CARECLIX HOLDINGS, INC. Forward-Looking Statements and Associated Risks.
This Form 10-K contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may", "will", "expect", "believe", "anticipate", "estimate, or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.
PLAN OF OPERATIONS
Our telemedicine heritage began with the development of our software application
"CareClix®" in 2012. The software was created by two board certified practicing
physicians who shared a vision for improving medicine through technology. They
created a software platform that allows medical professionals to connect to
patients virtually - from anywhere, at any time. The Company joined that growth
journey in
CareClix® is a telemedicine platform that enables provider groups of various sizes-from hospital systems to multi-specialty groups--to virtualize their existing brick and mortar entities. CareClix® enables them to provide virtual consultations with patients anywhere through the means of observational consultations all the way to leveraging handheld devices, virtual devices, and diagnostic devices-- regardless of where they patient is located. CareClix® compliments its virtual clinics with its own medical staff who can be utilized to create a full spectrum of medical services for our customer's patient populations within the US or across the globe. We customize our services to our customers exact specifications. Our customer can mix and match, add or delete, a wide range of technologies, medical services, or wellness services. CareClix® can match the transparency to our customers or partner's comfort level. CareClix® empowers providers to grow their practice, their brand, their revenue, and accomplish the mission of their organization.
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Currently, CareClix provides telemedicine in more than 30 countries around the world. We have local credentialed providers, local resellers, and local clients and customers in over 30 countries, and we are rapidly expanding our global footprint.
The Company is also launching a direct-to-consumer offering called "My CareClix" via website at www.mycareclix.com. This offering will allow consumers direct access to primary care, specialty care and behavior health.
The Company is also launching a chronic care remote patient monitoring program. At its essence, the program is a turn-key program for providers to offer their patients monitoring at no cost to the provider or patient, although many custom programs will be created. The functionality exists to provide custom programs for providers, health systems and employers.
CareClix is a leading telemedicine provider in the corrections space. Through key partnerships and relationships, CareClix provides telemedicine services to those incarcerated saving time and money for the health system and providing better care for the inmate patient.
We are currently working with our over 200 independent account executives to expand its footprint to: health programs, employer groups, third-party administrators, multi-specialty provider groups, ACOs, governments, post-acute care facilities, and hospitals. We have entered into an agreement with a major international benefits management company to provide our CareClix telemedicine services to employees of multiple international companies.
In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) expansion of telehealth operations internationally; (ii) increased sales and staff division; and (iii) marketing expenses. We intend to finance these expenses with increased revenues, further issuances of securities, and shareholder loans. Thereafter, we expect we will need to raise additional capital and generate additional revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business growth.
In
We commenced a second offering of convertible notes in
Our current business plan will require additional working capital to expand our
business operations and staff, which required an additional funding event
beginning at the end of the 2020 fiscal year. A third convertible note offering
currently has raised in excess of
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any assurances that we will be able to raise such funds or whether we would be able to raise such funds with terms that are favorable to us.
Company leadership has developed a direct-to-consumer product in response to the increased demand for telemedicine. The new product is called, "MyCareClix" and was launched in late 2020. MyCareClix is a product for individuals who are seeking telemedicine for themselves.
The Company has launched a Chronic Care Remote Patient Monitoring program targeting providers and provider groups with a turn-key solution for their Medicare patients.
In early 2020, we established an independent reseller team with a performance-based compensation plan. We have built a team of over 200 sales professionals as independent resellers and account executives. We expect significant growth as we seek to help fill the enormous demand for telehealth services across the globe. Our pipeline continues to grow.
RESULTS OF OPERATIONS FOR THE YEAR ENDED
Revenue
We recognized net revenue of
Cost of Revenue
Cost of revenue consisted of product costs, service costs, an inventory
impairment charge and fulfillment fees for supplement sales through the internet
of
Stock-based Compensation Expenses
We recognized stock-based compensation expenses of
General and Administrative Expenses
During the year ended
Other Income / (Expenses) Net
Interest expense was
Net Loss
During the year ended
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LIQUIDITY AND CAPITAL RESOURCES
We had cash on hand of
Liabilities consisted of accounts payable of trade creditors of
There can be no assurance that we will have adequate capital resources to fund planned expansions or that any additional funds will be available to us when needed or at all, or, if available, will be available on favorable terms or in amounts required by us. If we are unable to obtain adequate capital resources to fund expansions, we may be required to delay, scale back or eliminate some or all of our planned expansion, which may have a material adverse effect on our future business, results of operations and ability to operate as a going concern.
Our revenues from operations increased in the year 2020 by nearly four times over 2019 and we anticipate a similar substantial growth in fiscal 2021 We have also commenced a third round of financing in late 2020 to support our technology development.
In evaluating the Company's ability to continue as a going concern, management
considered the conditions and events that could raise substantial doubt
regarding the Company's ability to continue as a going concern within 12 months
after the Company's financial statements were issued (
The Company is subject to a number of risks similar to those of other Telehealth companies, healthcare consulting companies and subscription based businesses, including its dependence on outside sources of capital, the Company's ability to maintain and grow its subscriber base, uncertainty of generation of revenues and positive cash flow, dependence on key individuals, risks associated with research, development, testing, and successful protection of intellectual property, and the Company's susceptibility to infringement on the proprietary rights of others. The attainment of profitable operations is dependent on future events, including obtaining adequate financing to fulfill the Company's growth and operating activities and generating a level of revenues adequate to support the Company's cost structure.
The Company has experienced net losses and significant cash outflows from cash
used in operating activities over the past years. As of and for the year ended
In the past the Company has financed operations through loans from an Officer of the Company and two private offerings of convertible debt. The Company also plans to support its operations by continuing to raise the additional capital until the planned operating results are achieved. The Company business plan calls for significant expansions of the current business and consideration of potential mergers and additional funding will be required to support these expansion efforts.
The Company is unable to predict the extent of any future losses or when the Company will become profitable. Any debt financing, if available, may include potential restrictive covenants that impact the Company's ability to conduct business. If the Company is unable to raise additional capital when required or on acceptable terms, the Company may have to (i) significantly scale back its current operations or (ii) relinquish or otherwise dispose of rights to technologies or products on unfavorable terms. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect.
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Without raising additional capital there is substantial doubt about the
Company's ability to continue as a going concern through
Use of Cash:
Year Ended Year Ended
December 31, 2019 December 31, 2018
(1,000,000 ) -
Net Cash Provided by Financing Activities 1,828,632 63,279
Net Increase (Decrease) in Cash $ 6,883 $ (4,775 )
Operating Activities
Related party payable increased by
Investing Activities
We incurred
Financing Activities
During the year ended
CRITICAL ACCOUNTING POLICIES
All companies are required to include a discussion of critical accounting policies and estimates used in the preparation of their financial statements. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Our significant accounting policies are described in Note 1 to our Financial Statements. These policies were selected because they represent the more significant accounting policies and methods that are broadly applied in the preparation of our financial statements. However, it should be noted that we may acquire a new operating business. The critical
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accounting policies and estimates for such new operations will, in all likelihood, be significantly different from our current policies and estimates.
Inflation
In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future. Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.
Off-Balance Sheet Arrangements
Per
Accounting for Acquisitions
In accordance with the guidance for business combinations, we determine whether a transaction or other event is a business combination, which requires that the assets acquired, and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, we account for the transaction or other event as an asset acquisition. Under both methods, we recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, we evaluate the existence of goodwill or a gain from a bargain purchase. We capitalize acquisition-related costs and fees associated with asset acquisitions and immediately expense acquisition-related costs and fees associated with business combinations.
Income Taxes
The Company accounts for income taxes under FASB ASC 740 "INCOME TAXES." Under the asset and liability method of FASB ASC 740, deferred tax asset and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax basis. 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 FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax asset if it is more likely than not that the Company will not realize tax assets through future operations.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized. The Company has incurred losses
for financial-reporting and tax-reporting purposes since inception. Accordingly,
for federal and state income tax purposes, the benefit for income taxes has been
offset entirely by a valuation allowance against the related federal and state
deferred tax asset for the years ended
CRITICAL ACCOUNTING POLICIES
Our significant accounting policies are disclosed in Note 1 of our Financial Statements included elsewhere in this Form 10-K.
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