What changed in this filing

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Item 1. Financial Statements

2021-11-12 compared with 2021-07-30 · 104 added, 94 removed, 263 unchanged (43% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30,

Current assets:

Cash and cash equivalents

Accounts receivable, net

Prepaid assets

Total current assets

Accounts receivable, net of allowance for doubtful accounts

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

Accounts receivable, net of allowance for doubtful accounts of $ 496,289 and

$ 585,257 at September 30, 2021 and December 31, 2020, respectively

Property and equipment, net

1 unchanged sentence

Current liabilities:

Note payable to stockholder

Note payable to shareholder

Accounts payable and accrued liabilities

6 unchanged sentences

Common stock:

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

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

$ 0.001 par value, 250,000,000 shares authorized, 20,240,882 shares issued and outstanding at both September 30, 2021 and December 31, 2020

Additional paid-in capital

4 unchanged sentences

SPINE INJURY SOLUTIONS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS

ENDED JUNE 30,

FOR THE SIX MONTHS

ENDED JUNE 30,

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED

SEPTEMBER 30,

FOR THE NINE MONTHS ENDED

SEPTEMBER 30,

Net service revenues

Lease revenues

Total revenues

Total revenue

Cost of providing services

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Total other income and (expense)

Net income (loss)

Net loss per common share:

4 unchanged sentences

SPINE INJURY SOLUTIONS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS

ENDED JUNE 30,

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED

SEPTEMBER 30,

Cash flows from operating activities:

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Changes in operating assets and liabilities:

Accounts receivable, net

Accounts receivable

Prepaid expenses and other assets

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Cash flows from financing activities:

Repayment of note payable to stockholder

Proceeds of Paycheck Protection Program loan

Payments of note payable

Payments of note payable to a bank

Payments of note payable to shareholder

Net cash used in financing activities

4 unchanged sentences

Interest paid

Non-cash investing and financing activities:

Exchange of note payable to a bank for note payable to shareholder

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

SPINE INJURY SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ DEFICIT

For the Six Months Ended June 30, 2021 and 2020

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

For the nine months ended September 30, 2021 and 2020

Stockholders’

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Balances, June 30, 2021 (Unaudited)

Balances, September 30, 2021 (Unaudited)

Balances, December 31, 2019

1 unchanged sentence

Balances, June 30, 2020 (Unaudited)

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

Balances, September 30, 2020 (Unaudited)

No dividends were paid for the nine months ended September 30, 2021 and 2020.

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

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We assist the centers that provide the spine diagnostic injections and treatment and pay the doctors a fee for the medical procedures they performed.

After a patient is billed for the procedures performed by the affiliated doctor, we take control of the patients’ unpaid bill and oversee collection.

After a patient is billed for the procedures performed by the affiliated doctor, we take control of the patient’s unpaid bill and oversee collection.

In most instances, the patient is a plaintiff in an accident case, where the patient is represented by an attorney.

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Once we are paid, the patient’s attorney can receive payment for his or her legal fee.

During the fourth quarter of 2018, the decision was made to discontinue funding future medical procedures due to our cash position, and we have not funded any procedures in 2021 and 2020 and will not do so unless we can access additional capital.

During the fourth quarter of 2018, the decision was made to discontinue our involvement in future medical procedures due to our cash position, and we were not involved in any procedures in 2021 and 2020 and will not do so unless we can access additional capital.

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

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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 $ 5,277,847 to $ 20,282,545 as of June 30, 2021.

Since that time, our accumulated deficit has increased $ 5,252,769 to $ 20,257,467 as of September 30, 2021.

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

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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 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.

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

Any expectation of future profitability is dependent upon our ability to expand and develop our business, of which there can be no assurances.

1 unchanged sentence

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 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.

During the fourth quarter of 2018, the decision was made to discontinue our involvement in future medical procedures due to our cash position, which hampered 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 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.

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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.

As an alternative, we are also exploring possible strategic business transactions with third party companies.

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 stockholders.

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

In July 2021, a private company signed a letter of intent to acquire us.

In connection with the agreement, it paid $ 66,500 as a deposit to be applied to the total purchase price upon closing.

Prior to the expiration date provided in the letter of intent, the agreement was terminated in September 2021.

Upon termination of the agreement, $ 35,000 of the down payment was released to us and recognized as other income in the accompanying condensed consolidated statements of operations.

The remaining $ 31,500 was held in trust at September 30, 2021 and was released to us in the fourth quarter of 2021.

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.

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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 June 30, 2021, have been included.

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

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accordingly, it is possible that the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of our financial position and results of operations .

SPINE INJURY SOLUTIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

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Additionally, the Company’s QVH rental revenues are accounted for under ASC 842, Leases.

SPINE INJURY SOLUTIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Service and Product Sale Revenue Recognition

Historically, our net revenues included service revenues that arose from the delivery of medical diagnostic services provided to patients by medical professionals at spine injury diagnostic centers, only after the patients completed and signed required medical and financial paperwork.

Historically, our net revenues included service revenues that arose from the delivery of medical diagnostic services provided to the patient by medical professionals at the spine injury diagnostic centers, only after the patient completed and signed required medical and financial paperwork.

Service revenues were recorded as net patient service revenues based on variable consideration elements further described below and in Note 4.

While we did collect 100% of the accounts on certain patients, our historical collection rate was used to estimate the variable consideration expected and is reflected in the carrying balance of accounts receivable and service revenue recorded.

While we do collect 100% of the accounts on certain patients, our historical collection rate was used to estimate the variable consideration expected and is reflected in the carrying balance of the accounts receivable and service revenue recorded.

A discount rate of 48 %, based on payment history, was used to reduce revenue to 52 % of Current Procedural Terminology code rates (“CPT” codes are numbers assigned to every task and service a medical practitioner may provide to a patient including medical, surgical and diagnostic services.

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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 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.

We recorded no revenue related to medical diagnostic services provided during the three or nine months ended September 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.

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

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

As of September 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.

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We have not experienced any losses on these deposits .

Long-Lived Assets

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.

If the sum of the expected undiscounted future operating cash flows is less than the carrying amount of the related assets, an impairment loss is recognized in the consolidated statements of operations.

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.

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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Concentrations of Credit Risk

3 unchanged sentences

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 June 30, 2021 and December 31, 2020, respectively .

Stock Based Compensation

We account for the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including employee stock options, based on estimated fair values.

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

In the third quarter, we reassessed variable consideration based on recent collection trends resulting in $50,000 of additional revenue.

Additionally, we have established an allowance for doubtful accounts in the amount of $ 496,289 and $ 585,257 , at September 30, 2021 and December 31, 2020, respectively .

SPINE INJURY SOLUTIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

Legal Costs and Contingencies

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If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable.

Net Income (Loss) per Share

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

During the three and nine months ended September 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 consolidated statements of operations, because all such securities were anti-dilutive.

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

SPINE INJURY SOLUTIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Net Loss per Share

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

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.

Recent Accounting Pronouncements Not Yet Adopted

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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 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.

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however, collections occur upon settlement or judgment of cases.

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.

As of September 30, 2021 and December 31, 2020, we determined an allowance for uncollectable accounts of $ 496,289 and $ 585,257 , respectively, was needed for those customer accounts whose collections appear doubtful.

On August 31, 2020, Peter L.

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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.

The secured promissory note balance was $ 430,000 and $ 490,000 at September 30, 2021 and December 31, 2020, respectively.

In October 2021, the Company and Mr.

Dalrymple amended the promissory note to extend the maturity date to June 30, 2022.

On October 28, 2021, the Company and Mr.

Dalrymple entered into a letter agreement whereby the Company transferred certain accounts receivable having a gross balance of $ 84,865 to an entity owned by Mr.

Dalrymple as consideration for a $ 33,946 reduction in the balance of the promissory note.

During the three and nine months ended September 30, 2021, the Company recorded interest expense of $ 6,880 and $ 20,569 , respectively, on the Peter Dalrymple note.

During the three and nine months ended September 30, 2020, the Company recorded $ 2,281 and $ 15,090 , respectively, on the Wells Fargo term loan and $ 3,343 on the Peter Dalrymple note for the period from note inception, August 31, 2020, through September 30, 2020.

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 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.

As of September 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 nine months ended September 30, 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.

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.

We did not issue any shares of preferred stock for the three and nine months ended September 30, 2021.

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

LEASE REVENUES

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however, the Company has not generated material revenue from sales of equipment under such options.

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

Initial lease terms vary in length based upon customer needs and generally range from 12 to 36 months.

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.

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

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.

All of the Company’s outstanding lease contracts as of September 30, 2021, are scheduled to mature during the remainder of 2021 with expected operating lease payments to be received totaling approximately $ 25,000 .

The carrying value of equipment available for rent totaled $ 0 and $ 10,959 as of September 30, 2021 and December 31, 2020, respectively, and is included in property and equipment, net in the accompanying condensed consolidated balance sheets.

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

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Management Overview

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.

In July 2021, a private company signed a letter of intent to acquire us.

In connection with the agreement, it paid $66,500 as a deposit to be applied to the total purchase price upon closing.

Prior to the expiration date provided in the letter of intent, the agreement was terminated in September 2021.

Upon termination of the agreement, $35,000 of the deposit was released to us and recognized as other income in the accompanying condensed consolidated statements of operations.

The remaining $31,500 was held in trust at September 30, 2021 and was released to us in the fourth quarter of 2021.

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 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.

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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.

The unaudited financial statements for the nine months ended September 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 September 30, 2021 and the results of operations and cash flows for the three and nine months ended September 30, 2021 and 2020.

The results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2021 or any subsequent period.

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.

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

The revenue for the three months ended September 30, 2021 of $86,637 consisted of $26,073 of QVH leasing revenue, and $60,564 of service revenues consisting of excess collections on previously performed procedures totaling $10,564 and a revision to our estimated variable consideration totaling $50,000.

The revenue for the three months ended September 30, 2020 of $47,139 consisted of $25,573 of QVH leasing revenue, and $21,566 related to excess collections for previously performed procedures.

During the three months ended September 30, 2021, we incurred $89,679 of operating, general and administrative expenses compared to $121,908 for the same period in 2020.

Operating, general and administrative expenses were lower for the 2021 quarter compared to 2020 primarily because of decreases in payroll expenses of $13,103, legal fees of $5,285, consulting fees of $17,112, and $6,007 of insurance expense and other miscellaneous expense of approximately $4,000.

Other income for the three months ended September 30, 2021 totaled $28,120 compared to other expense of $5,624 during the comparable prior year period.

The change reflects the $35,000 received as a deposit from a private company seeking to acquire us, which was recognized as other income upon termination of the agreement.

As a result of the foregoing, we had net income of $25,078 for the three months ended September 30, 2021, compared to a net loss of $80,393 for the three months ended September 30, 2020.

Comparison of the nine-month period ended September 30, 2021 with the nine-month period ended September 30, 2020.

The revenue for the nine months ended September 30, 2021 of $146,689 consisted of $78,219 of QVH leasing revenue, and $68,470 of service revenues consisting of excess collections for previously performed procedures totaling $18,470 and a revision to our estimated variable consideration totaling $50,000.

For the same period in 2020, revenue was $156,383, consisting of $69,368 of QVH leasing and $87,015 related to excess collections for previously performed procedures.

During the nine months ended September 30, 2021, we incurred $230,453 of operating, general and administrative expenses compared to $385,642 for the same period in 2020.

The decrease is attributable to decreases in payroll expenses of $48,320, consulting expense of $25,153, bad debt expense net of recoveries of $69,912, rent expenses of $7,000 coupled with an increase of legal fees of $8,790, an increase of $10,268 in computer expenses and other miscellaneous expense decreases of approximately $4,000.

As a result of the foregoing, we had a net loss of $119,284 for the nine months ended September 30, 2021, compared to a net loss of $247,239 for the nine months ended September 30, 2020.

Liquidity and Capital Resources

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.

For the nine months ended September 30, 2021, cash provided in operations was $35,943 versus cash provided of $406,431 for the nine months ended September 30, 2020.

The decrease in cash provided in operations is primarily attributable to timing of collections of accounts receivable for procedures performed prior to 2018.

Collections of accounts receivable for the nine months ended September 30, 2021 and 2020 totaled $180,305 and $650,514, respectively.

Cash used in financing activities for the nine months ended September 30, 2021 consisted of repayments on our shareholder loan in the amount of $60,000.

Cash used in financing activities for the nine months ended September 30, 2020 were payments on our note payable to a shareholder of $65,000, payments on our term loan of $460,000 and 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 $5,277,847 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.

Since that time, our accumulated deficit has increased $5,252,769 to $20,257,467 as of September 30, 2021.

During the nine months ended September 30, 2021, we realized net revenue of $96,689 and incurred a net loss of $119,284.

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.

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

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.

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

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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