What changed in this filing

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Item 1. Financial Statements

2021-07-30 compared with 2021-05-14 · 98 added, 91 removed, 259 unchanged (42% of the section changed)

5 unchanged sentences

Accounts receivable, net

Prepaid assets

Total current assets

Accounts receivable, net of allowance for doubtful accounts

of $559,007 and $585,257 at March 31, 2021 and December 31,2020, respectively

of $ 559,007 and $ 585,257 at June 30, 2021 and December 31,2020, respectively

Property and equipment, net

1 unchanged sentence

Current liabilities:

Note payable to shareholder

Note payable to stockholder

Accounts payable and accrued liabilities

7 unchanged sentences

$ 0.001 par value, 250,000,000 shares authorized,

20,240,882 shares issued and outstanding at March 31, 2021 and December 31, 2020

20,240,882 shares issued and outstanding at June 30, 2021 and December 31, 2020

Additional paid-in capital

4 unchanged sentences

SPINE INJURY SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS

ENDED JUNE 30,

FOR THE SIX MONTHS

ENDED JUNE 30,

Net service revenues

Lease revenues

Total revenue

Total revenues

Cost of providing services

6 unchanged sentences

Basic/ diluted

Weighted average shares used in loss per common share:

Weighted average shares outstanding:

Basic/ diluted

1 unchanged sentence

SPINE INJURY SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31,

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS

ENDED JUNE 30,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash provided

by operating activities:

Adjustments to reconcile net loss to net cash

provided by operating activities:

Provision for bad debts, net of recoveries

Depreciation expense

5 unchanged sentences

Cash flows from financing activities:

Repayments of term loan

Repayments of note payable to shareholder

Repayment of note payable to stockholder

Proceeds of Paycheck Protection Program loan

Payments of note payable

Net cash used in financing activities

Net increase in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

4 unchanged sentences

SPINE INJURY SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY (DEFICIT)

For the Three Months Ended March 31, 2021 and 2020

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ DEFICIT

For the Six Months Ended June 30, 2021 and 2020

Stockholders’

Equity (Deficit)

Balances, December 31, 2020

Balances, March 31, 2021 (Unaudited)

Balances, June 30, 2021 (Unaudited)

Balances, December 31, 2019

Balances, March 31, 2020 (Unaudited)

No dividends were paid for the three months ended March 31, 2021 and 2020.

Balances, June 30, 2020 (Unaudited)

No dividends were paid for the six months ended June 30, 2021 and 2020.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

22 unchanged sentences

However, we continue to actively pursue the collection of previously funded procedures.

Without additional funding, there is no guarantee that we can continue as a going concern.

We own a patented device and process by which a video recording system is attached to a fluoroscopic x-ray machine, the “four camera technology,” which we believe can attract additional physicians and patients as well as provide us with additional revenue streams with our new programs designed to assist in treatment documentation.

5 unchanged sentences

Since our inception in 1998, until commencement of our spine injury diagnostic operations in August, 2009, our expenses substantially exceeded our revenue, resulting in continuing losses and an accumulated deficit from operations of $ 15,004,698 as of December 31, 2009.

Since that time, our accumulated deficit has increased $5,200,027 to $20,204,725 as of March 31, 2021.

Presently, we are trying to limit all operating expenses as much as possible.

Since that time, our accumulated deficit has increased $ 5,277,847 to $ 20,282,545 as of June 30, 2021.

Presently, we are trying to limit operating expenses to the greatest extent possible.

If in the future we decide to increase our service development, marketing efforts and/or brand building activities, we will need to increase our operating expenses and our general and administrative functions to support such growth in operations.

No such growth in operations is presently planned.

We are also actively seeking a private company with which to enter into a strategic business transaction, including without limitation a merger;

We are also actively seeking a private company with which to enter into a strategic business transaction, including a merger;

however, we cannot predict the ultimate outcome of our efforts.

Our continued existence is dependent upon our ability to successfully merge with a financially viable company, or our ability to increase revenue from services and obtain additional capital from borrowing and selling securities, as needed, to fund our operations.

Our continued existence is dependent upon our ability to successfully merge with a financially viable company, or our ability to increase revenue from services and obtain additional capital from borrowing and sales of our equity securities, as needed, to fund our operations.

There is no assurance that additional capital can be obtained or that it can be obtained on terms that are favorable to us and our existing stockholders.

2 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the fourth quarter of 2018, the decision was made to discontinue our involvement in future medical procedures due to our cash position, which also hampered our ability to pay back existing debt to Wells Fargo Bank, N.A.

and a current director and shareholder (see Note 5—Note Payable).

We were not involved in any procedures in 2021 and 2020 and will not do so unless we can access additional capital.

The previous service revenue we have earned has resulted in longer settlement times, which has created a slowdown in cash collections.

During the fourth quarter of 2018, the decision was made to discontinue our involvement in future medical procedures due to our limited cash position, which hampers our ability to pay back existing debt to a current director and stockholder (see Note 5—Term Loan).

We were not involved in any procedures in 2021 and 2020, and will not resume procedures unless we can access additional capital.

The service revenue we previously earned has resulted in longer settlement times and a slowdown in cash collections.

Additionally, our efforts to establish a market for the Quad Video Halo has not met our expectations, and we have cut back its development and operations.

1 unchanged sentence

We are actively pursuing a merger with a private company where they become the controlling company.

We find this the best course of action for our shareholders.

We find this the best course of action for our stockholders.

Further, the COVID-19 pandemic has made it difficult for us to collect our accounts receivable, as attorney and medical offices are closed resulting in delayed settlements and medical procedures being canceled, which affects our lease revenue.

8 unchanged sentences

These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2020 Annual Report as filed on Form 10-K.

In the opinion of management, all adjustments, including normal recurring adjustments necessary to present fairly our financial position with respect to the interim condensed consolidated financial statements and the results of its operations for the interim period ended March 31, 2021, have been included.

The results of operations for interim periods are not necessarily indicative of the results for a full year.

23 unchanged sentences

Patients were billed at the normal billing amount, based on national averages, for a particular CPT code procedure during the year ended December 31, 2018 and prior years.

We recorded no revenue related to medical diagnostic services provided during the three months ended March 31, 2021 and 2020, and revenue presented represents adjustments of variable consideration received for procedures performed in years prior to 2019.

We recorded no revenue related to medical diagnostic services provided during the three or six months ended June 30, 2021 and 2020, and revenue presented represents adjustments of variable consideration received for procedures performed in years prior to 2019.

Service revenue and corresponding accounts receivable are recognized by reference to “net revenue” and “accounts receivable, net” which is defined as gross amounts billed using CPT codes (“gross revenue”) less account discounts that are expected to result when individual cases are ultimately settled, which is the variable consideration associated with this revenue stream.

4 unchanged sentences

These revenues are recognized on a straight-line basis over the term of the lease.

As of March 31, 2021, the Company’s leases consisted solely of operating leases.

As of June 30, 2021, the Company’s leases consisted solely of operating leases.

As stated previously, we are uncertain on the effects of the COVID-19 pandemic on our lease revenue going forward.

10 unchanged sentences

Long-Lived Assets

We periodically review and evaluate long-lived assets such as intangible assets, when events and circumstances indicate that the carrying amount of these assets may not be recoverable.

We periodically review and evaluate long-lived assets, including intangible assets, when events and circumstances indicate that the carrying amount of these assets may not be recoverable.

In performing our review for recoverability, we estimate the future cash flows expected to result from the use of such assets and its eventual disposition.

1 unchanged sentence

Measurement of the impairment loss is based on the excess of the carrying amount of such assets over the fair value calculated using discounted expected future cash flows.

At March 31, 2021, no impairment of long-lived assets was determined to have occurred.

As of and for the six and three months ended June 30, 2021, no impairment of long-lived assets was determined to have occurred.

SPINE INJURY SOLUTIONS, INC.

1 unchanged sentence

Concentrations of Credit Risk

Assets that expose us to credit risk consist primarily of cash and accounts receivable.

Assets that expose us to credit risk consist primarily of accounts receivable.

Our accounts receivable are from a diversified customer base and, therefore, we believe the concentration of credit risk is minimal.

1 unchanged sentence

We record a discount based on the nature of our business, collection trends, and an assessment of our ability to fully realize amounts billed for services.

Additionally, we have established an allowance for doubtful accounts in the amount of $559,007 and $585,257, at March 31, 2021 and December 31, 2020, respectively.

Additionally, we have established an allowance for doubtful accounts in the amount of $ 559,007 and $ 585,257 , at June 30, 2021 and December 31, 2020, respectively .

Stock Based Compensation

1 unchanged sentence

Under authoritative guidance issued by the Financial Accounting Standards Board (“FASB”), companies are required to estimate the fair value or calculated value of share-based payment awards on the date of grant using an option-pricing model.

The value of awards that are ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statements of operations.

The value of awards that are ultimately expected to vest is recognized as expense over the requisite service periods in our condensed consolidated statements of operations.

We use the Black-Scholes Option Pricing Model to determine the fair-value of stock-based awards.

During the three months ended March 31, 2021 and 2020, we did not recognize compensation expense for issuances of our common stock in exchange for services.

During the three and six months ended June 30, 2021 and 2020, we did not issue any of our common stock in exchange for services.

We account for income taxes in accordance with the liability method.

13 unchanged sentences

Estimated interest and penalties, if any, are recognized as income tax expense and tax credits as a reduction in income tax expense.

For the three months ended March 31, 2021 and 2020, we recognized no estimated interest or penalties as income tax expense.

For the three and six months ended June 30, 2021 and 2020, we recognized no estimated interest or penalties as income tax expense.

Legal Costs and Contingencies

7 unchanged sentences

Net loss per common share is presented in accordance with ASC Topic 260, “Earnings per Share,” for all periods presented.

During the three months ended March 31, 2021 and 2020, common stock equivalents from outstanding stock options, warrants and convertible debt have been excluded from the calculation of the diluted earnings (loss) per share in the consolidated statements of operations, because all such securities were anti-dilutive.

During the three and six months ended June 30, 2021 and 2020, common stock equivalents from outstanding stock options, warrants and convertible debt have been excluded from the calculation of the diluted earnings (loss) per share in the condensed consolidated statements of operations, because all such securities were anti-dilutive.

The loss per share is calculated by dividing the net loss by the weighted average number of shares outstanding during the periods.

7 unchanged sentences

2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.

2016-13 is effective for annual periods beginning after December 15, 2020, with early application permitted in annual periods beginning after December 15, 2018.

2016-13 was initially effective for annual periods beginning after December 15, 2020, with early application permitted in annual periods beginning after December 15, 2018.

In November 2019, the FASB issued ASU 2019-10 which amended the effective date for small reporting companies to fiscal years beginning after December 15, 2022.

The amendments of ASU No.

2 unchanged sentences

2016-13 on the Company’s consolidated financial position, results of operations and disclosures.

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which is optional guidance related to reference rate reform that provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued.

This guidance is effective immediately but is only available through December 31, 2022.

The Company does not expect this standard to have a material impact on its condensed consolidated financial statements.

ACCOUNTS RECEIVABLE

5 unchanged sentences

While we do collect 100% of the accounts on some patients, our historical collection rate is used to calculate the carrying balance of the accounts receivable and the estimated revenue to be recorded.

A discount rate of 48%, based on payment history, was used to reduce revenue to 52% of CPT code billings (“gross revenue”) during the three months ended March 31, 2021.

A discount rate of 48 %, based on payment history, was used to reduce revenue to 52 % of CPT code billings (“gross revenue”) during the six months ended June 30, 2021.

The patients who receive medical services at the diagnostic centers are typically patients involved in auto accidents or work injuries.

6 unchanged sentences

however, collections occur upon settlement or judgment of cases.

As of March 31, 2021 and December 31, 2020, we determined an allowance for uncollectable accounts of $559,007 and $585,257, respectively, was needed for those customer accounts whose collections appear doubtful.

SPINE INJURY SOLUTIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2021 and December 31, 2020, we determined an allowance for uncollectable accounts of $ 559,007 and $ 585,257 , respectively, was needed for those customer accounts whose collections appear doubtful.

On August 31, 2020, Peter L.

4 unchanged sentences

The secured promissory note bears interest of 6 % per year with monthly payments of interest only due until maturity, when all unpaid interest and principal is due.

This note is collateralized by all our accounts receivable and a pledge of the stock of our wholly owned subsidiary, Quad Video Halo, Inc.

The secured promissory note balance was $470,000 and $490,000 at March 31, 2021 and December 31, 2020, respectively.

During the three months ended March 31, 2021, the Company recorded $6,765 in interest expense on the Dalrymple note, representing all interest due through that date.

This note is collateralized by all of our accounts receivable and a pledge of the stock of our wholly owned subsidiary, Quad Video Halo, Inc.

The secured promissory note balance was $ 450,000 and $ 490,000 at June 30, 2021 and December 31, 2020, respectively.

SPINE INJURY SOLUTIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three and six months ended June 30, 2021, the Company recorded $ 6,925 and $ 13,690 , respectively, in interest expense on the Dalrymple note, representing all interest due through that date.

STOCKHOLDERS ’ EQUITY

The total number of authorized shares of our common stock is 250,000,000 shares, $ 0.001 par value per share.

As of March 31, 2021, there were 20,240,882 common shares issued and outstanding.

We did not issue any shares of common stock for the quarter ended March 31, 2021.

On January 19, 2021, our stockholders approved the filing of an amendment to our certificate of incorporation authorizing 10,000,000 shares of preferred stock with a par value of $0.001 per share.

As of June 30, 2021, there were 20,240,882 common shares issued and outstanding.

We did not issue any shares of common stock for the three and six months ended June 30, 2021.

On January 19, 2021, our stockholders approved the filing of an amendment to our certificate of incorporation to increase our authorized common stock from 50,000,000 to 250,000,000 shares, and to authorize 10,000,000 shares of preferred stock, par value of $ 0.001 per share.

Such amendment was filed on January 20, 2021.

We did not issue any shares of preferred stock for the quarter ended March 31, 2021.

We have not made a provision for income taxes for the three months ended March 31, 2021 or 2020, which reflects our valuation allowance established against our benefits from net operating loss carryforwards.

Such amendment was filed on January 20, 2021.

We did not issue any shares of common stock or preferred stock for the three and six months ended June 30, 2021.

We have not made a provision for income taxes for the three and six months ended June 30, 2021 or 2020, which reflects our valuation allowance established against our benefits from net operating loss carryforwards.

LEASE REVENUES

6 unchanged sentences

Initial lease terms vary in length based upon customer needs and generally range from twelve to thirty-six months.

Customer have the option to keep equipment on rent beyond the initial lease term on a one-year successive term that auto renews unless canceled by the customer.

Customers have the option to keep equipment on rent beyond the initial lease term on a one-year successive term that auto renews unless canceled by the customer.

All of the Company’s rental products have long useful lives relative to the typical rental term with the original investment typically recovered in approximately five years .

1 unchanged sentence

The Company’s lease agreements do not contain residual value guarantees or restrictive covenants.

All of the Company’s outstanding lease contracts as of March 31, 2021, are scheduled to mature in 2021 with expected operating lease payments to be received totaling approximately $40,000.

Included in property and equipment, net, as of March 31, 2021 and December 31, 2020 is equipment available for rent in the amount of $7,354 and $10,959, respectively.

All of the Company’s outstanding lease contracts as of June 30, 2021, are scheduled to mature during the remainder of 2021 with expected operating lease payments to be received totaling approximately $ 16,000 .

Included in property and equipment, net, as of June 30, 2021 and December 31, 2020 is equipment available for rent in the amount of $ 3,749 and $ 10,959 , respectively.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

3 unchanged sentences

Management Overview

Shareholder Meeting

On January 19, 2021, we held an Annual Meeting of Stockholders of Spine Injury Solutions, Inc.

at our corporate offices.

In addition to electing our current directors, ratifying our independent registered accounting firm and approving a non-binding advisory resolution on executive compensation, stockholders approved the following proposals:

The filing of an amendment to our certificate of incorporation to increase the number of authorized shares of common stock from 50,000,000 to 250,000,000;

The filing of an amendment to our certificate of incorporation to increase the number of authorized shares of preferred stock from none to 10,000,000;

Authorizing our board of directors, without further stockholder approval, to effect a reverse stock split of all our outstanding common stock, by the filing of a certificate of amendment to our certificate of incorporation with the Secretary of State of Delaware, in a ratio of between one-for-two and one-for-1,000, with our board of directors having the discretion as to whether or not the reverse split is to be effected, and with the exact exchange ratio of any reverse split to be set at a whole number within the above range as determined by the board of directors in its sole discretion, at any time before the earlier of (a) January 19, 2022;

and (b) the date of our next annual meeting of stockholders;

A certificate of amendment was filed with the Secretary of State of Delaware on January 20, 2021 to effect the increase in the number of shares of common and preferred stock.

The board of directors has not yet effected a reverse stock split as of the date of this quarterly report, and has no present plans to do so.

During the fourth quarter of 2018, the decision was made to discontinue involvement in future medical procedures due to our cash position, which also hampers our ability to pay back existing debt to a current director and shareholder.

We did not perform any procedures in 2021 thus far or 2020 and will not do so unless we can access additional capital.

The service revenue we have earned has resulted in longer settlement times, which has created a slowdown in cash collections.

During the fourth quarter of 2018, the decision was made to discontinue involvement in future medical procedures due to our limited cash position, which also hampers our ability to pay back existing debt to a current director and stockholder.

We did not perform any procedures in 2021 thus far or in 2020 and will not resume procedures unless we can access additional capital.

The service revenue we previously earned has resulted in longer settlement times and a slowdown in cash collections.

Additionally, despite our efforts to establish a market for the Quad Video Halo, such market has not met our expectations and we have cut back its development and operations.

2 unchanged sentences

We are actively pursuing a merger with a private company where they become the controlling company.

We find this to be the best course of action for our shareholders.

We find this to be the best course of action for our stockholders.

Additionally, the COVID-19 pandemic has made it difficult for us to collect our accounts receivable, as attorney and medical offices are closed resulting in delayed settlements and medical procedures being canceled, which affects our lease revenue.

We are uncertain how this pandemic will affect our ability to collect in the future or its overall effect on our lease revenue.

Comparison of the three-month period ended March 31, 2021 with the three month-period ended March 31, 2020.

The revenue for the three months ended March 31, 2021 consisted of $4,818 related to excess collections for previously funded procedures coupled with $26,073 in lease revenues.

The revenue for the three months ended March 31, 2020 consisted of $29,948 related to excess collections for previously funded procedures coupled with $25,873 in lease revenues.

For the three months ended March 31, 2021 and 2020, we were not involved in any new procedures with spine injury diagnostic centers.

During the three months ended March 31, 2021, we incurred $90,671 of operating, general and administrative expenses compared to $84,448 for the same period in 2020.

Operating, general and administrative expenses were higher for the 2021 quarter compared to 2020 primarily because of a decrease of $36,000 in recoveries on accounts previously written off which are treated as a credit to operating expenses, partially offset by decreases in payroll ($16,000), consulting fees ($13,000) and insurance expense ($6,000).

As a result of the foregoing, we had net loss of $66,543 for the three months ended March 31, 2021, compared to a net loss of $36,577 for the three months ended March 31, 2020.

Results of Operations

The unaudited financial statements for the six months ended June 30, 2021 and 2020 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q.

In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2021 and the results of operations and cash flows for the three and six months ended June 30, 2021 and 2020.

The results for the three and six months ended June 30, 2021 is not necessarily indicative of the results to be expected for any subsequent quarter or of the entire year ending December 31, 2021.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations.

These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2020 as included in our previously filed report on Form 10-K.

Comparison of the three-month period ended June 30, 2021 with the three month-period ended June 30, 2020.

The revenue for the three months ended June 30, 2021 of $29,160 consisted of $26,073 of QVH leasing revenue, and $3,087 related to excess collections for previously funded procedures.

The revenue for the three months ended June 30, 2020 of $53,422 consisted of $17,922 of QVH leasing revenue, and $35,500 related to excess collections for previously funded procedures

During the three months ended June 30, 2021, we incurred $100,103 of operating, general and administrative expenses compared to $179,284 for the same period in 2020.

Operating, general and administrative expenses were lower for the 2021 quarter compared to 2020 primarily because of decreases of $66,887 in bad debt expense coupled with a decrease of $18,124 in payroll expenses.

As a result of the foregoing, we had net loss of $77,820 for the three months ended June 30, 2021, compared to a net loss of $130,269 for the three months ended June 30, 2020.

Comparison of the six-month period ended June 30, 2021 with the six month period ended June 30, 2020.

The revenue for the six months ended June 30, 2021 of $60,051 consisted of $52,146 of QVH leasing revenue, and $7,905 related to excess collections for previously funded procedures.

Revenue for the six months ended June 30, 2020 of $109,243 consisted of $43,795 of QVH leasing revenue, and $65,448 related to excess collections for previously funded procedures

During the six months ended June 30, 2021, we incurred $190,774 of operating, general and administrative expenses compared to $263,732 for the same period in 2020.

The decrease is attributable to decreases in payroll expenses of approximately $50,000, consulting expense of $8,000, legal fees of $10,000, bad debt expense net of recoveries of $13,000, computer expenses of $10,000, rent expenses of $4,000 coupled with increase of other expense of approximately $20,000.

As a result of the foregoing, we had a net loss of $144,363 for the six months ended June 30, 2021, compared to a net loss of $166,846 for the six months ended June 30, 2020.

Liquidity and Capital Resources

For the three months ended March 31, 2021, cash provided in operations was $32,593 which primarily included collections of accounts receivable of $112,945, partially offset by the net loss of $66,543.

For the three months ended March 31, 2020, cash provided in operations was $205,629 which primarily included collections of accounts receivable of $235,480, decreases in prepaid expenses of $8,306, and accounts payable of $6,541, along with non-cash depreciation expenses totaling $4,961.

Cash used in financing activities consisted of repayments on our note payable to shareholder of $20,000 during the three months ended March 31, 2021 and repayments on our term note of $205,000 during the three months ended March 31, 2020.

For the six months ended June 30, 2020, cash provided in operations was $14,729 which primarily included decreases in accounts receivable of $183,357, increases in prepaid expenses of $7,500, and decreases in accounts payable and accrued liabilities of $24,425, along with non-cash operating expenses totaling $7,210.

For the six months ended June 30, 2020, cash provided in operations was $329,827 which primarily included decreases in accounts receivable of $485,055, decreases in prepaid expenses of $10,308, and decreases in accounts payable and accrued liabilities of $32,298, along with non-cash operating expenses totaling $33,608.

Cash used in financing activities in 2021 consisted of $40,000 paid on a note to a stockholder.

Cash used in financing activities for the six months ended June 30, 2020 consisted of repayments on our term loan in the amount of $415,000 coupled with the proceeds of $64,097 related to our Paycheck Protection Program (PPP) loan.

Going Concern Considerations

Since our inception in 1998, until commencement of our spine injury diagnostic operations in August 2009, our expenses substantially exceeded our revenue, resulting in continuing losses and an accumulated deficit from operations of $15,004,698 as of December 31, 2009.

Since that time, our accumulated deficit has increased $5,200,027 to $20,204,725 as of March 31, 2021.

During the three months ended March 31, 2021, we realized net revenue of $30,891 and net loss of $66,543.

Since that time, our accumulated deficit has increased $5,277,847 to $20,282,545 as of June 30, 2021.

During the six months ended June 30, 2021, we realized net revenue of $60,051 and incurred a net loss of $144,363.

Successful business operations and our ability to generate cash flows from operations, sufficient to meet our debt obligations are dependent upon obtaining additional financing and achieving a level of collections adequate to support our cost structure.

Considering the nature of our business, we are not generating immediate liquidity and sufficient working capital within a reasonable period of time to fund our planned operations and strategic business plan through March 31, 2022.

There can be no assurances that there will be adequate financing available to us.

Additionally, during the fourth quarter of 2018, the decision was made to discontinue involvement with future medical procedures due to our cash position, which also hampers our ability to pay back our current shareholder (see Note 5—Note payable).

We were not involved with any procedures in 2021 or 2020 and will not do so unless we can access additional capital.

The service revenue we have earned has resulted in longer settlement times, which has created a slowdown in cash collections.

We were not involved in any procedures in 2021 or 2020 and will not resume procedures unless we can access additional capital.

The service revenue we previously earned has resulted in longer settlement times and a slowdown in cash collections.

Additionally, despite our efforts to establish a market for the Quad Video Halo, such market has not met our expectations and we have cut back its development and operations.

If we are unable to access additional capital in the near future, these recent developments could have a material negative impact on our financial performance and could have a material adverse effect on our results of operations and financial condition.

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern.

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern.

This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business.

The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

The unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements