UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
———————
FORM 10-Q
———————
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2015
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: 333-191564
———————
Integrated Inpatient Solutions, Inc.
(Exact name of registrant
as specified in its charter)
———————
N/A
(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark if the issuer (1) filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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[ ]No [X]
Indicate by check mark whether the registrant has submitted electronically and posted
on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes [X] No [ ]
Indicate by check mark if there is no disclosure
of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form, and no disclosure will be contained,
to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant
is a large accelerated filer, a non-accelerated filer, or a smaller reporting company, See the definition of "large accelerated
filer," "accelerated filer" and "smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
[ ] |
Accelerated filer |
[ ] |
Non-accelerated filer |
[ ] |
Smaller reporting company |
[X] |
Indicate by checkmark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer’s
classes of common stock, as of the latest practicable date.
Class |
|
Outstanding at
August 17, 2015 |
Common Stock |
|
111,225,013 |
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION |
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ITEM 1. |
FINANCIAL STATEMENTS |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
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4 |
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ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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14 |
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ITEM 4. |
CONTROLS AND PROCEDURES |
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17 |
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PART II – OTHER INFORMATION
ITEM 1. |
LEGAL PROCEEDINGS |
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18 |
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ITEM 1A. |
RISK FACTORS |
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18 |
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ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
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18 |
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ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES |
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18 |
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ITEM 4. |
MINE SAFETY DISCLOSURES |
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19 |
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ITEM 5. |
OTHER INFORMATION |
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18 |
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EXPLANATORY NOTE
As used in this Quarterly Report on Form 10-Q
(“Form 10-Q”), unless the context requires otherwise, “we,” “our,” “us” or
the “Company” refers to Integrated Inpatient Solutions, Inc. Pursuant to Item 10(f) of Regulation S-K promulgated
under the Securities Act of 1933, as amended (the “Securities Act”), we have elected to comply with the scaled disclosure
requirements applicable to “smaller reporting companies” throughout this Form 10-Q. Except as specifically included
in this Form 10-Q, items not required by the scaled disclosure requirements have been omitted.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
All statements contained in this Form 10-Q,
other than statements that relate to present or historical conditions, are forward-looking statements, including, but not
limited to, statements containing the words “believe,” “anticipate,” “expect” and words of
similar import and are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. These statements are based on certain assumptions and analyses made by us in light of our assessment of historical
trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances.
However, forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily
be accurate indications of the times at, or by which, such performance or results will be achieved, or whether such performance
or results will be achieved at all. Forward-looking information is based on information available at the time and/or management’s
good faith belief with respect to future events, and is subject to risks and uncertainties that could cause our actual performance
or results to differ materially from those expressed in the statements. Important factors that could cause such differences include,
but are not limited to: (i) our ability to continue as a going concern; (ii) our ability to raise additional financing on acceptable
terms, or at all; (iii) industry competition, conditions, performance and consolidation; (iv) the effects of adverse general economic
conditions, both within the United States and globally and the availability of debt and equity financing in view of the current
economy; (v) any adverse economic or operational repercussions from terrorist activities, war or other armed conflicts; (vi) new
product development and introduction in light of our lack of adequate financing; (vii) changes in business strategy or development
plans; (viii) the ability to attract and retain qualified personnel; and (ix) the ability to protect our technology, among others.
Consequently, all of the forward-looking statements
made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results
anticipated by management will be realized or, even if substantially realized, that they will have the expected consequences to
or effects on our business operations.
Forward-looking statements speak only as of the date the statements are made. The Company
assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other
factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company updates
one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect thereto
or with respect to other forward-looking statements.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The Company’s unaudited interim financial statements for
the three months ended June 30, 2015 form part of this quarterly report. They are stated in United States Dollars (US$) and are
prepared in accordance with United States generally accepted accounting principles.
These financial statements should be read in conjunction with the
audited financial statements and notes for the year ended December 31, 2014, on Form 10-K, as filed with the Securities and Exchange
Commission on March 30, 2015.
Integrated Inpatient Solutions, Inc. |
Condensed Consolidated Balance Sheets |
| |
June 30, | |
December 31, |
| |
2015 | |
2014 |
| |
(Unaudited) | |
|
ASSETS | |
| | |
CURRENT ASSETS | |
| | | |
| | |
Cash | |
$ | 221,346 | | |
$ | 372,206 | |
Accounts receivable, net | |
| 9,368 | | |
| 58,927 | |
Refundable income taxes | |
| 237,077 | | |
| 237,077 | |
Prepaid expenses and other current assets | |
| 11,956 | | |
| 14,810 | |
Assets from discontinued operations | |
| 41,416 | | |
| 45,546 | |
Total current assets | |
| 521,163 | | |
| 728,566 | |
| |
| | | |
| | |
Other assets | |
| | | |
| | |
Deposits | |
| 954 | | |
| 954 | |
| |
| | | |
| | |
TOTAL ASSETS | |
$ | 522,117 | | |
$ | 729,520 | |
| |
| | | |
| | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDER'S EQUITY | |
| | | |
| | |
CURRENT LIABILITIES | |
| | | |
| | |
Accounts payable and accrued liabilities | |
$ | 91,936 | | |
$ | 59,954 | |
Deferred revenue | |
| 12,027 | | |
| 23,782 | |
Due to related party | |
| 4,000 | | |
| — | |
Liabilities from discontinued operations | |
| 110,836 | | |
| 167,306 | |
Total current liabilities | |
| 218,799 | | |
| 251,042 | |
| |
| | | |
| | |
TOTAL LIABILITIES | |
| 218,799 | | |
| 251,042 | |
| |
| | | |
| | |
Commitments and Contingencies (See Note 3) | |
| | | |
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Stockholders’ Equity | |
| | | |
| | |
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 250,000 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | |
| 25 | | |
| 25 | |
Common stock, $0.0001 par value, 2,000,000,000 shares authorized, 111,225,013 and 150,503,951 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively. | |
| 11,123 | | |
| 15,850 | |
Additional paid-in capital | |
| 1,015,925 | | |
| 1,011,198 | |
Accumulated deficit | |
| (723,755 | ) | |
| (548,595 | ) |
Total Stockholders’ Equity | |
| 303,318 | | |
| 478,478 | |
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| | | |
| | |
Total Liabilities and Stockholders' Equity | |
$ | 522,117 | | |
$ | 729,520 | |
The accompanying notes are an integral part of the condensed
consolidated unaudited financial statements.
Integrated Inpatient Solutions, Inc. |
Condensed Consolidated Statement of Operations |
(Unaudited) |
| |
Three months ended June 30, | |
Six months ended June, 30 |
| |
2015 | |
2014 | |
2015 | |
2014 |
| |
(Consolidated) | |
| |
(Consolidated) | |
|
Revenue | |
$ | 67,529 | | |
$ | 59,280 | | |
$ | 141,052 | | |
$ | 99,420 | |
Cost of services | |
| 93,907 | | |
| 43,065 | | |
| 191,990 | | |
| 53,689 | |
Gross Income / (Loss) | |
| (26,378 | ) | |
| 16,215 | | |
| (50,938 | ) | |
| 45,731 | |
Operating expenses | |
| | | |
| | | |
| | | |
| | |
| |
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General and administrative | |
| 51,884 | | |
| 120,544 | | |
| 124,831 | | |
| 202,822 | |
Loss from continuing operations | |
| (78,262 | ) | |
| (104,329 | ) | |
| (175,769 | ) | |
| (157,091 | ) |
| |
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| | | |
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Benefit from income taxes on continuing operations | |
| — | | |
| 37,950 | | |
| — | | |
| 74,984 | |
Interest expense | |
| (742 | ) | |
| — | | |
| (742 | ) | |
| — | |
Interest Income | |
| 99 | | |
| 149 | | |
| 214 | | |
| 304 | |
Loss from continuing operations | |
| (78,905 | ) | |
| (66,230 | ) | |
| (176,297 | ) | |
| (81,803 | ) |
| |
| | | |
| | | |
| | | |
| | |
Discontinued operations: | |
| | | |
| | | |
| | | |
| | |
Income / (loss) from discontinued operations | |
| (4,709 | ) | |
| — | | |
| 1,137 | | |
| — | |
Income / (Loss) on discontinued operations | |
| (4,709 | ) | |
| — | | |
| 1,137 | | |
| — | |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
$ | (83,614 | ) | |
$ | (66,230 | ) | |
$ | (175,160 | ) | |
$ | (81,803 | ) |
Net loss per share - basic and diluted | |
| | | |
| | | |
| | | |
| | |
Loss from continuing operations | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
Income from discontinued operations | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | |
Net loss per share - basic and diluted | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
Weighted average number of common shares outstanding - basic and diluted | |
| 150,710,719 | | |
| 49,799,178 | | |
| 154,585,807 | | |
| 49,209,050 | |
Integrated Inpatient Solutions, Inc. |
Condensed Consolidated Statements of Cash Flows |
(Unaudited) |
| |
Six months ended |
| |
June 30, |
| |
2015 | |
2014 |
| |
| (Consolidated) | | |
| | |
Cash Flow used in Operating Activities | |
| | | |
| | |
Net Loss | |
$ | (176,297 | ) | |
$ | (81,803 | ) |
Plus net income from discontinued operations | |
| 1,137 | | |
$ | — | |
Net loss from operations | |
| (175,160 | ) | |
| (81,803 | ) |
Adjustments to reconcile net
loss to net cash used in operating activities: | |
| | | |
| | |
Depreciation | |
| — | | |
| 2,382 | |
Provision for doubtful accounts | |
| 5,155 | | |
| 5,881 | |
Stock issued for services | |
| — | | |
| 49,140 | |
Changes in assets and liabilities: | |
| — | | |
| | |
Accounts receivable | |
| 44,404 | | |
| (15,430 | ) |
Refundable Income Taxes | |
| — | | |
| (74,984 | ) |
Prepaid expenses and other current assets | |
| 2,854 | | |
| — | |
Assets from discontinued operations | |
| 4,130 | | |
| — | |
Deferred revenue | |
| (11,755 | ) | |
| 28,200 | |
Liabilities from discontinued operations | |
| (56,470 | ) | |
| (10,000 | ) |
Accounts payable and accrued expenses | |
| 31,982 | | |
| 1,300 | |
Net cash used in operating activities | |
| (154,860 | ) | |
| (95,314 | ) |
| |
| | | |
| | |
Cash Flow from Financing Activities | |
| | | |
| | |
Due to related party | |
| 4,000 | | |
| — | |
Net cash provided by financing activities | |
| 4,000 | | |
| — | |
| |
| | | |
| | |
Net decrease in cash | |
| (150,860 | ) | |
| (95,314 | ) |
| |
| | | |
| | |
Cash - Beginning of year | |
| 372,206 | | |
| 538,633 | |
Cash - End of the period | |
$ | 221,346 | | |
$ | 443,319 | |
| |
| | | |
| | |
During the six months ended June 30, 2015 47,278,938 shares of common stock were retired to the treasury with a par value of $4,728 | |
| | | |
| | |
Integrated Inpatient Solutions, Inc.
Notes to Condensed Financial Statements
June 30, 2015 (Consolidated) and June
30, 2014
(Unaudited)
NOTE 1 – ORGANIZATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated in Florida
on July 31, 2001. On September 21, 2001 the Company was acquired by PlaNet.Com, Inc., a Nevada public, non-reporting corporation.
Pla.Net.Com, Inc. was considered a shell at the time of acquisition and therefore the acquisition was treated as a reverse merger
(the acquired company is treated as the acquiring company for accounting purposes). Pla.Net.Com, Inc. changed its name to Inpatient
Clinical Solutions, Inc. immediately after the merger.
Through March 2013, the Company provided
health care services in South Florida. The Company provided inpatient physician care to various health care facilities and health
plans in the South Florida area. Prior to February 2012, the Company provided Hospitalist services at acute care hospitals. Hospitalists
focus on a patient’s care from the time of admission to discharge, working in close consultation with primary care physicians,
other referring physicians and medical providers to coordinate the inpatient care delivery system and manage the entire inpatient
episode of care.
The Company sold the hospitalist business
during February 2012. At that time, the Company changed its name from Inpatient Clinical Solutions, Inc. to Integrated Inpatient
Solutions, Inc. In November 2011, the Company entered into an agreement with a hospital to provide intensives services. Under the
exclusive agreement, the Company provided critical care intensives coverage for all medical and surgical intensive care unit patients
at the hospital. The physician’s includes full-time employees, part-time and temporary physicians as well as contracted physician
providers. The intensives agreement was terminated in January 2013.
The Company now provides interior design
services targeting budget minded individuals. The business operates under the trade name Integrated Interior Design. The Company
earns revenues from providing decorator services which are billed on hourly and per diem rates. The interior design business currently
operates in South Florida and will expand regionally and nationally. The business provides interior design, interior staging, accompanied
shopping, paint color selection, architectural drawing and other design services.
On August 26, 2014, the Company entered
into a Share Exchange Agreement pursuant to which the Company agreed to acquire all of the outstanding capital stock of Integrated
Timeshare Solutions, Inc., a Nevada corporation (“ITS”) in exchange for newly issued shares of the Company’s
common stock. Accordingly, as a result of the exchange, ITS is now a wholly owned subsidiary of the Company. ITS was established
on July 2, 2014 as a real estate consulting firm specializing in timeshare liquidation and mortgage relief. The Company has discontinued
operations of this subsidiary.
Basis of Presentation
The unaudited interim financial statements
have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial
information and with the instructions to Form 10-Q and Article 8 of Regulation SX. Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial statements.
The financial information furnished herein reflects all adjustments, consisting of normal
recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position,
results of operations and cash flows for the interim periods. The results of operations for the six months ended June 30, 2015
are not necessarily indicative of the results to be expected for the year ending December 31, 2015.
Use of Estimates
The preparation of financial statements
in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. The areas involving the most significant use of estimates include legal contingencies, deferred
tax benefits, refundable income taxes, estimated realizable value of accounts receivable and claims related to medical malpractice.
These estimates are based on knowledge of current events and anticipated future events. The Company adjusts these estimates each
period as more current information becomes available. The impact of any changes in estimates is included in the determination of
earnings in the period in which the estimate is adjusted. Actual results may ultimately differ materially from those estimates.
Cash
The Company considers cash in banks
and other highly liquid investments with insignificant interest rate risk and maturities of three months or less at the time of
acquisition to be cash and cash equivalents. At March 31, 2015 and December 31, 2014, the Company had no cash equivalents. The
Company maintains cash accounts in financial institutions that are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”).
Deposits in excess of the FDIC insurance amount of $250,000 totaled $0 at June 30, 2015. Deposits in excess of the FDIC insurance
amount of $250,000 totaled $80,000 at December 31, 2014
Accounts Receivable
The determination of bad debt allowances
constitutes a significant estimate. Accounts receivable represent amounts due from interior design customers. Accounts receivable
are recorded and stated at the amount expected to be collected and have been adjusted to reflect the differences between charges
and the estimated reimbursable amounts.
Accounts receivable represent amounts
due from customers for design services and customers relinquishing their Timeshares. Accounts receivable from customers for design
services are recorded and stated at the amount expected to be collected and reflect an allowance for uncollectible amounts of $12,142
and $6,987 at June 30, 2015 and December 31, 2014, respectively, Accounts receivable from customers relinquishing their Timeshares
was $9,000 and $9,000 at June 30, 2015 and December 31, 2014, respectively. This amount is being held by the company’s credit
card processor which places a six month hold on transactions dealing with Timeshares.
Principles of Consolidation
The accompanying condensed consolidated
financial statements include the accounts of Integrated Inpatient Solutions, Inc. and its wholly owned subsidiary Integrated Timeshare
Solutions, Inc. (from August 26, 2014). All intercompany transactions and balances have been eliminated in consolidation.
Impairment of Goodwill and Long-Lived
Assets
The Company assesses the recoverability
of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or
group of long-lived assets over their remaining estimated useful lives, against their respective carrying amounts. Impairment,
if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined
using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived
assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally
estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The
Company determined that there were no impairments of long-lived assets as of March 31, 2015.
Fair Value of Financial Instruments
U.S. GAAP for fair value measurements
establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three levels.
The fair value hierarchy gives the highest priority to quoted market prices (unadjusted) in active markets for identical assets
or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2 inputs are inputs, other than quoted
prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. The fair
value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities
and the lowest priority to unobservable inputs.
The carrying amounts of the Company’s
financial assets and liabilities, such as cash, accounts receivable, deposits, accounts payable and accrued liabilities, approximate
their fair values because of the short maturity of these instruments.
Revenue Recognition
The Company follows ASC 605-10-S99-1
of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable
and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement that
the services have been rendered to the customer, the sales price is fixed or determinable, and collectability is reasonably assured.
Interior Design – The Company
provides design services billed at hourly rates. The Company recognizes revenue from design services when services are rendered
to the customers.
Timeshare Liquidation –
The Company earns revenue from timeshare liquidation and mortgage relief services. The company offers services for timeshare owners
that either owns their timeshare outright and for those that have a mortgage on their property, and are interested in exiting their
timeshare property. The Company recognizes revenue when the title has been transferred and the transaction is complete.
Income Taxes
The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax
assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial
statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected
to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely
than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period
that includes the enactment date.
The Company adopted section 740-10-25
of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination
of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under
Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not
that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The
Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section
740-10-25.
Earnings (Loss) Per Share
The Company computes earnings (loss)
per share in accordance with the provisions of FASB ASC Topic 260, "Earnings Per Share," which specifies the computation,
presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. Basic
earnings (loss) per share are computed by dividing net earnings (loss) available to common shareholders by the weighted average
number of common shares outstanding during the period. Diluted earnings (loss) per share are computed assuming the exercise
of dilutive stock options under the treasury stock method and the related income tax effects As of June 30, 2015 and 2014, we had
250,000 shares of Convertible Preferred Stock outstanding convertible into 2,500,000 common shares.
Reclassification
Certain reclassifications, including
discontinued operations, have been made to the prior year’s data to conform to current year presentation. These reclassifications
had no effect on net income (loss).
Recent Accounting Pronouncements
In April 2015, FASB issued Accounting
Standards Update (“ASU”) No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying
the Presentation of Debt Issuance Costs”, is to simplify presentation of debt issuance costs by requiring that debt issuance
costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of
that debt liability, consistent with debt discounts. The ASU does not affect the recognition and measurement guidance for debt
issuance costs. For public companies, the ASU is effective for financial statements issued for fiscal years beginning after December
15, 2015, and interim periods within those fiscal years. Early application is permitted. We are currently reviewing the provisions
of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.
In April 2015, FASB issued Accounting
Standards Update (“ASU”) No. 2015-04, “Compensation – Retirement Benefits (Topic 715): Practical Expedient
for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets”, permits the entity to measure
defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply
that practical expedient consistently from year to year. The ASU is effective for public business entities for financial statements
issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is
permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations,
cash flows or financial condition.
In April 2015, FASB issued Accounting
Standards Update (“ASU”) No. 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software
(Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement”, provides guidance to
customers about whether a cloud computing arrangement includes a software license. If such an arrangement includes a software license,
then the customer should account for the software license element of the arrangement consistent with the acquisition of other software
licenses. If the arrangement does not include a software license, the customer should account for it as a service contract. For
public business entities, the ASU is effective for annual periods, including interim periods within those annual periods, beginning
after December 15, 2015. Early application is permitted. We are currently reviewing the provisions of this ASU to determine if
there will be any impact on our results of operations, cash flows or financial condition.
In April 2015, FASB issued Accounting Standards Update (“ASU”) No.
2015-06, “Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership
Dropdown Transactions”, specifies that, for purposes of calculating historical earnings per unit under the
two-class method, the earnings (losses) of a transferred business before the date of a drop down transaction should be
allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited
partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a
result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and
after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are
required. The ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal
years. Earlier application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be
any impact on our results of operations, cash flows or financial condition. All other newly issued accounting pronouncements
but not yet effective have been deemed either immaterial or not applicable.
NOTE 2 - STOCKHOLDERS' EQUITY
Common Stock
On June 23, 2015, the company amended its Articles
of Incorporation to increase the total number of shares of all classes of stock to 2,010,000,000 shares, of which 2,000,000,000
shares shall be Common Stock with a par value of $0.0001 per share, and 10,000,000 shares shall be Serial Preferred Stock with
a par value of $0.0001 per share.
In March 2015, the Company entered into a settlement agreement with a former Officer and shareholder. Under
the terms of the agreement, the Company agreed to pay $19,250 and forgive the $5,000 note receivable paid to the former Officer.
The former Officer and shareholder agreed to relinquish his interest in the Company including 21,296,819 shares of the Company’s
common stock. As of June 30, 2015, the Company has paid $19,250 to the former Officer and the stock ownership has been returned
to the Company's treasury.
In May 2015 the former Directors agreed to
relinquish 25,982,119 shares of the Company’s common stock due to Company winding down the timeshare business.
Preferred Stock
The Company has 10,000,000 authorized
shares of non-redeemable, convertible preferred stock with a par value of $.0001. Each share of preferred stock is convertible
to 10 shares of common stock.
NOTE 3 - COMMITMENT AND CONTINGENCIES
Commitment
In April 2013, the Company entered into
a one year office lease agreement at $450 per month, and the lease expired in May 2014. The office space was being occupied on
a month to month basis until the lease agreement was amended. In August 2014, the Company entered into an amended lease agreement.
The lease term is one year commencing on June 1, 2014 and will expire on May 31, 2015. The monthly rent remains at $450 per month.
Total rent expense for the three and six months ended June 30, 2015 and 2014 was $1,044, $2,385 $1,044 and $2,835 respectively.
On August 26, 2014, the Company entered
into an employment agreement with its Chief Executive Officer. The agreement is for a period of two years unless renewed or extended
by both parties. The agreement provides an annual base salary of $80,000. The Officer is also eligible for a bonus payment based
on the gross revenue achieved by the Company at the end of each twelve month period following commencement of this agreement. The
bonuses are ranging from $40,000 to $100,000 for gross revenues ranging from $3,750,000 to $7,500,000 and over $7,500,000. As of
June 30, 2015, the Company did not reach the targeted gross revenue. Therefore, the Officer did not receive any bonuses for the
six months ended June 30, 2015.
On August 26, 2014, the Company entered
into an employment agreement with its Senior Vice President of Sales. The agreement is for a period of two years unless renewed
or extended by both parties. The agreement provides an annual base salary of $80,000. The Officer is also eligible for a bonus
payment based on the gross revenue achieved by the Company at the end of each twelve month period following commencement of this
agreement. The bonuses are ranging from $40,000 to $100,000 for the gross revenue ranging from $3,750,000 to $7,500,000 and over
$7,500,000. In March 2015, the Officer entered into a settlement agreement with the Company. As a result, the employment agreement
was concurrently terminated.
Contingencies
While providing healthcare services
in the ordinary course of our business, the Company became involved in lawsuits and legal proceedings involving claims of medical
malpractice related to medical services provided by our affiliated physicians. The Company is currently involved in the settlement
stages of one such matter. The accompanying financial statements include an accrual of $50,000 for this matter under the caption
liabilities from discontinued operations. This accrual represents the Company’s anticipated deductible on the settlement.
The details of this settlement are described more fully below.
In September 2013, the Company became
involved in a legal settlement relating to a malpractice claim. As a result of the settlement agreement, the Company agreed to
pay a total amount of $500,000, which will be covered by the tail malpractice insurance. The Company has accrued $50,000 for the
deductible on the tail malpractice insurance as of June 30, 2015 and December 31, 2014.
Edra Schwartz as the Personal Representative
of the Estate of Robert A. Schwartz, Deceased, v. Jason Strong, M.D., Aretha Nelson, M.D. and Inpatient Clinical Solutions, Inc.
- This matter involves a 66 year old white male who developed a MRSA (methicillin-resistant staphylococcus aureus) infection following
a craniotomy to remove a suspected meningioma. The matter alleges (1) Failure to properly interpret the brain MRIs preoperatively
(this is directed at the radiologist preoperatively); and (2) Failure to diagnose a MRSA infection and brain abscess following
the craniotomy on May 6, 2009. The patient died on September 24, 2009. The suit commenced October 18, 2011 and the case is pending
in the circuit court of the 17 Judicial Circuit in and for Broward County, FL, Case # 11-10485. The claim is for unspecified monetary
damages. The Company is defending this case vigorously and, while the claims for damages have not been quantified, the Company
does not believe that a negative decision would have a material impact on the Company.
In November 2011, the Company became
involved in a legal settlement relating to a malpractice claim for $100,000. As a result of the settlement agreement, the Company
agreed to pay a total amount of $100,000. As of June 30, 2015 and December 31, 2014, the remaining balance was approximately $40,000
which is due in equal annual installments of $20,000 over the next two years.
The accrued legal settlements are presented
as liabilities from discontinued operation in the accompanying balance sheets (see Note 7).
In November 2014 the Company had a dispute
with a former Officer and shareholder. The agreement was settled in March 2015 whereupon the Company agreed to pay the former Officer
and shareholder $19,250 and forgive the $5,000 note receivable paid to the former Officer (see Note 4). The former Officer and
shareholder agreed to relinquish his entire interest in the company, including his stock ownership. As of June 30, 2015, the Company
has paid $19,250 to the former officer and the stock ownership has been returned to the Company.
The Company is currently not aware of
any other such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse affect
on its business, financial condition or operating results except for the items described above. Litigation is subject to inherent
uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.
NOTE 4 – NOTE RECEIVABLE –
RELATED PARTY
In March 2015, the Company entered into a settlement agreement with a former Officer
and shareholder. Under the terms of the agreement, the Company agreed to pay $19,250 and forgive the $5,000 note receivable paid
to the former Officer. The former Officer and shareholder agreed to relinquish his interest in the Company including 21,296,819
shares of the Company’s common stock. As of June 30, 2015, the Company has paid $19,250 to the former Officer and the stock
ownership has been returned to the Company's treasury.
NOTE 5 – DUE TO RELATED PARTY
During the six months ended June 30,
2015, the Officer and principal shareholder of the Company paid expenses on behalf of the Company in the amount of $4,000.
NOTE 6 – CONCENTRATIONS
Geographic and Employment
Our operations are concentrated in the
South Florida region. We are reliant on the services of two full time executives one who manage the operations of the Company.
Revenue and Accounts Receivable
During the six months ended June 30,
2015, 79% of revenues from the design business were derived from four customers of 37%, 18%, 12%, and 12% of net revenue.
At June 30, 2015, 78% of accounts receivable
were derived from three customers at 40%, 17%, 11% and 10%.
During the six months ended June 30, 2014,
45% of revenues were derived from two customers at 34%, and 11%.
At June 30, 2014, 64% of accounts receivable
were derived from three customers at 29%, 21% and 14%.
Accounts receivable from customers relinquishing
their Timeshares was $9,000 at June 30, 2015 and December 31, 2014. This amount is being held by the Company’s credit card
processor which places a six month hold on any transactions involving Timeshares.
NOTE 7 - Discontinued
Operations
In March 2013, management decided to
exit the health care provider business and in November
2014 management decided to exit the timeshare business. Accordingly, the Company's current strategy is focused on its interior
design business. Accordingly, the financial statements have been presented in accordance with ASC 205-20, Discontinued Operations.
The following table illustrates the
reporting of the discontinued operations included in the Statements of Operations for the June 30, 2015:
Timeshare deed liquidation revenue | |
$ | 35,195 | |
Operating expenses: | |
| | |
General and administrative | |
| 34,058 | |
Total operating expenses | |
| 34,058 | |
| |
| | |
Income from discontinued operations | |
$ | 1,137 | |
As of June 30, 2015 and December 31, 2014, assets and liabilities from discontinued operations are listed below:
| |
June 30, 2015 | |
December 31, 2014 |
| |
| | | |
| | |
Cash | |
$ | 32,416 | | |
$ | 20,496 | |
Accounts receivable | |
| 9,000 | | |
| 9,000 | |
Escrow funds - timeshare | |
| — | | |
| 16,050 | |
Assets from discontinued operations | |
$ | 41,416 | | |
$ | 45,546 | |
| |
| | | |
| | |
Accrued legal settlements | |
$ | 89,295 | | |
$ | 108,589 | |
Client Deposits - Timeshare | |
| 11,590 | | |
| 46,784 | |
Other | |
| 9,951 | | |
| 11,933 | |
Liabilities from discontinued operations | |
$ | 110,836 | | |
$ | 167,306 | |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our
financial condition and results of operations should be read in conjunction with our consolidated financial statements and related
notes that appear elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2014.
Cautionary Statement Regarding Forward-Looking Statements
This report may contain forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, and we intend
that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements are based
on our management’s beliefs and assumptions and on information currently available to our management. Any such forward-looking
statements would be contained principally in “Management’s Discussion and Analysis or Plan of Operations” and
“Risk Factors.” Forward-looking statements include information concerning our possible or assumed future results of
operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities and
the effects of regulation. Forward-looking statements include all statements that are not historical facts and can be identified
by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,”
“hopes,” “intends,” “may,” “plans,” “potential,” “predicts,”
“projects,” “should,” “will,” “would” or similar expressions.
Forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss
many of these risks in greater detail in “Risk Factors.” Given these uncertainties, you should not place undue reliance
on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions
only as of the date of this report. You should read this report and the documents that we reference in this report and have filed
as exhibits to the report completely and with the understanding that our actual future results may be materially different from
what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to
update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if
new information becomes available in the future.
Overview
The Company now provides interior design services targeting cost conscious
individuals. The business operates under the trade name Integrated Interior Design. The Company earns revenues from providing
decorator services which are billed on hourly and per diem rates. The interior design business currently operates in South
Florida and will expand regionally and nationally. The business provides interior design, interior staging, accompanied
shopping, paint color selection, architectural drawing and other design services.
On August 26, 2014, the
Company entered into a Share Exchange Agreement pursuant to which the Company agreed to acquire all of the outstanding capital
stock of Integrated Timeshare Solutions, Inc., a Nevada corporation (“ITS”) in exchange for newly issued shares of
the Company’s common stock. Accordingly, as a result of the exchange, ITS is now a wholly owned subsidiary of the Company.
ITS was established on July 2, 2014 as a real estate consulting firm specializing in timeshare liquidation and mortgage relief.
The Company has discontinued the operations of this subsidiary.
Our internet site, www.IntegratedInteriorDesigns.com
officially launched on June 1, 2013.
Critical Accounting Policies
Accounts Receivable
The Company had $58,927
in accounts receivable from customers at December 31, 2014. At June 30, 2015 accounts receivable had declined to $9,368.
The determination of contractual
and bad debt allowances constitutes a significant estimate. Accounts receivable represent amounts due from customers for design
services. Accounts receivable are recorded and stated at the amount expected to be collected and have been adjusted to reflect
the allowance for uncollectible amounts of approximately $12,142 and $6,987 at June 30, 2015 and December 31, 2014, respectively.
Accounts receivable from customers relinquishing their Timeshares was $9,000 and $9,000 at June 30, 2015 and December 31, 2014,
respectively and is included in Assets Held for Discontinued Operations. This amount is being held by the Company’s credit
card processor which places a six month hold on transactions dealing with Timeshares.
Revenue Recognition
The Company follows ASC
605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is
realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence
of an arrangement that the services have been rendered to the customer, the sales price is fixed or determinable, and collectability
is reasonably assured.
Interior Design
– The Company provides design services billed at hourly rates. The Company recognizes revenue from design services when
services are rendered to the customers.
Timeshare Liquidation
– The Company earns revenue from timeshare liquidation and mortgage relief services. The company offers services for
timeshare owners that either owns their timeshare outright and for those that have a mortgage on their property, and are interested
in exiting their timeshare property. The Company recognizes revenue when the title has been transferred and the transaction is
complete.
Income Taxes
The Company follows Section
740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for
the expected future tax consequences of events that have been included in the financial statements or tax returns. Under
this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of
assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred
tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets
will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that
includes the enactment date.
The Company adopted section
740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination
of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under
Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not
that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The
Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section
740-10-25.
Liquidity and Capital Resources
As of June 30, 2015, we
had total current assets of $521,163, consisting primarily of $221,346 in Cash and $237,077 in Refundable Income Taxes. We had
total current liabilities as of June 30, 2015 of $218,799.
We believe that we have
sufficient capital to cover all anticipated operations during the next twelve months: cash on hand was $221,346 as of June 30,
2015. Additionally, we are generating revenue from our interior design services. We believe that these amounts are adequate to
fund the company’s current projected capital requirements for at least twelve months. We do not presently have any material
commitments for capital expenditures.
The Company does not expect
to purchase any plant or significant equipment over the next 12 months.
We do not have
any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. If we need to
raise additional capital, there can be no assurance that such additional financing will be available to us on acceptable terms,
or at all. If we are unsuccessful at raising sufficient capital to fund our operations, for whatever reason, we may be forced
to seek opportunities outside of our new corporate focus or to seek a buyer for our business or another entity with which we could
partner. Ultimately, if all of these alternatives fail, we may be required to cease operations and seek protection from creditors
under applicable bankruptcy laws.
Results of Operations for the Three Months Ended June 30, 2015
and 2014
During the quarter ended June 30, 2015 we generated
revenue of $67,529 compared to revenue of $59,280 in the quarter ended June 30, 2014 from our interior design operations. Despite
this revenue increase, as explained below, we have a loss from our Interior Design business.
During the quarter ended June 30, 2015 our Cost of Services totaled $93,607. This
compared to $43,605 for the quarter ended June 30, 2015. We attribute this increase to an increase in number of clients as
well as an increase in size of some particular client expenditures, which because of the nature of discounts offered by
vendors, the Company must pay and be reimbursed.
All operating expenses during both periods consisted of General and
Administrative expenses, which total $51,884 during the quarter ended June 30, 2015, a decrease from $120,544 during the same
period in 2014. During the quarter ended June 30, 2015 we suffered a loss from continuing operations of $78,262, which was a
decrease from our loss of $104,329 during the same period in 2014. Also, during the quarter ended June 30, 2015 we incurred a
loss on discontinued operations of $4,709. We had no loss or income on discontinued operations during the quarter ending June
30, 2014. In total, we incurred a net loss during the quarter ended June 30, 2015 of $83,614 as opposed to incurring a net
loss of $66,230 during the quarter ended June 30, 2014.
During 2015, the Company has incurred a negative
margin on services provided due to costs exceeding contract prices due to subcontractors being unable to finish jobs. These issues
were outside of the control of the Company. In those instances we have hired new contractors, at higher prices to complete
outstanding obligations. Aside from the changes in subcontractor services, there have been changes in business that has
caused a reduction in the overall profit margin. The market has changed and we are bidding jobs with lower margins
and higher subcontractor pricing albeit high quality. For the future we see that a change in the business model will
help mitigate some of the reduced profit margins by increasing deposits on the higher end clients to meet the needs of initial
cash flow. With regards to the subcontractors, a problematic area for all business' of our type, we have committed to using
a very few quality subcontractors with which we personally have experience and relationships.
The hourly rate model has also proven to be problematic. When you are not physically
present with the client, the intangible of the time spent has been an issue with a number of clients. The majority of
new clients are on a fixed fee basis, whether just design and/or remodeling services are being engaged. Also, we have had
to reduce the fee somewhat to make it more attractive and generate revenue.
Results of Operations for the Six Months Ended June 30, 2015 and 2014
During the six months ended June 30, 2015 we generated revenue of $141,052 compared
to revenue of $99,420 in the six months ended June 30, 2014 from our current operations. Our Cost of Services during the six months
ended June 30, 2015 was $191,990, significantly higher than the $53,689 during the same period in 2014. This resulted in a gross
loss of $50,938 during the six months ended June 30, 2015 compared to gross income of $45,731 during the six months ended June
30, 2014.
All operating expenses during both periods consisted of General and Administrative expenses,
which totaled $124,831 during the six months ended June 30, 2015 which decreased from $202,822 during the same period in 2014.
During the six months ended June 30, 2015 we suffered a loss from continuing operations of $175,769, which was a slight increase
from the loss of $157,091 during the same period in 2014. Also, during the six months ended June 30, 2015 we had a gain on discontinued
operations of $1,137. We had no loss on discontinued operations during the six months ending June 30, 2014. In total, we incurred
a net loss during the six months ended June 30, 2015 of $175,160 as opposed to a net loss of $81,803 during the six months ended
June 30, 2014.
CONTRACTUAL OBLIGATIONS
The Company is a smaller reporting company
as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.
Off Balance Sheet Arrangements
As of June 30, 2015, there were no off balance
sheet arrangements.
Recent Accounting Pronouncements
In April 2015, FASB issued
Accounting Standards Update (“ASU”) No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30):
Simplifying the Presentation of Debt Issuance Costs”, is to simplify presentation of debt issuance costs by requiring
that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the
carrying amount of that debt liability, consistent with debt discounts. The ASU does not affect the recognition and measurement
guidance for debt issuance costs. For public companies, the ASU is effective for financial statements issued for fiscal years
beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. We are currently
reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial
condition.
In April 2015, FASB issued
Accounting Standards Update (“ASU”) No. 2015-04, “Compensation – Retirement Benefits (Topic 715): Practical
Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets”, permits the entity
to measure defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end
and apply that practical expedient consistently from year to year. The ASU is effective for public business entities for financial
statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application
is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of
operations, cash flows or financial condition.
In April 2015, FASB issued
Accounting Standards Update (“ASU”) No. 2015-05, “Intangibles – Goodwill and Other – Internal-Use
Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement”, provides guidance
to customers about whether a cloud computing arrangement includes a software license. If such an arrangement includes a software
license, then the customer should account for the software license element of the arrangement consistent with the acquisition
of other software licenses. If the arrangement does not include a software license, the customer should account for it as a service
contract. For public business entities, the ASU is effective for annual periods, including interim periods within those annual
periods, beginning after December 15, 2015. Early application is permitted. We are currently reviewing the provisions of this
ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.
In April 2015, FASB issued Accounting Standards Update (“ASU”) No.
2015-06, “Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership
Dropdown Transactions”, specifies that, for purposes of calculating historical earnings per unit under the
two-class method, the earnings (losses) of a transferred business before the date of a drop down transaction should be
allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited
partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a
result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and
after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are
required. The ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal
years. Earlier application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be
any impact on our results of operations, cash flows or financial condition. All other newly issued accounting pronouncements
but not yet effective have been deemed either immaterial or not applicable.
ITEM 4. CONTROLS AND PROCEDURES
In connection with the
preparation of this quarterly report on Form 10-Q, an evaluation was carried out by our management, with the participation of
the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of June 30, 2015. Disclosure
controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the
Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and
that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial
Officer, to allow timely decisions regarding required disclosures.
Based on that evaluation,
our management concluded, as of the end of the period covered by this report, that our disclosure controls and procedures were
effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified
in the SEC's rules and forms.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal
control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the quarter ended June 30, 2015 that
have materially affected, or are reasonably likely to materially affect our internal control over financial reporting
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Concurrent with the Company’s
decision to cease operations of ITS, the Company’s former Senior Vice President of Sales hired counsel and claimed that
he had been wrongly terminated. A settlement agreement with the former Officer was ultimately singed. Under the terms of the agreement,
the Company agreed to pay $19,250 and forgive the $5,000 note receivable paid to the former Officer. The former Officer agreed
to relinquish his interest in the Company including 21,296,819 shares of the Company’s common stock. As of June 30, 2015,
the Company has paid $19,250 to the former officer and the stock ownership has been returned to the Company.
Additionally, in connection
with the Company’s decision to cease operations of ITS, former Directors of the Company agreed to relinquish 25,982,119
shares of the Company’s common stock due to the Company winding down ITS.
In the ordinary course of the Company’s
business in the health care industry, the Company became involved in lawsuits and legal proceedings involving claims of medical
malpractice related to medical services provided by the Company’s affiliated physicians. The Company is currently involved
in one such matter where the claim could exceed insurance coverage and is awaiting mediation to be scheduled in the matter.
Edra Schwartz as the Personal Representative of the Estate
of Robert A. Schwartz, Deceased, v. Jason Strong, M.D., Aretha Nelson, M.D. and Inpatient Clinical Solutions, Inc.
This matter involves a 66 year old white male who developed a MRSA
(methicillin-resistant staphylococcus aureus) infection following a craniotomy to remove a suspected meningioma. The matter
alleges (1) Failure to properly interpret the brain MRIs preoperatively (this is directed at the radiologist preoperatively);
and (2) Failure to diagnose a MRSA infection and brain abscess following the craniotomy on May 6, 2009. The patient died on
September 24, 2009. The suit commenced October 18, 2011 and the case is pending in the circuit court of the 17 Judical
Circuit in and for Broward County, FL, Case # 11-10485. The claim is for unspecified monetary damages. The Company is
defending this case vigorously and, while the claims for damages have not been quantified, the Company does not believe that
a negative decision would have a material impact on the Company.
We are not aware of any other pending or threatened
litigation against us that we expect will, individually or in the aggregate, have a material adverse effect on our business, financial
condition, liquidity, or operating results. We cannot assure you that we will not be adversely affected in the future by legal
proceedings.
ITEM 1A. RISK FACTORS
The Company is a smaller reporting company
as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE
OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY STANDARDS
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
3.1(a)# | | Articles of Incorporation of the Company. |
3.1(b) | | * Articles of Amendment of Articles of Incorporation. |
3.1(c)* | | Articles of Amendment of Articles of Incorporation. |
3.1(d)* | | September 2001 Consent of Board of Directors establishing preferred stock. |
3.2# | | Bylaws of the Company. |
10.1* | | Asset Purchase Agreement. |
10.2* | | Bill of Sale, Assignment and Assumption Agreement. |
10.3* | | Seller Noncompetition Agreement. |
10.4* | | Owner Noncompetition Agreement. |
10.5* | | Owner Consulting Agreement. |
10.6+ | | Share Exchange Agreement between the Company and Integrated Timeshare Solutions, Inc. |
10.7+ | | Employment Agreement with Osnah Bloom. |
10.8+ | | Employment Agreement with Bradley Scott. |
10.9+ | | Voting Agreement among the Company, Osnah Bloom, Dominic Alto, Bradley Scott and Josh
M. Bloom |
# Filed in the Registrant’s Registration Statement on Form
S-1 on October 4, 2014.
* Filed in the Amendment 1 to the Registrant’s Registration
Statement on Form S-1 on January 3, 2014.
+ Filed in the Registrant’s Current Report on Form 8-K on
August 29, 2014.
SIGNATURES
Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned,
thereunto duly authorized.
|
Integrated Inpatient Solutions, Inc. |
|
|
|
Date: August 18, 2015 |
By: |
/s/ Osnah Bloom |
|
|
|
Osnah Bloom
Principal Executive Officer and
Principal Financial Officer |
Exhibit 31.1
CERTIFICATION BY THE
CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Osnah Bloom, certify that:
1. | | I have reviewed this Quarterly Report on Form 10-Q of Integrated Inpatient Solutions,
Inc.; |
2. | | Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report; |
3. | | Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report; |
4. | | I am responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | | Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this
report is being prepared; |
(b) | | Designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | | Evaluated the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and |
(d) | | Disclosed in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and |
5. | | I have disclosed, based on my most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions): |
(a) | | All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and |
(b) | | Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant’s internal control over financial reporting. |
* * *
By: |
/s/ Osnah
Bloom |
|
Osnah Bloom |
|
Chief Executive Officer |
Date: August 18, 2015
Exhibit 31.2
CERTIFICATION BY THE CHIEF
FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Osnah Bloom, certify that:
1. | | I have reviewed this Quarterly
Report on Form 10-Q of Integrated Inpatient Solutions, Inc.; |
2. | | Based on my knowledge, this
report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report; |
3. | | Based on my knowledge, the
financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | | I am responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | | Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities,
particularly during the period in which this report is being prepared; |
(b) | | Designed such internal control
over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
(c) | | Evaluated the effectiveness
of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | | Disclosed in this report any
change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | | I have disclosed, based on
my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee
of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | | All significant deficiencies
and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | | Any fraud, whether or not material,
that involves management or other employees who have a significant role in the registrant’s internal control over financial
reporting. |
* * *
By: |
/s/ Osnah Bloom |
|
Osnah Bloom |
|
Chief Financial Officer |
Date: August 18, 2015
EXHIBIT 32.1
CERTIFICATION BY THE CHIEF
EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
I, Osnah Bloom, Chief Executive Officer
of Integrated Inpatient Solutions, Inc. (the “Company”), hereby certify pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 that:
(a) | | the Company’s periodic report on Form 10-Q for the quarterly period ended June
30, 2015 (the “Form 10-Q”), fully complies with the requirements of Section 13(a) or Section 15(d), as applicable,
of the Securities Exchange Act of 1934, as amended, and related interpretations; and |
(b) | | the information contained in the Form 10-Q fairly presents, in all material respects,
the financial condition and results of operations of the Company. |
* * *
By: |
/s/ Osnah
Bloom |
|
Osnah Bloom |
|
Chief Executive Officer |
Date: August 18, 2015
EXHIBIT 32.2
CERTIFICATION BY THE CHIEF
FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
I, Osnah Bloom, Chief Financial Officer
of Integrated Inpatient Solutions, Inc. (the “Company”), hereby certify pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 that:
(a) | | the Company’s periodic report on Form 10-Q for the quarterly period ended June
30, 2015 (the “Form 10-Q”), fully complies with the requirements of Section 13(a) or Section 15(d), as applicable,
of the Securities Exchange Act of 1934, as amended, and related interpretations; and |
(b) | | the information contained in the Form 10-Q fairly presents, in all material respects,
the financial condition and results of operations of the Company. |
* * *
By: |
/s/ Osnah
Bloom |
|
Osnah Bloom |
|
Chief Financial Officer |
Date: August 18, 2015
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