSI Note was amended to change the beginning repayment period from December 31, 2018 to June 30, 2019 for $50,000 and 3 quarterly installments of $50,000 thereafter. On April 30, 2019, $95,550 of accounts payable was added the DMSI Note. On June 30, 2019, the DMSI Note was amended to change the beginning repayment period from June 30, 2019 to September 30, 2019 for $100,000 and 2 quarterly installments of $50,000 thereafter. The payments due on September 30, 2019, December 31, 2019, March 31, 2020 were not paid and the noteholder has notified the Company of the event of default.
On March 15, 2019, the Company entered into a Revenue Based Factoring Agreement with a third party. Under the agreement, the Company has sold $124,450 (the “Purchase Price”) in future accounts and contract rights for $95,000. The advance was received by the Company on March 15, 2019. A portion of the proceeds was used to satisfy the balance due on the September 26, 2018 Factoring Agreement described above. The difference between the amount sold and the purchase price of $29,450 has been recorded as a debt discount. In exchange for the purchased amount, the Company authorized the third party to ACH debit $506 daily from the Company’s bank account until the purchased amount is fully received.
On October 31, 2019, the Company entered into a Revenue Based Factoring Agreement with a third party. Under the agreement, the Company has sold $124,450 (the “Purchase Price”) in future accounts and contract rights for $95,000. The advance was received by the Company on November 1, 2019. A portion of the proceeds was used to satisfy the balance due on the March 15, 2019 Factoring Agreement described above. The difference between the amount sold and the purchase price of $29,450 has been recorded as a debt discount. In exchange for the purchased amount, the Company authorized the third party to ACH debit $506 daily from the Company’s bank account until the purchased amount is fully received.
On April 27, 2020, the Company entered into a Revenue Based Factoring Agreement with a third party. Under the agreement, the Company has sold $100,632 (the “Purchase Price”) in future accounts and contract rights for $76,818. The advance was received by the Company on April 28, 2020. A portion of the proceeds was used to satisfy the balance due on the October 31, 2019 Factoring Agreement described above. The difference between the amount sold and the purchase price of $23,814 has been recorded as a debt discount. In exchange for the purchased amount, the Company authorized the third party to ACH debit $421 daily from the Company’s bank account until the purchased amount is fully received. The Company amortized $3,980 of debt discount during the six months ended June 30, 2020. As of June 30, 2020, the balance due was $83,936, net of debt discount of $19,834.
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On May 8, 2020, the Company received $46,700 from the Paycheck Protection Program (the “Loan”) established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) of 2020. The proceeds of this loan may be fully forgiven in the event that at least 60% is used for payroll and the balance for utilities within the first 24 weeks of receipt of the proceeds. The Company intends to use the entire proceeds on payroll and anticipates that the Loan will be forgiven. The term of the Loan, less any forgiven portion, is for 2 years at an annual rate of interest of 1.0%.
On June 23, 2020, the Company received a loan of $150,000 from the Small Business Administration from a program established under the Cares Act. The proceeds may be used as working capital for Company expenses. Installment payments, including principal and interest, of $731.00 monthly, will begin 12 months from the date of the promissory note. The balance of principal and interest will be payable 30 years from the date of the promissory note at an annual interest rate of 3.75%. The collateral for the loan is the tangible and intangible assets of the Company.
NOTE 4 – COMMITMENTS AND CONTINGENCIES
On January 15, 2017, the Company entered into a two-year lease for office space, effective January 15, 2017 for a monthly rent of $1,143 per month. The lease expired January 31, 2019. On January 15, 2019, the Company entered into a one-year lease. The monthly rent is $1,228. Rent expense for the six months ended June 30, 2020 and June 30, 2019 was $7,401 and $7,206, respectively.
We face risks related to the novel coronavirus (Covid-19) which could significantly disrupt our operations, sales, and financial results. Our business will be adversely impacted by the effects of Covid-19. In addition to global macroeconomic effects, the Covid-19 outbreak and any other related adverse public health developments will cause disruption to our operations and sales activities. Our suppliers, third-party distributors, sub-contractors and customers have been and will be disrupted by worker absenteeism, quarantines, and restrictions on our employees’ ability to work, office closures, or other travel or health-related restrictions. In addition, Covid-19 or other disease outbreak will in the short-run and may over the longer term adversely affect the economies and financial markets, resulting in an economic downturn that will affect demand for our products and impact our operating results. There can be no assurance that any decrease in revenues resulting from Covid-19 will be offset by increased revenues in subsequent periods. Although the magnitude of the impact of the Covid-19 outbreak on our business and operations remains uncertain, the continued spread of Covid-19 or the occurrence of other epidemics and the imposition of related public health measures, travel and business restrictions will adversely impact our business, financial condition, operating results, and cash flows. In addition, we have experienced and will experience disruptions to our business operations resulting from quarantines, self-isolations, or other movement and restrictions on the ability of our employees to perform their jobs that may impact our ability to develop and design our products in a timely manner or meet required milestones or customer commitments.
NOTE 5 – STOCKHOLDERS’ EQUITY
(A) - Stock issued for cash
Effective February 15, 2019, by mutual agreement, the Company and two shareholders representing 400 shares of common stock of the Company issued in October 2017, cancelled said shares and refunded $410 to the shareholders.
(B) - Equity Incentive Plan
On January 30, 2016, the Board of Directors, with the approval of a majority of the shareholders of the Company, adopted the 2016 Equity Incentive Plan (the “Plan”) which will be administered by a committee appointed by the Board.
The Company, under its 2016 Plan, issues options to various officers, directors and consultants. The options vest in equal annual installments over a five-year period. All of the options are exercisable at a purchase price based on the last price of the Company’s common stock on the date of grant and have a term of 10 years.
The following sets forth the options granted and outstanding as of June 30, 2020:
| Number of Options | Weighted Average Exercise price | Granted Options Exercisable | Intrinsic value | |||||||||||||
| Options outstanding at December 31, 2019 | 90,000 | $ | 0.001 | 90,000 | $ | 0 | ||||||||||
| Granted | -- | -- | -- | -- | ||||||||||||
| Exercised | -- | -- | -- | -- | ||||||||||||
| Forfeited/Expired | -- | -- | -- | -- | ||||||||||||
| Options outstanding at June 30, 2020 | 90,000 | $ | 0.001 | 90,000 | $ | 0 | ||||||||||
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This quarterly report on Form 10-Q and other reports filed by EMR Technology Solutions Inc. (the “Company”) from time to time with the SEC (collectively, the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto appearing elsewhere in this report.
Overview
We intend for this discussion to provide information that will assist in understanding our financial statements, the changes in certain key items in those unaudited condensed consolidated financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our unaudited condensed consolidated financial statements.
Business Overview
The Company is a Nevada corporation incorporated on November 3, 2015 as a holding corporation focusing on the acquisition of healthcare related technology companies. The Company’s fiscal year end is December 31. To date, the Company has financed and acquired four electronic medical records companies.
Growth Strategy
Our growth strategy involves three primary approaches: acquiring electronic medical record companies and then migrating the customers of those companies to our solutions, selling our solutions directly to healthcare providers practicing in ambulatory settings, and acquiring providers of other healthcare technology services such as third-party insurance administrators and revenue cycle management companies. We intend to distribute our solutions through our websites, endorsements from medical groups and associations, and referrals from existing clients.
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Results of Operations
Revenues
For the three and six months ended June 30, 2020, revenues were $100,582 and $208,821, respectively, compared to $150,304 and $338,988 for the same periods in 2019, respectively. The decrease in revenues for the three months ended June 30, 2020 was primarily attributable to a $16,589 decrease in one-time revenues and a decrease of $33,129 in recurring revenues primarily due to the effects of COVID-19 of approximately $20,000 in decreased patient encounters and the balance from terminated accounts. The decrease in revenues for the six months ended June 30, 2020 was primarily attributable to a $61,000 decrease in one-time revenues due to fewer physician clients required to report certain patient care results to the Centers for Medicare & Medicaid Services, and a decrease of $69,100 in recurring revenues, primarily due to the effects of COVID-19 of approximately $20,000 in decreased patient encounters and the balance from terminated accounts.
Cost of Revenues
Cost of revenues were $11,868 and $24,630 for the three and six months ended June 30, 2020, respectively, compared to $22,440 and $45,715 for the same periods in 2019. The decrease in cost of revenues for the three months ended June 30, 2019, was primarily attributable to reduced revenues described above and reduced co-location facilities expense. The decrease in cost of revenues for the six months ended June 30, 2019, was primarily attributable to reduced revenues described above and reduced co-location facilities expense.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $114,276 and $252,778 for the three and six months ended June 30, 2020, respectively, compared to $223,617 and $431,506 for the same period in 2019. The decrease in selling, general and administrative expenses for the three months ended June 30, 2020, was primarily attributable to a decrease in payroll costs of $82,900, due to furloughed and terminated employees, $47,300 in decreased bonuses, and offset by an increase in legal fees of $25,000. The decrease in selling, general and administrative expenses for the six months ended June 30, 2020, was primarily attributable to a decrease in payroll costs of $107,900, due to furloughed and terminated employees, a decrease in payroll tax accruals of $33,900, $47,300 in decreased bonuses, and offset by an increase in legal fees of $38,200.
Amortization Expense
Amortization expense was $6,413 and $62,333 for the three and six months ended June 30, 2020 compared to $145,950 and $291,900 for the same period in 2019. These decreases were primarily attributable to a reduced basis for amortization due to an impairment charge of $345,000 in 2018.
Other Income/Expense
Other Expense was $38,878 and $92,778 for the three and six months ended June 30, 2020, respectively, compared to $$31,000 and $69,507 for the same periods in 2019. This was primarily due to a grant of $6,000 from the SBA Economic Injury Disaster Loan (EIDL) Advance program and offset by an increase in interest expense resulting from the factoring agreements entered into in April 2020, the PPP Loan in May 2020, and the SBA Loan in June 2020.
Net Loss
Net Loss for the three and six months ended June 30, 2020 was $$70,853 and $223,698, respectively, compared to $272,703 and $499,640 for the same periods in 2019. These decreases were primarily due to factors described above.
Liquidity and Capital Resources
The following table summarizes total current assets, liabilities and working capital at June 30, 2020 compared to December 31, 2019.
June 30, 2020 | December 31, 2019 | |||||||
| Current Assets | $ | 97,677 | $ | 31,343 | ||||
| Current Liabilities | $ | 2,339,408 | $ | 2,328,211 | ||||
| Working Capital (Deficit) | $ | (2,241,731 | ) | $ | (2,296,868 | ) | ||
As of June 30, 2020, we had a working capital deficit of ($2,241,731) as compared to working capital deficit of ($2,296,868) at December 31, 2019, an increase in working capital deficit of $55,137.
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Net cash used by operations of $88,606 increased by $92,997 for the six months ended June 30, 2020 over the same period in 2019 primarily due to a decrease in net losses in 2020 over 2019 of $275,942, amortization expense of $229,567, and a net change in operating assets and liabilities of $4,413.
Net cash provided by financing activities of $152,612 for the six months ended June 30, 2020 increased by $162,112 from $9,500 used in financing activities during the same period in 2019. This increase was primarily due to a net increase in PPP Loans of $46,700, SBA Loans of $150,000, decreases in factoring advances of $18,182, and factoring advance repayments of $16,816.
Our Auditors Have Raised Substantial Doubts as to Our Ability to Continue as a Going Concern
Our unaudited condensed consolidated financial statements have been prepared assuming we will continue as a going concern. The Company has experienced recurring losses from operations which have caused an accumulated deficit of $6,516,454 at June 30, 2020.
The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.
The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The accompanying unaudited condensed 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. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
Critical Accounting Policies and Estimates
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us 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 financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates may include those pertaining to accruals, stock-based compensation, useful lives of intangibles, and income taxes. Actual results could materially differ from those estimates.
Revenue Recognition
The Company accounts for revenue in accordance with Topic 606, which The Company adopted on January 1, 2018, using the modified retrospective method. The adoption of Topic 606 did not have a material impact on the timing or amounts of revenue recognized in our unaudited condensed consolidated financial statements and therefore did not have a material impact on our financial position, results of operations, equity or cash flows as of the adoption date or for the six months ended June 30, 2020. The Company did not recognize any cumulative-effect adjustment to retained earnings upon adoption as the impact was immaterial. Also, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.
Revenues are recognized when the Company satisfies a performance obligation by transferring control of the promised goods or services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration The Company expect to be entitled to in exchange for those goods or services. The Company also assesses our customer’s ability and intention to pay, which is based on a variety of factors including our customer’s historical payment experience and financial condition.
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The Company derives revenue from the sale of software licenses when the products are installed and all required post implementation services are completed. The Company recognizes revenue from consulting services as the services are performed. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer under Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts with customers contain a single performance obligation to provide agreed-upon products or services. For contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. In accordance with Topic 606, we do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. The timing of our performance often differs from the timing of invoicing, which results in the recording of deferred revenue. Deferred revenue will be recognized when performance obligation is satisfied.
Recent Accounting Standards
We have implemented all new accounting standards that are in effect and may impact our unaudited condensed consolidated financial statements and do not believe that there are any other new accounting standards that have been issued that might have a material impact on our financial position or results of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We do not hold any derivative instruments and do not engage in any hedging activities.
Item 4. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures.
In connection with the preparation of this Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, our Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), based on the 2013 framework and criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our PEO and PFO concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
(b) Changes in Internal Control over Financial Reporting.
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K filed with the SEC on July 31, 2020.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
As of June 30, 2020, we are in default in the payment of principal on promissory notes of $1,178,587 and the payment of promissory note interest of $147,565.
Item 4. Mine Safety Disclosures.
Not applicable.
Not applicable.
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| Exhibit No. | Description | |
| 31.1 | Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). * | |
| 31.2 | Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). * | |
| 32.1 | Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** | |
| 32.2 | Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** | |
| 101.INS | XBRL Instance Document * | |
| 101.SCH | XBRL Taxonomy Extension Schema * | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase * | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase * | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase * | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase * |
| * | Filed herewith |
| ** | Furnished herewith |
| 17 |
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.
| EMR TECHNOLOGY SOLUTIONS, INC. | ||
| Date: August 21, 2020 | By: | /s/ John X. Adiletta |
| Name: | John X. Adiletta | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
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