GenFlat Holdings, Inc 10-Q for FY2024 Q1
GenFlat Holdings, Inc. (GFLT)
About this 10-Q
GenFlat Holdings, Inc filed this 10-Q on October 6, 2023, covering the quarter ended August 31, 2023 (FY2024 Q1).
Headline figures
Quarter ended August 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $0
- compared with $0 a year earlier
- Net loss
- $22.65K
- compared with a net loss of $32.58K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended:
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
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(Address of principal executive offices) |
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(Registrant’s telephone number, including area code)
___________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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.
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).
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 | ☐ |
☒ | Smaller reporting company | ||
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| Emerging growth company |
If an emerging growth company, indicate by check mark 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
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Healthcare Business Resources Inc.
Table of Contents
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PART I – FINANCIAL INFORMATION |
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Item 1. | Financial Statements: |
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| Consolidated Statements of Stockholders’ Deficit (unaudited) |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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HEALTHCARE BUSINESS RESOURCES | ||||||||
Consolidated Balance Sheets | ||||||||
(Unaudited) | ||||||||
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| August 31, 2023 |
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| February 28, 2023 |
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Assets |
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Current Assets: |
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Cash and cash equivalents |
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Note receivable |
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Total current assets |
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Total Assets |
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Liabilities and Stockholders' Deficit |
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Current Liabilities: |
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Accounts payable |
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Accrued expenses |
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Advance, related party |
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Senior secured convertible credit line |
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Total current liabilities |
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Total Liabilities |
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Commitments and contingencies |
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Stockholders' Deficit: |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total Stockholders' Deficit |
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Total Liabilities and Stockholders' Deficit |
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See accompanying notes to the unaudited consolidated financial statements. | ||||||||
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| Table of Contents |
HEALTHCARE BUSINESS RESOURCES | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
For the three and six months ended August 31, 2023 and 2022 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
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| August 31, 2023 |
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| August 31, 2022 |
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Revenue: |
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Revenue |
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Total revenue |
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Operating expenses: |
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General and administrative |
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Professional fees |
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Total operating expenses |
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Loss from operations |
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Other income (expense): |
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Gain on settlement of liabilities |
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Interest expense |
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Total other income (expense) |
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Net loss |
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Loss per share - basic |
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Loss per share - diluted |
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Weighted average shares outstanding - basic |
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Weighted average shares outstanding - diluted |
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See accompanying notes to the unaudited consolidated financial statements. | ||||||||||||||||
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| Table of Contents |
HEALTHCARE BUSINESS RESOURCES | ||||||||||||||||||||||
Consolidated Statements of Stockholders' Deficit | ||||||||||||||||||||||
For the six months ended August 31, 2023 and 2022 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
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| Additional |
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| Total |
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| Shares |
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| Amount |
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| Capital |
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| Deficit |
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Balance February 28, 2023 |
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Stock-based compensation |
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Net loss |
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Balance May 31, 2023 |
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Stock-based compensation |
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Net loss |
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Balance August 31, 2023 |
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Balance February 28, 2022 |
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Stock-based compensation |
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Net loss |
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Balance May 31, 2022 |
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Common shares issued for settlement of note payable, related party |
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Stock-based compensation |
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Net loss |
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Balance August 31, 2022 |
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See accompanying notes to the unaudited consolidated financial statements. | ||||||||||||||||||||||
| 5 |
| Table of Contents |
HEALTHCARE BUSINESS RESOURCES | ||||||||
Consolidated Statements of Cash Flows | ||||||||
For the six months ended August 31, 2023 and 2022 | ||||||||
(Unaudited) | ||||||||
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| August 31, 2023 |
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Cash Flows from Operating Activities: |
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Net loss |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock based compensation |
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Gain on settlement of liabilities |
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Changes in operating assets and liabilities: |
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Accounts payable |
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Accrued expenses |
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Net cash used in operating activities |
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Cash Flows from Investing Activities: |
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Payment received from note receivable |
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Net cash provided by investing activities |
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Cash Flows from Financing Activities: |
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Payments on notes payable |
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Proceeds from notes payable, related party |
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Payments on notes payable, related party |
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Net cash provided by financing activities |
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Net change in cash and cash equivalents |
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Cash and cash equivalents, at beginning of period |
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Cash and cash equivalents, at end of period |
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Supplemental disclosures of cash flow information: |
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Cash paid for interest |
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Cash paid for income taxes |
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Supplemental disclosure of non-cash investing and financing activities: |
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Expenses paid with senior secured convertible credit line |
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Common shares issued for settlement of note payable, related party |
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See accompanying notes to the unaudited consolidated financial statements. | ||||||||
| 6 |
| Table of Contents |
Healthcare Business Resources, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1. NATURE OF BUSINESS AND GOING CONCERN
On September 9, 2019 (commencement of operations), Healthcare Business Resources, Inc. (“we”, “our”, the “Company”), a domestic corporation was organized in Delaware to provide consulting services to healthcare organizations. These services include management consulting related to sales, marketing, business development and advisory board function. The Company’s services are designed to help clients increase revenue, improve overall efficiency and effectiveness of their operations and grow strategically.
On March 5, 2021, HBR Pointclear, LLC, a Delaware limited liability company was incorporated. HBR Pointclear, LLC was formed to enter into an Option Agreement to Purchase Business Assets with PointClear Solutions, Inc.
On June 18, 2021, we and HBR Sub, Inc., a Delaware corporation and our wholly owned subsidiary entered into and closed an Agreement and Plan of Merger (the “Merger Agreement”), with UserTech U.S. LLC, a Delaware limited liability company (“UPlus”) and UPlus Health, LLC, a Delaware limited liability company and a wholly-owned subsidiary of UPlus (“UPlus Health”). Pursuant to the Merger Agreement, and subject to the terms and conditions contained therein, HBR Sub, Inc. was merged with and into UPlus Health, with UPlus Health surviving the merger on the terms and subject to the conditions set forth in the Merger Agreement and certain ancillary agreements. UPlus Health is now our Company’s wholly owned subsidiary. UPlus helps companies across multiple industries with continuous innovation and market development through the implementation of its proprietary technology called the U+Method, which is a is a step-by-step product development methodology that focuses on front–loading the risky parts of product development before starting large buildouts (the “U+Method Technology”). UPlus has licensed to UPlus Health the U+Method Technology and related intellectual property for use in the health care and medical services industry (the “Medical Industry”), pursuant to the license attached to the Merger Agreement as Exhibit A (the “License Agreement”). UPlus and the Company believe that their individual capabilities and expertise could be combined to provide a unique integrated solution to clients in the Medical Industry; and UPlus’ post transaction participation in providing the anticipated integrated solution is set forth in the services agreement (the “Services Agreement”), a copy of which is set forth as Exhibit B to the Merger Agreement. The Company’s post transaction financial metrics plan for UPlus Health and the anticipated integrated solution is set forth in UPlus Health’s financial metrics plan (“Financial Metrics Plan”), a copy of which is set forth as Exhibit C to the Agreement. UPlus Health will be managed by the Company’s current management team.
In this filing, unless context requires otherwise, references to “we,” “our,” “us” and “our Company” refer to Healthcare Business Resources Inc., a Delaware corporation, and its subsidiaries HBR Pointclear, LLC, HBR Business Development, LLC and UPlus Health, LLC.
Liquidity and Going Concern
These consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain equity financings to continue operations. The Company has a history of and expects to continue to report negative cash flows from operations and a net loss. Management believes that the cash on hand is sufficient to fund its planned operations into but not beyond the near term. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern twelve months from the issuance of these consolidated financial statements. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company may seek additional funding through a combination of equity offerings, debt financings, or other third-party funding.
| 7 |
| Table of Contents |
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not misleading. Operating results for the six months ended August 31, 2023, are not necessarily indicative of the final results that may be expected for the year ending February 28, 2024. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the period ended February 28, 2023, included in our Form 10-K filed with the SEC on May 30, 2023 (“Form 10-K”). Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10- K, have been omitted.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Impairment of Long-lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. As of August 31, 2023, no impairment was recorded.
Revenue Recognition
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) or (“ASC Topic 606”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The new guidance provides a five-step process for recognizing revenue that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also requires expanded qualitative and quantitative disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance is effective for public companies with annual reporting periods beginning after December 31, 2017 and is to be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial adoption. Early adoption is permitted for all entities but not before the original effective date for public entities. The Company adopted ASC Topic 606 on September 9, 2019 (commencement of operations).
The Company recognizes revenue from contracts with its customers under ASC Topic 606. As sales are expected to be primarily from sales of advisory services, the Company does not expect significant post-delivery obligations. Revenue from sales of advisory services is recorded over the period earned and are recognized under ASC Topic 606 in a manner that reasonably reflects the delivery of its services to customers in return for expected consideration and includes the following elements:
| · | Executed contracts with the Company’s customers that it believes are legally enforceable; |
| · | Identification of the performance obligation within the respective contract, which is the delivery of service; |
| · | Determination of the transaction price for each performance obligation in the respective contract; |
| · | Allocation of the transaction price to each performance obligation; and |
| · | Recognition of revenue only when the Company satisfies each performance obligation. |
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We charged clients a fee for our management consulting services based on time (e.g. hourly or project-based or monthly) or based on a percentage of cost savings or incremental revenue (e.g. revenue or cost savings). As of August 31, 2023, we have acquired one customer who has contracted with us to market its services in exchange for a performance-based fee equal to 50% of any fee collected by this customer from business referred by our Company to this customer. We cannot estimate the value of the fee or fees we may obtain from this engagement, if any. As of August 31, 2023, we have generated limited management consulting services revenue and we are unable to determine how long, if ever, that we will ever generate enough management consulting revenue to sustain our operations.
We plan to charge clients a fee for our financial incentives services primarily based on the economic benefit we facilitate from any incentive programs, when permitted by any applicable rules and guidelines. Where contingency fees are not permissible, fixed fee contracts may be used. As part of our incentive program services, we may be at risk for certain third-party accounting, legal and consulting fees until such time as we are reimbursed by our client, if ever.
Basic and Diluted Loss Per Share
The computation of basic loss per share of common stock is based on the weighted average number of shares outstanding during the period. Diluted loss per share is calculated by dividing the Company’s net loss available to common stockholders by the diluted weighted average number of shares outstanding during the year. For the six months ended August 31, 2023 and 2022, there were
Recent Accounting Pronouncements
The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying consolidated financial statements.
NOTE 3. NOTE RECEIVABLE
On March 12, 2021, the Company, through its wholly owned subsidiary HBR Pointclear, LLC, a Delaware limited liability company (“HBRP”); and PointClear Solutions, Inc., an Alabama corporation (“PointClear”) entered into an Option Agreement to Purchase Business Assets (the “Option Agreement”). The term of the Option (the “Option Term”) commenced on March 12, 2021, and automatically expires on August 1, 2022 (the “Option Termination Date”), unless duly extended, exercised, or sooner terminated as provided in the Option Agreement.
PointClear is a health care focused information technology solutions company that provides its clients technology driven solutions based upon its three core competencies; (i) Strategic planning, (ii) Digitization and Design, and (iii) Production and Implementation (the “Business”). Pursuant to the Option Agreement, PointClear granted to HBRP an exclusive non- cancelable option (the “Option”) to require PointClear to enter into an Asset Purchase Agreement (the “Asset Purchase Agreement”) under which, HBRP may (i) purchase all of PointClear’s tangible and intangible assets used in, or useful to the Business (the “Business Assets”), and (ii) the assume certain defined liabilities and contracts related to the Business. The Option provides HBRP the right, but not the obligation, to (i) enter into the Asset Purchase Agreement at any time until August 1, 2022 (the “Option Term”), and (ii), require PointClear to sell the Business Assets and perform under the Asset Purchase Agreement.
Pursuant to the Option, HBRP shall arrange for an unsecured loan of up to $
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On September 29, 2021, the Company, through HBRP and PointClear entered into a Separation and Settlement Agreement (“Separation and Settlement Agreement”), effective October 1, 2021, and terminated their mutual obligations under the Option Agreement and Improvement Loan Agreement. Pursuant to the Separation and Settlement Agreement, with respect to the: (i) Option Agreement, the Option Agreement is cancelled and none of the parties have any current or future rights or obligations under the Option Agreement; (ii) Improvement Loan Agreement, the principal owed by PointClear under the Improvement Loan Agreement is reduced to $
NOTE 4. SENIOR SECURED CREDIT LINE
Senior Secured Convertible Credit Line
On July 1, 2022, the Company entered a secured convertible note up to $
As of August 31, 2023 and February 28, 2023, the Company has drawn $
NOTE 5. EQUITY
Incentive Stock Options
During the six months ended August 31, 2023, the Company recognized $
The following table summarizes the stock option activity for the six months ended August 31, 2023:
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| Number of |
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| Weighted Average Exercise Price |
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| Options |
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| Per Share |
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Outstanding at February 28, 2023 |
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| $ |
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Granted |
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| - |
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| - |
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Exercised |
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| - |
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| - |
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Forfeited and expired |
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| - |
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| - |
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Outstanding at August 31, 2023 |
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| $ |
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As of August 31, 2023, there were
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Stock Warrants
The following table summarizes the stock warrant activity for the six months ended August 31, 2023:
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| Number of |
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| Weighted Average Exercise Price |
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| Warrants |
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| Per Share |
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Outstanding at February 28, 2023 |
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| $ |
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Granted |
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| - |
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| - |
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Exercised |
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| - |
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| - |
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Forfeited and expired |
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| - |
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Outstanding at August 31, 2023 |
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| $ |
| ||
As of August 31, 2023, the outstanding stock warrants have a weighted average remaining term of
NOTE 6. RISK CONCENTRATIONS
Financial instruments that potentially expose the Company to certain concentrations of credit risk include cash in bank accounts. The cash deposits, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). Beginning January 1, 2013, as per FDIC, all deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit are standardly insured for up to $
NOTE 7. RELATED PARTY TRANSACTIONS
Advance – Related Party
During the year ended February 28, 2023 the Company received $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-looking Information
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “we believe,” “we intend,” “may,” “should,” “will,” “could” and similar expressions denoting uncertainty or an action that may, will or is expected to occur in the future. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements.
Examples of forward-looking statements include:
| · | the timing of the development of future products; |
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| · | projections of costs, revenue, earnings, capital structure and other financial items; |
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| · | statements of our plans and objectives; |
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| · | statements regarding the capabilities of our business operations; |
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| · | statements of expected future economic performance; |
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| · | statements regarding competition in our market; and |
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| · | assumptions underlying statements regarding us or our business. |
The ultimate correctness of these forward-looking statements depends upon several known and unknown risks and events. We discuss our known material risks under “Risk Factors” in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 30, 2023. However, readers should carefully review the risk factors set forth in other reports or documents we file from time to time with the Securities and Exchange Commission, particularly any future Annual Reports on Form 10- K, any Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K. Many factors could cause our actual results to differ materially from the forward-looking statements. In addition, we cannot assess the impact of each factor 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.
We caution you that actual outcomes and results may differ materially from what is expressed, implied, or forecast by our forward-looking statements. The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
Overview
We operate primarily in the healthcare industry and provide services that include management consulting related to sales, marketing, business development and advisory board functions to healthcare organizations; and financial incentive program services to identify grants, tax credits and other government incentives for companies across a variety of industries including healthcare. As a result of our limited revenues to date, our board of directors has recently begun to evaluate other business opportunities beyond the scope of our business plan, which may include, among other things, the possible acquisitions of, or investments in, other businesses. We have no written plans or agreements for any transactions with any person with respect to these matters, and we cannot assure you that our Company will enter into any such transactions. In the meantime, we will continue to operate pursuant to our business plan.
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In this filing, unless context requires otherwise, references to” we,” “our,” “us” and “our Company” refer to Healthcare Business Resources Inc., a Delaware corporation, and its subsidiaries HBR Pointclear, LLC, HBR Business Development, LLC and UPlus Health, LLC.
Principal Services
Our business plan provides that we generate revenue by providing consulting services. These services include:
| · | management consulting related to sales, marketing, business development and advisory board functions to healthcare organizations; |
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| · | financial incentive program services to identify grants, tax credits and other government incentives for companies across a variety of industries including healthcare; and |
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| · | technology consulting and engineering services. |
Our management, board of advisors and board of directors have extensive experience in market expansion strategies, financial analysis, acquisition integration, management consulting and training, healthcare law, corporate law, capital markets, mergers and acquisitions. We believe the combined experience, knowledge, credibility and connections of our people are unique and potentially valuable to prospective clients. As a result of our limited revenues to date, our board of directors has recently begun to evaluate other business opportunities beyond the scope of our business plan, which may include, among other things, the possible acquisitions of, or investments in, other businesses. We have no written plans or agreements for any transactions with any person with respect to these matters, and we cannot assure you that our Company will enter into any such transactions.
Management consulting services
Our management consulting services are designed to help clients increase revenue, improve overall efficiency of their operations, grow strategically and increase profitability. We provide clients with advice and assistance tailored to address each client’s challenges and opportunities, with a focus on healthcare organizations that face operational and financial changes. We believe that distressed companies respond to challenges by restructuring their business and capital structure, while healthy companies strive to capitalize on opportunities by improving operations, reducing costs and maximizing revenue. Many organizations have limited resources dedicated to respond effectively to challenges and opportunities. As a result, we believe many organizations seek to supplement their internal resources with experienced independent consultants like us.
Financial incentive program services
Our financial incentive program services are designed to identify grants, tax credits and other government incentives for companies across a variety of industries including healthcare. We assist with advising on and documenting business processes related to such credits and rebates and work with certified public accounting firms and business owners to compile reports and documentation required to apply for various financial incentive programs.
As part of our financial incentive program services, we perform an initial review of a prospective client’s relevant financial, tax and business documentation at no cost to determine the potential economic benefits from various federal and state incentive programs.
We charge clients a fee primarily based on the economic benefit we facilitate from any incentive programs, when permitted by any applicable rules and guidelines. Where contingency fees are not permissible, fixed fee contracts may be used. As part of our incentive program services, we may be at risk for certain third-party accounting, legal and consulting fees until such time as we are reimbursed by our client, if ever.
As of the date of this report on Form 10-Q, we have no customers enrolled in our financial incentive program services. We cannot assure you that any of these potential customers will engage our Company for services. Further, we cannot assure you that we will ever generate enough financial incentive program revenue to sustain our Company’s operations.
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Technology consulting and engineering services
Our technology consulting and engineering services include digital strategy, design, development, and management services, with expertise in enterprise software, mobile and web-based application solutions. These services are designed to help clients speed innovation, expand market share, drive revenue, and encourage patient satisfaction and population health.
As part of our technology consulting and engineering services, we perform an initial review of a prospective clients’ challenges and relevant technologies to determine areas for potential improvement and growth opportunities. We charge clients a fee for our technology consulting and engineering services based on the project.
We implement the U+Method as our step-by-step product development methodology that focuses on front–loading the risky parts of product development before starting large build–outs. The U+Method enables us to determine whether and where a product fits in the market, create a learning organization to continue iterations, and, ultimately, drive profitability:
STAGE 1 - Ideation/ IP Prioritization
Ideation or IP prioritization including potential use cases
| · | Definition of commercialization goals |
| · | IP inventory & prioritization |
| · | Ranking based on highest revenue potential vs. likelihood of winning |
STAGE 2 – Validation
Initial idea validation and market testing
| · | MVP target markets (geographic) for rapid adoption |
| · | Initial GTM proposition / product |
| · | Target users |
| · | Product positioning |
| · | High-level user stories |
| · | Legal requirements |
STAGE 3 - Market Testing
Strategy for taking the MVP to market
| · | Channel testing |
| · | Pricing sensitivity |
| · | Brand and communications |
| · | Wireframe prototype of the MVP scope to test with users |
| · | Iteration of prototypes based on feedback |
| · | Microsite smoke testing |
STAGE 4 - Tech Build
Specification and build of the MVP
| · | Product definition |
| · | MVP specification |
| · | MVP scoping |
| · | UI design for target group and market |
| · | Information Architecture |
| · | AWS infrastructure and DevOps setup |
| · | Buildout in agile mode |
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STAGE 5 – Scaling
Launching with the early customers and scaling operations
| · | Early customer feedback gathering |
| · | Future tech roadmap |
| · | Marketing campaigns |
As of August 31, 2023, we generated no revenue from technology consulting and engineering services and we are unable to determine how long, if ever, it would take to continue to attract paying clients. We cannot assure you that we will ever generate enough revenue to sustain our operations.
Strategy
The key elements of our business model is as follows:
1. | Attract highly qualified advisors and consultants. We believe performance-based compensation, including stock option plan participation, attracts top talent. Presently, we primarily engage independent advisors and consultants to minimize our fixed operating expenses. To date, we have entered into advisory board agreements with advisors who have healthcare industry experience in market expansion strategies, financial analysis, acquisition integration, management consulting and training, healthcare law, corporate law, capital markets, mergers and acquisitions. |
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2. | Grow our network of potential clients. Grow our network of healthcare and other organizations that could benefit from our services. To be successful, we must establish and strengthen the awareness of our brand. We believe that maintaining and enhancing our brand recognition is an important aspect of our business plan by promoting awareness of our services through public relations efforts, social media outreach, Internet marketing and business development partnerships. Attracting healthcare and other organizations who are primarily interested in growing their business through sales, marketing and business development is a key aspect of our business model. |
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3. | Pursue strategic acquisitions. Evaluating select acquisitions of complementary businesses as another means to broaden the scope of our capabilities and our client base is also important to our business model. For example, acquiring companies that provide consulting, training, education, marketing, audits, cost recovery, group purchasing, compliance, certification, security, information technology and other non-clinical healthcare business services would support our business model. Strategic acquisitions could scale our revenue with less business risk. We do not have any agreements to acquire any business at this time, and any future acquisition may result in unforeseen operating difficulties and expenditures particularly if the key personnel of the acquired company choose not to work for us and we may have difficulty retaining the customers of any acquired business due to changes in management and ownership. Additionally, as discussed above, our board of directors has recently begun to evaluate other business opportunities beyond the scope of our business plan, which may include, among other things, the possible acquisitions of, or investments in, other businesses. We have no written plans or agreements for any transactions with any person with respect to these matters, and we cannot assure you that our Company will enter into any such transactions. |
Results of Operations for the three months ended August 31, 2023 compared to three months August 31, 2022
Revenues: We generated $0 of revenues for the three months ended August 31, 2023 compared to $1,884 for the three months ended August 31, 2022. Our revenues came from management consulting services performed for customers. The decrease in revenue was attributable to the Company’s inability to obtain new customers.
Operating Expenses: Operating expenses decreased to $19,828 for the three months ended August 31, 2023 compared to $29,168 for the three months ended August 31, 2022. The changes in operating expenses were mainly attributed to the decreases in professional fees of $11,270 which were offset by an increase in general and administrative expenses of $1,930.
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Other Income (Expense): Other expense was $2,824 for the three months ended August 31, 2023 compared to other expense of $3,410 for 2022.
Results of Operations for the six months ended August 31, 2023 compared to six months August 31, 2022
Revenues: We generated $0 of revenues for the six months ended August 31, 2023 compared to $1,884 for the six months ended August 31, 2022. Our revenues came from management consulting services performed for customers. The decrease in revenue was attributable to the Company’s inability to obtain new customers.
Operating Expenses: Operating expenses decreased to $48,668 for the six months ended August 31, 2023 compared to $94,580 for the six months ended August 31, 2022. The changes in operating expenses were mainly attributed to the decreases in professional fees of $42,4 and other general and administrative expenses of $3,437.
Other Income (Expense): Other expense was $5,251 for the six months ended August 31, 2023 compared to other income of $7,160 for 2022. The change was attributable to the gain on settlement of accrued interest notes payable of $14,906 in prior year.
Liquidity and Capital Resources
On August 31, 2023, we had cash of $27,411 and we had a working capital deficit of $90,822.
Senior Secured Convertible Credit Line
On July 1, 2022, the Company entered a secured convertible note up to $100,000. The secured convertible note matures on July 1, 2023 and bears interest at 8% per annum. The convertible note is secured by 11,000,000 shares of the Company’s common stock held by the Company’s CEO. On July 12, 2023, the Company amended the secured convertible note of $100,000 issued on July 1, 2022. The amended secured convertible note was increased to $150,000 and is due on January 1, 2024. As of August 31, 2023, the Company has drawn $104,103 on the convertible note.
In the future, we may raise additional capital through the issuance of additional shares of common stock or preferred stock, or through the issuance of additional debt financing. If we issue additional shares of common stock in the future, our then existing stockholders may face substantial dilution.
No assurance can be given that we will obtain access to capital markets in the future or that adequate financing to satisfy the cash requirements of implementing our business strategies will be available on acceptable terms. Our inability to gain access to capital markets or obtain acceptable financing could have a material adverse effect upon the results of our operations and financial condition. Our failure to raise additional funds if needed in the future will adversely affect our business operations, which may require us to suspend our operations and lead you to lose your entire investment.
It is likely that our operating losses will increase in the future, and it is very possible we will never achieve or sustain profitability. We may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall or other unanticipated changes in our industry. Any failure by us to accurately make predictions would have a material adverse effect on our business, results of operations and financial condition.
Summary of Cash Flows
Cash used in operating activities
Net cash used in operating activities was $400 and $29,279 for the six months ended August 31, 2023 and 2022, respectively, and mainly included stock-based compensation, professional fees to our consultants, attorneys, and accountants.
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Cash provided by investing activities
Net cash provided by investing activities was $13,619 and $16,343 for the six months ended August 31, 2023 and 2022, respectively, which was related to payments on note receivable balance.
Cash provided by financing activities
Net cash provided by financing activities was $0 for the six months ended August 31, 2023. Net cash provided by financing activities was $0 for the six months ended August 31, 2022, which was related to proceeds from notes payable, related party and payments on notes payable and notes payable, related party.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements, including the notes thereto. We consider critical accounting policies to be those that require more significant judgments and estimates in the preparation of our financial statements, including the following: long lived assets; intangible assets valuations; and income tax valuations. Management relies on historical experience and other assumptions believed to be reasonable in making its judgment and estimates. Actual results could differ materially from those estimates.
Management believes its application of accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change.
Off-Balance Sheet Arrangements
As of August 31, 2023, 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 is material to investors.
Contractual Obligations
There have been no material changes outside the ordinary course of business in our contractual commitments during the six months ended August 31, 2023.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures.
Our chief executive officer, who serves as our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report on Form 10-Q. Based on this evaluation, our principal executive officer/principal financial officer concluded that as a result of the material weakness in our internal control over financial reporting discussed below, our disclosure controls and procedures were not effective at ensuring that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding disclosure.
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The matters involving internal controls and procedures that our management considered to be material weaknesses in our internal control over financial reporting as of August 31, 2023 include the following:
| · | We do not have written documentation of our internal control policies and procedures. |
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| · | Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. To the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. |
A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard 1305) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.
It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
In light of the material weakness described above, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.
Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended August 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not Applicable.
ITEM 1A. RISK FACTORS.
Not Applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable.
ITEM 4. MINE SAFETY DISCLOSURES.
Not Applicable.
ITEM 5. OTHER INFORMATION.
Not Applicable.
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ITEM 6. EXHIBITS.
EXHIBIT INDEX
SEC Reference Number |
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| Incorporated by reference to Company’s Form S-1 Registration Statement filed on 06/08/2020 | ||
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| Incorporated by reference to Company’s Form S-1 Registration Statement filed on 09/22/2020 | ||
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| Incorporated by reference to Company’s Form 8-K filed on 07/6/2022 | ||
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| Incorporated by reference to Company’s Form 10-Q filed on 07/14/2023 | |||
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101 |
| XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q |
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104 |
| Cover Page Interactive Data File |
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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 on October 5, 2023.
| Healthcare Business Resources Inc. | ||
| Registrant |
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By: | /s/ Stephen Epstein | ||
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| Stephen Epstein, |
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| Chief Executive Officer and Chief Financial Officer |
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EXHIBIT 31.1
CERTIFICATION
I, Stephen Epstein, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Healthcare Business Resources 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. | The registrant’s other certifying officer(s) and I are 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: |
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| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our 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; |
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| (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 |
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| (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. | The registrant’s other certifying officer(s) and I have disclosed, based on our 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): |
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| (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, |
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| (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. |
Date: October 5, 2023
| /s/ Stephen Epstein Stephen Epstein |
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| Chief Executive Officer |
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| (Principal Executive Officer) |
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EXHIBIT 31.2
CERTIFICATION
I, Stephen Epstein, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Healthcare Business Resources 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. | The registrant’s other certifying officer(s) and I are 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: |
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| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our 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; |
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| (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 |
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| (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. | The registrant’s other certifying officer(s) and I have disclosed, based on our 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): |
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| (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, |
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| (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. |
Date: October 5, 2023
| /s/ Stephen Epstein |
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| Stephen Epstein |
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| Chief Financial Officer |
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| (Principal Financial and Accounting Officer) |
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EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Stephen Epstein, Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Healthcare Business Resources Inc. on Form 10-Q for the quarterly period ended August 31, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Healthcare Business Resources Inc.
| /s/ Stephen Epstein | |
| Stephen Epstein | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
Date: October 5, 2023
EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Stephen Epstein, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Healthcare Business Resources Inc. on Form 10-Q for the quarterly period ended August 31, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Healthcare Business Resources Inc.
| /s/ Stephen Epstein | |
| Stephen Epstein | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
Date: October 5, 2023