PREAXIA HEALTH CARE PAYMENT SYSTEMS INC. General Overview Corporate Overview
The Company primarily undertakes its operations through its wholly-owned
subsidiary,
General Overview
PreAxia Payment is a company which intends to deliver a comprehensive suite of solutions and services directed at the emerging health payment market, specifically the opportunities tied to the growth of health spending accounts ("HSA"). There is a rapid shift in healthcare traditional payment models to consumer-directed healthcare that is creating significant opportunities for financial services and insurance industries to deliver new dynamic products to this emerging market.
Spawned by the need to address escalating health care costs, changes in the
regulatory environment and the growing consumer desire for greater participation
in the management of their health benefits, the boundaries between health care
and the financial services industries are becoming increasingly blurred. With
the trend towards self-directed health payment solutions and the growing demand
for faster, easier and more convenient benefit services, the insurance and
benefits industries are banking on HSA medical payments being their next big
growth conduit. Studies suggest that HSAs in the US reached
Plan of Operation
Over the next twelve months, we plan to:
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(a) Raise additional capital to execute our business plans;
(b) Penetrate the health care processing markets in Canada , the United
States and worldwide, by continuing to develop innovative health care
processing products and services;
(c) Build up a network of strategic alliances with several types of health
insurance companies, governments and other alliances in various vertical
markets, and;
(d) Fill the positions of senior management sales, administrative and
engineering positions.
Liquidity and Capital Resources
As of
Our ability to meet our financial liabilities and commitments is primarily
dependent upon the continued issuance of equity to new stockholders and our
ability to achieve and maintain profitable operations. PreAxia's cash and cash
equivalents will not be sufficient to meet its working capital requirements for
the next twelve-month period. We will not initially have any cash flow from
operating activities as we are in the startup stage. We project that we will
require an estimated
There are no assurances that we will be able to obtain funds required for our continued operations. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business.
There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful and sufficient market acceptance of our products and achieving a profitable level of operations. The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. The Company is unable to predict the effect, if any, that the coronavirus COVID-19 global pandemic may have on its access to the financing markets. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
Our working capital (deficit) as ofMay 31, 2022 and 2021 is summarized as follows: Working Capital May 31, May 31, 2022 2021 Current Assets$ 259 $ 40 Current Liabilities (2,140,723 ) (1,959,861 ) Working Capital (Deficit)$ (2,140,464 ) $ (1,959,821 )
The increase in our working capital deficit of
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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, capital expenditures or capital resources that is material to stockholders.
Results of Operations - Years ended
The following summary of our results of operations should be read in conjunction
with our consolidated financial statements for the year ended
For the years ended
Our operating results for the year ended
Revenue
During the years ended
Expenses
Our total expenses for the year ended
Consulting Fees
During each of the years ended
Research and Development
Research and development expenses during the year ended
Wages and Benefits
There were no wages and benefits during the years ended
Office and Administration
Office and administration expenses increased by
Professional Fees
Professional fees during the year ended
Interest Expense
Interest expense is
Critical Accounting Policies
We have identified certain accounting policies, described below, that are the most important to the portrayal of our current financial condition and results of operations. Please refer to Note 2 of the accompanying consolidated financial statements for a full and complete disclosure of our accounting policies.
Revenue Recognition
In accordance with ASC 606, "Revenue from Contracts with Customers," revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation.
Gross Versus Net Revenue 10
ASC 606 provides guidance on proper recognition of principal versus agent considerations which is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controls the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party.
The Company provides administrative services for Health Spending Accounts sponsored by employers (the "customer"). The Company does not take possession of goods or control the services provided as the employees of customer are free to determine their health care provider. As such, the Company records revenue net of reimbursements to employees. The Company's services to the customer consist of reviewing medical costs for eligibility and reimbursing employees for eligible costs.
Software Development Costs
The Company accounts for software development costs in accordance with several
accounting pronouncements, including FASB ASC 730, "Research and Development,"
FASB ASC 350-40, "
Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs. Additionally, costs incurred after determination of readiness for market have been expensed as research and development.
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