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MediXall Group, Inc. – ‘10-Q’ for 9/30/19

On:  Thursday, 11/14/19, at 12:31pm ET   ·   For:  9/30/19   ·   Accession #:  1553350-19-1178   ·   File #:  333-194337

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

11/14/19  MediXall Group, Inc.              10-Q        9/30/19   41:1.8M                                   Edgar Filing LLC/FA

Quarterly Report   —   Form 10-Q   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    301K 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     21K 
 3: EX-31.2     Certification -- §302 - SOA'02                      HTML     21K 
 4: EX-32.1     Certification -- §906 - SOA'02                      HTML     15K 
 5: EX-32.2     Certification -- §906 - SOA'02                      HTML     15K 
33: R1          Document and Entity Information                     HTML     47K 
14: R2          Condensed Consolidated Balance Sheets               HTML     75K 
23: R3          Condensed Consolidated Balance Sheets               HTML     34K 
                (Parenthetical)                                                  
38: R4          Condensed Consolidated Statements of Operations     HTML     50K 
31: R5          Consolidated Statement of Changes in Stockholders'  HTML     54K 
                Equity (Deficit)                                                 
13: R6          Consolidated Statement of Changes in Stockholders'  HTML     17K 
                Equity (Deficit) (Parenthetical)                                 
22: R7          Condensed Consolidated Statements of Cash Flows     HTML     75K 
37: R8          Organization and Nature of Operations               HTML     18K 
34: R9          Going Concern                                       HTML     21K 
17: R10         Summary of Significant Accounting Policies          HTML     60K 
25: R11         Related Party Transactions                          HTML     24K 
36: R12         Preferred Stock                                     HTML     16K 
30: R13         Pending Legal Matters                               HTML     17K 
16: R14         Lease                                               HTML     36K 
24: R15         Summary of Significant Accounting Policies          HTML    104K 
                (Policies)                                                       
35: R16         Summary of Significant Accounting Policies          HTML     47K 
                (Tables)                                                         
29: R17         Related Party Transactions (Tables)                 HTML     22K 
15: R18         Lease (Tables)                                      HTML     37K 
26: R19         Going Concern (Details Narrative)                   HTML     24K 
40: R20         Summary of Significant Accounting Policies          HTML     20K 
                (Details)                                                        
28: R21         Summary of Significant Accounting Policies          HTML     32K 
                (Schedule of Basic and Diluted LPS) (Details)                    
19: R22         Summary of Significant Accounting Policies          HTML     22K 
                (Details Narrative)                                              
21: R23         Related Party Transactions (Details)                HTML     28K 
39: R24         Related Party Transactions (Details Narrative)      HTML     29K 
27: R25         Preferred Stock (Details Narrative)                 HTML     18K 
18: R26         Lease (Schedule of Components of Lease Expense and  HTML     30K 
                Other Lease Information) (Details)                               
20: R27         Leases (Schedule of Future Minimum Lease            HTML     26K 
                Commitments) (Details)                                           
12: XML         IDEA XML File -- Filing Summary                      XML     66K 
41: EXCEL       IDEA Workbook of Financial Reports                  XLSX     35K 
 6: EX-101.INS  XBRL Instance -- mdxl-20190930                       XML    515K 
 8: EX-101.CAL  XBRL Calculations -- mdxl-20190930_cal               XML     87K 
 9: EX-101.DEF  XBRL Definitions -- mdxl-20190930_def                XML    102K 
10: EX-101.LAB  XBRL Labels -- mdxl-20190930_lab                     XML    370K 
11: EX-101.PRE  XBRL Presentations -- mdxl-20190930_pre              XML    276K 
 7: EX-101.SCH  XBRL Schema -- mdxl-20190930                         XSD     65K 
32: ZIP         XBRL Zipped Folder -- 0001553350-19-001178-xbrl      Zip     53K 


‘10-Q’   —   Quarterly Report
Document Table of Contents

Page (sequential)   (alphabetic) Top
 
11st Page  –  Filing Submission
"Item 1
"Condensed Consolidated Balance Sheets at September 30, 2019 (unaudited) and December 31, 2018
"Condensed Consolidated Statements of Operations for the three months and nine ended September 30, 2019 and 2018 (unaudited)
"Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2019 and 2018 (unaudited)
"Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)
"Notes to Condensed Consolidated Financial Statements (unaudited)
"Item 2
"Item 3
"Item 4
"Item 1A
"Item 5
"Item 6
"Signatures

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


(Mark One)


þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2019


or


¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from _______________________to__________________________


Commission File Number: 333-194337


MediXall Group, Inc.

 (Exact name of registrant as specified in its charter)


Nevada

33-0864127

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

 

 

2929 East Commercial Blvd., PH-D,

Ft. Lauderdale, Florida

33308

(Address of principal executive offices)

(Zip Code)


954-440-4678

(Registrant’s telephone number, including area code)


Not applicable

 (Former name, former address and former fiscal year, if changed since last report)


Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

N/A

 

N/A

 

N/A


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ  No ¨


Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ  No ¨


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer   ¨

Accelerated filer   ¨

Non-accelerated filer     þ

Smaller reporting company  þ

 

Emerging growth company  þ


If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes þ  No ¨


As of November 1, 2019, the issuer had 75,708,722 shares of its common stock issued and outstanding.

 

 

 




 


MEDIXALL GROUP, INC. AND SUBSIDIARIES


INDEX


 

 

Page No.

PART I

FINANCIAL INFORMATION

 

                        

 

                        

ITEM 1.

FINANCIAL STATEMENTS:

1

 

Condensed Consolidated Balance Sheets at September 30, 2019 (unaudited) and December 31, 2018

1

 

Condensed Consolidated Statements of Operations for the three months and nine ended September 30, 2019 and 2018 (unaudited)

2

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2019 and 2018 (unaudited)

3

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)

5

 

Notes to Condensed Consolidated Financial Statements (unaudited)

6

ITEM 2.

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

13

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

16

ITEM 4.

CONTROLS AND PROCEDURES

16

 

 

 

PART II

OTHER INFORMATION

 

 

 

 

ITEM 1.

LEGAL PROCEEDINGS

17

ITEM 1A.

RISK FACTORS

17

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

17

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

17

ITEM 4.

MINE SAFETY DISCLOSURES

17

ITEM 5.

OTHER INFORMATION

17

ITEM 6.

EXHIBITS

17

SIGNATURES

18







 




 


PART 1.  FINANCIAL INFORMATION


ITEM 1.

FINANCIAL STATEMENTS


MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash

 

$

50,707

 

 

$

201,509

 

Accounts receivable - related party

 

 

 

 

 

160,590

 

Total current assets

 

 

50,707

 

 

 

362,099

 

 

 

 

 

 

 

 

 

 

Furniture and equipment, net

 

 

21,044

 

 

 

15,164

 

 

 

 

 

 

 

 

 

 

Right-of-use lease asset

 

 

130,294

 

 

 

 

 

 

 

 

 

 

 

 

 

Website and development costs

 

 

356,704

 

 

 

351,457

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

558,749

 

 

$

728,720

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

184,994

 

 

$

163,828

 

Accounts payable and accrued expenses - related party

 

 

42,250

 

 

 

21,931

 

Operating lease liability

 

 

70,154

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

297,398

 

 

 

185,759

 

 

 

 

 

 

 

 

 

 

Operating lease liability

 

 

64,196

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

361,594

 

 

 

185,759

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Series A Convertible Preferred stock, $0.001 par value, 5,000,000 authorized; 264,894 issued and outstanding

 

 

265

 

 

 

265

 

Common Stock, $0.001 par value 750,000,000 shares authorized; 75,468,722 and 69,642,554 shares issued and outstanding

 

 

75,469

 

 

 

69,642

 

Additional paid-in capital

 

 

12,479,895

 

 

 

10,701,887

 

Accumulated deficit

 

 

(12,358,474

)

 

 

(10,228,833

)

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

197,155

 

 

 

542,961

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

558,749

 

 

$

728,720

 



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




1



 


MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

  

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

807

 

 

$

372

 

 

$

2,253

 

 

$

1,545

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional fees

 

 

131,988

 

 

 

169,452

 

 

 

448,812

 

 

 

274,243

 

Professional fees - related party

 

 

55,725

 

 

 

15,000

 

 

 

186,275

 

 

 

75,000

 

Management fee - related party

 

 

120,000

 

 

 

75,000

 

 

 

360,000

 

 

 

225,000

 

Personnel related expenses

 

 

311,556

 

 

 

350,547

 

 

 

868,602

 

 

 

1,474,292

 

Other selling, general and administrative

 

 

96,416

 

 

 

125,542

 

 

 

268,205

 

 

 

316,106

 

Total Operating Expenses

 

 

715,685

 

 

 

735,541

 

 

 

2,131,894

 

 

 

2,364,641

 

Loss before income taxes

 

 

(714,878

)

 

 

(735,169

)

 

 

(2,129,641

)

 

 

(2,363,096

)

Income taxes

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(714,878

)

 

$

(735,169

)

 

$

(2,129,641

)

 

$

(2,363,096

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share - basic and diluted

 

$

(0.01

)

 

$

(0.01

)

 

$

(0.03

)

 

$

(0.04

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding during the periods - basic and diluted

 

 

74,640,786

 

 

 

65,774,921

 

 

 

72,874,854

 

 

 

64,097,832

 



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




2



 


MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2018


 

 

Series A Voting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Total

 

 

 

$0.001 Par Value

 

 

$0.001 Par Value

 

 

Paid-in

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance, December 31, 2017

 

 

264,894

 

 

$

265

 

 

 

60,337,382

 

 

$

60,337

 

 

$

7,190,572

 

 

$

(7,245,404

)

 

$

5,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds received pursuant to Private Placement

 

 

 

 

 

 

 

 

2,144,163

 

 

 

2,144

 

 

 

638,467

 

 

 

 

 

 

640,611

 

Memorandum, net of $103,500 offering cost (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for services (unaudited)

 

 

 

 

 

 

 

 

865,000

 

 

 

865

 

 

 

518,135

 

 

 

 

 

 

519,000

 

Net loss (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,011,863

)

 

 

(1,011,863

)

Balance, March 31, 2018 (unaudited)

 

 

264,894

 

 

 

265

 

 

 

63,346,545

 

 

 

63,346

 

 

 

8,347,174

 

 

 

(8,257,267

)

 

 

153,518

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds received pursuant to Private Placement

 

 

 

 

 

 

 

 

1,917,076

 

 

 

1,917

 

 

 

863,052

 

 

 

 

 

 

864,969

 

Memorandum, net of $167,670 offering cost (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for services (unaudited)

 

 

 

 

 

 

 

 

333,333

 

 

 

333

 

 

 

199,667

 

 

 

 

 

 

200,000

 

Net loss (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(616,064

)

 

 

(616,064

)

Balance, June 30, 2018 (unaudited)

 

 

264,894

 

 

 

265

 

 

 

65,596,954

 

 

 

65,596

 

 

 

9,409,893

 

 

 

(8,873,331

)

 

 

602,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds received pursuant to Private Placement

 

 

 

 

 

 

 

 

237,000

 

 

 

237

 

 

 

107,256

 

 

 

 

 

 

107,493

 

Memorandum, net of $32,342 offering cost (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for services (unaudited)

 

 

 

 

 

 

 

 

348,358

 

 

 

348

 

 

 

208,668

 

 

 

 

 

 

209,016

 

Net loss (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(735,169

)

 

 

(735,169

)

Balance, September 30, 2018 (unaudited)

 

 

264,894

 

 

$

265

 

 

 

66,182,312

 

 

$

66,181

 

 

$

9,725,817

 

 

$

(9,608,500

)

 

$

183,763

 



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



3



 


MEDIXALL GROUP, INC. AND SUBSIDIARIES

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

THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2019


 

 

Series A Voting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Total

 

 

 

$0.001 Par Value

 

 

$0.001 Par Value

 

 

Paid-in

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2018

 

 

264,894

 

 

$

265

 

 

 

69,642,554

 

 

$

69,642

 

 

$

10,701,887

 

 

$

(10,228,833

)

 

$

542,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds received pursuant to Private Placement

 

 

 

 

 

 

 

 

2,351,000

 

 

 

2,351

 

 

 

605,523

 

 

 

 

 

 

607,874

 

Memorandum, net of $0 offering cost (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for services (unaudited)

 

 

 

 

 

 

 

 

240,000

 

 

 

240

 

 

 

124,760

 

 

 

 

 

 

125,000

 

Net loss (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(744,398

)

 

$

(744,398

)

Balance March 31, 2019 (unaudited)

 

 

264,894

 

 

 

265

 

 

 

72,233,554

 

 

 

72,233

 

 

 

11,432,170

 

 

 

(10,973,231

)

 

 

531,437

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds received pursuant to Private Placement

 

 

 

 

 

 

 

 

1,471,500

 

 

 

1,472

 

 

 

390,155

 

 

 

 

 

 

391,627

 

Memorandum, net of $0 offering cost (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(670,365

)

 

 

(670,365

)

Balance, June 30, 2019 (unaudited)

 

 

264,894

 

 

 

265

 

 

 

73,705,054

 

 

 

73,705

 

 

 

11,822,325

 

 

 

(11,643,596

)

 

 

252,699

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds received pursuant to Private Placement

 

 

 

 

 

 

 

 

1,711,000

 

 

 

1,711

 

 

 

631,289

 

 

 

 

 

 

633,000

 

Memorandum, net of $0 offering cost (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for services (unaudited)

 

 

 

 

 

 

 

 

52,668

 

 

 

53

 

 

 

26,281

 

 

 

 

 

 

26,334

 

Net loss (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(714,878

)

 

 

(714,878

)

Balance, September 30, 2019 (unaudited)

 

 

264,894

 

 

$

265

 

 

 

75,468,722

 

 

$

75,469

 

 

$

12,479,895

 

 

$

(12,358,474

)

 

$

197,155

 



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





4



 


MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net Loss

 

$

(2,129,641

)

 

$

(2,363,096

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

3,000

 

 

 

3,000

 

Stock issued as compensation for services

 

 

121,334

 

 

 

928,016

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable - related party

 

 

160,590

 

 

 

 

Accounts payable and accrued expenses

 

 

51,166

 

 

 

(41,288

)

Accounts payable and accrued expenses - related party

 

 

20,319

 

 

 

(63,400

)

Amortization of right-of-use lease asset

 

 

49,047

 

 

 

 

Operating lease liability

 

 

(44,991

)

 

 

 

Net cash used in operating activities

 

 

(1,769,176

)

 

 

(1,536,768

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of furniture and equipment

 

 

(8,880

)

 

 

(6,223

)

Website development costs

 

 

(5,247

)

 

 

(242,054

)

Net cash used in investing activities

 

 

(14,127

)

 

 

(248,277

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES -

 

 

 

 

 

 

 

 

Proceeds from the sale of common stock, net of offering costs

 

 

1,632,501

 

 

 

1,613,073

 

 

 

 

 

 

 

 

 

 

Net decrease in cash

 

 

(150,802

)

 

 

(171,972

)

Cash at beginning of period

 

 

201,509

 

 

 

191,440

 

 

 

 

 

 

 

 

 

 

Cash at end of period

 

$

50,707

 

 

$

19,468

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid during the period:

 

 

 

 

 

 

 

 

Interest

 

$

 

 

$

 

Income taxes

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

 

 

 

Reclassification of stock compensation from accounts payable and accrued expenses to common stock

 

$

30,000

 

 

$

 

Right-of-use lease asset obtained in exchange for operating lease liabilities

 

$

179,341

 

 

$

 


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





5



 


MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


Note 1 - Organization and Nature of Operations


MediXall Group, Inc. (the "Company “or “MediXall”) was incorporated on December 21, 1998 under the laws of the State of Nevada under the name of IP Gate, Inc. The Company had various name changes since, to reflect changes in the Company’s operating strategies.


MediXall is a technology and innovation-driven organization that has developed a new generation healthcare marketplace platform to address the growing needs of self-pay and high deductible consumers for greater transparency and price competition in their healthcare costs. The cloud-based MediXall.com platform connects patients with healthcare providers and wellness services. The Company’s targeted marketplace is Florida, with plans for a nationwide roll-out. Further discussion on our operations, mission, and initiatives can be found in the Management’s Discussion and Analysis section of this report.


The Company has the following wholly-owned subsidiaries: (1) IHL of Florida, Inc., which is dormant, (2) Medixall Financial Group, which connects patients and practitioners with third party lenders, (3) Medixaid, Inc. which is dormant, and (4) MediXall.com, Inc. which was established to carry out the development and operation of our healthcare marketplace platform.


Note 2 – Going Concern


The Company began generating nominal revenue in 2019 and 2018. The Company has an accumulated deficit of $12,358,474 at September 30, 2019, and does not have sufficient operating cash flows. The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), which contemplates continuation of the Company as a going concern, which is dependent upon the Company’s ability to establish itself as a profitable business.


In its report with respect to the Company’s consolidated financial statements for the years ended December 31, 2018 and 2017 as included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on May 16, 2019, the Company’s independent auditors expressed substantial doubt about the Company’s ability to continue as a going concern. Because the Company has generated minimal revenues from its planned operations, its ability to continue as a going concern is wholly dependent upon its ability to obtain additional financing. Since inception, the Company has funded operations through short-term borrowings, related party loans, and the proceeds from equity sales in order to meet its strategic objectives. The Company's future operations are dependent upon its ability to generate revenues along with additional external funding as needed. However, there can be no assurance that the Company will be able to obtain sufficient funds to continue the development of its business plan. Subsequent to September 30, 2019, the Company has issued 240,000 shares of its common stock for total proceeds of $70,000.


In view of these conditions, the ability of the Company to continue as a going concern is in substantial doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. These condensed consolidated financial statements do not give effect to any adjustments which will be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying condensed consolidated financial statements.







6



MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 


Note 3 - Summary of Significant Accounting Policies


Basis of Presentation


The accompanying unaudited, condensed consolidated financial statements of the Company have been prepared in accordance with GAAP for interim financial information, and the SEC rules for interim financial reporting. Certain information and footnote disclosures normally included in the condensed consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However, in the opinion of management, the accompanying interim condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the Company’s condensed consolidated financial position as of September 30, 2019 and the condensed consolidated results of operations and cash flows for the periods presented. The condensed consolidated results of operations for interim periods are not necessarily indicative of the results of operations to be expected for any subsequent interim period or for the fiscal year ended December 31, 2019. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2018 included in the Company’s Form 10-K, which was filed with the SEC on May 16, 2019.


Principles of Consolidation


These condensed consolidated financial statements presented are those of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.


Use of Estimates


The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.


Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non-conforming events. Accordingly, the actual results could differ significantly from estimates.


A material estimate that is particularly susceptible to significant change in the near-term relate to the determination of the impairment of website and development cost. The Company uses various assumptions and actuarial data it believes to be reasonable under the circumstances to make this estimate. Although considerable variability is likely to be inherent in this estimate, management believes that the amount provided is reasonable. This estimate is continually reviewed and adjusted if necessary. Such adjustment is reflected in current operations.


Risks and Uncertainties


The Company's operations are subject to significant risks and uncertainties including financial, operational and regulatory risks, including the potential risk of business failure.


Furniture and equipment, net


Furniture and equipment are carried at cost, less accumulated depreciation. Major improvements are capitalized, while repair and maintenance are expensed when incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations for the period.




7



MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 


Depreciation is computed on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:

 

 

 

Estimated

 

 

 

Useful Lives

 

 

 

 

 

Equipment

 

5 years

 

Furniture

 

5-10 years

 

 

Fair Value Measurement


The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy which prioritizes the inputs used in the valuation methodologies in measuring fair value:


Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. The Company has no assets or liabilities valued with Level 1 inputs.


Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities valued with Level 2 inputs.


Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s website and development costs are the only assets or liabilities valued with Level 3 inputs.


Fair Value of Financial Instruments


The carrying value of cash approximates its fair value because of the short-term nature of these instruments and their liquidity. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.


Income Taxes


The Company accounts for income taxes using the liability method prescribed by ASC 740, "Income Taxes". Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.


Pursuant to accounting standards related to the accounting for uncertainty in income taxes, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more- likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than -not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de- recognized in the first subsequent financial reporting period in which the threshold is no longer met. The accounting standard also provides guidance on de- recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.


The Company assessed its earnings history, trends, and estimates of future earnings, and determined that the deferred tax asset could not be realized as of September 30, 2019. Accordingly, a valuation allowance was recorded against the net deferred tax asset.




8



MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 


Revenue Recognition


The Company records revenue when all of the following have occurred; (1) persuasive evidence of an arrangement exists, (2) service delivery has occurred, (3) the sales price to the customer is fixed or determinable, and (4) collectability is reasonably assured.


Revenue is recognized at point of sale, with no further obligations.


Share Based Payment Arrangements


The Company applies the fair value method in accounting for its stock based compensation. This standard states that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. The Company fair values the stock based compensation at the market price for the Company's stock as of the date of issuance.


Loss Per Share


The computation of basic loss per share (“LPS”) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted LPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted LPS does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on LPS. Therefore, when calculating LPS, there is no inclusion of dilutive securities as their inclusion in the LPS calculation is antidilutive.


Following is the computation of basic and diluted loss per share for the three and nine month periods ended September 30, 2019 and 2018:


 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Basic and Diluted LPS Computation

 

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss available to common stockholders

 

$

(714,878

)

 

$

(735,169

)

 

$

(2,129,641

)

 

$

(2,363,096

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

74,640,786

 

 

 

65,774,921

 

 

 

72,874,854

 

 

 

64,097,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted LPS

 

$

(0.01

)

 

$

(0.01

)

 

$

(0.03

)

 

$

(0.04

)


Potentially dilutive securities not included in the calculation of diluted LPS attributable to common stockholders because to do so would be anti-dilutive are as follows (in common stock equivalent shares):


Preferred stock (convertible)

 

 

24,900,000

 

 

 

24,900,000

 

 

 

24,900,000

 

 

 

24,900,000

 





9



MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 


Recent Accounting Pronouncements


In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02, Leases (Topic 842). ASU 2016-02 is intended to improve financial reporting of leasing transactions by requiring organizations that lease assets to recognize assets and liabilities for the rights and obligations created by leases on the condensed consolidated balance sheet. The Company adopted ASU 2016-02 on January 1, 2019. Our only lease at the adoption date was an operating lease with a 4 year term, commenced in January 2018, does not offer any options to extend, and does contain a rent escalation clause. The effect of this ASU increased condensed consolidated assets and condensed consolidated liabilities by $179,341, at the adoption date. The discount rate used in this calculation was 6.0%. For operating leases, the asset and liability are expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the condensed consolidated statements of cash flows.


In June 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-07, “Compensation – Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting,” to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this update took effect in 2019. The adoption of this guidance did not have a material impact on the Company's condensed consolidated financial statements.


Recoverability of Long-Lived Assets


The Company assesses the recoverability of long-lived assets annually or whenever events or changes in circumstances indicate that expected future undiscounted cash flows might not be sufficient to support the carrying amount of an asset. The Company deems an asset to be impaired if a forecast of undiscounted future operating cash flows is less than the carrying amount. If an asset is determined to be impaired, the loss is measured as the amount by which the carrying value of the asset exceeds its fair value. There was no impairment of long-lived assets pertaining to the nine month periods ended September 30, 2019 and 2018. However, there can be no assurances that future impairment tests will not result in a charge to operations.


Website and Development Costs

 

Internal and external costs incurred to develop, the internal-use computer software during the application and development stage shall be capitalized subsequent to the preliminary project stage and when it is probable that the project will be completed. As of September 30, 2019, the Company has met the capitalization requirements and has incurred $356,704 in costs related to the development of the Medixall platform.


Note 4 – Related Party Transactions


Pursuant to an agreement dated June 2013 and amended on May 20, 2019, TBG Holdings Corp. (“TBG”), was engaged to provide business advisory services, manage and direct our public relations, provide recruiting services, develop and maintain material for market makers and investment bankers, provide general administrative services, and respond to incoming investor relations calls. TBG is owned in part by Neil Swartz, the Company’s Chief Executive Officer and director, and a significant stockholder of the Company, and Timothy Hart, the Company’s Chief Financial Officer and director, and a significant stockholder of the Company. Under this agreement, we pay TBG a revised monthly fee of $40,000. During the three and nine month periods ended September 30, 2019 and 2018, the Company expensed $120,000 and $75,000 and $360,000 and $225,000, respectively, of related party management fees related to this agreement.




10



MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 


R3 Accounting LLC (“R3”), owned by Mr. Hart, provides accounting, tax and bookkeeping services to the Company. During the three and nine month periods ended September 30, 2019 and 2018, the Company expensed $55,725 and $15,000 and $186,275 and $75,000, respectively, related to R3 services.


Accounts receivable (accounts payable and accrued expenses) to related parties are as follows:


Related Party

 

At

September 30,

2019

 

 

At

December 31,

2018

 

TBG

 

$

(22,319

)

 

$

160,590

 

R3

 

 

(19,931

)

 

 

(21,931

)

 

 

$

(42,250

)

 

$

138,659

 


Note 5 – Preferred Stock


The 264,894 outstanding preferred shares are convertible into 24,900,000 common shares. The preferred shares do not pay dividends. The number of votes for the preferred share shall be the same as the amount of shares of common shares that would be issued upon conversion.


Note 6 – Pending Legal Matters


In January 2014 the Company was named as a co-defendant in a civil law proceeding in Broward County Florida. The complaint alleges a contract dispute between the Company's major shareholders' and various parties that are unrelated to the Company. The plaintiffs alleged the Company engaged in a breach of fiduciary duty, tortious interference with business relations and a fraudulent transfer of assets. Management plans a vigorous defense and it believes there is no basis for these allegations. Management is also exploring possible counterclaims against the plaintiffs. The Company's legal counsel has opined that an unfavorable outcome of this case is deemed remote and any possible loss is deemed immaterial. No accrual has been reflected on the condensed consolidated financial statements regarding this matter. As of September 30, 2019 there has been no new development in this matter.


Note 7 – Lease


We adopted ASU 2016-02, Leases on January 1, 2019, which resulted in the recognition of one operating lease on the condensed consolidated balance sheet in 2019 and forward. See Note 3 – Recent Pronouncements for more information on the adoption of the ASU. We determine if a contract contains a lease at inception and recognize operating lease right-of-use asset and operating lease liability based on the present value of the future minimum lease payments at the adoption date. As our lease does not provide an implicit rate, we use our incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease agreements that have lease and non-lease components, are accounted for as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.


The Company’s operating lease obligation is for the Company’s office facility. Our lease has a remaining lease term of approximately 1.8 years and does not offer an option to extend the lease. The components of lease expense and other lease information as of and during the three and nine month periods ended September 30, 2019 and 2018 are as follows:


 

 

Three Month Period Ended September 30,

2019

 

 

Nine Month Period Ended September 30,

2019

 

 

 

 

 

 

 

 

Operating Lease Expense Recognized

 

$

18,816

 

 

$

56,447

 

Cash paid for amounts included in measurement of lease liabilities

 

$

17,464

 

 

$

53,167

 




11



MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 



 

 

Three Month Period Ended September 30,

2018

 

 

Nine Month Period Ended September 30,

2018

 

 

 

 

 

 

 

 

Operating Lease Expense Recognized

 

$

19,448

 

 

$

62,092

 

Cash paid for amounts included in measurement of lease liabilities

 

 

N/A

 

 

 

N/A

 


N/A – Not applicable during 2018. The Company adopted ASU 2016-02 Leases on January 1, 2019.


 

 

At

September 30,

2019

 

 

 

 

 

Operating lease right-of-use asset

 

$

130,294

 

Operating lease liability

 

$

134,350

 

Weighted-average remaining lease term

 

 

1.8 years

 

Weighted-average discount rate

 

 

6.0

%


Future minimum lease payments under non-cancellable leases, reconciled to our discounted operating lease liability is as follows:


 

 

At

September 30,

2019

 

Remainder of 2019

 

$

18,628

 

2020

 

$

76,452

 

2021

 

$

46,182

 

Total future minimum lease payments

 

$

141,262

 

Less imputed interest

 

$

(6,912

)

Total operating lease liability

 

$

134,350

 










12



 


ITEM 2.

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


FORWARD LOOKING STATEMENTS


This report contains forward looking statements. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements contained in this report speak only as of the date of this report, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Such forward-looking statements include statements regarding, among other things, matters associated with:


 

·

our ability to continue as a going concern,

 

·

our history of losses which we expect to continue,

 

·

the significant amount of liabilities due related parties,

 

·

our ability to raise sufficient capital to fund our company,

 

·

our ability to integrate acquisitions and the operations of acquired companies,

 

·

the limited experience of our management in the operations of a public company,

 

·

potential weaknesses in our internal control over financial reporting,

 

·

increased costs associated with reporting obligations as a public company,

 

·

a limited market for our common stock and limitations resulting from our common stock being designated as a penny stock,

 

·

the ability of our board of directors to issue preferred stock without the consent of our stockholders,

 

·

our management controls the voting of our outstanding securities, and

 

·

the conversion of shares of Series A preferred stock will be very dilutive to our existing common stockholders.


You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in this report, in Part I. Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2018 and our other filings with the Securities and Exchange Commission. Other sections of this report include additional factors which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.


OTHER PERTINENT INFORMATION


Unless specifically set forth to the contrary, when used in this report the terms “Medixall Group”, the “Company,” “we”, “us”, “our” and similar terms refer to Medixall Group, Inc., a Nevada corporation, and its direct and indirect wholly-owned subsidiaries.


GENERAL


The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the Company’s results of operations and financial condition. The MD&A is provided as a supplement to, and should be read in conjunction with the unaudited condensed consolidated financial statements and the accompanying notes included in this Quarterly Report on Form 10-Q.




13



 


The MD&A is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.


OVERVIEW


MediXall is a technology and innovation-driven organization that is developing a new generation healthcare marketplace platform to address the growing need of self-pay and high deductible consumers for greater transparency and price competition in their healthcare costs. The cloud-based MediXall.com platform connects patients with healthcare providers and wellness services. The Company’s targeted marketplace is Florida, with plans for a nationwide roll-out.


MediXall seeks to revolutionize the medical industry by improving communication; providing better technology and support services; and enabling more efficient, cost-effective healthcare for the consumer. By approaching the healthcare ecosystem as a whole, MediXall seeks to create, invest and incubate companies that embody its mission statement.


Going Concern


We have incurred net losses of approximately $12.4 million since inception through September 30, 2019. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2018 contains an explanatory paragraph regarding our ability to continue as a going concern based upon the fact that we are dependent upon our ability to increase revenues along with raising additional external capital as needed. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances we will be successful in our efforts to generate revenues or report profitable operations or to continue as a going concern, in which event investors would lose their entire investment in our company.


Results of Operations


Three Month Period Ended September 30, 2019 Compared to the Three Month Period Ended September 30, 2018


Revenue


We have nominal revenue for the three month periods ended September 30, 2019 and 2018.


Operating Expenses


A summary of our operating expense for the three month periods ended September 30, 2019 and 2018 follows:


 

 

Three Months Ended

 

 

 

 

 

 

September 30,

 

 

(Decrease) /

 

 

 

2019

 

 

2018

 

 

Increase

 

Operating expense

 

 

 

 

 

 

 

 

 

Professional fees

 

$

131,988

 

 

$

169,452

 

 

$

(37,464

)

Professional fees – related party

 

 

55,725

 

 

 

15,000

 

 

 

40,725

 

Management fee – related party

 

 

120,000

 

 

 

75,000

 

 

 

45,000

 

Personnel related expenses

 

 

311,556

 

 

 

350,547

 

 

 

(38,991

)

Other selling, general, and administrative

 

 

96,416

 

 

 

125,542

 

 

 

(29,126

)

Total operating expense

 

$

715,685

 

 

$

735,541

 

 

$

(19,856

)


Operating expenses decreased $19,856 or 3% to $715,685 in 2019 compared to $735,541 in 2018. The decrease in total operating expenses is primarily due to an increase in professional fees and management fee-related party as a result of an increase in fees charged by R3 and TBG (discussed in Note 4), offset by a decrease in personnel related expenses. The decrease in personnel related expenses is due to less shares of common stock being issued for services to employees in 2019 compared to 2018.




14



 


Nine Month Period Ended September 30, 2019 Compared to the Nine Month Period Ended September 30, 2018


Revenue


We have nominal revenue for the nine month period ended September 30, 2019 and 2018.


Operating Expenses


A summary of our operating expense for the nine month periods ended September 30, 2019 and 2018 follows:


 

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

 

Increase /

 

 

 

2019

 

 

2018

 

 

(Decrease)

 

Operating expense

 

 

 

 

 

 

 

 

 

Professional fees

 

$

448,812

 

 

$

274,243

 

 

$

174,569

 

Professional fees – related party

 

 

186,275

 

 

 

75,000

 

 

 

111,275

 

Management fee – related party

 

 

360,000

 

 

 

225,000

 

 

 

135,000

 

Personnel related expenses

 

 

868,602

 

 

 

1,474,292

 

 

 

(605,690

)

Other selling, general, and administrative

 

 

268,205

 

 

 

316,106

 

 

 

(47,901

)

Total operating expense

 

$

2,131,894

 

 

$

2,364,641

 

 

$

(232,747

)


Operating expenses decreased $232,747 or 10% to $2,131,894 in 2019 compared to $2,364,641 in 2018. The decrease in total operating expenses is primarily due to an increase in professional fees such as consultant and legal fees, an increase in professional fees – related party as a result of an increase in fees charged by R3 (discussed in Note 4), an increase in management fee-related party as a result of an increase in fees charged by TBG (discussed in Note 4), offset by a decrease in personnel related expenses. The decrease in personnel related expenses is due to less shares of common stock being issued for services to employees in 2019 compared to 2018.


Liquidity and capital resources


Liquidity is the ability of a company to generate sufficient cash to satisfy its needs. At September 30, 2019 we had $50,707 in cash and a net working capital deficit of $246,691.


For the nine month period ended September 30, 2019 we raised $1,632,501 from sales of our common stock, net of offering costs of $0, and for the nine month period ended September 30, 2018, we raised $1,613,073, net of offering cost of $303,512.


Net cash used in operating activities for nine month period ended September 30, 2019 was $1,769,176 as compared to $1,536,768 for the nine month period ended September 30, 2018. This change primarily results from our decreased net loss offset by fluctuations in accounts receivable-related party, accounts payable and accrued expenses,  accounts payable and accrued expenses-related party and the issuance of common stock to employees for services rendered.


Our primary source of capital to develop and implement our business plan has been from sales of common stock.


Other Contractual Obligations


None.


Off-Balance Sheet Arrangements

  

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term "off-balance sheet arrangement" generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.




15



 


Recently Issued Accounting Pronouncements


See Note 3 to our condensed consolidated financial statements for more information regarding recent accounting pronouncements and their impact to our condensed consolidated results of operations and financial position.


ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.


ITEM 4.

CONTROLS AND PROCEDURES.


Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

  

We carried out an evaluation as required by paragraph (b) of Rule 13a-15 and 15d-15 of the Exchange Act, under the supervision and with the participation of our management, including our Interim Chief Executive Officer and Chief Financial Officer, of the effectiveness of our financial disclosures, controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of September 30, 2019.

  

A material weakness can be defined as an insufficiency of internal controls that may result in a more than remote likelihood that a material misstatement will not be prevented, detected or corrected in a company’s condensed consolidated financial statements.


Based upon that evaluation, our Interim Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2019 our disclosure controls and procedures were not effective, based on the following deficiencies:

  

  

Weaknesses in accounting and finance personnel: We have a small accounting staff and we do not have the robust employee resources and expertise needed to meet complex and intricate GAAP and SEC reporting requirements of a U.S. public company. Additionally, numerous adjustments and proposed adjustments have been noted by our auditors. This is deemed by management to be a material weakness in preparing condensed consolidated financial statements.

  

  

  

  

We have written accounting policies and control procedures, but we do not have sufficient staff to implement the related controls. Management had determined that this lack of the implantation of segregation of duties, as required by our written procedures, represents a material weakness in our internal controls.

  

  

  

  

Internal control has as its core a basic tenant of segregation of duties. Due to our limited size and economic constraints, the Company is not able to segregate for control purposes various asset control and recording duties and functions to different employees. This lack of segregation of duties had been evaluated by management, and has been deemed to be a material control deficiency.

  

The Company has determined that the above internal control weaknesses and deficiencies could result in a reasonable possibility for the condensed consolidated financial statements that a material misstatements will not be prevented or detected on a timely basis by the Company’s internal controls.

  

Management is currently evaluating what steps can be taken in order to address these material weaknesses. As a growing small business, the Company continuously devotes resources to the improvement of our internal control over financial reporting. Due to budget constraints, the staffing size, proficiency and specific expertise in the accounting department is below requirements for the operation. The Company is anticipating correcting deficiencies as funds become available.


Changes in Internal Control Over Financial Reporting


There were no changes during our last fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.






16



 


PART II - OTHER INFORMATION


ITEM 1.

LEGAL PROCEEDINGS.


Except for litigation described in the pending legal matters Note 6 there is no other litigation. Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party averse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.


ITEM 1A.

RISK FACTORS.


As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.


ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


During the nine month period ended September 30, 2019, we:


 

·

Received proceeds of $1,632,501, net of offering costs of $0, pursuant to a Private Placement Memorandum and for which 5,533,500 shares of restricted common stock were issued. These securities were issued pursuant to exemptions from the registration requirements of the Securities Act of 1933 (Securities Act), as amended, pursuant to section 4(a)(2) thereof.

 

·

Issued 292,668 restricted shares of common stock as compensation for services rendered by employees, advisors and independent contractors of the Company with a fair market value of $151,334. These securities were issued pursuant to exemptions from the registration requirements of the Securities Act, pursuant to section 4(a)(2) thereof.


ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.


None.


ITEM 4.

MINE SAFETY DISCLOSURES.


Not applicable to our Company.


ITEM 5.

OTHER INFORMATION.


None.


ITEM 6.

EXHIBITS.


Exhibit No.

 

Description

31.1

  

Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer *

31.2

  

Rule 13a-14(a)/ 15d-14(a) Certification of Chief Financial Officer *

32.1

  

Section 1350 Certification of Chief Executive Officer *

32.2

 

Section 1350 Certification of Chief Financial Officer *

101.INS

  

XBRL Instance Document *

101.SCH

  

XBRL Taxonomy Extension Schema *

101.CAL

  

XBRL Taxonomy Extension Calculation Linkbase *

101.DEF

  

XBRL Taxonomy Extension Definition Linkbase *

101.LAB

  

XBRL Taxonomy Extension Label Linkbase *

101.PRE

  

XBRL Taxonomy Extension Presentation Linkbase *

———————

*

Filed herewith.



17



 



SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 

MediXall Group, Inc.

 

 

 

Dated: November 14, 2019

By:

/s/ Timothy S. Hart

 

 

Timothy S. Hart

 

 

Chief Financial Officer, Principal Financial and Accounting Officer

 

 

 

 

 

 

Dated: November 14, 2019

By:

/s/ Neil Swartz

 

 

Neil Swartz

 

 

Interim Chief Executive Officer, Principal Executive Officer













18


 C: 

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing    Date    Other Filings
12/31/1910-K,  NT 10-K
Filed on:11/14/19
11/1/19
For Period end:9/30/19
6/30/1910-Q
5/20/19
5/16/1910-K
3/31/1910-Q,  NT 10-Q
1/1/19
12/31/1810-K,  NT 10-K
9/30/1810-Q
6/30/1810-Q
3/31/1810-Q
12/31/1710-K,  10-K/A
12/21/98
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