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Risks Related to Our Company
−Removed: We have discontinued funding future medical procedures due to our cash position
−Removed: During the fourth quarter of 2018, the decision was made to discontinue funding future medical procedures due to our cash position, which also hampers our ability to pay back existing debt to Peter Dalrymple, a director and shareholder (see Note 6—Notes Payable in the Notes to Consolidated Financial Statements).
−Removed: We have not funded any procedures in 2020 and will not do so in the future unless we can access additional capital.
−Removed: The service revenue we have funded has resulted in longer settlement times, which has created a slowdown in cash collections.
+Added: We have discontinued our involvement in future medical procedures due to our cash position
+Added: 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 hampers our ability to pay back existing debt to Peter Dalrymple, a director and shareholder (see Note 6—Notes Payable).
+Added: We have not funded any procedures in 2021 and have no plans to do so in the future.
+Added: The service revenue we previously earned has resulted in longer settlement times, which has created 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.
−Removed: If we are unable to access additional capital in the near future, these recent developments will have a material negative impact on our financial performance and could have a material adverse effect on our results of operations and financial condition.
+Added: 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.
Management has determined that certain factors raise substantial doubt about our ability to continue as a going concern, and our continued existence is dependent upon our ability to successfully execute our business plan.
The financial statements included with this report are presented under the assumption that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time.
−Removed: Management has determined that certain factors raise substantial doubt about our ability to continue as a going concern, including our net loss of $297,394 for the year ended December 31, 2020 and our accumulated deficit of $20,138,182 at December 31, 2020.
+Added: Management has determined that certain factors raise substantial doubt about our ability to continue as a going concern, including our net loss of $140,365 for the year ended December 31, 2021 and our accumulated deficit of $20,278,547 at year-end.
We are not generating sufficient operating cash flows to support continuing operations.
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The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
−Removed: Our history in the healthcare services business makes an evaluation of us and our future extremely difficult, and profits are not assured.
−Removed: We began development of our healthcare services business at the end of December 2008 and opened our first spine injury diagnostic center in August 2009.
−Removed: There can be no assurance that we will be profitable in the future or that investors’ investments in us will be returned to them in full, or at all, over time.
−Removed: In view of our history in the healthcare industry, an investor must consider our business and prospects in light of the risks, expenses and difficulties encountered by companies in our industry.
−Removed: There can be no assurance that we will be successful in undertaking any or all of the activities required for successful commercial operations.
−Removed: Our failure to successfully undertake such activities could materially and adversely affect our business, prospects, financial condition and results of operations.
−Removed: There can be no assurance that our business operations will generate significant revenues, that we will generate additional positive cash flow from our operations or that we will be able to achieve or sustain profitability in any future period.
−Removed: Additionally, we have expended a great deal of resources developing, testing, and marketing the Quad Video Halo, but we have no assurances that the market will accept this product.
We are dependent on key personnel .
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We may experience potential fluctuations in results of operations.
−Removed: Our future revenues may be affected by a variety of factors, many of which are outside our control, including the success of implementing our business and trends and changes in the healthcare industry.
−Removed: We have no control on how long it takes cases to settle, making it difficult to forecast cash flow.
−Removed: As a result of our operating history and the nature of our business plan, it is difficult to forecast revenues or earnings accurately, which may fluctuate significantly from quarter to quarter.
+Added: Our future revenues may be affected by a variety of factors, many of which are outside our control.
+Added: We have no control on how long it takes our remaining cases to settle, making it difficult to forecast cash flow.
+Added: As a result of our limited operating history and the discontinuation of our previous business plan, it is difficult to forecast revenues or earnings accurately, which may fluctuate significantly from quarter to quarter.
We have a history of significant operating losses and will need to increase operating expenses in the future if we decide to grow our business.
−Removed: 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.
−Removed: Since that time, our accumulated deficit has increased to $20,138,182, as of December 31, 2020.
−Removed: During the fourth quarter of 2018, we chose to discontinue funding future medical procedures due to our cash position.
+Added: 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 of $20,278,547 as of December 31, 2021.
+Added: During the fourth quarter of 2018, we chose to discontinue our involvement in future medical procedures due to our cash position.
Presently, we are trying to limit all operating expenses as much as possible.
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We will need to generate significant revenues to achieve our business plan.
−Removed: Our continued existence is dependent upon our ability to successfully execute our business plan, as well as our ability to increase revenue from services and obtain additional capital from borrowing and selling securities, as needed, to fund our operations.
+Added: Our continued existence is dependent upon our ability to successfully execute our business plan, as well as our ability to increase revenue and obtain additional capital from borrowing and selling 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.
−Removed: Any expectation of future profitability is dependent upon our ability to expand and develop our healthcare services business, of which there can be no assurances.
+Added: Any expectation of future profitability is likely dependent upon our ability to consummate a merger with a target company, of which there can be no assurances.
We may incur significant expenses as a result of being a publicly traded company, which may negatively impact our financial performance.
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If we are unable to assert that our internal control is effective, investors could be adversely affected.
−Removed: Our healthcare business model is unproven.
−Removed: Our healthcare business model depends upon our ability to implement and successfully execute our business and marketing strategy, which includes our ability to find and form relationships with spine surgeons, orthopedic surgeons and other healthcare providers, from whom they may obtain referrals for injured patients.
+Added: Our QVH business model is unproven.
+Added: Our QVH business model depends upon our ability to implement and successfully execute our business and marketing strategy, which includes our ability to find healthcare providers to whom we can sell or lease QVH units, and from whom we may obtain referrals.
If we are unable to find and form relationships with such healthcare providers, our business will likely fail.
−Removed: If competition increases, our growth and profits, if any, may decline.
−Removed: The market to provide healthcare services and solutions is highly fragmented and competitive.
−Removed: Currently, we believe the business solutions that we can provide to spine surgeons, orthopedic surgeons and other healthcare providers for necessary, reasonable and appropriate treatment for musculo-skeletal spine injuries resulting from automobile and work-related accidents, are somewhat unique in most geographic markets.
−Removed: However, if we achieve our goal of becoming a leader in providing technology and monetizing services to spine surgeons, orthopedic surgeons and other healthcare providers to facilitate proper treatment of their injured clients, we believe that competition for our business model will substantially increase.
−Removed: Further, there are many alternatives to the services we can provide, that are currently available to surgeons and their injured patients.
−Removed: We can make no assurances that we will be able to effectively compete with the various services that are currently available or may become available in the future.
−Removed: Because the barriers to entry in our geographic markets are not substantial and customers have the flexibility to move easily to new care management service providers, we believe that the addition of new competitors may occur relatively quickly.
−Removed: Some physicians and other healthcare providers may elect to compete with us by offering their own products and services to their clients and patients.
−Removed: In addition, significant merger and acquisition activity has occurred in our industry as well as in industries that will supply products to us, such as the hospital, physician, pharmaceutical, medical device, and health information systems industries.
−Removed: If competition within our industry intensifies, our ability to affiliate with new doctors and/or obtain physician referrals, or maintain or increase our revenue growth, pricing flexibility, control over medical cost trends, and marketing expenses may be compromised.
−Removed: Future acquisitions and joint ventures may use significant resources or be unsuccessful.
−Removed: As part of our business strategy, we may pursue acquisitions of companies providing services that are similar or complementary to those that we provide or plan to provide in our business, and we may enter into joint ventures to provide services at certain facilities.
−Removed: These acquisitions and joint venture activities may involve:
−Removed: significant cash expenditures;
−Removed: additional debt incurrence;
−Removed: additional operating losses;
−Removed: increases in intangible assets relating to goodwill of acquired companies;
−Removed: significant acquisition and joint venture related expenses,
−Removed: any of which could have a material adverse effect on our financial condition and results of operations.
−Removed: Additionally, a strategy of growth by acquisitions and joint ventures involves numerous risks, including:
−Removed: difficulties integrating acquired personnel and harmonizing distinct corporate cultures into our current businesses;
−Removed: diversion of our management’s time from existing operations;
−Removed: potential losses of key employees or customers of acquired companies.
−Removed: We cannot assure you that we will be able to identify suitable candidates or negotiate and consummate suitable acquisitions or joint ventures.
−Removed: Also, we cannot assure you that we will succeed in obtaining financing for any future acquisitions or joint ventures at a reasonable cost, or that such financing will not contain restrictive covenants that limit our operating flexibility or other unfavorable terms.
−Removed: Even if we are successful in consummating acquisitions or joint ventures, we may not succeed in developing and achieving satisfactory operating results for the acquired businesses or integrating them into our existing operations.
−Removed: If lawsuits are brought against us and are successful, we may incur significant liabilities.
−Removed: Although we are not a medical service provider, spine surgeons, orthopedic surgeons and other healthcare providers with whom we form relationships are involved in the delivery of healthcare and related services to the public.
−Removed: In providing these services, the physicians and other licensed providers in our affiliated professional groups are exposed to the risk of professional liability claims.
−Removed: Further, plaintiffs have proposed expanded theories of liability against managed care companies as well as against employers who use managed care in many cases that, if established and successful, could expose us to liability from such claims, and could adversely affect our operations.
−Removed: Regulatory authorities or other parties may assert that, in conducting our business, we may be engaged in unlawful fee splitting or the corporate practice of medicine.
−Removed: The laws of many states prohibit physicians from splitting professional fees with non-physicians and prohibit non-physician entities, such as us, from practicing medicine, self-referral and from employing physicians to practice medicine.
−Removed: The laws in most states regarding the corporate practice of medicine have been subjected to limited judicial and regulatory interpretation.
−Removed: We believe our current and planned activities do not constitute fee-splitting or the unlawful corporate practice of medicine as contemplated by these laws.
−Removed: There can be no assurance, however, that future interpretations of such laws will not require structural and organizational modification of our existing relationships with the practices.
−Removed: In addition, statutes in some states in which we do not currently operate could require us to modify our affiliation structure.
−Removed: If a court, payer or regulatory body determines that we have violated these laws, we could be subject to civil or criminal penalties, our contracts could be found legally invalid and unenforceable (in whole or in part), or we could be required to restructure our arrangements with our contracted physicians and other licensed providers.
−Removed: We operate in an industry that is subject to extensive federal, state, and local regulation, and changes in law and regulatory interpretations could reduce our revenue and profitability potential.
−Removed: The healthcare industry is subject to extensive federal, state, and local laws, rules, and regulations relating to, among other things:
−Removed: payment for services;
−Removed: conduct of operations, including fraud and abuse, anti-kickback, physician self-referral, and false claims prohibitions;
−Removed: operation of provider networks and provision of case management services;
−Removed: protection of patient information;
−Removed: business, facility, and professional licensure, including surveys, certification, and recertification requirements;
−Removed: corporate practice of medicine and fee splitting prohibitions;
−Removed: ERISA health benefit plans;
−Removed: medical waste disposal and environmental protection.
−Removed: In recent years, both federal and state government agencies have increased civil and criminal enforcement efforts relating to the healthcare industry.
−Removed: This heightened enforcement activity increases our potential exposure to damaging lawsuits, investigations, and other enforcement actions.
−Removed: Any such action could distract our management and adversely affect our business reputation and profitability.
−Removed: In the future, different interpretations or enforcement of laws, rules, and regulations governing the healthcare industry could subject our current business practices to allegations of impropriety, self-referral or illegality or could require us to make changes in our facilities, equipment, personnel, services, and capital expenditure programs, increase our operating expenses, and distract our management.
−Removed: If we fail to comply with these extensive laws and government regulations, we could suffer civil and criminal penalties, or be required to make significant changes to our operations.
−Removed: In addition, we could be forced to expend considerable resources to respond to an investigation or other enforcement action under these laws or regulations.
−Removed: Changes in laws, rules, and regulations, including those governing the corporate practice of medicine, fee splitting, workers ’ compensation, and insurance, may affect our ability to expand our operations into other states and, therefore, may reduce our profitability.
−Removed: State laws, rules, and regulations relating to our business vary widely from state to state, and courts and regulatory agencies have seldom interpreted them in a way that provides guidance with respect to our business operations.
−Removed: Changes in these laws, rules, and regulations may adversely affect our profitability.
−Removed: In addition, the application of these laws, rules, and regulations may affect our ability to expand our operations into new markets.
−Removed: Most states limit the practice of medicine to licensed individuals or professional organizations comprised of licensed individuals.
−Removed: Many states also limit the scope of business relationships between business entities like ours and licensed professionals and professional organizations, particularly with respect to fee splitting between a licensed professional or professional organization and an unlicensed person or entity.
−Removed: We operate our business by maintaining long-term administrative and management agreements with affiliated professional doctors.
−Removed: Through these agreements, we perform only non-medical administrative services.
−Removed: All control over medical matters is retained by the affiliated physicians or professional groups.
−Removed: Although we believe that our arrangements with physicians and the other affiliated licensed providers comply with applicable laws, regulatory authorities or other third parties may assert that we are engaged in the corporate practice of medicine or that our arrangements with the physicians or affiliated professional groups constitute fee-splitting or self-referral, or new laws may be introduced that would render our arrangements illegal.
−Removed: If this were to occur, we and/or the affiliated professional groups could be subject to civil or criminal penalties and/or we could be required to restructure these arrangements, all of which may result in significant cost to us and affect our profitability.
+Added: We have been contacted in connection with various merger and acquisition opportunities and may choose to enter into a merger and/or acquisition transaction in the future.
+Added: We have been contacted by parties seeking to merge and/or acquire us.
+Added: While we have not entered into any definitive agreements or understandings to merge with or acquire any entity, in the event that we do enter into a merger and/or acquisition with a separate company in the future, our majority shareholders will likely change and new shares of common stock could be issued, resulting in substantial dilution to our then current shareholders.
+Added: As a result, our new majority shareholders will likely change the composition of our board of directors and replace our current management.
+Added: The new management will likely change our business focus and we can make no assurances that our new management will be able to properly manage our direction or that this change in our business focus will be successful.
+Added: If we do enter into a merger or acquisition, and our new management fails to properly manage and direct our operations, we may be forced to scale back or abandon our operations, which will cause the value of our common stock to decline or become worthless.
+Added: We have not entered into any binding merger or acquisition agreements as of the date of this filing.
+Added: Since we have not yet selected a particular target industry or target business with which to complete a business combination, we are unable to ascertain the merits or risks associated with any particular business or industry.
+Added: Since we have not yet identified a particular industry or prospective target business, there is no basis for investors to evaluate the possible merits or risks of the target business which we may ultimately acquire (or which may acquire us).
+Added: If we complete a business combination with a financially unstable company or an entity in its development stage, we may be affected by numerous risks inherent in the operations of those entities.
+Added: Although our management intends to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors.
+Added: There can be no assurance that any prospective business combination will benefit shareholders or prove to be more favorable to shareholders than any other investment that may be made by shareholders and investors.
+Added: Our officers and directors may allocate time to other business activities, thereby causing conflicts of interest as to how much time to devote to our affairs.
+Added: This could have a negative impact on the Company ’ s ability to consummate a business combination in a timely manner, if at all.
+Added: Our officers and directors are not required to commit full time to our affairs, which may result in a conflict of interest in allocating time between our business and other businesses.
+Added: Management is also engaged in other business endeavors and is not obligated to contribute any specific number of hours per week to our affairs.
+Added: If management’s other business affairs require them to devote more time to such affairs, it could limit their ability to devote time to our affairs or present the Company as a viable business opportunity and could have a negative impact on our ability to consummate a business combination.
+Added: Furthermore, we do not have an employment agreement with any members of management.
+Added: The Company may be unable to obtain additional financing, if and when required, to complete a business combination or to fund the operations and growth of the business combination target, which could compel the Company to restructure a potential business combination transaction or to entirely abandon a particular business combination.
+Added: The Company has not yet identified any prospective target business.
+Added: If we require funds for a particular business combination because of the size of the business combination or otherwise, or if we require funds for any other purpose, we will be required to seek additional financing, which may or may not be available a terms and conditions satisfactory to the Company, if at all.
+Added: To the extent that additional financing proves to be unavailable when and if needed to consummate a particular business combination, we would be compelled to restructure the transaction or abandon that particular business combination and seek an alternative target business candidate.
+Added: In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth of the target business.
+Added: The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
+Added: The Company’s officers, directors or stockholders are not required to provide any financing to us in connection with or after a business combination.
+Added: It is probable that the Company will only be able to enter into one business combination, which will cause us to be solely dependent on such single business and a limited number of products or services.
+Added: If and when the Company is able to enter into a business combination transaction, it is probable that transaction will be with a single operating business.
+Added: Accordingly, the prospects for the Company’s success may be:
+Added: solely dependent upon the performance of a single operating business, or
+Added: dependent upon the development or market acceptance of a single or limited number of products or services.
+Added: In this case, the Company will not be able to diversify the Company’s operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry.
+Added: The Company has limited resources and there is significant competition for business combination opportunities.
+Added: Therefore, the Company may not be able to enter into or consummate an attractive business combination.
+Added: The Company expects to encounter intense competition from other entities having a business objective similar to the Company’s, including venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions.
+Added: Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates.
+Added: Many of these competitors possess greater technical, human and other resources than the Company does and the Company’s financial resources are limited when contrasted with those of many of these competitors.
+Added: While the Company believes that there are numerous potential target businesses that it could acquire, the Company’s ability to compete in acquiring certain sizable target businesses will be limited by the Company’s limited financial resources and the fact that the Company will use its common stock to acquire an operating business.
+Added: This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
+Added: If the Company is deemed to be an investment company, the Company may be required to institute burdensome compliance requirements and the Company ’ s activities may be restricted, which may make it difficult for the Company to enter into a business combination
+Added: Although we are subject to the reporting requirements of the Exchange Act, management believes we will not be subject to regulation under the Investment Company Act of 1940, since we will not be engaged in the business of investing or trading in securities.
+Added: If we engage in business transactions which will result in our holding passive investment interests in a number of entities, we could be subject to regulations under the Investment Company Act.
+Added: If so, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs.
+Added: We have received no formal determination from the SEC as to our status under the Investment Company Act, and, consequently, violation of the Investment Company Act could subject us to material adverse consequences.
+Added: Only one of four of our directors is independent, so actions taken and expenses incurred by our officers and directors on behalf of us will generally not be subject to independent review.
+Added: Only one of the four members of our board of directors is independent.
+Added: While the Company anticipates that all actions taken by our director on the Company’s behalf will be in the Company’s and its stockholders’ best interests, if actions are taken, or expenses are incurred that are actually not in the Company’s and its stockholders best interests, it could have a material adverse effect on our business and plan of operation and the price of our stock held by the public stockholders.
Risks Related to Our Common Stock
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Additionally, we are presently seeking to enter into a strategic business transaction with another company.
−Removed: Either event could result in us issuing a large number of shares of common stock.
+Added: Either event is expected to result in us issuing a large number of shares of common stock.
Any issuance of shares of our common stock will dilute the percentage ownership interest of all stockholders and may further dilute the book value per share of our common stock.
−Removed: This dilution could be substantial, depending on the size of such issuance transaction.
+Added: This dilution could be substantial, depending on the size of any such transaction.
We do not anticipate paying any cash dividends.
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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.