ITEM
1. BUSINESS.
Background
We
are a medical device technology and software as a service (SaaS) company focused on enabling primary care physicians (PCP’s) to
increase their revenues by providing them with relevant, value-based tools to evaluate and treat chronic disease as well as provide preventive
care through reimbursable procedures. In some cases, the products we provide our physician clients will enable them to diagnose and treat
patients with chronic diseases which they historically have referred to specialists, allowing them to increase their practice revenue.
As part of our mission, we are providing PCPs with the software, training and devices necessary to allow them to treat their patients
using value-based healthcare, informatics and algorithmic personalized medicine. Our digital healthcare, clinical decision support and
point of care solutions also support non face to face remote patient and therapeutic monitoring, to address chronic care and preventive
medicine and are reimbursable to the medical practice.
In
November 2020, we began shipping AllergiEnd® diagnostic related products and immunotherapy treatments to PCPs in response
to their requests based upon courses of treatment recommended for their patients building on the capabilities of QHSLab, our primary
SaaS tool.
In
June 2021, we announced that we had acquired the method patent, trademark and website associated with AllergiEnd®’s
diagnostic and allergen immunotherapy product portfolio. The acquisition of the AllergiEnd® assets provides us the opportunity
to more fully integrate and leverage our product portfolio across our marketing platform, customer relationships and cost structure.
Based
on the success of PCPs using our Quality Health Score Lab Expert System (“QHSLab”) digital healthcare platform combined with
the acquired AllergiEnd® product line, we intend to increase our revenues by charging physicians a monthly subscription fee
for the use of QHSLab and soliciting additional PCPs to increase their revenues by using our proven revenue generating QHSLab and AllergiEnd®
line of products. We also plan to introduce additional point of care diagnostics and treatments, and digital medicine programs that PCPs
can use and prescribe in their practices. In all cases, PCPs will be paid under existing government and private insurance programs, based
upon analyses conducted utilizing QHSLab and treatments provided as a result of such analyses.
Industry
The
healthcare industry has yet to experience the improvements in outcomes, access, and cost-effectiveness that have transformed many other
industries through the use of digital technologies. In an effort to address a worsening pandemic of chronic diseases associated with
aging populations, technology companies are now contributing innovative solutions that enhance chronic and preventive care management
through the structured capture, storage and analysis of large quantities of patient data, and remote monitoring digital applications
to reduce the burden of care on healthcare systems.
Digital
medicine products utilizing sophisticated hardware and software to capture, store, analyze and access patient data, can be used independently
or in concert with pharmaceuticals, biologics, devices, or other products to optimize patient care and health outcomes. A key component
of digital medicine is the analysis of raw patient data, including physiological and environmental signals or responses to digital health
risk assessments to provide the physician with result-oriented output to support clinical decision making and better coordinate patient
care and treatment.
Digital
Therapeutics, that is, the use of digital medicine products to assess a patient’s state of health and monitor progress in response
to recommended lifestyle changes, medication adherence and treatment regimens, is considered a treatment in its own right, and may be
reimbursable depending upon a patient’s health condition and diagnosis, giving health-care providers an economic incentive to engage
in digital healthcare. We intend to add features to our QHSLab platform which allow PCPs to engage in digital medicine for which they
will be reimbursed.
Our
Operating Model
Our
mission is to enhance the quality of life of individuals and populations through physician-directed digital medicine and innovative,
artificial intelligence (AI) enhanced preventive health technologies.
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Value
Based. The Company provides tools that enhance health care for patients while lowering costs to insurance providers and corporate
America and allowing physicians to increase their practice revenues. |
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Patient
Centered. Our products streamline the relationship between physicians and their patients, providing a high quality experience
for patients, and increasing the value provided to them during care. |
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Time
Saving. Physicians can maximize face-to-face office visits and non-face-to-face patient education while generating additional
revenue through reimbursable preventative services. |
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Prevention
Focused. Our products are designed to promote prevention, early detection, management, and reversal of chronic diseases. |
QHSLab
Expert System
We
have developed and are constantly upgrading our high-level, fully automated cloud-based SaaS system named the QHSLab which provides physicians
and healthcare organizations with the ability to capture and store patient information electronically in a secure database. The patients’
data is analyzed by specific and proprietary algorithms, assisting the physician in making a diagnosis and prescribing a course of treatment
and appropriate care coordination. We provided physicians at practices which use QHSLab with analytical tools to diagnose and treat allergies
and asthma which allowed them to increase revenues by expanding the breadth of their practices. Our focus for the immediate future, is
to increase the number of physicians utilizing the QHSLab platform, to charge users a monthly fee, to expand the number of diagnostic
algorithms and health risk assessments incorporated into QHSLab and to add features which allow PCPs to engage in reimbursable forms
of digital medicine, thereby enabling general practice physicians to increase their revenues.
Our
QHSLab Expert System is capable of handling large quantities of data, without compromising security, accuracy or precision. We can set
parameters to accommodate prospective client physician and healthcare organizations’ policies and easily deal with significant
increases in user workload. Our cloud-based software and IT system scales to allow a virtually unlimited number of user sessions to be
activated. By utilizing a set, well-known path built into our third-party ‘robust’ cloud server infrastructure our QHSLab
is not only capable of scaling to a large number of users, but is also built on a globally-scalable architecture, allowing us to deliver
high availability to users in just about any geographic region.
The
importance of identifying particular health risks and the indicators of the risks to be identified vary between different healthcare
settings and sectors. Some require psychological data while others require a detailed medical history and list of medications. The data
collected and analyzed by our QHSLab and the feedback provided to a physician can be tailored to provide the physician with an individualized
assessment tailored to his practice.
Advantages
of the QHSLab Expert System
QHSLab
has the potential to play the same role in behavioral medicine and lifestyle interventions that pharmacological interventions play in
biological medicine. It will help physicians and healthcare organizations overcome barriers preventing adoption of behavioral and therapeutic
change programs for health promotion and disease prevention through easy to use applications.
Through
purposeful design, the QHSLab Expert System:
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Conducts
a comprehensive assessment of patient behaviors, lifestyle and disease risk; |
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Integrates
into existing physician and healthcare interventions; |
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Collects
and compiles relevant, empirical data; |
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Utilizes
this information for decision making (both artificial and naturalistic); |
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Accounts
for individual differences yet is appropriate for whole populations; |
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Provides
guidelines for consistent decisions; |
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Demonstrates
flexibility by allowing new variables to be added; |
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Requires
relatively low-skilled IT involvement in assessment or patient program development; and |
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Maximizes
revenue by providing less costly ‘digital’ alternatives to face-to-face interactions. |
Our
interventions are ideal for population-based approaches. We provide an efficient means of screening. Upon development, our interactive
AI based programs will branch into in-depth assessment when a problem area is identified. QHSLab will include a large array of interventions
that can be matched to individual user requirements.
QHSLab
will be expanded to incorporate a wide variety of different digital healthcare intervention programs including allergies and asthma,
mental health, musculoskeletal health and pain, hypertension, metabolic syndrome, sleep disorders, dietary assessments, weight loss and
much more. Our AI driven approaches will range from patient treatment seeking interventions and motivational materials for participants
in early stages of behavioral change to more detailed advice and support for participants in later stages of behavioral change. As a
participant progresses (or regresses), different intervention materials will be available.
Our
system will provide an automated recording device so that minimal amounts of progress can be detected and reinforced. Gathering data
through automation provides an extensive empirical data base that can be used to both serve the participant and provide an evaluation
of the effectiveness of the system. Since health risk prevention can be very expensive in terms of the resources required to provide
services to all participants, QHSLab represents a far less costly alternative.
An
article published December 28, 2021, in the Journal of the American Medical Association (JAMA) titled ‘Assessment of an Interactive
Digital Health–Based Self-management Program to Reduce Hospitalizations Among Patients With Multiple Chronic Diseases’ reported
on the success achieved by physicians utilizing a research system similar to QHSLab. The randomized clinical trial found that “among
participants who received the internet chronic disease management intervention, fewer were admitted to the hospital” and “digital
health interventions supporting patient self-management and self-monitoring has the potential to augment primary care among patients
with multiple chronic diseases and co-morbidities.”
Physicians
are seeking preventive and chronic care management tools for their medical decision making and patient care, including non-face to face
asynchronous interventions and easy to incorporate workflow digital screenings. Today, independent physicians and their practices desire
digital health relationships that meet all their needs and those of their patients, instead of having to incorporate multiple limited
services from numerous digital health companies. Physicians don’t have time to pick and choose among different digital health systems.
QHSLab solves this problem especially for the independent primary care provider.
AllergiEnd®
The
first point of contact for most allergy patients is their primary care doctor or pediatrician. There are approximately 60 million Americans
affected by allergic disorders, yet there are fewer than 3,000 practicing Board Certified Allergists and approximately 2,400 Board Certified
Otolaryngologists specializing in allergy or approximately 1 specialist for every 11,000 allergy sufferers. It is estimated that the
number of full-time equivalent (FTE) allergists/immunologists will decline about 7 percent in coming years. Meanwhile, demand for the
services these physicians provide is projected to increase by 35 percent over the foreseeable future.
Only
a limited number of primary care physicians have sufficient training to diagnose and treat allergy-suffering patients in their offices.
The primary care provider is managing many forms of chronic diseases today that in the past were in the specialist domain, while allergies
have remained the exception. We believe there is a need to equip primary care physicians, physician assistants, nurse practitioners,
and nurses with the ability to diagnose and treat allergy sufferers and that this need provides a strong economic opportunity for the
Company.
The
AllergiEnd® system empowers allergist primary care providers with means to test patients for a broad spectrum of allergens
within the confines of their office, thereby enabling the physician to identify the specific cause of the patient’s allergies which
can lead to targeted allergen immunotherapy treatment as opposed to merely masking symptoms with various anti-histamines. The product
line consists primarily of a disposable, one-time use set of FDA cleared and patented skin test applicators and a unique patented test
tray for use with the test applicators.
As
part of our service, we provide physicians and their staff with the know-how and training in allergy screening via the QHSLab digital
medicine platform, skin test confirmation of the particular allergen causing the allergy symptoms and targeted allergen immunotherapy
necessary to enable the physician to desensitize positive allergic patients, thereby treating the cause of the allergies, not merely
the symptoms. AllergiEnd® allergen immunotherapies are pharmacy compounded preparations provided by a contract pharmacy in
response to prescriptions given by the treating physicians that slowly expose the patient to small doses of the allergen culprit, either
via subcutaneous injections in the doctor’s office or through convenient at home sublingual (under the tongue) oral drops. This
approach is similar, if not identical, to that used by allergists the world over for many years. This builds the body’s immune
system to the allergens, thereby overcoming the patient’s excessive reaction to allergens that were previously causing allergy
symptoms. Allergen Immunotherapy practiced safety is the only known method of treatment that leads to prolonged tolerance to the allergens
causing the patient’s allergic chronic disease. In addition to enhancing the level of care doctors can provide their patients;
the screening, testing and allergen immunotherapy are reimbursable under established CPT codes enhancing the physician’s practice
and, in many instances, also providing a new cash pay alternative for physicians and their patients.
Q-Scale
Psychological Emotional Wellbeing
It
has been suggested that nearly 75% of all medical office visits (to all types of healthcare providers) are related to stress, anxiety
and depression.
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“Q”
stands for Quality of Life, and the Q-Scale measures a patient’s responses (or early “warning” signs) to questions
regarding their sleep, stress, anxiety, worry, pain, and overall life satisfaction. Patients with high mental health risks are flagged
for further screening during the same assessment. |
The
Q-Scale is a digital health 10-item questionnaire designed to measure psycho-emotional factors in patients at risk of mental health issues.
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Five
categorical ratings are available for response to each item, ranging from “none of the time” to “all of the time.”
If responses to the Q-Scale indicate potential mental health troubles, patients are directed to the Kessler 6 questions within the
assessment to identify their risk of anxiety and depression for further clinical evaluation. Responses then categorize the patient
as “at-risk” for mental health issues, including depression. Then the treating physician will be informed through a simple-to-read
report of the need for more focused evaluation during their encounter with the patient. |
This
assessment provides immediate feedback to patients while allowing for substantial reimbursements for physicians.
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Patients
are provided with a comprehensive, yet easy to interpret report based on their responses, providing supportive self-management strategies
to improve their coping skills and wellbeing. The Q-Scale aligns with CPT code 96136, which is used when tests are administered by
a physician or other qualified healthcare professional. It is defined as “psychological or neuropsychological test administration
/ scoring by a physician or other qualified healthcare professional, two or more tests, any method.” |
For
our physician customers, the product is time-saving, maximizing face-to-face office visits while generating additional revenue through
reimbursement codes accepted by commercial payors, Medicare and Medicaid. From a patient perspective, Q-Scale promotes early detection
and treatment of conditions potentially related to stress, anxiety, or depression, and increases the value provided to patients during
their care.
Industry
trends also reinforce the growing need for new and time-sensitive approaches for the treatment of mental health-related issues. According
to the Centers for Disease Control and Prevention, one in five Americans will experience a mental illness in a given year. Also, one
in 25 Americans will be impacted by a severe mental illness, such as schizophrenia, bipolar disorder, or major depression. In addition,
a recent study published by KFF, a non-profit organization focused on health-care issues, indicated that the COVID-19 pandemic and resulting
economic recession have negatively affected many people’s mental health with up to 40% of people reporting anxiety and depressive-related
symptoms.
Key
aspects of the Q-Scale product include:
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Utilizes QHSLab’s cloud-based software and technology system that scales to allow a virtually unlimited number of user sessions
to be activated and integrates into existing physician and healthcare interventions while collecting and compiling relevant, empirical
data.
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Measures a patient’s responses, identifying early “warning” signs using questions regarding their sleep, stress, anxiety,
worry, pain and overall life satisfaction. Patients determined to have high mental health risks are identified for further screening
during the same assessment. Items in the Q-Scale have been deliberately written to emphasize normal psychological functioning in generally
healthy patients, therefore it is a total population screening tool.
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If responses to the Q-Scale indicate potential mental health issues, patients are directed to the PHQ-9, GAD-7 and Kessler 6, a global
measure of distress drawing from depressive and anxiety related symptomology. The treating physician is then alerted to the need for
more focused evaluation during their encounter with the patient.
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Patients receive a post-assessment digital ‘feedback’ report and self-management strategies useful in addressing any items
identified during the assessment.
Executing
on our Growth Strategy
Growing
Recuring Revenue Base |
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Increasing
the number of medical practitioners utilizing our point-of-care and digital medicine services, growing our revenue per client metric. |
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Future
distribution channels include Management Service Organization (MSO) partnerships, Independent Physician Associations (IPA’s),
and complementary digital health networks. |
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Expanding
Product Portfolio |
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Additional
point-of-care diagnostic, digital medicine, and treatments that PCPs can use, prescribe, and be reimbursed for under existing government
and private insurance programs. |
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Increasing
Industry Visibility |
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Increasing
the number of company/university-sponsored medical conferences partnering with various University’s to introduce and educate
members of the medical community about the technology and revenue opportunities available. |
Competition
The
market for future point of care and software as a service solutions is highly competitive and characterized by rapid change. The success
of our solutions will be contingent upon our ability to provide superior solutions and a strong value proposition for all potential customers
and their patients. Many existing competitors are well-established and enjoy greater resources or other strategic advantages. It is likely
that there will be new entrants into our market, some of which may become significant competitors. With the introduction of new technologies
and market entrants, we expect the competitive environment to be and remain intense. We currently face competition from a range of companies,
including Teledoc Health, Virta Health Corp., Omada Health, Inc., Glooko, Inc., Hello Heart Inc., Lyra Health, Inc., Onduo LLC, Lark
Health, DarioHealth Corp and Noom, Inc., some of which market direct to the consumer, bypassing physicians.
Our
main competitors fall into the following categories:
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private and public companies that offer specific chronic disease products and services, such as solutions for allergies and asthma, diabetes,
hypertension, and certain addictions or behavioral health conditions;
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large enterprises focused on the healthcare industry, including initiatives and partnerships launched by companies which may offer or
develop products or services with features or benefits that overlap with our proposed future solutions; and
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digital health device manufacturers that facilitate the collection of data but offer limited interpretation, feedback or guidance.
Many
of our current competitors enjoy greater resources, recognition, deeper customer relationships, larger existing customer bases, and more
mature intellectual property portfolios than we do currently.
Intellectual
Property
Although
certain of our current software applications and pioneering methods, as well as those developed in the future, will be eligible for patent
and trademark protection, we believe that the costs of maintaining and enforcing such intellectual property rights may not afford us
a competitive advantage and for the immediate future we intend to rely primarily on maintaining the secrecy of our proprietary information.
Government
Regulation
The
healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes and
regulations govern the manner in which we and the PCPs which use our products provide and bill for services and collect reimbursement
from governmental programs and private payors, our contractual relationships with vendors and clients, our marketing activities and other
aspects of our operations. Of particular importance are:
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the
federal physician self-referral law, commonly referred to as the Stark Law; |
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the
federal Anti-Kickback Act; |
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the
criminal healthcare fraud provisions of HIPAA; |
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the
federal False Claims Act; |
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reassignment
of payment rules that prohibit certain types of billing and collection by companies which do business with PCPs; |
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similar
state law provisions pertaining to anti-kickback, self-referral and false claims issues; |
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state
laws that prohibit general business corporations, such as us, from practicing medicine; and |
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laws
that regulate debt collection practices as applied to our debt collection practices. |
Because
of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our
business activities could be subject to challenge under one or more of such laws. Dealing with investigations can be time- and resource-consuming
and can divert management’s attention from our business.
The
FDA issued a Finalized Guidance on medical mobile applications (“Apps”). The FDA determined that certain Apps may meet
the definition of a medical device because they provide the user with certain biologic information. The Guidance contains an
appendix that provides examples of mobile apps that may meet the definition of a medical device but for which the FDA intends to
exercise enforcement discretion. These mobile apps may be intended for use in the diagnosis of disease or other conditions, or in
the cure, mitigation, treatment, or prevention of disease. Even though these mobile apps may meet the definition of a medical
device, the FDA intends to exercise enforcement discretion for these mobile apps because they pose lower risk to the public. Based
on our understanding of the Guidance, although there can be no guarantee, we believe our QHSLab services will eventually be subject
to regulatory requirements because such services seem to fall within the statutory examples of medical devices with respect to which
the FDA intends to monitor compliance with applicable regulations. Although many of the Apps described in the Guidance have been in
use for an extended period of time, the impact they have had on the need for patient visits to a physician and thus, on the use of
our products, has not been determined.
Employees
As
of March 29, 2023, we had four employees devoting full-time services to the Company, all of whom were engaged in direct sales and operations.
In addition, we engage independent entities and consultants that provide programming services, Quality Management System development,
Marketing and Medical Consulting & Advisory services. We believe that our relationships with our employees and consultants are good.
ITEM
1A. RISK FACTORS.
You
should carefully consider each of the following risks and all of the other information set forth in this annual report. The following
risks relate principally to our business and our common stock. These risks and uncertainties are not the only ones facing our company.
Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect
our business. If any of the risks and uncertainties develop into actual events, this could have a material adverse effect on our business,
financial condition or results of operations. In that case, the trading price of our common stock could decline. Please also see the
section “Government Regulation” above.
Risks
Related to Our Business
We
incurred net losses in 2022 and 2021 and may not be able to continue to operate as a going concern.
We
suffered net losses of $996,001 and $770,176 for the years ended December 31, 2022 and 2021, respectively. We also had negative cash
flows from operations for the years ended December 31, 2022 and 2021. During the years ended December 31, 2022 and 2021, to support our
operations we received loans in the aggregate amount of $1,575,800. The report of our independent registered public accountants on our
consolidated financial statements for the year ended December 31, 2022 states that these factors raise uncertainty about our ability
to continue as a going concern.
Unless
we are able to generate positive cash flows from operations, we will continue to depend upon further issuances of debt, equity or other
financings to fund ongoing operations. We may continue to incur additional operating losses and we cannot assure you that we will continue
as a going concern.
We
may need additional financing.
We
have funded our operating losses through borrowings, including amounts borrowed from our principal shareholder. As of December 31, 2022,
all related party notes combined with the associated accrued interest payable to our principal shareholder have been converted into equity.
As of the date of this annual report we have notes and loans outstanding in the aggregate amount, inclusive of accrued interest, of $1,763,672.
Our Original Issue Discount Secured Convertible Promissory Note in the principal amount of $440,000 matures on July 19, 2023 and our
Original Issue Discount Secured Convertible Promissory Note in the principal amount of $706,000 matured on August 10, 2022. On October
17, 2022, the Company received notice from the manager of Mercer Fund of its agreement to forebear
from the exercise of any rights it might have as a result of any defaults under this Note and the related documents between us and the
Mercer Fund, provided that the Mercer Fund reserved all of its rights under such agreements. The
Note continues to accrue interest at 5%.
If,
we are not able to pay or refinance the outstanding principal and accrued interest on these notes when due, our operations may be materially
and adversely affected. We may need to offer the holders of our debt increases in the rates of interest they receive or otherwise compensate
them through payments of cash or issuances of our equity securities or reductions in the price at which they can convert their convertible
securities. Future financings or re-financings may involve the issuance of additional debt, equity and securities convertible into or
exercisable for our equity securities. If we are unable to consummate such financings or re-financings, the trading price of our common
stock could be adversely affected and the terms of such financings may adversely affect the interests of our existing stockholders. Any
failure to obtain additional working capital when required would have a material adverse affect on our business and financial condition
and may result in a decline in the price of our common stock. If we are not able to fund ongoing losses through funds provided by third
parties or our principal shareholder, we may become insolvent.
Servicing
our debt requires a significant amount of cash.
Our
ability to make payments on and to refinance our debt, to fund planned capital expenditures and to maintain sufficient working capital
depends on our ability to generate cash in the future. This is subject to numerous factors beyond our control, including our ability
to expand our physician client base. We cannot assure you that our business will generate sufficient cash flow from operations in an
amount sufficient to enable us to service our debt or to fund our other liquidity needs. If our cash flow and capital resources are insufficient
to allow us to make scheduled payments on our debt, we will need to seek additional capital or restructure or refinance all or a portion
of our debt on or before the maturity thereof, any of which could have a material adverse effect on our business, financial condition
or results of operations. We cannot assure you that we will be able to refinance any of our debt on commercially reasonable terms or
at all. If we are unable to generate sufficient cash flow to repay or refinance our debt on favorable terms, it could significantly adversely
affect our financial condition and the value of our outstanding debt and common stock. Our ability to restructure or refinance our debt
will depend on the condition of the capital markets and our financial condition. Any refinancing of our debt could be at higher interest
rates and could require us to issue to the holders additional shares of our common stock and may require us to comply with more onerous
covenants, which could further restrict our business operations. There can be no assurance that we will be able to obtain any financing
when needed.
We
are an early stage company with a short operating history and a relatively new business model in an emerging and rapidly evolving market,
which makes it difficult to evaluate our future prospects.
We
are an early stage entity subject to all of the risks inherent in a young business enterprise, such as, lack of market recognition and
limited banking and financial relationships. We have little operating history to aid in our assessing future prospects. We will encounter
risks and difficulties as an early stage company in a new and rapidly evolving market. We may not be able to successfully address these
risks and difficulties, which could materially harm our business and operating results.
We
are not generating sufficient revenues to achieve our business plan.
We
first generated revenues in the fourth quarter of 2020. There is no assurance that we will generate sufficient revenues to become cash
flow positive or ever be profitable. If planned operating levels are changed, higher operating costs encountered, more time needed to
implement our plan, or less funding is received, more funds than currently anticipated may be required. If additional capital is not
available when required, if at all, or is not available on acceptable terms we may be forced to modify or abandon our business plans.
We
have identified material weaknesses in our internal controls, and we cannot provide assurances that these weaknesses will be effectively
remediated or that additional material weaknesses will not occur in the future. If our internal control over financial reporting or our
disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud, or
file our periodic reports in a timely manner, which may cause investors to lose confidence in us and lead to a decline in our stock price.
We cannot remedy the deficiencies in our internal controls until we increase the number of officers in our Company.
Our
management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule
13a-15(f) under the Exchange Act. We have identified material weaknesses in our internal controls with respect to our segregation of
duties, which cannot be rectified until we have additional officers, and our limited resources and our insufficient controls over review
of accounting for certain complex transactions therefore our disclosure controls and procedures are not effective in providing material
information required to be included in our periodic SEC filings on a timely basis and to ensure that information required to be disclosed
in our periodic SEC filings is accumulated and communicated to our management to allow timely decisions regarding required disclosure
about our internal control over financial reporting. Some of the material weaknesses in our internal controls are due to our limited
management staff. Due to limited staffing, we are not always able to detect errors or omissions in financial reporting and cannot eliminate
weaknesses due to our inability to segregate duties. If we fail to comply with the rules under Sarbanes-Oxley related to disclosure controls
and procedures in the future or continue to have material weaknesses and other deficiencies in our internal control and accounting procedures
and disclosure controls and procedures, our stock price could decline significantly and raising capital could be more difficult. If additional
material weaknesses or significant deficiencies are discovered or if we otherwise fail to address the adequacy of our internal control
and disclosure controls and procedures our business may be harmed. Moreover, effective internal controls are necessary for us to produce
reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reports or prevent
fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and
the trading price of our securities could drop significantly.
All
of our revenues have been generated from one product line.
To
date, all of our revenue has been derived from a limited number of product lines. If we fail to develop or acquire additional products
or services from which we can generate revenues, we may not achieve sustained positive cash flow or generate profits. As a result, we
will be severely constrained in our ability to fund our operations and achieve our business plan.
We
are dependent upon third parties for our products.
We
depend upon third parties to supply us with all of the products included in the “AllergiEnd®” line of products from which
we currently derive all of our revenues. If these parties were unable or unwilling to continue to supply our needs, we might not be able
to find an alternative source of supply which would materially adversely impact our business, financial condition and operating results.
We
have engaged in limited product development activities and our product development efforts may not result in commercial products.
Although
our QHSLab has been provided to physicians and enabled them to generate revenues, we have only recently begun to charge physicians for
this product under various software as a service, subscription and license based revenue models. We intend to develop additional features
to be added to QHSLab to provide PCPs with additional sources of revenue. There is no assurance that any of the new features we develop
will gain market acceptance. We cannot guarantee we will be able to produce commercially successful products. Further, our eventual operating
results could be susceptible to varying interpretations by potential customers, or scientists, medical personnel, regulatory personnel,
statisticians and others, which may delay, limit or prevent executing our proposed business plan.
Our
business model is unproven with no assurance of any revenues or operating profits.
Our
current business model is unproven and the profit potential, if any, is unknown. We are subject to all the risks inherent in a new business
model. There can be no assurance that our business model will prove successful or that we will achieve significant revenue or profitability.
If
we fail to raise additional capital, our ability to implement our business plan and strategy could be compromised.
We
have limited capital resources and operations. To date, our operations primarily have been funded from capital contributions and loans
from our principal shareholder and more recently, third party loans. We may not be able to obtain additional financing on terms acceptable
to us, or at all. Even if we obtain financing for our near-term operations and product development, we may require additional capital
beyond the near term. If we are unable to raise capital when needed, our business, financial condition and results of operations would
be materially adversely affected, and we could be forced to reduce or discontinue our operations.
If
we issue additional shares of common stock, it would reduce our stockholders’ percent of ownership and may dilute our share value.
Our
Certificate of Incorporation authorizes the issuance of 900 million shares of common stock. As at March 29, 2023 we have outstanding
9,315,508 shares of common stock, without giving effect to shares issuable upon conversion or exercise of convertible notes, preferred
stock, options and warrants currently outstanding. The future issuance of common stock or securities exercisable for or convertible into
common stock to raise capital may result in substantial dilution in the percentage of our common stock held by our then existing stockholders.
We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock upon the conversion or exercise
of outstanding notes and warrants, for future services or acquisitions or other corporate actions may have the effect of diluting the
value of the shares held by our then existing stockholders and might have an adverse effect on any trading market for our common stock.
Dependence
on Key Existing and Future Personnel.
Our
success depends, to a large degree, upon the efforts and abilities of Troy Grogan, our sole officer, and key consultants. The loss of
the services of one or more of our key providers could have a material adverse effect on our operations. In addition, as our business
model is implemented, we will need to recruit and retain additional management, financial personnel, key employees and consulting service
providers in virtually all phases of our operations. Key employees and consultants will require a strong background in our industry.
We cannot assure that we will be able to successfully attract and retain key personnel.
Our
sole officer and director is engaged in other business activities and has a conflict in determining how much time to devote to our affairs.
His failure to devote sufficient time to our business cloud have a negative impact on our operations.
Our
sole executive officer and director is not required to, and will not, commit his full time to our affairs, which results in a conflict
of interest in allocating his time between our operations and the other businesses in which he is engaged. Our sole executive officer
and director is engaged in several other business endeavors and is not obligated to contribute any specific number of hours to our affairs.
His failure to devote time to our business could have an adverse impact on our business, results of operations and financial condition.
We
operate in a highly competitive industry.
We
encounter competition from local, regional or national entities, some of which have superior resources or other competitive advantages.
Intense competition may adversely affect our business, financial condition or results of operations. Our competitors may be larger and
more highly capitalized, with greater name recognition. We will compete with such companies on brand name, quality of services, level
of expertise, advertising, product and service innovation and differentiation of product and services. As a result, our ability to secure
significant market share may be impeded.
We
face substantial competition, and others may discover, develop, acquire or commercialize competitive products before or more successfully
than we do.
We
operate in a highly competitive environment. Our products compete with other products or treatments for diseases for which our products
may be indicated. Other healthcare companies have greater clinical, research, regulatory and marketing resources than us. In addition,
some of our competitors may have technical or competitive advantages for the development of technologies and processes. These resources
may make it difficult for us to compete with them to successfully discover, develop and market new products.
The
growth of our business relies, in part, on the growth and success of our clients.
The
utility of our products to our clients will be determined by their ability to incorporate them into their health care regimen and the
acceptance of our products by their patients. The ability of our clients to incorporate our products into their practices is outside
of our control. In addition, if the number of patients of one or more of our clients using our products were to be reduced, such decrease
would lead to a decrease in our revenue.
We
conduct business in a heavily regulated industry and if we fail to comply with applicable laws and government regulations, we could incur
penalties or be required to make significant changes to our operations or experience adverse publicity, which could have a material adverse
effect on our business, financial condition, and results of operations.
The
healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes and
regulations govern the products we offer and the manner in which we provide and bill for services and collect reimbursement from governmental
programs and private payors, our contractual relationships with our providers, vendors and clients, our marketing activities and other
aspects of our operations. Of particular importance are:
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the
federal physician self-referral law, commonly referred to as the Stark Law; |
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the
federal Anti-Kickback Act; |
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the
criminal healthcare fraud provisions of HIPAA; |
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the
federal False Claims Act; |
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reassignment
of payment rules that prohibit certain types of billing and collection; |
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similar
state law provisions pertaining to anti-kickback, self-referral and false claims issues; |
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state
laws that prohibit general business corporations, such as us, from practicing medicine; and |
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laws
that regulate debt collection practices as applied to our debt collection practices. |
Some
of our business activities could be subject to challenge under one or more of such laws. Achieving and sustaining compliance with these
laws may prove costly. Failure to comply with these laws and other laws can result in civil and criminal penalties such as fines, damages,
overpayment recoupment, loss of enrollment status and exclusion from the Medicare and Medicaid programs. The risk of our being found
in violation of these laws and regulations is increased by the fact that many of their provisions are open to a variety of interpretations.
Our failure to accurately anticipate the application of these laws and regulations to our business or any other failure to comply with
regulatory requirements could create liability for us and negatively affect our business. Any action against us for violation of these
laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s
attention from the operation of our business and result in adverse publicity. Dealing with investigations can be time- and resource-consuming.
Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business. In addition, because
of the potential for large monetary exposure under the federal False Claims Act, which provides for treble damages and mandatory minimum
penalties of $5,500 to $11,000 per false claim or statement, healthcare providers often resolve allegations without admissions of liability
for significant and material amounts to avoid the uncertainty of treble damages that may be awarded in litigation proceedings. Such settlements
often contain additional compliance and reporting requirements as part of a consent decree, settlement agreement or corporate integrity
agreement. It is expected that the government will continue to devote substantial resources to investigating healthcare providers’
compliance with the healthcare reimbursement rules and fraud and abuse laws. The laws, regulations and standards governing the provision
of healthcare services may change significantly in the future.
Developments
in the healthcare industry could adversely affect our business.
Developments
in the healthcare industry and evolving government policy could adversely affect healthcare spending and reimbursement for healthcare
services. We expect that we will be particularly dependent on primary care physicians and possibly others in the healthcare industry
who are dependent upon revenues derived from federal healthcare programs.
General
reductions in expenditures by healthcare industry participants could result from, among other things:
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government or private initiatives that affect the manner in which healthcare providers interact with patients, payers or other healthcare
industry participants, including changes in pricing or means of delivery of healthcare products and services; |
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consolidation of healthcare industry participants; |
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reductions in governmental funding for healthcare; |
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●adverse
changes in business or economic conditions affecting healthcare payers or providers, pharmaceutical, biotechnology or medical device
companies or other healthcare industry participants; and |
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restructuring of the healthcare industry and possible elimination of private insurers. |
Even
if general expenditures by industry participants remain the same or increase, developments in the healthcare industry may result in reduced
spending for the products or services we provide. The use of our products and services could be affected by changes in health insurance
plans resulting in a decrease in the willingness of PCPs to purchase our products.
The
timing and impact of developments in the healthcare industry are difficult to predict. We cannot assure you that the markets for any
products we may seek to distribute and services we provide will be sustained.
Our
use and disclosure of personally identifiable information, including health information, is subject to federal and state privacy and
security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could result in
significant liability or reputational harm and, in turn, a material adverse effect on our client base, membership base and revenue.
Numerous
state and federal laws and regulations govern the collection, dissemination, use, privacy, confidentiality, security, availability and
integrity of personally identifiable information (PII), including protected health information (PHI). HIPAA establishes a set of basic
national privacy and security standards for the protection of PHI, by health plans, healthcare clearinghouses and certain healthcare
providers, referred to as covered entities, and the businesses with which covered entities contract for services, which includes us.
HIPAA requires companies like us to develop and maintain policies and procedures with respect to PHI, including the adoption of administrative,
physical and technical safeguards to protect such information. HIPAA imposes mandatory penalties for certain violations which can be
significant. HIPAA mandates that the Secretary of Health and Human Services, or HHS conduct periodic compliance audits of HIPAA covered
entities or business associates. It also tasks HHS with establishing a methodology whereby individuals who were the victims of breaches
of unsecured PHI may receive a percentage of the Civil Monetary Penalty fine paid by the violator. HIPAA further requires that patients
and, in some instances, HHS be notified of any unauthorized acquisition, access, use or disclosure of their unsecured PHI that compromises
the privacy or security of such information, with certain exceptions. Numerous other federal and state laws protect the confidentiality,
privacy, availability, integrity and security of PHI. These laws in many cases are more restrictive than, and may not be preempted by,
HIPAA, creating complex compliance issues for us and our clients potentially exposing us to additional expense, adverse publicity and
liability. If we do not comply with existing or new laws and regulations related to PHI, we could be subject to criminal or civil sanctions.
Because of the extreme sensitivity of the PII we store and transmit, the security features of our technology platform are very important.
If our security measures, some of which are managed by third parties, are breached or fail, unauthorized persons may obtain access to
sensitive client and patient data, including HIPAA-regulated PHI. As a result, our reputation could be severely damaged, adversely affecting
client and patient confidence. Clients may curtail their use of or stop using our services or our client base could decrease, which would
cause our business to suffer. In addition, we could face litigation, damages for contract breach, penalties and regulatory actions for
violation of HIPAA and other applicable laws or regulations and significant costs for remediation, notification to individuals and for
measures to prevent future occurrences. Any security breach could also result in increased costs associated with liability for stolen
assets or information, repairing system damage that caused by such breaches, incentives offered to clients or other business partners
in an effort to maintain business relationships after a breach and implementing measures to prevent future occurrences, including organizational
changes, deploying additional personnel and protection technologies, training employees and engaging third-party experts and consultants.
While we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain
coverage sufficient to compensate for all liability and in any event, insurance coverage would not address the reputational damage that
could result from a security incident. We outsource important aspects of the storage and transmission of client and patient information,
and thus rely on third parties to manage functions that have material cyber-security risks. We attempt to address these risks by requiring
outsourcing subcontractors who handle client and patient information to sign business associate agreements contractually requiring those
subcontractors to adequately safeguard personal health data to the same extent that applies to us and in some cases by requiring such
outsourcing subcontractors to undergo third-party security examinations. However, we cannot assure you that these contractual measures
and other safeguards will adequately protect us from the risks associated with the storage and transmission of client and patient proprietary
and protected health information.
The
security of our platform, networks or computer systems may be breached, and any unauthorized access to our customer data will have an
adverse effect on our business and reputation.
The
use of our products will involve the storage, transmission and processing of our clients’ and their patients’ private data.
Individuals or entities may attempt to penetrate our network or platform security, or that of our third-party hosting and storage providers,
and could gain access to our clients’ and their patients’ private data, which could result in the destruction, disclosure
or misappropriation of proprietary or confidential information of our clients’ and their patients’ or their customers, employees
and business partners. If any of our clients’ private data is leaked, obtained by others or destroyed without authorization, it
could harm our reputation, we could be exposed to civil and criminal liability, and we may lose our ability to access private data, which
will adversely affect the quality and performance of our platform. In addition, our platform may be subject to computer malware, viruses
and computer hacking, fraudulent use attempts and phishing attacks, all of which have become more prevalent. Any failure to maintain
the performance, reliability, security and availability of our products or services and technical infrastructure to the satisfaction
of our clients may harm our reputation and our ability to retain existing customers and attract new users. While we will implement procedures
and safeguards that are designed to prevent security breaches and cyber-attacks, they may not be able to protect against all attempts
to breach our systems, and we may not become aware in a timely manner of any such security breach. Unauthorized access to or security
breaches of our platform, network or computer systems, or those of our technology service providers, could result in the loss of business,
reputational damage, regulatory investigations and orders, litigation, indemnity obligations, damages for contract breach, civil and
criminal penalties for violation of applicable laws, regulations or contractual obligations, and significant costs, fees and other monetary
payments for remediation. If customers believe that our platform does not provide adequate security for the storage of sensitive information
or its transmission over the Internet, our business will be harmed. Customers’ concerns about security or privacy may deter them
from using our platform for activities that involve personal or other sensitive information.
Because
we rely on the internet to interact with our clients, we are subject to an extensive and highly-evolving regulatory landscape and any
adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating
results, and financial condition.
Our
business and the businesses of our customers conducted using our platform and technology, are subject to extensive laws, rules, regulations,
policies, orders, determinations, directives, treaties, and legal and regulatory interpretations and guidance directed to those who conduct
business over the internet, including those governing privacy, data governance, data protection, cybersecurity, fraud detection, payment
services, consumer protection and tax. Many of these legal and regulatory regimes were adopted prior to the advent of the internet, mobile
technologies, digital assets, and related technologies. As a result, they are subject to significant uncertainty, and vary widely across
U.S. federal, state, and local jurisdictions. These legal and regulatory regimes, including the laws, rules, and regulations thereunder,
evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict
with one another. To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines,
revocation of licenses, limitations on our products and services, reputational harm, and other regulatory consequences, each of which
may be significant and could adversely affect our business, operating results, and financial condition.
In
addition to existing laws and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in
the United States may adopt new laws and regulations, or new interpretations of existing laws and regulations may be issued by such bodies
or the judiciary, which may change how we operate our business, how our products and services and those of our customers are regulated,
and what products or services we and our competitors can offer, requiring changes to our compliance and risk mitigation measures
To
the extent we use “open source” software, our use could adversely affect our ability to offer our services and subject us
to possible litigation.
We
may use open source software in connection with our products and services. Companies that incorporate open source software into their
products have, from time to time, faced claims challenging the use of open source software and/or compliance with open source license
terms. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software or claiming
noncompliance with open source licensing terms. Some open source software licenses require users who distribute software containing open
source software to publicly disclose all or part of the source code to such software and/or make available any derivative works of the
open source code, which could include valuable proprietary code of the user, on unfavorable terms or at no cost. While we monitor the
use of open source software and try to ensure that none is used in a manner that would require us to disclose our proprietary source
code or that would otherwise breach the terms of an open source agreement, such use could inadvertently occur, in part because open source
license terms are often ambiguous. Any requirement to disclose our proprietary source code or pay damages for breach of contract could
have a material adverse effect on our business, financial condition and results of operations and could help our competitors develop
products and services that are similar to or better than ours.
Assertions
by third parties of infringement or other violations by us of their intellectual property rights could result in significant costs and
harm our business and operating results.
Our
success depends upon our ability to refrain from infringing upon the intellectual property rights of others. Some companies, including
some of our competitors, own large numbers of patents, copyrights and trademarks, which they may use to assert claims against us. As
we grow and enter new markets, we will face a growing number of competitors. As the number of competitors in our industry grows and the
functionality of products in different industry segments overlaps, we expect that software and other solutions in our industry may be
subject to such claims by third parties. Third parties may in the future assert claims of infringement, misappropriation or other violations
of intellectual property rights against us. We cannot assure you that infringement claims will not be asserted against us in the future,
or that, if asserted, any infringement claim will be successfully defended. A successful claim against us could require that we pay substantial
damages or ongoing royalty payments, prevent us from offering our services, or require that we comply with other unfavorable terms. We
may also be obligated to indemnify our customers or business partners or pay substantial settlement costs, including royalty payments,
in connection with any such claim or litigation and to obtain licenses, modify applications or refund fees, which could be costly. Even
if we were to prevail in such a dispute, any litigation regarding our intellectual property could be costly and time-consuming and divert
the attention of our management and key personnel from our business operations.
Natural
disasters, unusually adverse weather conditions, pandemic outbreaks, terrorist acts, conflicts between nations and the response of the
United States to such occurrences, could impair our ability to purchase, receive or replenish inventory or raw materials or could cause
US agencies and insurance companies to modify reimbursement policies, which could result in lost sales, reduced revenues and otherwise
adversely affect our financial performance.
The
occurrence of one or more natural disasters, unusually adverse weather conditions, pandemic outbreaks, such as the recent outbreak
of the coronavirus, or COVID-19, terrorist acts, conflicts between nations and the response of US agencies to such occurrences, could
adversely affect our operations and financial performance. To the extent these events impact one or more of our key suppliers, our operations
and financial performance could be materially adversely affected through lost sales. Such events could also cause US agencies and insurance
companies to modify reimbursement policies which could result in lost sales, reduced revenues and otherwise adversely affect our financial
performance.
Risks
Related to Regulation
Our
products may be subject to product liability legal claims, which could have an adverse effect on our business, results of operations
and financial condition.
Certain
of our products provide applications that relate to patient clinical information. Any failure by our products to provide accurate and
timely information concerning patients, their medication, treatment and health status, generally, could result in claims against us which
could materially and adversely impact our financial performance, industry reputation and ability to market new systems. In addition,
a court or government agency may take the position that our delivery of health information directly, including through licensed practitioners,
or delivery of information by a third party site that a consumer accesses through our websites, exposes us to assertions of malpractice,
other personal injury liability, or other liability for wrongful delivery/handling of healthcare services or erroneous health information.
We anticipate that in the future we will maintain insurance to protect against claims associated with the use of our products as well
as liability limitation language in our end-user license agreements, but there can be no assurance that our insurance coverage or contractual
language would adequately cover any claim asserted against us. A successful claim brought against us in excess of or outside of our insurance
coverage could have an adverse effect on our business, results of operations and financial condition. Even unsuccessful claims could
result in our expenditure of funds for litigation and management time and resources.
There
is significant uncertainty in the healthcare industry in which we operate, and we are subject to the possibility of changing government
regulation, which may adversely impact our business, financial condition and results of operations.
The
healthcare industry is subject to changing political, economic and regulatory influences that may affect the procurement processes and
operation of healthcare facilities. During the past several years, the healthcare industry has been subject to an increase in governmental
regulation of, among other things, reimbursement rates and certain capital expenditures.
Laws
reforming the U.S. healthcare system may have an impact on our business. Various legislators have announced that they intend to examine
proposals to reform certain aspects of the U.S. healthcare system. Healthcare providers may react to these proposals, and the uncertainty
surrounding such proposals, by curtailing or deferring investments, including those for our systems and related services. Cost-containment
measures instituted by healthcare providers as a result of regulatory reform or otherwise could result in a reduction of the allocation
of capital funds. Such a reduction could have an adverse effect on our ability to sell our systems and related services. On the other
hand, changes in the regulatory environment have increased and may continue to increase the needs of healthcare organizations for cost-effective
data management and thereby enhance the overall market for healthcare management information systems. We cannot predict what effect,
if any, such proposals or healthcare reforms might have on our business, financial condition and results of operations.
We
have taken steps to modify our products, services and internal practices as necessary to facilitate our compliance with applicable regulations,
but there can be no assurance that we will be able to do so in a timely or complete manner. Achieving compliance with these regulations
could be costly and distract management’s attention and divert other company resources, and any noncompliance by us could result
in civil and criminal penalties.
Developments
of additional federal and state regulations and policies have the potential to negatively affect our business.
Our
software is anticipated to be considered a medical device by the U.S. Food and Drug Administration (“FDA”) and therefore
subject to regulation by the FDA as a medical device. Such regulation requires the registration of the applicable manufacturing facility
and software and hardware products, application of detailed record-keeping and manufacturing standards, and FDA approval or clearance
prior to marketing. An approval or clearance requirement could create delays in marketing, and the FDA could require supplemental filings
or object to certain of these applications, the result of which could adversely affect our business, financial condition and results
of operations.
Compliance
with changing regulation of corporate governance and public disclosure will result in significant additional expenses.
Changing
laws, regulations, and standards relating to corporate governance and public disclosure for public companies, including the Sarbanes-Oxley
Act of 2002 and various rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), are creating
uncertainty for public companies. Our Company’s management will need to invest significant time and financial resources to comply
with both existing and evolving requirements for public companies, which will lead, among other things, to significantly increased general
and administrative expenses and a certain diversion of management time and attention from revenue generating activities to compliance
activities.
We
may be subject to false or fraudulent claim laws.
There
are numerous federal and state laws that forbid submission of false information or the failure to disclose information in connection
with submission and payment of physician claims for reimbursement. Any failure of our services to comply with these laws and regulations
could result in substantial liability including, but not limited to, criminal liability, could adversely affect demand for our services
and could force us to expend significant capital, research and development and other resources to address the failure. Errors by us or
our systems with respect to entry, formatting, preparation or transmission of claim information may be determined or alleged to be in
violation of these laws and regulations. Determination by a court or regulatory agency that our services violate these laws could subject
us to civil or criminal penalties, invalidate all or portions of some of our client contracts, require us to change or terminate some
portions of our business, require us to refund portions of our services fees, cause us to be disqualified from serving clients doing
business with government payers and have an adverse effect on our business.
We
are subject to the Stark Law, which may result in significant penalties.
Provisions
of the Omnibus Budget Reconciliation Act of 1993 (42 U.S.C. § 1395nn) (the “Stark Law”) prohibit referrals by a physician
of “designated health services” which are payable, in whole or in part, by Medicare or Medicaid, to an entity in which the
physician or the physician’s immediate family member has an investment interest or other financial relationship, subject to several
exceptions. Unlike the Fraud and Abuse Law, the Stark Law is a strict liability statute. Proof of intent to violate the Stark Law is
not required. The Stark Law also prohibits billing for services rendered pursuant to a prohibited referral. Several states have enacted
laws similar to the Stark Law. These state laws may cover all (not just Medicare and Medicaid) patients. Many federal healthcare reform
proposals in the past few years have attempted to expand the Stark Law to cover all patients as well. As with the Fraud and Abuse Law,
we consider the Stark Law in planning our products, marketing and other activities, and believe that our operations are in compliance
with the Stark Law. If we violate the Stark Law, our financial results and operations could be adversely affected. Penalties for violations
include denial of payment for the services, significant civil monetary penalties, and exclusion from the Medicare and Medicaid programs.
We
are Required to Comply with Medical Device Reporting (MDR) and We Must Report Certain Malfunctions, Deaths and Serious Injuries Associated
with Our Medical Device Which Can Result In Voluntary Corrective Actions, Mandatory Recall or FDA Enforcement Actions.
Under
applicable FDA MDR regulations, medical device manufacturers are required to submit information to the FDA when they receive a report
or become aware that a device has or may have caused or contributed to a death or serious injury or has or may have a malfunction that
would likely cause or contribute to death or serious injury if the malfunction were to recur.
All
manufacturers placing medical devices on the market in the European Economic Area and the United States are legally bound to report any
serious or potentially serious incidents involving devices they produce or sell to the regulatory agency, or Competent Authority, in
whose jurisdiction the incident occurred.
If
our products fail to comply with evolving government and industry standards and regulations, we may have difficulty selling our products.
We
may be subject to additional federal and state statutes and regulations in connection with offering services and products via the Internet.
On an increasingly frequent basis, federal and state legislators are proposing laws and regulations that apply to Internet commerce and
communications. Areas being affected by these regulations include user privacy, pricing, content, taxation, copyright protection, distribution,
and quality of products and services. To the extent that our products and services are subject to these laws and regulations, the sale
of our products and services could be harmed.
Risks
related to our Common Stock
There
is not now, and there may never be, an active market for our common stock.
Our
common stock is listed on the OTCQB level of the OTC Market under the symbol “USAQ,” but there is no active trading market
for our common stock. There can be no assurance that an active trading market for our securities will develop, or that if one develops,
that it will be sustained. The trading market for securities of companies listed on the OTC Market is substantially less liquid than
the average trading market for companies listed on a national securities exchange. In addition, our ability to raise capital will be
adversely affected by a listing on the OTC Market, as compared to a listing on a national securities exchange.
Our
stock price is likely to be highly volatile because of several factors, including a limited public float.
The
market price of our common stock has been volatile and is likely to be highly volatile in the future. You may not be able to resell shares
of our common stock following periods of volatility because of the market’s adverse reaction to volatility.
Factors
that could cause such volatility include, among other things:
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actual
or anticipated fluctuations in our operating results; |
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the
limited number of securities analysts covering us and distributing research and recommendations about us; |
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the
low public float for our common stock; |
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the
low trading volume of our common stock; |
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announcements
concerning our business or those of our competitors; |
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actual
or perceived limitations on our ability to raise capital when we require it, and to raise such capital on favorable terms; |
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conditions
or trends in our industry; |
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litigation; |
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changes
in market valuations of similar companies; |
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future
sales of common stock; |
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departure
of key personnel or failure to hire key personnel; and |
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general
market conditions. |
Any
of these factors could have a significant and adverse impact on the market price of our common stock. In addition, the stock market in
general has at times experienced extreme volatility and rapid decline that has often been unrelated or disproportionate to the operating
performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock and/or
warrants, regardless of our actual operating performance.
Our
common stock is subject to the “Penny Stock” Rules of the SEC, which makes transactions in our stock cumbersome and may reduce
the value of an investment in our stock.
The
SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s
account for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction,
setting forth the identity and quantity of the penny stock to be purchased.
In
order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information
and investment experience and objectives of the person; and (b) make a reasonable determination that the transactions in penny stocks
are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating
the risks of transactions in penny stocks.
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating
to the penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination;
and (b) that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers
may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult
for investors to dispose of our common shares and cause a decline in the market value of our stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions
payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the limited market in penny stocks.
Shares
eligible for future sale may adversely affect the market.
Substantially
all of the outstanding shares of our common stock in addition to the shares issuable upon conversion of our outstanding convertible notes
are freely tradable without restriction or registration under the Securities Act or otherwise eligible sale under Rule 144 promulgated
under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely
after six months, subject only to the current public information requirement. Affiliates may sell after six months, subject to the Rule
144 volume, manner of sale (for equity securities), current public information, and notice requirements. Of the 9,315,508 shares of our
common stock outstanding as of March 31, 2022, approximately 1,644,169 shares in addition to the approximately 7,741,487 shares issuable
upon conversion of $1,146,000 convertible notes are tradable without restriction and the balance are restricted securities which may
be sold in accordance with Rule 144. Given the limited trading of our common stock, resale of even a small number of shares of our common
stock pursuant to Rule 144 or an effective registration statement, may adversely affect the market price of our common stock.
Our
sole director and officer controls a majority of the votes which may be cast at a meeting of our stockholders.
In
addition to the common stock owned by our sole director and officer, he owns shares of our Series A Preferred Stock which have the right
to vote on all issues presented to our common stockholders. Taking into account the votes he is eligible to cast by virtue of the number
of shares of our common stock and Series A Preferred Stock held by our sole officer and director, he controls a majority of the votes
which may be cast at a meeting of our stockholders, and therefore controls our operations and will have the ability to control all matters
submitted to stockholders for approval. This stockholder thus has complete control over our management and affairs. Accordingly, his
ownership may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential
acquirer from making a tender offer for our common stock, which may further affect its liquidity.
Under
our Certificate of Incorporation, our director has the authority, without stockholder approval, to issue preferred stock with terms that
may not be beneficial to common stockholders and with the ability to adversely affect stockholder voting power and perpetuate the board’s
control over our company.
Our
director may authorize the issuance of preferred stock in one or more series with such limitations and restrictions as he may determine,
in his sole discretion, with no further authorization by security holders required for the issuance of such shares. Our director may
determine the specific terms of the preferred stock, including: designations; preferences; conversions rights; cumulative, relative;
participating; and optional or other rights, including: voting rights; qualifications; limitations; or restrictions of the preferred
stock. Our sole director has exercised this authority to authorize the Series A Preferred Stock which, taking into account the votes
he is eligible to cast by virtue of the number of shares of our common stock and Series A Preferred Stock he holds, our sole director
controls a majority of the votes which may be cast at a meeting of our stockholders, and therefore has the ability to control all matters
submitted to stockholders for approval.
The
issuance of preferred stock may adversely affect the voting power and other rights of the holders of common stock. Preferred stock may
be issued quickly with terms calculated to discourage, make more difficult, delay or prevent a change in control of our company or make
removal of management more difficult. As a result, the Board of Directors’ ability to issue preferred stock may discourage the
potential hostile acquirer, possibly resulting in beneficial negotiations. Negotiating with an unfriendly acquirer may result in terms
more favorable to us and our stockholders. Conversely, the issuance of preferred stock may adversely affect the market price of, and
the voting and other rights of the holders of the common stock. We presently have no plans to issue any preferred stock.
We
incur significant costs as a result of operating as a public company and our management will have to devote substantial time to public
company compliance obligations.
The
Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and the national stock exchanges, have imposed various
requirements on public companies, including requiring changes in corporate governance practices. Our management and other personnel will
need to devote a substantial amount of time to these compliance requirements and any new requirements that the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010 may impose on public companies. Moreover, these rules and regulations, along with compliance
with accounting principles and regulatory interpretations of such principles, have increased and will continue to increase our legal,
accounting and financial compliance costs and have made and will continue to make some activities more time- consuming and costly. For
example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability
insurance, and we may be required to accept reduced policy limits and coverage or incur substantial costs to maintain the same or similar
coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our
board of directors or our board committees, or as executive officers. We will evaluate the need to hire additional accounting and financial
staff with appropriate public company experience and technical accounting and financial knowledge. We estimate the additional costs to
be incurred as a result of being a public company to be in excess of $150,000 annually.
Effective
internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud. Management has assessed
the effectiveness of our internal control over financial reporting as of December 31, 2022. Based on our assessment, we have concluded
that our internal controls over financial reporting were not effective as of December 31, 2022, due to lack of an oversight committee
and lack of segregation of duties. Management will consider the need to add personnel and implement improved review procedures.
Our
system of internal control over financial reporting is not effective and we need to take remedial measures to improve our internal control
over financial reporting. Remedial measures will likely require hiring additional personnel. We cannot assure our stockholders that the
measures we will take to remediate areas in need of improvement will be successful or that we will implement and maintain adequate controls
over our financial processes and reporting in the future. If we are unable to maintain appropriate internal financial reporting controls
and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm
our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information
and have a negative effect on the market price for shares of our common stock.
Because
we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares
unless they sell them.
We
have not declared or paid any cash dividends on our common stock nor do we anticipate paying any in the foreseeable future. Furthermore,
we expect to retain any future earnings to finance our operations and expansion. The payment of cash dividends in the future will be
at the discretion of our Board of Directors and will depend upon our earning levels, capital requirements, any restrictive loan covenants
and other factors the Board considers relevant. Unless we pay dividends, our stockholders will not be able to receive a return on their
shares unless they sell them. We cannot assure you that you will be able to sell shares when you desire to do so.
We
are a “Smaller Reporting Company” with reduced disclosure requirements which may make our common stock less attractive to
investors.
We
are a “smaller reporting company.” As a “smaller reporting company,” the disclosure we are required to provide
in our SEC filings are less than it would be if we were not a “smaller reporting company.” Specifically, “smaller reporting
companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of
Section 404(b) of the Sarbanes-Oxley Act of 2002 requiring that independent registered public accounting firms provide an attestation
report on the effectiveness of internal control over financial reporting and have certain other decreased disclosure obligations in their
SEC filings, including, among other things, being permitted to provide two years of audited financial statements in annual reports rather
than three years. Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it
harder for investors to analyze the Company’s results of operations and financial prospects which may make our common stock less
attractive, which may result in a less active trading market, higher volatility and a lower price for our common stock.
We
are an “emerging growth company” and our election to comply with the reduced disclosure requirements as a public company
may make our common stock less attractive to investors.
For
so long as we remain an “emerging growth company,” as defined in the JOBS Act, we may take advantage of certain exemptions
from various requirements applicable to public companies that are not “emerging growth companies,” including not being required
to comply with the independent auditor attestation requirements of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, being required to provide fewer years of audited financial statements and
exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden
parachute payments not previously approved. We would cease to be an “emerging growth company” upon the earliest to occur
of: (i) the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; (ii) the date we qualify as a large
accelerated filer, with at least $700 million of equity securities held by non-affiliates; (iii) the date on which we have, in any three-year
period, issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending five years
after our initial public offering of our stock. We may choose to take advantage of some but not all of these reduced reporting burdens.
Accordingly, the information contained in our periodic reports may be different than the information provided by other public companies.
The JOBS Act also provides that an “emerging growth company” can take advantage of an extended transition period for complying
with new or revised accounting standards. We have elected to take advantage of this extended transition period under the JOBS Act. As
a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other
companies who have adopted the new or revised accounting standards. It is possible that some investors will find our common stock less
attractive as a result, which may result in a less active trading market for our common stock and higher volatility in our stock price.
Limitations
on director and officer liability and indemnification of our officers and directors by our articles of incorporation, as amended, and
by-laws it may discourage stockholders from bringing suit against an officer or director.
Our
articles of incorporation, as amended, and bylaws provide, with certain exceptions as permitted by Nevada law, that a director or officer
shall not be personally liable to us or our stockholders for breach of fiduciary duty as a director or officer, unless the director or
officer committed both a breach of fiduciary duty and such breach was accompanied by intentional misconduct, fraud or knowing violation
of law. These provisions may discourage stockholders from bringing suit against a director or officer for breach of fiduciary duty and
may reduce the likelihood of derivative litigation brought by stockholders on behalf of us against a director or officer.
We
are responsible for the indemnification of our officers and directors.
Should
our officers and/or directors require us to contribute to their defense in an action brought against them in their capacity as such,
we may be required to spend significant amounts of our capital. Our articles of incorporation, as amended, and bylaws also provide for
the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney’s fees and
other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on behalf
of us. In addition, we have entered into an indemnification agreement with our Chief Executive Officer. This indemnification policy could
result in substantial expenditures, which we may be unable to recoup. If these expenditures are significant or involve issues which result
in significant liability for our key personnel, we may be unable to continue operating as a going concern.