What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-16 compared with 2021-03-26 · 35 added, 35 removed, 76 unchanged (48% of the section changed)

MARKET FOR REGISTRANT ’ S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is quoted on the OTC Markets under the symbol, “SPIN.”

Our common stock is quoted on the OTC Markets under the symbol, “SPIN.” Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Record Holders

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As of December 31, 2021, we do not have any compensation plans under which our equity securities are authorized for issuance.

SELECTED FINANCIAL DATA

Not Applicable.

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

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At the end of 2008, we launched our new business concept of medical services and technology that delivers turnkey solutions to spine surgeons, orthopedic surgeons and other healthcare providers for necessary, reasonable and appropriate treatment for musculo-skeletal spine injuries.

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 a current director and shareholder.

We did not fund any procedures in 2020 and will not do so in the future unless we can access additional capital.

The service revenue we have funded 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 cash position, which also hampers our ability to pay back existing debt to a current director and shareholder.

We were not involved in any procedures in 2021 and have no plans to do so in the future.

The service revenue 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.

In late 2018, however, we were able to sell certain contracts to customers for the use of our QVH units along with image processing services.

In late 2018, however, we were able to lease QVH units to customers, which leases include the use of our QVH units along with image processing services.

There can be no guarantee of us continuing as a going concern if we cannot find additional capital.

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

Further, we have been in negotiations with a certain third-party candidate since December 2021.

We are presently negotiating terms of a proposed share exchange agreement with the candidate, under which its shareholders would exchange their shares for shares of our stock.

Although we do not presently have a binding agreement with this company or its shareholders, it is possible that a definitive agreement for the proposed transaction could be agreed to and consummated in the imminent future.

There is no assurance that such transaction will be completed, or if completed, that the terms will be favorable to us.

Results of Operations

For the years ended December 31, 2021 versus 2020:

We recorded $95,941 in QVH lease revenue for the year ended December 31, 2020 coupled with $76,078 relating to excess collections for previously funded procedures, resulting in revenue of $172,019.

We recorded $104,292 in QVH lease revenue for the year ended December 31, 2021, coupled with $64,588 of service revenues consisting of excess collections for previously funded procedures totaling $14,588 and a revision to our estimated variable consideration totaling $50,000, resulting in revenue of $168,880.

For the same period in 2020, we recorded $95,941 in QVH lease revenue coupled with $76,078 relating to excess collections for previously funded procedures bringing total revenue to $172,019.

For the year ended December 31, 2021, our collections of previously funded procedures decreased as we are no longer funding new procedures and previously funded procedures are in run-off.

There were no service costs in 2020.

For the year ended December 31, 2019 service cost was $115,235 which consisted of inventory obsolescence write downs for the period.

For the years ended December 31, 2021 versus 2020:

Operating, general and administrative expenses for the year ended December 31, 2021 were $379,883 as compared to $507,397 for the year ended December 31, 2020.

Operating expenses decreased due to decreases in bad debt expenses, investor relations expenses, payroll, consulting, insurance, computer expenses, factoring expense, goodwill impairment, depreciation and amortization, and rent expense.

Bad debt expense, net of recoveries, included in operating, general and administrative expenses, totaled $0 and $538,577, respectively, for the years ended December 31, 2020 and 2019.

The decrease in bad debt expense is primarily attributable to our assessment of active cases that have aged greater than historic norms.

While we continue to pursue all amounts owed, we increased the allowance for bad debt minimally to encompass those receivables in which collection is doubtful.

Other income (expense) for the year ended December 31, 2020 was other income, net of $37,984 as compared to other expense, net of $62,904 for the year ended December 31, 2019.

For the year ended December 31, 2020, other income, net consisted primarily of the forgiveness of our Paycheck Protection Program (“PPP”) loan as further described below, partially offset by $26,646 of interest expense..

For the year ended December 31, 2019 the other expense, net consisted of $2,399 of income coupled with $65,303 of interest expense.

Operating expenses decreased due primarily to decreases in payroll, rent, consulting and insurance expenses.

Other income (expense) for the year ended December 31, 2021 was other income, net of $70,638 as compared to other income, net of $37,984 for the year ended December 31, 2020.

The 2021 other income consisted of $63,500 of deposit received from a private company seeking to acquire us, which was recognized as other income upon termination of the letter of intent agreement.

In addition, we recognized $33,946 as other income upon the transfer of certain accounts receivable with a carrying value of $0 to Peter Dalrymple, a director, in exchange for a reduction in the note payable to Mr.

Dalrymple in the amount of $33,946.

For the year ended December 31, 2020, other income, net consisted primarily of the forgiveness of our Paycheck Protection Program (“PPP”) loan as further described below.

Other income (expense) was partially offset by $26,859 and $26,646 of interest expense during the years ended December 31, 2021 and 2020, respectively.

On April 22, 2020 we received an SBA loan in the amount of $64,097 under the federal PPP which helps businesses keep their workforce employed during the Coronavirus crisis.

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Net loss for the year ended December 31, 2021 was $140,365 compared to net loss of $297,394 for the year ended December 31, 2020.

The main reason for the decrease is that we did not take as large bad debt expense, as well as no expense related to writing off obsolete inventory, factoring expense, nor impairment of goodwill, coupled with other operating expenses being lower.

The main reason for the decrease was lower operating expenses, coupled with an increase in other income, as described above.

Liquidity and Capital Resources

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The decrease in cash provided by operations was mainly due to a decrease in collections of outstanding receivables.

Cash used in financing activities totaled $61,054 for the year ended December 31, 2021, consisting of $61,054 in payments on our note to Peter Dalrymple.

Cash used in financing activities totaled $515,903 for the year ended December 31, 2020, consisting of payments on our note payable totaling $110,000 and $470,000 in payments on our line of credit, partially offset by proceeds received from a PPP loan of $64,097.

Cash used in financing activities totaled $585,000 for the year ended December 31, 2019, consisting of $90,000 in payments on our note and $495,000 in payments on our line of credit.

Income Tax Expense (Benefit)

We have experienced losses and as a result have net operating loss carryforwards available to offset future taxable income.

We have not made a provision for income taxes in 2021 or 2020, which reflects our valuation allowance established against our benefits from net operating loss carryforwards.

Critical Accounting Policies

In Note 3 to the audited consolidated financial statements for the years ended December 31, 2021 and 2020 included in this Form 10-K, we discuss those accounting policies that are considered to be significant in determining the results of operations and our financial position.

The following critical accounting policies and estimates are important in the preparation of our financial statements:

The following critical accounting policies and estimates are important in the preparation of our consolidated financial statements:

Use of Estimates

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Our credit policy has been established based upon extensive experience by management in the industry and has been determined to ensure that collectability is reasonably assured.

Payment for services are primarily made to us by a third party and the credit policy includes terms of net 240 days for collections;

however, collections occur upon settlement or judgment of cases.

Payment for services are primarily made to us by a third party upon settlement of a case.

As of December 31, 2021 and 2020, there were no material contract assets, contract liabilities, or deferred contract costs recorded in the consolidated financial statements.

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Rental billings for periods extending beyond period end are recorded as deferred income and are recognized in the period earned.

For the QVH Leases, rental related services revenues for support, maintenance and video processing, delivery, and installation are lease related because the payments are considered minimum lease payments that are an integral part of the negotiated lease agreement with the customer.

For the QVH leases, rental related service revenues for support, maintenance and video processing, delivery, and installation are lease related because the payments are considered minimum lease payments that are an integral part of the negotiated lease agreement with the customer.

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

As of the year ended December 31, 2021, the Company’s leases consisted solely of operating leases.

Accounting Standards Updates

In Note 3 to the audited consolidated financial statements for the years ended December 31, 2020 and 2019 included in this Form 10-K, we discuss those recent accounting pronouncements that may be considered to be significant in determining current and/or future results of operations and our financial position.

Going Concern

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 $5,134,184 to $20,138,182 as of December 31, 2020.

During the year ended December 31, 2021, we recorded net revenue of $168,880 and a net loss of $140,365.

Successful business operations and our transition to attaining profitability are dependent upon obtaining additional financing and achieving a level of revenue adequate to support our cost structure.

Considering the nature of the 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 the period of one year from the issuance of this report.

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 funding future medical procedures due to our cash position, which also hampered our ability to pay back existing debt to a current director and shareholder (see Note 6—Notes Payable in the Notes to Consolidated Financial Statements).

We did not fund any procedures in 2020 and will not do so unless we can access additional capital.

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

Presently, we are trying to limit all operating expenses as much as 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 actively seeking a private company with which to enter into a strategic business transaction, including without limitation 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 obtain additional capital from borrowing and/or 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.

Any expectation of future profitability is likely dependent upon our ability to successfully merge with another company, of which there can be no assurances.

During the fourth quarter of 2018, the decision was made to discontinue our involvement with future medical procedures due to our cash position, which also hampered our ability to pay back existing debt to a current director and shareholder (see Note 6—Notes Payable in the consolidated financial statements).

We were not involved in any procedures in 2021 and have no plans to do so in the future.

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.

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.

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

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

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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-K

Item 5. Market for Registrant’s Common Equity