UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015
Commission File Number: 333-148546
HEMCARE HEALTH SERVICES INC.
(FORMERLY NSU RESOURCES INC)
(Exact name of registrant as specified in its charter)2021
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(Exact name of registrant as specified in its charter) |
Commission File Number:333-148546
Nevada | 20-8248213 | |
(State | (I.R.S. Employer Identification No.) | |
5940 S. Rainbow Blvd., Ste 400-32132, Las Vegas, NV | 89118 | |
(Address of principal executive offices) | (Zip Code) |
4830 W. Kennedy Blvd., Suite 600, Tampa, FL 33609(702) 796-6363
(Address of principal executive offices, including zip code)
(844) 4-HEMCARE, (844) 4-436-2273
(Registrant'sRegistrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o ☐ No x☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes x ☐ No o☒
Indicate by check mark whether the registrant:registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x ☐ No o☒
Indicate by check mark whether the registrant has submitted electronically on its corporate Web site, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-KSK (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant'sregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K10K or any amendment to this Form 10-K. x☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of "large“large accelerated filer," "accelerated” “accelerated filer,"” “smaller reporting company,” and "smaller reporting company"“emerging growth company” in Rule 12b-212b2 of the Exchange Act. (Check one):
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller | ☒ | |
| Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-212b2 of the Exchange Act). Yes o ☐ No x☒
The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2020 was approximately $20,973,259 (based on a closing sale price of $1.60 per share as reported for the NASDAQ Global Select Market on June 30, 2020). For purposes of this calculation, shares of common stock held by officers, directors and their affiliated holders and shares of common stock held by persons who hold more than 10% of the outstanding common stock of the registrant have been excluded from this calculation because such persons may be deemed to be affiliates. This determination of executive officer or affiliate status is not necessarily a conclusive determination for other purposes.
As of May 23, 2016 the issuer had 142,162,211March 10, 2023, 24,926,287 shares of common stock issued and 141,782,211 shares of common stockthe registrant’s Common Stock, $ 0.001 par value, were outstanding.
INDEX
INDEXDLT RESOLUTION, INC.
(FORMERLY HEMCARE HEALTH SERVICES, INC.
(FORMERLY NSU RESOURCES INC))
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | 16 | ||||
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Table of contents |
PART I.
Cautionary Note
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are subject to a number of risks and uncertainties. All statements that are not historical facts are forward-looking statements, including statements about our business strategy, the effect of Generally Accepted Accounting Principles ("GAAP") pronouncements, uncertainty regarding our future operating results and our profitability, anticipated sources of funds and all plans, objectives, expectations and intentions and the statements regarding future potential revenue, gross margins and our prospects for fiscal 2009.2023. These statements appear in a number of places and can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "future," "intend," or "certain" or the negative of these terms or other variations or comparable terminology, or by discussions of strategy.
Actual results may vary materially from those in such forward-looking statements as a result of various factors that are identified in "Item 1A.—Risk Factors" and elsewhere in this document. No assurance can be given that the risk factors described in this Annual Report on Form 10-K are all of the factors that could cause actual results to vary materially from the forward-looking statements. References in this Annual Report on Form 10-K to (i) the "Company," the "Registrant," "Hemcare Health Services""DLT” "we," "our," "HCRE,"“DLTI,” and "us" refer toDLT Resolution Inc. (formerly HCRE, Hemcare Health Services Inc. (formerly NSU Resrouces, Inc.).
Investors and security holders may obtain a free copy of the Annual Report on Form 10-K and other documents filed by Hemcare Health ServicesDLT Resolution Inc. with the Securities and Exchange Commission ("SEC") at the SEC's website at http://www.sec.gov. Free copies of the Annual Report on Form 10-K and other documents filed by Hemcare Health ServicesDLT Resolution Inc. with the SEC may also be obtained from Hemcare Health ServicesDLT Resolution Inc. by directing a request to DLT Resolution Inc., Attention: John Wilkes. 5940 S. Rainbow Blvd, Ste 400-32132, Las Vegas, NV 89118 or tel. 1 (702) 796-6363
ITEM 1BUSINESS.
General
DLT Resolution Inc. (formerly Hemcare Health Services Inc., Attention: John Wilkes 3800 Paddock Road, R.R. #5, Claremont, Ontario, Canada L1Y 1A2.
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General
Hemcare Health Services Inc. (formerly NSU Resources Inc) (") (“The Company"Company”) was incorporated on January 17, 2007, under the laws of the State of Nevada. The principal offices are located at 4830 W. Kennedy Blvd., Suite 600, Tampa, FL 33609.5940 S. Rainbow Blvd, Ste 400-32132, Las Vegas, NV 89118. The telephone number is (844) 4-436-2273.1 (702) 796-6363. The Company has never declared bankruptcy and it has never been in receivership, and it has never been involved in any legal action or proceedings.receivership. Our fiscal year end is December 31.
Description of Business
DLT Resolution Inc. (“DLT”) currently operates in three high-tech industry segments: Blockchain Applications; Telecommunications; and Data Services which includes Image Capture, Data Collection, Data Phone Center Services, and Payment Processing. Its clients represent some of the top businesses from a variety of sectors. Additionally, the Company formed a wholly-owned Canadian subsidiary to carry on business in Canada on effective November 23, 2017 and acquired A.J.D. Data Services on January 21, 2018. The Company's business planCompany offers secure data management, Information Technology (IT) and objective isother telecommunications services in Canada and the United States. DLT Resolution helps organizations that have invoices, ledgers, statements, applications, surveys, employee and customer rewards programs and a wide range of other non-core functions benefit from data management. DLT Resolution also operates a Health Information Exchange providing the ability to focus on hemorrhoidrequest and retrieve medical proceduresinformation & records while meeting all of today's Security & Compliance demands for which it entered into a license agreementHIPAA, PIPEDA and PHIPA. Through RecordsBank.org, the Company offers an easy to open hemorrhoid treatment centersuse online gateway to its centralized system for patients, lawyers and promote the Ultroid Hemorrhoid System globally.insurers to retrieve and access medical records.
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DLT Telecom (DLT Resolution Corp.)
As a result of the business combination with 1922861 Ontario Inc. on April 12, 2018, our business now includes vital customers within the Resolution Telecom business. The Resolution Telecom business has been providing a wide range of innovative solutions that are reliable, scalable and flexible to hundreds of Canadian businesses for more than two decades. The Company’s infrastructure solutions are delivered as a monthly service with substantial flexibility in the packaging and the delivery to ensure the solution is one that best meets each business’s needs.
At the core of its offerings, DLT Telecom Hosted PBX provides customers with cloud-based technology and infrastructure for IP voice communications at a significant savings over on premise solutions. Customers have the flexibility to utilize all the features such as voicemail to email, email transcription, call recording, CRM integration, remote workers, and mobile user apps without the capital expenditure of a traditional legacy system. By offering a truly supported hosted PBX platform, customers no longer require the expense of technicians making programming changes or deploying on site hardware.
Expansive Voice Portfolio - Traditional and Hosted IP. The Company’s feature-rich Hosted PBX platform eliminates the cost and complexity of owning and maintaining a traditional premise-based system.
Hosted PBX is an advanced, fully hosted, and managed service that is continually upgraded to support market leading business productivity features for all customers.
Data Services Ltd.
DLT Data is a content management and data collection company. DLT Data enables automation and processing by tying service needs to your organization’s business and mobile applications. Seamless, Paperless, Clutter-free. DLT Data help companies – big and small, replace manual paper processes. Eliminate paper and increase productivity and space. Consolidate paper at the point of entry and turn documents into safe, secure, searchable images all within the cloud or on customer premise servers. With DLT Data's Enterprise Content Management Solution, all files, images and records of any kind are only a click away.
Employees
Currently there are no4 employees of the Company; however, several other employees willCompany through its wholly owned subsidiaries. Management works at the pleasure of the board and for the foreseeable future, additional work on its development efforts are to be needed to implement the Company's business plan. contracted out.
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Research and Development Expenditures
Since the time of our incorporation we have not incurred any research or development expenditures.
Business Strategy
During the second quarter of 2014, the Company exited the Rare Earth Elements business. As part of this exit, the Company assigned the exclusive license issued from 1776729 Ontario Corporation, a related party, for rare earth extraction and carbon credit technologies to its former officer for $100, thus terminating the Company's license in the technologies. Additionally, a full and mutual release was signed by the Company and Great Rock Development Corp. pertaining to the rare earth extraction technology use as described in the Company's Form 8K filed on April 29, 2013.
On June 29, 2014 the Company was granted the perpetual exclusive rights to the use of Optimum Performance (a proprietary formulation of a highly potent all-in-one daily feed supplement for the Horse industry. In consideration for the assignment of these rights, the Company will pay a gross sales royalty of 1.5% on future sales and agreed to pre-pay royalties by the issuance of 120,000 Preferred Series A 12% Convertible shares to 2412151 Ontario Limited.
During the year ended December 31, 2015,2021, the Company shiftedhas not incurred any research expenses.
Business Strategy
DLT Resolution’s strategy is to provide secure data management to organizations large and small across Canada. Included with data management are telecom and other IT solutions to assist organizations with offloading burdensome back office services and thus helping clients achieve operational efficiency.
Secure, Online & Remote Voting
Since the launch of Vote YourChoice (™) - Secure Online and Remote Voting Application in June 2020, we have seen significant acceptance and demand for our service. To date, we have signed up a number of new public sector unions, deployed online & remote voting for a number of new and existing union clients and are planning the launch into new markets outside of our current union customer base.
Vote YourChoice™ - Secure Online and Remote Voting
Vote YourChoice™ fulfils the need for an ever-growing demand of online and remote voting requirements for all types of public and private elections. This requirement is now, more than ever, a fundamental change in the way people are able to cast their ballot and maintain physical distancing requirements. This remote ability is also estimated to increase voter participation by 18% to 35%. Vote YourChoice(™) software includes union elections and voting, condominium corporation voting, publicly traded company voting, municipal and provincial elections to name but a few applications globally.
Voting Integrity
Secure, cost-effective and integrated with all organizations requirements. Organizations stakeholders are assured that their votes are processed by a neutral third party and in a transparent manner due in part to our unique voter-verified audit trail. Organizations can also count on our support team as a virtual part of its business focuselections staff.
Through the deployment of the Company’s Distributed Ledger Technology “Blockchain” solution, DLT aims to hemorrhoid medical procedures and enteredleverage our offerings adding benefits previously unattainable in the marketplace.
Distributed Ledger Technology “Blockchain”
Distributed Ledger Technology “Blockchain” permits trust to be intrinsically embedded into a license agreementtechnological solution, enabling smooth partnerships and transactions dramatically reducing friction between stakeholders. Our first commercial application launch is expected to open hemorrhoid treatment centersbe in the online and promoteremote voting application space, leveraging the Ultroid Hemorrhoid System globally. In considerationCompany’s own Vote Your Choice(™) voting application deployed to its Canadian Clients. These clients are primarily private and public sector unions.
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Blockchain benefits to clients and stakeholders:
Workflow Automation
Distributed Ledger Technology “Blockchain” enabled trust improves coordination between various partners, due to a shared view of transactions and liabilities. This in turn permits the elimination of third parties, resulting in cost savings.
Audit Trail
Facilitates a single view of data instead of the need for the transfer of these rightsconsolidation across various disparate systems that results in reliable audit trails due to the Company, it issued 100,000 shareshistory of series A preferred convertible stock.all transactions being available in the ledger.
Data Privacy
Provable privacy protects clients’ data from being visible to unauthorized parties in compliance with all of today's HIPPA requirements.
Revenue Assurance
Implementation of smart contracts allows for near-instantaneous charging, thus leading to improved revenue assurance and fraud reduction.
Health Information Exchange
DLT Resolution owns RecordsBank.org, a Centralized System for Patients, Lawyers & Insurers to retrieve and access Medical Records. The centralized system and portal is a cloud-based PIPEDA & HIPAA compliant network of Providers and Record Requestors. Utilizing a secure platform, providers will be able to securely exchange records electronically with third-party requestors. Health care providers with proper authorization can also share records with each other. The system works on a fee per record basis with future plans of licensing medical data, stripped of identifiers for medical research.
Reports to Security Holders
We file our quarterly and annual report with the Securities and Exchange Commission (SEC), which the public may view and copy at the Public Reference Room at 100 F Street, N.E. Washington D.C. 20549. SEC filings, including supplemental schedule and exhibits, can also be accessed free of charge through the SEC website www.sec.gov.
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Factors Affecting Future Operating Results
This Annual Report on Form 10-K contains forward-looking statements concerning our future programs, expenses, revenue, liquidity and cash needs as well as our plans and strategies. These forward-looking statements are based on current expectations and we assume no obligation to update this information, except as required by applicable laws and regulations. Numerous factors could cause actual results to differ significantly from the results described in these forward-looking statements, including the following risk factors.
Because our auditors have issued a going concern opinion, there is substantial uncertainty we will continue activities in which case you could lose your investment.
Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business for the next twelve months. As such we may have to cease activities and you could lose your investment.
We currently do not have adequate funds to cover the costs associated with maintaining our status as a Reporting Company.
The Company currently has no cash available. This amount will not be enough to pay the legal, accounting, and filing fees that is required to maintain our status as a reporting company, which is currently estimated at $20,000 for fiscal year 2016. If we can no longer be a reporting company our common stock would no longer be eligible for quotation on the Over-the-Counter Bulletin Board. This would result in there being no public market for an investor to trade our common stock and any investment made would be lost in its entirety.
We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease activities, which would result in a complete loss of any investment made into the Company.
We were incorporated on January 17, 2007 and we have not started our proposed business activities or realized any revenues. We have no operating history upon which an evaluation of our future success or failure can be made. As of December 31, 2015 our net loss since inception is $3,254,352. Based upon current plans, we expect to incur operating losses in future periods. Failure to generate revenues will cause us to suspend or cease activities.
If we are able to complete financing through the sale of additional shares of our common stock in the future, then shareholders will experience dilution.
The most likely source of future financing presently available to us is through the sale of shares of our common stock. Any sale of common stock will result in dilution of equity ownership to existing shareholders. This means that if we sell shares of our common stock, more shares will be outstanding and each existing shareholder will own a smaller percentage of the shares then outstanding. To raise additional capital we may have to issue additional shares, which may substantially dilute the interests of existing shareholders. Alternatively, we may have to borrow large sums, and assume debt obligations that require us to make substantial interest and capital payments.
Because there is currently a limited public trading market for our common stock, you may not be able to resell your stock.
Although our common stock is quoted on the Over-the-Counter Bulletin Board (OTCBB) the market is limited. If a market does not develop there would be no central place, such as stock exchange or electronic trading system to resell your shares.
Because our securities are subject to penny stock rules, you may have difficulty reselling your shares.
Our shares are penny stocks are covered by, and subject to, section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell the Company's securities including the delivery of a standardized disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing monthly account statements. For sales of our securities, the broker/dealer must make a special suitability determination and receive from its customer a written agreement prior to making a sale. The imposition of the foregoing additional sales practices could adversely affect a shareholder's ability to dispose of his stock.
We are subject to the requirements of section 404 of the Sarbanes-Oxley Act. If we are unable to timely comply with section 404 or if the costs related to compliance are significant, our profitability, stock price and results of operations and financial condition could be materially adversely affected.
We are required to comply with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002, which require us to maintain an ongoing evaluation and integration of the internal controls of our business. We were required to document and test our internal controls and certify that we are responsible for maintaining an adequate system of internal control procedures for the year ended December 31, 2015.
We evaluated our existing controls for the year ended December 31, 2015. Our Chief Executive Officer identified material weaknesses, specifically a poor segregation of duties, in our internal control over financial reporting and determined that we did not maintain effective internal control over financial reporting as of December 31, 2015. The identified material weaknesses did not result in material audit adjustments to our 2015 financial statements; however, uncured material weaknesses could negatively impact our financial statements for subsequent years.
In addition, a material weakness in the effectiveness of our internal controls over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition.
Further, we believe that the out-of-pocket costs, the diversion of management's attention from running the day-to-day operations and operational changes caused by the need to comply with the requirements of Section 404 of the Sarbanes-Oxley Act could be significant. If the time and costs associated with such compliance exceed our current expectations, our results of operations could be adversely affected.
There may be conflicts of interest between our management and our non-management stockholders.
Conflicts of interest create the risk that management may have an incentive to act adversely to the interests of other investors. A conflict of interest may arise between our management's personal financial interests and the fiduciary duty to our stockholders. Further, our management's own financial interests may at some point compromise their fiduciary duty to our stockholders. John Wilkes and James Cao, who are the Company's sole officers and a majority of its directors, continue to be involved in businesses that operate and commercialize technologies that are similar or related to the Company's, although those businesses exploit and seek to exploit different applications and opportunities. In addition, although it is anticipated that these individuals will spend significant time and effort developing our business, it is possible that they will be exposed to business or employment opportunities that would conflict with the interests of the Company, or cause them to reduce their efforts on the Company's behalf or to entirely cease working with the Company. If we and any other businesses with which our officers are involved wish to take advantage of the same opportunity, then the officer and director that is affiliated with both companies would abstain from voting upon the opportunity.
Future success is highly dependent on the ability of management to further develop and implement a business plan, and secure customers.
The nature of our operations is highly speculative and there is a consequent risk of loss of your investment. The success of our activities will depend on the availability of finances, opportunities relating to carbon trading, offset and reduction regimes, greenhouse gas emission reduction programs, government regulations and economic conditions in the forestry and timber industries. As we have no operating history or revenue and only minimal assets, there is a risk that we will be unable to consummate a business combination. The Company has had no recent operating history and no revenues or earnings from operations since inception. We have no significant assets or financial resources. We will, in all likelihood, sustain operating expenses without realizing significant revenues for the foreseeable future, at least until the market opportunities for the Company's services and technology develops and the demand for our services becomes more proven and regular. This will likely result in our incurring net operating losses for the foreseeable future. We cannot assure that our business will develop as hoped, or that it will become profitable.
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Our business may have no revenues for the foreseeable future.ITEM 1ARISK FACTORS
We have had no revenues from operations. Although the technologies offer potential, we may not realize any revenues unless and until we successfully develop a revenue stream from the use of existing licenses.Not Applicable
We may issue more shares to raise additional capital, and permit the development of the Company's business.ITEM 1BUNRESOLVED STAFF COMMENTS
As a result, the shareholdings of current shareholders may be diluted. Our Articles of Incorporation authorizes the issuance of a maximum of 275,000,000 shares of common stock. We may issue additional shares from time to time to raise the capital that we anticipate will be required to further develop our business. Any share issuance would be subject to compliance with applicable securities laws and subject to that limitation, unless our Articles of Incorporation are amended with approval of our stockholders. This may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. Moreover, the common stock issued from time to time may be valued on an arbitrary or non-arm's-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock or preferred stock are issued, dilution to the interests of our stockholders will occur and the rights of the holders of common stock might be materially and adversely affected.
There is limited public market for our Common Stock, and we have never paid dividends on our Common Stock.
There is limited public trading market for our common stock which is listed on OTCQB: HCRE and none is expected to develop until our business develops further. Additionally, we have never paid dividends on our common stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into the Company to further its business strategy. Moreover, a significant number of unregistered securities may not become traded. Pursuant to the Securities Act of 1933, as amended (the "Securities Act") and any other applicable securities laws or regulations these restrictions will limit the ability of our stockholders to liquidate their investment.
Limited Operating History; Need for Additional Capital.
Although the Company draws on the expertise on the principals who have been operating private businesses in the renewable energy and forestry sectors, there is no pertinent historical financial information for the Company upon which to base an evaluation of our performance. Our assets and business have not yet generated substantial or recurring revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services. We will require additional financing to cover costs that we expect to incur over the next twelve months. We believe that debt financing will not be an alternative for funding our operations as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or other securities. However, we cannot provide any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our plan of operations. In the absence of such financing, we will not be able to continue and our business plan will fail.
Our common stock is subject to the "penny stock" rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.
The Securities and Exchange Commission has adopted certain rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are applicable to "penny stocks". For the purposes relevant to us, a "penny stock" is any equity security that has a market price of less than $5.00 per share or has an exercise or conversion price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
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In order to approve a person's account for transactions involving penny stocks, the broker or dealer must:
(1) obtain financial information, investment experience and investment objectives of the person; and
(2) make a reasonable determination that the proposed transactions in penny stocks are suitable for that person and that 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 prepared by the SEC relating to the penny stock market, which, in highlight form:
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Following a transaction, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
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 stock and depress the market value of our stock.
There are additional risks of investing in penny stocks whether in public offerings or in secondary trading, relating to 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.
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None
ITEM 2PROPERTIES. |
We do not own any property; the principal offices are located at 4830 W. Kennedy Blvd., Suite 600, Tampa, FL 33609.5940 S. Rainbow Blvd, Ste 400-32132, Las Vegas, NV 89118. The telephone number is (844) 4-436-2273. 1 (702) 796-6363.
ITEM 3 LEGAL PROCEEDINGS. |
Hemcare Health Services,On March 29, 2019, DLT Resolution Corp. and DLT Resolution Inc. was served with a Statement of Claimants 300-306 Town Centre Boulevard Limited Partnership/Court File No. CV-19-00617228-000 (Toronto) for unpaid rent and lost revenue related to the premises. In this action, the Plaintiff has claimed damages against the Defendants DLT Resolution Corp. and DLT Resolution Inc. in the amount of $567,385 for an alleged breach of lease. The Plaintiff has claimed damages against the Defendant DLT Resolution Inc. in the amount of $567,385 for allegedly wrongfully inducing a breach of lease and tortious interference with contractual relations. The Plaintiff has further claimed damages against the Defendant DLT Resolution Inc. in the amount of $567,385 for allegedly oppressive conduct under the Ontario Business Corporations Act. The Plaintiff has further claimed compensation for its legal costs and for pre-judgment interest. The Company filed a statement of Defense citing, amongst other things, that it has never entered into any agreement with the landlord, nor guaranteed any such liability. The Defendants DLT Resolution Corp. and DLT Resolution Inc. intend to contest the claim vigorously. There is not currentlyno intention to make a partysettlement offer nor have instructions been received to make a settlement offer at this juncture. Since the statement of defense was delivered on May 16, 2019, the Company had no further communication from counsel for the Plaintiff nor have any legal proceedings.steps been taken to move the litigation forward. Although there can be no assurance of the Company’s ability to dismiss the claim, management feels the claim is without merit and is confident it will receive a ruling in its favor.
ITEM 4MINE SAFETY DISCLOSURES. |
None
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PART II
ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
Our common stock is quoted on the Over-the-Counter Bulletin Board (OTCBB) under the ticker symbol HCRE.DLTI. The stock trades are limited and sporadic; there is no established public trading market for our common stock.
Dividends
We declared $19,000$0 and $0 of dividends on preferred stock during the yearyears ended December 31, 20152021 and anticipate declaring dividends on preferred stock at the same rate during the year ended December 31, 2016.2020.
Securities Authorized for Issuance under Equity Compensation Plans
There is no stock option plan in place for the company.
Recent Sales of Unregistered Securities
There was no sale of unregistered securities during the year ended December 31, 2015.2021.
Securities issued in 20152020
During the year ended December 31, 2015,2020, the Company issued a total of 100,0001,500,000 shares of Series A Preferred Stock in exchange for a prepaid royalty, issued 26,211 common shares as rounding from our 1:50 stock split from March 2015, issued 138,830,000 common shares for the conversionto acquire 100% ownership of 138,830Union Strategies, Inc. and 31,250 shares of Series A Preferred Stock, rescinded 730,000 common shares and issued 900,000 common sharesstock for cash proceeds of $45,000.$25,000 in cash.
Securities issued in 2021 |
During the year ended December 31, 2021, the Company issued 1,000,000 shares of common stock to complete the acquisition of Union Strategies, Inc.
ITEM 6 SELECTED FINANCIAL DATA.
Summary of Financial Data
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Revenues |
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| $ | 391,693 |
| $ | 403,919 |
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Operating Expenses |
| $ | 399,261 |
| $ | 26,340 |
|
| $ | 536,364 |
| $ | 758,054 |
| ||
|
|
|
|
|
|
|
|
|
|
| ||||||
Earnings (Loss) |
| $ | (630,108 | ) |
| $ | (186,345 | ) | ||||||||
Loss |
| $ | 2,429,226 |
| $ | (503,929 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||
Total Assets |
| $ | 22,964 |
| $ | - |
|
| $ | 1,358,657 |
| $ | 3,523,068 |
| ||
|
|
|
|
|
|
|
|
|
|
| ||||||
Liabilities |
| $ | 497,395 |
| $ | 104,914 |
|
| $ | 1,228,181 |
| $ | 2,834,195 |
| ||
|
|
|
|
|
|
|
|
|
|
| ||||||
Stockholders' Deficit |
| $ | (474,431 | ) |
| $ | (104,914 | ) | ||||||||
Stockholders’ Equity |
| $ | 130,746 |
| $ | 688,873 |
|
8 |
Table of contents |
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
The following discussion is intended to assist in the understanding and assessment of significant changes and trends related to the results of operations and financial condition of Hemcare Health SerivcesDLT Resolution, Inc. This discussion and analysis should be read in conjunction with our financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K for the fiscal year ended December 31, 2015.2021.
Critical Accounting Policies
Use of Estimates
The preparation of our consolidated financial statements and notes thereto requires management to make estimates and assumptions that affect the amounts and disclosures reported within those financial statements. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, contingencies, litigation and income taxes. Management bases its estimates and judgments on historical experiences and on various other factors believed to be reasonable under the circumstances. Actual results under circumstances and conditions different than those assumed could result in differences from the estimated amounts in the financial statements. There have been no material changes to these policies during the year ended December 31, 2015. 2021.
Revenue Recognition
Revenue is recognized when persuasive evidence of an agreement exists, the price is fixed or determinable, goods are delivered, or services performed and collectability is reasonably assured.
Going concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flow from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management’s plans in regards to this matter include raising additional equity financing and borrowing funds under a private credit facility and/or other credit sources.
Principals of Consolidation
The consolidated financial statements represent the results of DLT Resolution, Inc. and its wholly owned subsidiaries, DLT Resolution Corp., DLT Data Services; and Union Strategies, Inc. (“USI”), which is a discontinued operation.) All intercompany transactions and balances have been eliminated.
Plan of Operations
Liquidity and Capital Resources. As of December 31, 20152021, we had $33,862 of cash on hand of $20,334 and we hadtotal liabilities of $497,395.$1,228,181. We must secure additional funds in order to continue our business. We were required to secure a loan to pay expenses relating to filing this report including legal, accounting and filing fees and maywill be required to secure additional financing to fund future filings. We believe that we will be able to obtain this loan from a current shareholder of the Company; however we cannot provide any assurance that we will be able to raise additional proceeds or secure additional loans in the future to cover our expenses related to maintaining our reporting company status (estimated at $20,000 for the year ending December 31, 2016). Furthermore, there is no guarantee we will receive the required financing to complete our business strategies; we cannot provide any assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. If we are unable to accomplish raising adequate funds then it would be likely that any investment made into the Company would be lost in its entirety.
Results of Operations. Total revenues were $391,963 and $403,919 in 2021 and 2020, respectively, with the decrease attributable to the deterioration in market conditions due to the COVID-19 pandemic. Total operating expenses were $399,261$536,364 for the year ended December 31, 2021 compared to $758,014 during the year ended December 31, 2015 compared2020. The decrease in operating expenses relates to $26,340a reduction in our business attributable to the deterioration in market conditions due to the COVID-19 pandemic.
9 |
Table of contents |
Other Expense: Other Expense totaled $2,378 during the year ended December 31, 2014. The increase in expenses is from the Company incurring increased professional fees associated with broker fees paid for securing the license agreement2021 compared to distribute the Ultroid Hemorrhoid System.
Other Income (Expense): Other expenses totaled $230,847($7,342) during the year ended December 31, 2015 compared to $160,005 during2020. For 2021, Other Expense consists primarily of interest expense.
Loss from Discontinued Operations: In 2022, we suspended operations of USI and in 2023 we sold our 100% ownership of USI.Loss from discontinued operations was $2,282,447 for the year ended December 31, 2014. The increase in other expenses is mostly attributable2021 compared to an increase in excess cost of prepaid royalties over value and $32,177 of interest expenses incurred during$142,490 for the year ended December 31, 2015 on notes entered into during that year.2020. The increase in loss is attributed to writedowns of USI intangible assets and its receivables.
Off-Balance Sheet Arrangements. None We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Contractual Obligations. None
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
We do not currently hold any market risk sensitive instruments entered into for hedging transaction risks related to foreign currencies. In addition, we have not entered into any transactions with derivative financial instruments for trading purposes.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
Our financial statements appear beginning on page F-1, immediately following the signature page of this report.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Since the appointment of BFBorgers CPA, PC as our independent registered accounting firm through present, which included the audit of our financial statements for the years ended December 31, 2021 and 2020, there were (i) no disagreements between the Company and BFBorgers CPA, PC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreement, if not resolved to the satisfaction of BFBorgers CPA, PC, would have caused BFBorgers CPA, PC to make reference thereto in their reports on the financial statements for such years, and (ii) no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.
During years ended December 31, 2021 and 2020, and in the subsequent interim period through to present, the Company has not consulted with BFBorgers CPA, PC regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that Heaton & Company concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).
10 |
|
NoneDisclaimer: This filing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements are based largely on the expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the control of management. Therefore, actual results could differ materially from the forward-looking statements contained in this press release. Additional information respecting the factors that could materially affect the Company and its operations are contained in its annual report on Form 10-K, Form 10-Q’s, 8-K’s and other periodic reporting as filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statement.
ITEM 9A CONTROLS AND PROCEDURES. |
Disclosure Controls and Procedures
Management of Hemcare Health ServicesDLT Resolution Inc. is responsible for maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 (the "Exchange Act"“Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission'sCommission’s rules and forms.
In addition, the disclosure controls and procedures must ensure that such information is accumulated and communicated to the Company'sCompany’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.
At the end of the period covered by this report, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act"“Exchange Act”)) was carried out under the supervision and with the participation of our Principal Executive Officer, Principal Financial and Accounting Officer. Based on his evaluation of our disclosure controls and procedures, he concluded that during the period covered by this report, such disclosure controls and procedures were not effective to detect the inappropriate application of US GAAP standards. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our disclosure controls and that may be considered to be "material“material weaknesses."”
The Company will continue to create and refine a structure in which critical accounting policies and estimates are identified, and together with other complex areas, are subject to multiple reviews by accounting personnel. In addition, the Company will enhance and test our year-end financial close process. Additionally, the Company'sCompany’s management will increase its review of our disclosure controls and procedures. Finally, we plan to designate individuals responsible for identifying reportable developments. We believe these actions will remediate the material weakness by focusing additional attention and resources in our internal accounting functions. However, the material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
11 |
Table of contents |
Management'sManagement’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; (iii) provide reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and (iv) provide reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because changes in conditions may occur or the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2015. This assessment is based on2021. In assessing the effectiveness of our internal control over financial reporting as of December 31, 2021, our management used the criteria for effective internal control described in Internal Control — Integrated Framework issuedset forth by the Committee of Sponsoring Organizations of the Treadway Commission.Commission (2013 framework). Based on its assessment, management concluded that our internal control over financial reporting as of December 31, 20152018 was not effective in the specific areas described in the "Disclosure“Disclosure Controls and Procedures"Procedures” section above and as specifically described in the paragraphs below.
As of December 31, 20152021 the Principal Executive Officer/Principal Financial Officer identified the following specific material weaknesses in the Company'sCompany’s internal controls over its financial reporting processes:
|
| Policies and Procedures for the Financial Close and Reporting Process — Currently there are no policies or procedures that clearly define the roles in the financial close and reporting process. The various roles and responsibilities related to this process should be defined, documented, updated and communicated. Failure to have such policies and procedures in place amounts to a material weakness to the |
|
| |
• | Representative with Financial Expertise — For the year ending December 31, | |
|
| |
• | Adequacy of Accounting Systems at Meeting Company Needs — The accounting system in place at the time of the assessment lacks the ability to provide high quality financial statements from within the system, and there were no procedures in place or built into the system to ensure that all relevant information is secure, identified, captured, processed, and reported within the accounting system. Failure to have an adequate accounting system with procedures to ensure the information is secure and accurately recorded and reported amounts to a material weakness to the | |
|
| |
• | Segregation of Duties — Management has identified a significant general lack of definition and segregation of duties throughout the financial reporting processes. Due to the pervasive nature of this issue, the lack of adequate definition and segregation of duties amounts to a material weakness to the |
12 |
Table of contents |
In light of the foregoing, once we have the adequate funds, management plans to develop the following additional procedures to help address these material weaknesses:
|
| The Company will create and refine a structure in which critical accounting policies and estimates are identified, and together with other complex areas, are subject to multiple reviews by accounting personnel. In addition, we plan to enhance and test our month-end and year-end financial close process. Additionally, our audit committee will increase its review of our disclosure controls and procedures. We also intend to develop and implement policies and procedures for the financial close and reporting process, such as identifying the roles, responsibilities, methodologies, and review/approval process. We believe these actions will remediate the material weaknesses by focusing additional attention and resources in our internal accounting functions. However, the material weaknesses |
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management'sManagement’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management'smanagement’s report in this annual report.
This report shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Changes in Internal Controls
There have been no changes in our internal control over financial reporting that occurred during our fiscal year ended December 31, 20152021 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.
ITEM 9B OTHER INFORMATION. |
None.
13 |
Table of contents |
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
The Company'sCompany’s executive officers and directors and their respective age as of December 31, 20152018 are as follows:
Directors:Director:
Name of Director | Age | |||
|
| |||
John Wilkes |
|
Executive Officer:
Name of Officer | Age |
| ||
|
| President, CEO and | ||
|
|
|
The term of office for each director is one year, or until the next annual meeting of the shareholders.
Biographical Information
Set forth below is a brief description of the background and business experience of our officers and director for the past year.
James Cao
Mr. James Cao, (52) has 20+ years of experience operating business enterprises, including business to business and business to consumer activities.
Mr. Cao has owned and operated CAO Real Estate, a Commercial and Residential Real Estate Brokerage Firm since 2004. Duties include hiring, training and managing sales associates as well as managing company production and establishing company guidelines and policy and holds a Florida Real Estate Brokers license.
Prior to founding his real estate company, Mr. Cao was President/C.E.O of American Dreamhome Funding, Inc. from 2002 to 2008. American Dreamhome Funding was a successful mortgage brokerage company serving CitiCorp, Wachovia, Countrywide Funding, AmNet Mortgage, Bank of America, Wells Fargo Bank, SunTrust Bank and World Savings. During this time he led a sales force in Florida and Georgia, growing annual sales to $54 million.
From 1999 to 2000 Mr. Cao was the Chief Operating Officer of Netoy Corp. Netoy was a publically traded e-commerce toy company with a $250 million market cap. He was responsible for recruiting, hiring, and successfully expanding their sales force. Mr. Cao negotiated with companies such as IBM, EMC, Oracle and Sprint which allowed them to implement logistical software and hardware to accommodate increased e-commerce traffic.
John Wilkes
Mr. Wilkes, M.B.A., C.P.A., C.A. (54)(60) earned his C.A. designation with Price Waterhouse in Toronto, Canada. Upon obtaining his designation he worked privately for a brief period of time before joining Coopers & Lybrand in Toronto, Canada. While there Mr. Wilkes focused on insolvency and Mergers and Acquisitions. In the early '90's Mr. Wilkes joined a junior investment bank called Pagun Corporation where he spent most of his time evaluating environmental technologies. Since 2005, Mr. Wilkes has been an Independent Investment Management Professional, making private investments in both private and public companies that, for the most part, have their core business in the environmental space.
Significant Employees
We do not employ any non-officers who are expected to make a significant contribution to its business.John Wilkes is an officer and Director of the Company.
Corporate Governance
Nominating Committee. We have not established a Nominating Committee because of our limited operations; and because we have only two directors and one officer, we believe that we are able to effectively manage the issues normally considered by a Nominating Committee.director who is John Wilkes..
Audit Committee. We have has not established an Audit Committee because of our limited operations; and because we have only two directors and one officer, we believe that we are able to effectively manage the issues normally considered by a Audit Committee.director.
Code of Ethics. We have not adopted a Code of Ethics for our principal executive and financial officers.Ethics.
14 |
|
ITEM 11 EXECUTIVE COMPENSATION.
Summary Compensation Table
Name and principal position |
| Fiscal Year |
| Salary |
|
| Bonus |
|
| Other annual compensation |
|
| Restricted award(s) |
|
| Securities underlying options/ SARs |
|
| LTIP payouts |
|
| All other compensation |
| |||||||
John Wilkes Director |
| 2015 |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
James Cao Chief Executive Officer |
| 2015 |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 5,540 |
|
Name and principal position |
| Fiscal Year |
| Salary |
|
| Bonus |
|
| Other annual compensation |
|
| Restricted stock award(s) |
|
| Securities underlying options/ SARs |
|
| LTIP payouts |
|
| All other compensation |
| |||||||
John Wilkes Director |
| 2021 |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
John Wilkes Director |
| 2020 |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
There has been no cash payment outside of the amounts above paid to the individuals above for services rendered in all capacities to us for the year ended December 31, 2015.2021 and 2020. Minimal compensation is anticipated within the next six months to any officer or director of the Company.
Stock Option Grants
We did not grant any stock options to the executive officer during the year ended December 31, 2015.2021 and 2020.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
The following table provides the names and addresses of each person known to the Company to own more than 5% of the outstanding common stock as of December 31, 20152021 and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly.
Beneficial Owner |
| Amount of Stock Owned |
|
| % Ownership |
| ||
Tom Krutulis |
|
| 22,832,000 |
|
|
| 16.1 | % |
|
|
|
|
|
|
|
|
|
Jaswinder Singh |
|
| 12,215,000 |
|
|
| 8.6 | % |
|
|
|
|
|
|
|
|
|
Gilles Trahan |
|
| 10,530,000 |
|
|
| 7.4 | % |
|
|
|
|
|
|
|
|
|
Tran Tran |
|
| 10,000,000 |
|
|
| 7.0 | % |
|
|
|
|
|
|
|
|
|
All Others |
|
| 86,585,211 |
|
|
| 60.9 | % |
|
|
|
|
|
|
|
|
|
Total issued |
|
| 142,162,211 |
|
|
| 100 | % |
Beneficial Owner |
| Number of Shares Owned |
|
| Percent Ownership |
| ||
Mind Tech Group |
|
| 5,000,000 |
|
|
| 24 | % |
John Wilkes |
|
| 4,003,000 |
|
|
| 19 | % |
Total |
|
| 9,003,000 |
|
|
| 43 | % |
15 |
|
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
During the year ended December 31, 2015,2021, there were no other material transactions between the Company and any Officer, Director or related party that has not been disclosed in footnote 54 to the financial statements. Additionally, there are no Officers, Directors or other related parties that since the date of incorporation had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:
-The Officers and Directors; -Any person proposed as a nominee for election as a director; -Any other person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to the outstanding shares of common stock; -Any relative or spouse of any of the foregoing persons who have the same house as such person. |
|
|
|
| |
|
| |
|
|
Any future transactions between us and our Officers, Directors, and Affiliates will be on terms no less favorable to us than can be obtained from unaffiliated third parties. Such transactions with such persons will be subject to approval of our Board of Directors.
ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
During the years ended December 31, 20152021 and 2014,2020, the Company incurred auditing expenses of approximately $10,375$40,000 and $16,125.$17,000. There were no other audit related services or tax fees incurred.
16 |
Table of contents |
PART IV
ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
|
|
| The following documents have been filed as a part of this Annual Report on Form 10-K. |
1. | Consolidated Financial Statements |
Page | |||
Report of Independent Registered Public Accounting Firm – 2021 | F-3 | ||
| F-4 | ||
| F-5 | ||
Consolidated Statements of | F-6 | ||
Consolidated Statement of Stockholders' Deficit | F-8 | ||
Consolidated Statements of Cash Flows |
| F-9 | |
Notes to Consolidated Financial Statements |
| F-10-20 |
2. | Financial Statement Schedules. |
All schedules are omitted because they are not applicable or not required or because the required information is included in the Financial Statements or the Notes thereto.
3. | Exhibits. |
The following exhibits are filed as part of, or incorporated by reference into, this Annual Report:
EXHIBIT NUMBER | DESCRIPTION | |
Articles of Incorporation (Incorporated by reference to the Registration Statement on Form SB-2, previously filed with the SEC on January 9, 2008) | ||
|
| |
|
| |
|
| |
|
| |
101 | Interactive |
*Filed herewith
17 |
Table of contents |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| /s/ John Wilkes | /s/ John Wilkes | |||
| John Wilkes | ||||
President and Chief Executive Officer | Chief Financial Officer, Secretary and Treasurer | ||||
(Principal Executive Officer) | (Principal Financial Officer) | ||||
|
| ||||
March 10, 2023 | March 10, 2023 |
18 |
Table of contents |
HEMCARE HEALTH SERVICESDLT RESOLUTION INC.
(Formerly NSU Resources Inc.)
Financial Statements
December 31, 2015 and 2014
Consolidated Financial Statements
December 31, 2021 and 2020
F-1 |
Table of contents |
HEMCARE HEALTH SERVICESDLT RESOLUTION INC.
(Formerly NSU Resources Inc.)
Consolidated Financial Statements
December 31, 20152021 and 20142020
CONTENTS
Page(s) | |||
Report of Independent Registered Accounting Firm (PCAOB ID #5041) | F-3 | ||
Consolidated Balance Sheets | F-4 | ||
Consolidated Statements of Operations | F-5 | ||
| |||
| F-7 | ||
F-8 | |||
| F-9 - |
F-2 |
Table of contents |
PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL CORPORATION
1438 N. HIGHWAY 89 STE. 130
FARMINGTON, UTAH 84025
_______________
(801) 447-9572 FAX (801) 447-9578
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMReport of Independent Registered Public Accounting Firm
To the Boardshareholders and the board of Directors and Stockholdersdirectors of DLT Resolution, Inc.
Hemcare Health Services Inc. (Formerly NSU Resources Inc.)
Tampa, FLOpinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Hemcare Health ServicesDLT Resolution, Inc. (Formerly NSU Resources Inc.) as of December 31, 20152021 and 2014 and2020, the related statements of operations, stockholders' deficitequity (deficit), and cash flows for the years then ended. ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on thesethe Company's financial statements based on our audits.audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our auditsaudit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included considerationAs part of our audits we are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company'sCompany’s internal control over financial reporting. Accordingly, we express no such opinion. An
Our audit also includesincluded performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements, assessingstatements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provideaudit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hemcare Health Services Inc. (Formerly NSU Resources Inc.) as of December 31, 2015 and 2014 and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America./S/ BF Borgers CPA PC
BF Borgers CPA PC
The accompanying financial statementsWe have been prepared assuming thatserved as the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses and has a net capital deficiency. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note (2). The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.Company's auditor since 2019
Lakewood, CO
/s/ Pritchett, Siler & Hardy, P.C.
Pritchett, Siler & Hardy, P.C.
Farmington, Utah 84025
May 23, 2016 March 10, 2023
F-3 |
Table of contents |
DLT RESOLUTION, INC | ||||||||
Consolidated Balance Sheets As of December 31 | ||||||||
|
|
|
| |||||
|
| 2021 |
|
| 2020 |
| ||
|
| |||||||
ASSETS |
| |||||||
Current assets |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 33,862 |
|
| $ | 7,666 |
|
Accounts receivable |
|
| 62,420 |
|
|
| 45,604 |
|
Total current assets |
|
| 96,282 |
|
|
| 53,270 |
|
Assets from discontinued operations |
|
| 1,048,633 |
|
|
| 3,193,072 |
|
Intangible assets, net of accumulated amortization |
|
| 213,742 |
|
|
| 276,726 |
|
Total assets |
| $ | 1,358,657 |
|
| $ | 3,523,068 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
| $ | 318,575 |
|
| $ | 171,156 |
|
Accounts payable, related party |
|
| 15,000 |
|
|
| 15,000 |
|
Interest payable, related party |
|
| 47,067 |
|
|
| 41,565 |
|
Related party payables |
|
| 60,017 |
|
|
| 20,884 |
|
Notes payables, related party |
|
| 81,500 |
|
|
| 81,500 |
|
Notes payable, current portion |
|
| 62,612 |
|
|
| 62,730 |
|
Liabilities from discontinued operations |
|
| 638,410 |
|
|
| 548,649 |
|
Total current liabilities |
|
| 1,223,181 |
|
|
| 941,484 |
|
|
|
|
|
|
|
|
|
|
Notes payable, net of current portion |
|
| 5,000 |
|
|
| 5,000 |
|
Other long term liability |
|
| - |
|
|
| 1,887,711 |
|
Total liabilities |
|
| 1,228,181 |
|
|
| 2,834,195 |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
Series A convertible preferred stock, $1.00 par value; 5,000,000 shares authorized; 0 issued and outstanding at December 31, 2021 and December 31, 2020 |
|
| - |
|
|
| - |
|
Series B convertible preferred stock, $1.00 par value; 500,000 shares authorized; 64,000 issued and outstanding at December 31, 2021 and December 31, 2020 |
|
| 64,000 |
|
|
| 64,000 |
|
Common stock, $0.001 par value; 275,000,000 shares authorized; 26,926,287 and 25,926,287 issued; 23,111,287 and 22,111,287 outstanding at December 31, 2021 and December 31, 2020 |
|
| 26,926 |
|
|
| 25,926 |
|
Common stock subscribed |
|
| 14,000 |
|
|
| 14,000 |
|
Additional paid in capital |
|
| 6,762,010 |
|
|
| 4,913,010 |
|
Other comprehensive income |
|
| (182,345 | ) |
|
| 816,396 |
|
Treasury stock, 3,815,000 shares at December 31, 2021 and 2020 |
|
| (5,300 | ) |
|
| (5,300 | ) |
Accumulated deficit |
|
| (6,548,815 | ) |
|
| (5,139,159 | ) |
Total stockholders’ equity |
|
| 130,476 |
|
|
| 688,873 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
| $ | 1,358,657 |
|
| $ | 3,523,068 |
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements. |
F-4 |
Table of contents |
DLT RESOLUTION, INC. | ||||||||
Consolidated Statements of Operations | ||||||||
|
|
|
|
| ||||
|
| Year ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Revenue |
| $ | 391,963 |
|
| $ | 403,919 |
|
Cost of revenue and operating expenses |
|
|
|
|
|
|
|
|
Cost of revenue |
|
| 154,190 |
|
|
| 170,963 |
|
General and administrative |
|
| 182,833 |
|
|
| 227,773 |
|
Depreciation and amortization |
|
| 61,264 |
|
|
| 103,916 |
|
Professional fees |
|
| 138,077 |
|
|
| 91,182 |
|
Goodwill impairment loss |
|
| - |
|
|
| 164,180 |
|
Total operating expenses |
|
| 536,364 |
|
|
| 758,014 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| (144,401 | ) |
|
| (354,095 | ) |
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
Foreign exchange gain/(loss) |
|
| (284 | ) |
|
| 33 |
|
Loss on investment |
|
| - |
|
|
| - |
|
Interest expense |
|
| (2,094 | ) |
|
| (7,375 | ) |
Total other expense |
|
| (2,378 | ) |
|
| (7,342 | ) |
|
|
|
|
|
|
|
|
|
Net loss from continuing operations |
| $ | (146,779 | ) |
| $ | (361,437 | ) |
|
|
|
|
|
|
|
|
|
Loss from discontinued operations |
| $ | (2,282,447 | ) |
| $ | (142,490 | ) |
|
|
|
|
|
|
|
|
|
Net loss |
| $ | (2,429,226 | ) |
| $ | (503,929 | ) |
|
|
|
|
|
|
|
|
|
Loss per common share, basic and diluted |
| $ | 0.03 |
|
| $ | (0.02 | ) |
Weighted average basic shares outstanding |
|
| 26,544,419 |
|
|
| 25,806,082 |
|
Weighted average diluted shares outstanding |
|
| 26,544,419 |
|
|
| 25,806,082 |
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements. |
F-5 |
Table of contents |
DLT RESOLUTION, INC. | ||||||||
Consolidated Statements of Comprehensive Income | ||||||||
|
|
|
|
|
|
| ||
|
| Year ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Net loss |
| $ | (2,429,226 | ) |
| $ | (503,929 | ) |
Other comprehensive income |
|
|
|
|
|
|
|
|
Gain on valuation adjustment to other long-term liabilities |
|
| 1,022,240 |
|
|
| 360,024 |
|
Foreign currency translation adjustment |
|
| (408,245 | ) |
|
| 490,802 |
|
Total other comprehensive income |
|
| 1,430,485 |
|
|
| 850,826 | �� |
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income |
| $ | (998,741 | ) |
| $ | 346,897 |
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements. |
F-6 |
Table of contents |
HEMCARE HEALTH SERVICES INC.Balance SheetsDLT RESOLUTION, INC
Condensed Consolidated Statements of Changes in Stockholders’ Deficit
|
| December 31, |
| |||||
|
| 2015 |
|
| 2014 |
| ||
ASSETS | ||||||||
Current assets |
|
|
|
|
|
| ||
Cash |
| $ | 20,334 |
|
| $ | - |
|
Prepaid expenses |
|
| 2,630 |
|
|
| - |
|
Total current assets |
|
| 22,964 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Total assets |
| $ | 22,964 |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
| $ | 86,896 |
|
| $ | 67,665 |
|
Dividends payable |
|
| 19,000 |
|
|
| - |
|
Related party payables |
|
| 37,249 |
|
|
| 37,249 |
|
Current notes payables |
|
| 350,000 |
|
|
| - |
|
Related party convertible notes payable, net of discounts $10,249 and $0 |
|
| 385 |
|
|
| - |
|
Convertible notes payable, net of discounts $12,835 and $0 |
|
| 3,865 |
|
|
| - |
|
Total current liabilities |
|
| 497,395 |
|
|
| 104,914 |
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit |
|
|
|
|
|
|
|
|
Series A convertible preferred stock, $1.00 par value; 5,000,000 shares authorized, 81,170 and 120,000 and shares issued and outstanding at December 31, 2015 and 2014 |
|
| 81,170 |
|
|
| 120,000 |
|
Common stock, $0.001 par value; 275,000,000 shares authorized; 142,162,211 and 3,136,000 issued; 141,782,211 and 2,756,000 outstanding at December 31, 2015 and 2014 |
|
| 142,162 |
|
|
| 3,136 |
|
Additional paid in capital |
|
| 2,556,665 |
|
|
| 2,377,270 |
|
Other comprehensive income |
|
| 24 |
|
|
| 24 |
|
Treasury stock, 380,000 shares |
|
| (100 | ) |
|
| (100 | ) |
Accumulated deficit |
|
| (3,254,352 | ) |
|
| (2,605,244 | ) |
Total stockholders' deficit |
|
| (474,431 | ) |
|
| (104,914 | ) |
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' deficit |
| $ | 22,964 |
|
| $ | - |
|
Year Ended December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
|
| Series B Preferred Stock |
|
| Common Stock |
|
| Common Stock |
|
| Additional Paid-in |
|
| Treasury |
|
| Other Comprehensive |
|
| Accumulated |
|
| Non-Controlling |
|
|
|
| |||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Subscribed |
|
| Capital |
|
| Stock |
|
| income |
|
| Deficit |
|
| Interest |
|
| Total |
| |||||||||||
Balance, December 31, 2020 |
|
| 64,000 |
|
| $ | 64,000 |
|
|
| 25,926,287 |
|
| $ | 25,926 |
|
| $ | 14,000 |
|
| $ | 4,913,010 |
|
| $ | (5,300 | ) |
| $ | 816,396 |
|
| $ | (5,139,159 | ) |
|
| - |
|
| $ | 688,873 |
|
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
| - |
|
Issuance of common stock for acquisitions |
|
| - |
|
|
| - |
|
|
| 1,000,000 |
|
|
| 1,000 |
|
|
| - |
|
|
| 1,849,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,850,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (378,742 | ) |
|
| - |
|
|
| - |
|
|
| (378,742 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on adjusted value of other long-term liability |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,022,240 |
|
|
| - |
|
|
| - |
|
|
| 610,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| (1,406,986 | ) |
|
| - |
|
|
| (503,929 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2021 |
|
| 64,000 |
|
| $ | 64,000 |
|
|
| 26,926,287 |
|
| $ | 26,926 |
|
| $ | 14,000 |
|
| $ | 6,762,010 |
|
| $ | (5,300 | ) |
| $ | (182,345 | ) |
| $ | (6,548,815 | ) |
|
| - |
|
| $ | 130,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2019 |
|
| 64,000 |
|
| $ | 64,000 |
|
|
| 24,395,037 |
|
| $ | 24,395 |
|
| $ | - |
|
| $ | 4,218,265 |
|
| $ | (5,300 | ) |
| $ | (34,430 | ) |
| $ | (4,635,230 | ) |
|
| - |
|
|
| (368,300 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash proceeds |
|
|
|
|
|
|
|
|
|
| 31,250 |
|
|
| 315 |
|
|
| - |
|
|
| 24,969 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for acquisitions |
|
| - |
|
|
| - |
|
|
| 1,500,000 |
|
|
| 1,500 |
|
|
| - |
|
|
| 669,776 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 671,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of common stock subscription |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 490,802 |
|
|
| - |
|
|
| - |
|
|
| 490,802 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on adjusted value of other long-term liability |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 360,024 |
|
|
| - |
|
|
| - |
|
|
| 360,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (503,929 | ) |
|
|
|
|
|
| (503,929 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2020 |
|
| 64,000 |
|
| $ | 64,000 |
|
|
| 25,926,287 |
|
| $ | 25,926 |
|
| $ | 14,000 |
|
| $ | 4,913,010 |
|
| $ | (5,300 | ) |
| $ | 816,396 |
|
| $ | (5,139,159 | ) |
|
| - |
|
| $ | 688,873 |
|
See accompanying notes to financial statements.
HEMCARE HEALTH SERVICES INC.Statements of Operations
Year ended December 31, 2015 2014 Revenue Operating expenses General and administrative Professional fees Total operating expenses Other income (expense) Other income Interest expense Excess cost of prepaid royalties over value Total other income (expense) Net loss Preferred stock dividends payable Net loss attributable to common shareholders Basic and diluted loss per common share Weighted average shares outstanding $ - $ - 23,977 - 375,284 26,340 399,261 26,340 937 100 (32,177 ) - (199,607 ) (160,105 ) (230,847 ) (160,005 ) $ (630,108 ) $ (186,345 ) (19,000 ) - $ (649,108 ) $ (186,345 ) $ (0.01 ) $ (0.06 ) 87,783,992 2,932,578
See accompanying notes tocondensed consolidated financial statements.
HEMCARE HEALTH SERVICES INC.Statement of Changes in Stockholders' Deficit
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
| Other comprehensive |
|
| Treasury |
|
| Accumulated |
|
|
| ||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| in Capital |
|
| income |
|
| Stock |
|
| Deficit |
|
| Total |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balance, December 31, 2013 |
|
| - |
|
| $ | - |
|
|
| 3,136,000 |
|
| $ | 3,136 |
|
| $ | 2,337,165 |
|
| $ | 24 |
|
| $ | - |
|
| $ | (2,418,899 | ) |
| $ | (78,574 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares issued for prepayment of royalty |
|
| 120,000 |
|
|
| 120,000 |
|
|
| - |
|
|
| - |
|
|
| 40,105 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 160,105 |
|
Treasury stock exchanged for asset |
|
| - |
|
|
| - |
|
|
| (380,000 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (100 | ) |
|
| - |
|
|
| (100 | ) |
Net loss, year ended December 31, 2014 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (186,345 | ) |
|
| (186,345 | ) |
Balance, December 31, 2014 |
|
| 120,000 |
|
|
| 120,000 |
|
|
| 2,756,000 |
|
|
| 3,136 |
|
|
| 2,377,270 |
|
|
| 24 |
|
|
| (100 | ) |
|
| (2,605,244 | ) |
|
| (104,914 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares issued for prepayment of royalty |
|
| 100,000 |
|
|
| 100,000 |
|
|
| - |
|
|
| - |
|
|
| 99,607 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 199,607 |
|
Conversion of preferred shares to common shares |
|
| (138,830 | ) |
|
| (138,830 | ) |
|
| 138,830,000 |
|
|
| 138,830 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Issuance of common shares for rounding in stock split |
|
|
|
|
|
|
|
|
|
| 26,211 |
|
|
| 26 |
|
|
| (26 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Recession of common shares |
|
| - |
|
|
| - |
|
|
| (730,000 | ) |
|
| (730 | ) |
|
| 730 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Common stock issued for cash |
|
| - |
|
|
| - |
|
|
| 900,000 |
|
|
| 900 |
|
|
| 44,100 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 45,000 |
|
Beneficial conversion features recorded as debt discounts |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 34,984 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 34,984 |
|
Dividend declared on preferred stock |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (19,000 | ) |
|
| (19,000 | ) |
Net loss, year ended December 31, 2015 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (630,108 | ) |
|
| (630,108 | ) |
|
|
| 81,170 |
|
| $ | 81,170 |
|
|
| 141,782,211 |
|
| $ | 142,162 |
|
| $ | 2,556,665 |
|
| $ | 24 |
|
| $ | (100 | ) |
| $ | (3,254,352 | ) |
| $ | (474,431 | ) |
See accompanying notes to financial statements.
HEMCARE HEALTH SERVICES INC.Statements of Cash Flows
|
| Year ended December 31, |
| |||||
|
| 2015 |
|
| 2014 |
| ||
Cash flows from operating activities |
|
|
|
|
|
| ||
Net loss from operations |
| $ | (630,108 | ) |
| $ | (186,345 | ) |
Adjustments to reconcile net loss to net cash used in operating activities |
|
| ||||||
Excess cost of prepaid royalties over value |
|
| 199,607 |
|
|
| 160,105 |
|
Gain on sale of intangible asset for treasury stock |
|
| - |
|
|
| (100 | ) |
Note payable entered into for professional fees |
|
| 350,000 |
|
|
| - |
|
Amortization of debt discounts |
|
| 11,900 |
|
|
| - |
|
Expenses paid on behalf of company by related parties |
|
| 15,784 |
|
|
| 18,035 |
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
Prepaid expenses |
|
| (2,630 | ) |
|
| 800 |
|
Accounts payable and accrued liabilities |
|
| 19,231 |
|
|
| 7,505 |
|
Net cash provided by (used in) operating activities |
|
| (36,216 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from convertible notes payable |
|
| 19,700 |
|
|
| - |
|
Repayments of convertible notes payable |
|
| (3,000 | ) |
|
|
|
|
Repayments of related party convertible notes payable |
|
| (5,150 | ) |
|
|
|
|
Proceeds from sale of common stock |
|
| 45,000 |
|
|
| - |
|
Net cash provided by financing activities |
|
| 56,550 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Net change in cash |
|
| 20,334 |
|
|
| - |
|
Cash at beginning of period |
|
| - |
|
|
| - |
|
Cash at end of period |
| $ | 20,334 |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ | - |
|
| $ | - |
|
Cash paid for income taxes |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities |
|
|
|
|
|
|
|
|
Preferred stock issued for prepaid royalties |
| $ | 100,000 |
|
| $ | 120,000 |
|
Related party convertible notes entered into in exchange for related party payable |
| $ | 15,784 |
|
| $ | - |
|
Note payable entered into for professional fees |
| $ | 350,000 |
|
| $ | - |
|
See accompanying notes to financial statements.
F-7 |
Table of contents |
DLT RESOLUTION, INC | ||||||||
Consolidated Statements of Cash Flows | ||||||||
|
|
|
|
| ||||
|
| December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Cash flows from operating activities |
|
|
|
|
|
| ||
Net loss from continuing operations |
| $ | (146,779 | ) |
| $ | (361,437 | ) |
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities |
|
|
|
|
|
|
|
|
Goodwill impairment loss |
|
| - |
|
|
| 164,180 |
|
Bad debt expense |
|
| 5,682 |
|
|
| - |
|
Depreciation and amortization expense |
|
| 61,264 |
|
|
| 370,552 |
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
Accounts receivable |
|
| (21,252 | ) |
|
| (142,378 | ) |
Prepaid expenses and other current assets |
|
| - |
|
|
| (108,791 | ) |
Interest payable, related party |
|
| 5,502 |
|
|
| 7,375 |
|
Accounts payable and accrued liabilities |
|
| 60,901 |
|
|
| 138,165 |
|
Accounts payable, related party |
|
| 57,894 |
|
|
| - |
|
Lease obligation |
|
|
|
|
|
| (6,771 | ) |
(Repayments) proceeds from related parties, net |
|
| - |
|
|
| (57,683 | ) |
Net cash used in operating activities |
|
| 23,212 |
|
|
| 3,213 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from notes payable |
|
| - |
|
|
| 61,404 |
|
Proceeds (repayments) from bank overdrafts |
|
| - |
|
|
| (20,317 | ) |
Proceeds from sale of common stock subscription |
|
| - |
|
|
| 14,000 |
|
Proceeds from sale of common stock |
|
| - |
|
|
| 25,000 |
|
Net cash provided by financing activities |
|
| - |
|
|
| 80,087 |
|
|
|
|
|
|
|
|
|
|
Net change in cash from continuing operations |
|
| 23,212 |
|
|
| (4,336 | ) |
Effect of exchange rate on cash |
|
| 2,984 |
|
|
| (1,138 | ) |
Cash and cash equivalents at beginning of year |
|
| 7,666 |
|
|
| 13,140 |
|
Cash and cash equivalents at end of year |
|
| 33,862 |
|
| $ | 7,666 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ | - |
|
| $ | - |
|
Cash paid for income taxes |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities |
|
|
|
|
|
|
|
|
Other long term liability entered into for acquisition of Union Strategies, Inc. |
| $ | - |
|
| $ | 1,240,000 |
|
Common shares issued for acquisition of Union Strategies, Inc. |
| $ | 1,850,000 |
|
| $ | 2,400,000 |
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements. |
F-8 |
Table of contents |
DLT RESOLUTION INC.
(FORMERLY HEMCARE HEALTH SERVICES INC.)
(Formerly NSU Resources, Inc.)
Notes to Consolidated Financial Statements
December 31, 20152021 and 20142020
Note 1 – Nature of Business- Organization and Significant Accounting Policies
The Company was organized on January 17, 2007 (Date of Inception) under the laws of the State of Nevada, as DBL Senior Care, Inc. The Companyand subsequently changed its name to DLT Resolution Inc. on December 11, 2009 to Elemental Protective Coatings Corp, subsequently changed its name on January 27, 2011 to Bio-Carbon Solutions International,4, 2017.
DLT Resolution Inc. (“DLT, the “Company”, then to NSU Resources Inc on October 31, 2011“we” and more recently to HemCare Health“our”) operates in three high-tech industry segments: Blockchain Applications; Telecommunications; and Data Services Inc. on March 2, 2015.which includes Image Capture, Data Collection, Data Phone Center Services, and Payment Processing. The Company producesoffers secure data management, Information Technology (IT) and distributesother telecommunications services in Canada and the United States. The Company operates a lineHealth Information Exchange providing the ability to request and retrieve medical information and records while meeting all of all-in-one horse feed supplement.today’s Security & Compliance demands for HIPAA, PIPEDA and PHIPA.
The former business ofaccompanying financial statements have been prepared assuming that the Company waswill continue as a going concern. The Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to provide personal care servicesexperience negative cash flow from operations. These factors raise substantial doubt about the Company's ability to elderly, physically disabled continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management’s plans in regards to this matter include raising additional equity financing and borrowing funds under a private credit facility and/or other home-bound individuals suffering infirmity. During the year ended December 31, 2009, the board of directors changed the Company's focus toward the manufacture and sale of fire retardant products. The Company then changed its focus to the licensing of certain technologies related to rare earth minerals mining then to having the exclusive rights to the use of Optimum Performance (a proprietary formulation of a highly potent all-in-one daily feed supplement for the Horse industry. Currently, the Company has shifted its focus to hemorrhoid medical procedures and entered into a license agreement to open hemorrhoid treatment centers and promote the Ultroid Hemorrhoid System globallycredit sources.
Note 2 – Significant Accounting Policies
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash
For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2015 or 2014.
Income taxes
Income taxes are provided for using the liability method of accounting in accordance with FASB ASC Topic 740 (formally SFAS No. 109 "Accounting“Accounting for Income Taxes"Taxes”). A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.
Revenue RecognitionAt December 31, 2021 and 2020, there were no uncertain tax positions that require accrual.
Revenue is recognized when persuasive evidenceAccounts Receivable
Accounts receivable balances are established for amounts owed to the Company from its customers from the sales of an agreement exists, the price is fixed or determinable, goods are delivered or services performed and collectability is reasonably assured.products. The Company did not generate any revenues duringclosely monitors the years ended December 31, 2015 or 2014.collectability of outstanding accounts receivable and provide an allowance for doubtful accounts based on estimated collections of outstanding amounts.
Convertible debtRevenue Recognition
The Company records a beneficial conversion feature relatedfollows ASC 606 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue upon the transfer of promised services to customers in amounts that reflect the consideration to which the Company expects to be entitled the transfer of services. The Company considers revenue earned when all the following criteria are met: (i) the contract with the customer has been identified, (ii) the performance obligations have been identified, (iii) the transaction price has been determined, (iv) the transaction price has been allocated to the issuanceperformance obligations, and (v) the performance obligations have been satisfied. The Company primarily generates revenues through the sale of convertible debts that have conversion featuresproducts through its website and at fixed or adjustable rates.industry tradeshows.
Property and equipment
Property and equipment are stated at cost less accumulated depreciation. The beneficial conversion featureCompany provides for depreciation using the convertible instruments is recognized and measured by allocating a portionstraight-line method over the estimated useful lives of the proceedsrelated assets, which range from three to five years. Maintenance and repair costs are expensed as they are incurred while renewals and improvements which extend the useful life of an increaseasset are capitalized. At the time of retirement or disposal of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in additional paid-in capitalthe consolidated results of operations.
F-9 |
Table of contents |
Intangible Assets
Intangible assets consist of developed technology, customer relationships, the Company’s website, non-compete agreements and asdomain names. The Company amortizes, to cost of revenue and operating expenses, these definite-lived intangible assets on a reductionstraight-line basis over the life of the assets which range from five to seven years.
Impairment of Long-Lived Assets and Goodwill
The carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized when the convertible instrument equalcarrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the intrinsicuse of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.
The Company tests goodwill for impairment annually as of December 31, or whenever events or changes in circumstances indicate that goodwill may be impaired. The Company initially assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the conversion features. The beneficial conversion feature will be accreted by recording additional non-cash interest expense overtotality of events or circumstances, the expected lifeCompany determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the convertible notes.Company compares the reporting unit’s carrying amount to its fair value. If the reporting unit’s carrying amount exceeds its fair value, an impairment charge is recorded based on that difference.
HEMCARE HEALTH SERVICES INC.
(Formerly NSU Resources, Inc.)
Notes to Financial Statements
December 31, 2015 and 2014There was no impairment of long-lived assets or goodwill during the periods presented.
Note 2 – Significant Accounting Policies (continued)Reclassification of Prior Year Presentation
Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassification had no effect on the reported results of operation.
Share Based Expenses
The Company complies with FASB ASC Topic 718 Compensation—Stock Compensation, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that is based on the fair value of the entity'sentity’s equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC Topic 718 primarily focuses on accounting for transactions in which an entity obtains employee services in share-based payment transactions. This statement requires a public entity to expense the cost of employee services received in exchange for an award of equity instruments. This statement also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted FASB ASC Topic 718 upon formation of the Company and expenses share based costs in the period incurred.
Going concern
The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company has no cash, no material assets, accumulated losses of $3,428,812, a working capital deficit of $118,891, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The officers and directors have committed to advancing certain operating costs of the Company.
Valuation of Investments in Securities and Securities at fair value – Definition and Hierarchy
FASB ASC 820-10-15 defines fair value, thereby eliminating inconsistencies in guidance found in various prior accounting pronouncements, and increases disclosures surrounding fair value calculations. FASB ASC 820-10-15 establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows:
Level 1 – unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company at the measurement date.
Level 2 – inputs that are observable in the marketplace other than those inputs classified as Level 1.
Level 3 – inputs that are unobservable in the marketplace and significant to the valuation.
The Company has no assets or liabilities that are required to be carried at fair value. Accounts payable and related party payables have fair values that approximate the carrying value due to the short term nature of these instruments.
Recent Accounting Pronouncements
Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future consolidated financial statements.
HEMCARE HEALTH SERVICES INC.
(Formerly NSU Resources, Inc.)
Notes to Financial Statements
December 31, 2015 and 2014
Note 2 – Significant Accounting Policies (continued)
Net loss per common shareIncome (Loss) Per Share
Net loss per share is calculated in accordance with FASB ASC Topic 260 (formerly SFAS No. 128, Earnings Per Share). The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted losstopic 260. Basic earnings (loss) per share is computed using the weighted average number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised. Basicby dividing net income, or loss, per common share is based onby the weighted average number of shares of common stock outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock outstanding for the period, assuming conversion or exercise of all potentially dilutive securities outstanding during each reporting period presented. Potentially dilutive securities are not presented or used in the computation of diluted loss per share on the statement of operations for periods presented. Thewhen the Company incurs net losses, as their effect would be anti-dilutive.
F-10 |
Table of contents |
As of December 31, 2021 and 2020, the Company had 84,668,400 common stock equivalents0 shares of Series A Preferred Stock issued and outstanding. As of December 31, 2021 and 2020, the Company had 64,000 shares of Series B Convertible Preferred Stock issued and outstanding that were excluded from earnings per share due toconverts into 12,800 shares of the anti-dilutive nature.Company’s Common Stock.
Principals of Consolidation
The consolidated financial statements represent the results of Union Strategies, Inc. and DLT Resolution, Inc.; its wholly owned subsidiaries, DLT Resolution Corp. and DLT Data Services; and the assets, processes, and results therefrom of 1922861 Ontario Inc. Note 7 – Acquisition of 1922861 Ontario Inc.) All intercompany transactions and balances have been eliminated.
Foreign Currency Translation
The functional currency of the Company’s subsidiaries in Canada is the Canadian Dollar. The subsidiaries’ assets and liabilities have been translated to U.S. dollars using exchange rates of 0.782656 and 0.784129 in effect at the balance sheet dates of December 31, 2021 and December 31, 2020, respectively. Statements of operations amounts have been translated using the annual weighted average exchange rates of 0.768390 and 0.767548 for the years ended December 31, 2021 and 2020, respectively. Resulting gains or losses from translating foreign currency financial statements are recorded as other comprehensive income (loss). Foreign currency transaction gains and losses resulting from exchange rate fluctuations on transactions denominated in a currency other than the local currency are included in other income (expense). There were ($284) and $33 currency transaction (losses) gains recognized during the years ended December 31, 2021 and 2020, respectively.
Fair Value of Financial Instruments
Fair value of certain of the Company’s financial instruments including cash, prepaid expenses, accounts payable, accrued expenses, notes payable, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.
Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.
Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.
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Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income.
Recent Accounting Pronouncements
The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date.
On August 5, 2020, the Financial Accounting Standards Board (FASB) issued accounting standards update (ASU) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).
The amendments in the ASU remove certain separation models for convertible debt instruments and convertible preferred stock that require the separation of a convertible debt instrument into a debt component and an equity or derivative component. The ASU also amends the derivative scope exception guidance for contracts in an entity’s own equity. The amendments remove three settlement conditions that are required for equity contracts to qualify for the derivative scope exception.
In addition to the above, the ASU expands disclosure requirements for convertible instruments and simplifies areas of the guidance for diluted earnings-per-share calculations that are impacted by the amendments.
The ASU is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021. Early adoption is permitted. The FASB noted that an entity should adopt the guidance as of the beginning of its annual fiscal year. The standard is effective for the Company beginning in fiscal year September 30, 2024.
Entities may elect to adopt the amendments through either a modified retrospective method of transition or a fully retrospective method of transition. If an entity has convertible instruments that include a down round feature, early adoption of the ASU is permitted for fiscal years beginning after December 15, 2020.
ASU 2016-13 Measurement of Credit Losses on Financial Instrument is effective for fiscal years beginning after December 15, 2022. This is not expected to apply to the Company as financial instruments giving rise to credit risk are not utilized by the Company.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact this new guidance will have on its financial statements.
The Company does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
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Note 2 – Discontinued Operations
The Company acquired Union Strategies, Inc. (“USI”) in January 2020 and in 2022, the Company suspended its operations and have recognized its activities as discontinued operations with the financial statements for 2021 and 2020. All assets, including goodwill and intangible assets associated with USI are written off and included in the 2021 loss from discontinued operations. In 2023, the Company sold its 100% ownership of USI to a third party for a nominal payment and the acquirer assumed all of USI’s liabilities on a nonrecourse basis. In connection with the sale, the Company received 2,000,000 shares of its Common Stock held by an individual who sold USI shares to the Company in January 2020.
Note 3 – Stockholders' EquityGoodwill and Intangible Assets
Series A Convertible Preferred Stock
As discussedDue to a sustained decline in the 8-K filedmarket capitalization of our Common Stock during the first quarter of 2020, we performed an interim goodwill impairment test. Management considered that, along with other possible factors affecting the SEC on June 29, 2014, duringassessment of the Company’s reporting unit for the purposes of performing a goodwill impairment assessment, including management assumptions about expected future revenue forecasts and discount rates, changes in the overall economy, trends in the stock price, estimated control premium, other operating conditions, and the effect of changes in estimates and assumptions that could materially affect the determination of fair value and goodwill. As a result of the significant decline in the current market capitalization despite any of the other positive factors contemplated and relatively little change in our ongoing business operations, the outcome of this goodwill impairment test resulted in a charge for the impairment of goodwill related to the acquisition of A.J.D. Data Services of $160,594 recorded in the unaudited consolidated financial statements for the year ended December 31, 2014,2020.
We amortize identifiable intangible assets on a straight-line basis over their estimated useful lives. As of December 31, 2021 and 2020, identifiable intangibles were as follows:
|
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
| ||
Developed technology |
| $ | 316,976 |
|
| $ | 317,572 |
|
Customer relationships |
|
| 101,745 |
|
|
| 101,937 |
|
Website |
|
| - |
|
|
| 119,000 |
|
Domain and trade name |
|
| 3,913 |
|
|
| 3,921 |
|
Non-compete |
|
| 36,785 |
|
|
| 36,854 |
|
Accumulated amortization |
|
| (245,677 | ) |
|
| (302,558 | ) |
Total intangible assets, net |
| $ | 213,742 |
|
| $ | 276,726 |
|
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Expected future amortization expense related to identifiable intangibles based on our carrying amount as of December 31, 2021 for the following five years is as follows (in thousands):
For the Twelve Months ended December 31, |
|
|
| |
2022 |
| $ | 71,247 |
|
2023 |
|
| 71,247 |
|
2024 |
|
| 71,248 |
|
2025 |
|
| - |
|
2026 |
|
| - |
|
Thereafter |
|
|
|
|
|
| $ | 213,742 |
|
Note 4 - Related Party Transactions
No compensation was incurred for the services of the Company’s directors or executives during the years ended December 31, 2021 and 2020.
As of December 31, 2021 and December 31, 2020, the Company amended its articleshad outstanding amounts payable to related parties of incorporation$60,017 and $20,884. The obligations are unsecured, non-interest bearing, due on demand and payable in Canadian dollars, with the change in the liability from December 31, 2021 to designateDecember 31, 2020 attributable to the previously authorized series A preferred stock to series A convertible preferred stock. The preferred series A 12% convertible shares have a par value of $1, entitle holder to one votechange in the exchange rate for U.S. and accrue dividends at 12% per year, paid quarterly. At the option of the holder, the stock can be converted into shares of the Company's common stock. The number of shares to be issued will be determined by dividing the amount of the Series A shares being converted by $0.001.Canadian dollars.
During the year ended December 31, 2014,2019, the Company issued 120,000 sharesalso made payments for services rendered by related parties totaling $25,000, resulting in balances owed for such services of series A convertible preferred stock in exchange for$15,000 as of December 31, 2021 and 2020.
The Company has a prepayment of royaltiesnote payable to a related party totaling $120,000. During year endedas settlement for consulting services. The note carries interest of 9% compounded annually and is due on demand. As of December 31, 2015, the Company issued 100,000 shares2021 and December 31, 2020, $81,500 of seriesprincipal and $47,067 and $41,565 of accrued interest was due, respectively.
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Note 5 - Stockholders’ Equity
Series A convertible preferred stock in exchange for a prepayment of royalties with a deemed value of $0 due to the undeterminable nature of the true future usable value to the Company. The Company also accepted the conversion notices from certain series A convertible preferred shareholders to convert a total of 138,830 shares of series A preferred stock to 138,830,000 shares of $0.001 par value common stock.Convertible Preferred Stock
The excessCompany is authorized to issue up to 5,000,000 shares of Series A Convertible Preferred Stock. The Series A Convertible Preferred Stock can be converted to common shares at the option of the valueholder at a rate of the preferred shares issued in excess of the value of the prepaid royalties has been expensed as a financing cost.$1 per share.
There were 81,170 and 120,0000 shares of seriesSeries A convertible preferred stock issued and outstanding as of December 31, 20152021 and 2014. Additionally,December 31, 2020, respectively.
Series B Convertible Preferred Stock
The Company is authorized to issue up to 500,000 shares of Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock can be converted to common shares at the Company had accrued dividends payable onoption of the holder at a rate of $0.20 per share.
There were 64,000 shares of series AB convertible preferred stock totaling $19,000issued and $0 atoutstanding as of December 31, 20152021 and 2014.December 31, 2020.
Common Stock
On March 2,May 20, 2021, the Company issued 1,000,000 shares of restricted Common Stock pursuant to the Purchase Agreement to acquire USI.
On January 30, 2020, the Company issued 1,500,000 shares of restricted Common Stock pursuant to the Purchase Agreement to acquire USI.
On January 13, 2020, the Company issued 31,250 shares of restricted Company Common Stock to a third party individual in a stock subscription agreement for $25,000 in cash.
The Company retired 650,000 shares of its Common Stock in 2019.
Treasury Stock
There are 3,815,000 shares of Common Stock held as treasury stock as of December 31, 2021 and December 31, 2020, respectively, as a result of a 2014 buy-back of 38,000 post-split shares of Common Stock for cash and a 2017 buy-back of 3,777,000 shares of Common Stock in exchange for $5,000 note payable and $200 related party payable.
Note 6 – Notes Payable
Related Party
In 2015, the Company effectedentered into a 1:50 reverse stock split.$350,000 note payable with a related party as a settlement for payment of consulting services provided valued at $350,000. The effectsnote carries interest of 9% compounded annually and was due on November 19, 2016. In 2016, the reverse split are shown retroactively in these financial statements.Company issued 50,000 shares of Series A Preferred Stock as repayment of $31,500 of accrued interest and $18,500 of outstanding principal. In 2017, the Company issued 1,250,000 shares of its Common Stock as repayment of $250,000 of principal. As of December 31, 2020 and 2019, $81,500 of principal and $47,067 and $41,565 of accrued interest due was due, respectively.
Non – Related Party
On August 1, 2017, the Company entered into a $5,000 note payable with an unrelated party to purchase Company Common Stock held by the unrelated party. The note was due on July 1, 2019 and bears no interest. As of December 31, 2020 and 2019, the $5,000 note principal is outstanding.
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The authorized common stockGovernment of Canada launched CEBA to assist businesses during the Company consists of 275,000,000 shares and carries a par value of $0.001.current challenges by providing interest-free unsecured loans. During the year ended December 31, 2014,2020, the Company’s three Canadian subsidiaries each received CEBA loans. The loans bear zero interest and may be repaid any time after October 1, 2020 and if repaid on or before December 31, 2022, CEBA will forgive CAD 10,000 in loan principal. Should a CEBA loan be unpaid as of December 31, 2022, the loan converts to a three-year term loan having a 5% annual fixed rate of interest. As of December 31, 2021 and 2020, the Company bought back 380,000 post-split shareshas a total of common stock into treasury from a former officer for $100. The shares are being carried as treasury shares as reflected on the balance sheet.$109,571 and $109,778 (CAD 140,000) in outstanding CEBA loans.
During the year ended December 31, 2015, the Company rescinded 730,000 common shares previously issued pursuant to certain agreements. The Company determined the holders did not have legal right to the shares as issued.
During the year ended December 31, 2015, the Company issued 138,830,000 common shares from the conversion of 138,830 shares of Series A Preferred Stock.
During the year ended December 31, 2015, the Company issued 900,000 shares of common stock for total cash proceeds of $45,000 and 26,211 shares to account for rounding in our 1:50 stock split as previously discussed.
There were 142,162,211 and 3,136,000 common shares issued and 141,782,211 and 2,756,000 outstanding (post-split) at December 31, 2015 and 2014, respectively.
Note 4 –7 - Income Taxes
We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Pursuant to FASB ASC Topic 740, when it is more likely than not that a tax asset cannot be realized through future income, the Company must provide an allowance for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry-forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry-forward period. The Company records estimated losses from interest and penalties arising from taxes remitted late as well as unrecognized tax benefits as they are incurred as general and administrative expenses. The Company did not have accrued interest or penalties related to income taxes as of December 31, 2021 or 2020. The Company has not filed its 2021 and 2020 tax returns as of the date of this filing.
The sources and tax effects of the temporary differences for the periods presented are as follows:
HEMCARE HEALTH SERVICES INC.
(Formerly NSU Resources, Inc.)
Notesfollows (rounded to Financial Statements
December 31, 2015 and 2014the nearest thousand):
Note 4 – Income Taxes (continued)
|
| December 31, |
|
| December 31, |
|
| December 31, 2021 |
|
| December 31 2020 |
| ||||
Net operating loss carry forward |
| $ | 748,640 |
| $ | 318,139 |
|
| $ | 4,970,000 |
| $ | 2,541,000 |
| ||
Applicable Canadian Federal and Provincial tax rates |
| 26.5 | % |
| 26.5 | % |
|
| 26.5 | % |
|
| 26.5 | % | ||
Deferred tax asset |
| 198,390 |
| 84,307 |
| |||||||||||
Deferred tax asset related to net operating losses |
| 1,317,000 |
| 673,000 |
| |||||||||||
Deferred tax asset relating to debt discounts and derivative liability (at 26.5%) |
| - |
| - |
| |||||||||||
Valuation allowance |
|
| (198,390 | ) |
|
| (84,307 | ) |
|
| (1,317,000 | ) |
|
| (673,000 | ) |
Net deferred tax asset |
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
This represents an increase in the net operating loss carry forward of $430,501 and $19,869 for the years ended December 31, 2015 and 2014. A reconciliation of income taxes computed at the United States federal statutory rate of 21% and 35% to the income tax recorded is as follows:
|
| December 31, |
|
| December 31, |
|
| December 31, 2021 (21%) |
|
| December 31, 2022 (21%) |
| ||||
Tax benefit at United States Federal statutory rate (35%) |
| $ | 220,538 |
| $ | 65,221 |
| |||||||||
Tax benefit at United States Federal statutory rate |
| $ | 510,000 |
| $ | 141,000 |
| |||||||||
Differences in U.S. and Canadian tax rates on provision |
| (36,592 | ) |
| (15,839 | ) |
| 136,000 |
| 53,000 |
| |||||
Non-deductible losses-prepaids |
| (69,862 | ) |
| (42,428 | ) | ||||||||||
Increase in valuation allowance |
|
| (114,083 | ) |
|
| (6,954 | ) |
|
| (374,000 | ) |
|
| (88,000 | ) |
Income tax provision |
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
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This represents an increase in the valuation allowance of $114,083 and $6,954 for the years ended December 31, 2015 and 2014. The Company did not pay any income taxes during the years ended December 31, 20152021 or 2014,2020, or since inception.
The net federal operating loss carry forward will begin to expire in 2026. This carry forward may be limited upon the consummation of a business combination under IRC Section 381. Tax years commencing in 2012at inception remain open for examination by the IRS, where applicable.
Effective January 1, 2018, the U.S. Congress enacted the “Tax Jobs and Cuts Act” which, among other things, reduced the maximum corporate tax rate to 21%. There is no impact on deferred tax asset valuations related to this change due to the fact that the Company’s operations primarily reside in Canada.
Note 58 – Related Party TransactionsConcentrations
During the years ended December 31, 20152021 and 2014,2020, no single customer accounted for more than 10% of total revenue for the respective periods. As of December 31, 2021 and 2020, no customer had an outstanding accounts receivable balance that was 10% of our total accounts receivable at that time.
Note 9 – Commitments and contingencies
Litigation
On March 29, 2019, DLT Resolution Corp. and DLT Resolution Inc. was served with a Statement of Claimants 300-306 Town Centre Boulevard Limited Partnership/Court File No. CV-19-00617228-000 (Toronto) for unpaid rent and lost revenue related to the premises. In this action, the Plaintiff has claimed damages against the Defendants DLT Resolution Corp. and DLT Resolution Inc. in the amount of $567,385 for an alleged breach of lease. The Plaintiff has claimed damages against the Defendant DLT Resolution Inc. in the amount of $567,385 for allegedly wrongfully inducing a breach of lease and tortious interference with contractual relations. The Plaintiff has further claimed damages against the Defendant DLT Resolution Inc. in the amount of $567,385 for allegedly oppressive conduct under the Ontario Business Corporations Act. The Plaintiff has further claimed compensation for its legal costs and for pre-judgment interest. The Company filed a statement of Defense citing, amongst other things, that it has never entered into any agreement with the landlord, nor guaranteed any such liability. The Defendants DLT Resolution Corp. and DLT Resolution Inc. intend to contest the claim vigorously. There is no intention to make a settlement offer nor have instructions been received to make a settlement offer at this juncture. Since the statement of defense was delivered on May 16, 2019, the Company had no further communication from counsel for the Plaintiff nor have any steps been taken to move the litigation forward. Although there can be no assurance of the Company’s ability to dismiss the claim, management feels the claim is without merit and is confident it will receive a ruling in its favor.
Note 10 – Subsequent events
In 2022, the Company suspended the operations of USI and have recognized its activities as discontinued operations with the financial statements for 2021 and 2020. In 2023, the Company sold its 100% ownership of USI to a third party for a nominal payment and the acquirer assumed all of USI’s liabilities on a nonrecourse basis. In connection with the sale, the Company received loans from2,000,000 shares of its officers totaling $15,784 and $18,035Common Stock held by an individual who sold USI shares to fund operations via expenses paid directly to vendors on behalfthe Company in January 2020. Following the receipt of the Company. These loans are non-interest bearing, are due on demand and as such included in current liabilities. Imputed interest has been considered, but determined to be immaterial to the financial statements as a whole.
On August 8, 2015,2,000,000 shares, the Company entered into a convertible note payable for $15,784 in exchange for the related party payable incurred from expenses paid on behalf of the Company. The note carries interest at a rate of 6% per annum, is due on August 24, 2016 and may be converted into common stock of the Company at the option of the noteholder at a rate of $.01 per share. The beneficial conversion feature in the note created a debt discount of $15,784 of which $5,535 was recognized during the year ended December 31, 2015 leaving an unamortized discount of $10,249 as of December 31, 2015 that will be recognized over the remaining life of the note. There was $10,634 of interest plus accrued interest totaling $360 due as of December 31, 2015.has 24,926,287 shares outstanding.
HEMCARE HEALTH SERVICES INC.
(Formerly NSU Resources, Inc.)
Notes to Financial Statements
December 31, 2015 and 2014
Note 6 – Excess Cost of Prepaid Royalties Over Value
During the year ended December 31, 2014, the Company issued a total of 120,000 preferred shares of $1 par value Series A convertible preferred stock. The shares carried a value of $160,105 resulting in an immediate excess payment over value of $160,105 based on the Company's determination that it may not realize value for the prepayment resulting in a full charge-off to operations for $160,105.
During the year ended December 31, 2015, the Company issued a total of 100,000 preferred shares of $1 par value Series A convertible preferred stock. The shares carried a value of $199,607 resulting in an immediate excess payment over value of $199,607 based on the Company's determination that it may not realize value for the prepayment resulting in a full charge-off to operations for $199,607.
Note 7 – Notes Payable
During the year ended December 31, 2015, the Company entered into a note payable with an unrelated party as a settlement for payment of consulting services provided valued at $350,000. The note carries interest of 9% compounded annually and is due on November 19, 2016. There was $350,000 of principal and $19,504 of accrued interest due as of December 31, 2015. Accrued interest payable is included in "accounts payable and accrued liabilities" on the balance sheet.
Note 8 – Convertible Notes Payable
During the year ended December 31, 2015, the Company entered into a convertible note payable with an unrelated party resulting in net cash proceeds to the Company totaling $19,700. The note is convertible into common stock of the Company at the option of the noteholder at a rate of $0.01 per share. The Company measured the value of the beneficial conversion feature of the note and recorded a discount equal to the face value of the note on the date of issuance. The discount will be recognized ratably over the life of the note through the due date as shown below. A summary of the outstanding convertible note payable as of December 31, 2015 follows:
|
| Due Date |
| Principal |
|
| Discount |
|
| Net Value |
| |||
Noteholder 1 |
| 9/1/2016 |
| $ | 16,700 |
|
| $ | (12,835 | ) |
| $ | 3,865 |
|
Total |
|
|
| $ | 16,700 |
|
| $ | (12,835 | ) |
| $ | 3,865 |
|
Note 9 – Subsequent Events
We have evaluated subsequent events through the date of this filing and determined there are no additional events to disclose.
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