UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C.  20549


FORM 10-Q



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


For the quarterly period ended September 30, 20172018


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


     For the transition period from

 to


Commission File No.   000-54917


FUTURE HEALTHCARE OF AMERICA

 (Exact name of registrant as specified in its charter)


WYOMING

45-5547692

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)


5001 Baum Blvd, Suite 770

Pittsburgh, PA 15213

 (Address of Principal Executive Offices)


Registrant's Telephone Number:  (561) 693-1422



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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.   (1) Yes [X ][X]  No[  ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X ][X]  No [  ]


Indicate by check mark whether the Registrantregistrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitionthe definitions of “large‘‘large accelerated filer,”filer”, “accelerated filer,’’ “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer  [  ]

Accelerated filer [  ]

Non-accelerated filer  [  ]

(Do not check if a smallerSmaller reporting company)company  [ X ]

Smaller reporting company [X]

Emerging Growth company [X]


If an emerging growth company, indicate by check mark ifwhether 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. [X][  ]  



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



As of November 8, 2017,October 31, 2018, there were 11,265,631 shares of common stock, par value $0.001, of the registrant issued and outstanding.







1





PART I - FINANCIAL INFORMATION


 

The Unaudited Consolidated Financial Statements of Future Healthcare of America, a Wyoming corporation (the “Company,” “FHA,” “we,” “our,” “us” and words of similar import) were prepared by management and commence on the following page, together with related notes.  In the opinion of management, the Unaudited Consolidated Financial Statements fairly present the financial condition of the Company.



 


Future Healthcare of America


 

Index to Unaudited Financial Statements


  

Page

 

 

  

  

Unaudited Condensed Consolidated Balance Sheets

3

  

  

Unaudited Condensed Consolidated Statements of Operations

4

  

  

Unaudited Condensed Consolidated Statements of Cash Flows

5

  

  

Notes to Unaudited Condensed Consolidated Financial Statements

6

 

 

  
























2




FUTURE HEALTHCARE OF AMERICA

 UNAUDITEDCONDENSED CONSOLIDATED BALANCE SHEETS

 

September 30,  2017

 

December 31, 2016

 

September 30,  2018 (Unaudited)

 

December 31, 2017

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash

$     113,586

 

$  206,352

 

$     60,202

 

$  144,462

 

Accounts receivable

504,395

 

473,388

 

Accounts receivable, net

182,360

 

198,670

 

Prepaid expenses

43,540

 

60,799

 

13,694

 

27,218

 

Current asset from discontinued operations

176,601

 

219,696

 

Total current assets

661,521

 

740,539

 

432,857

 

590,046

 

 

 

 

 

 

 

 

 

Deferred tax asset, net

-

 

-

 

-

 

-

 

Total assets

$    661,521

 

$  740,539

 

$    432,857

 

$  590,046

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

117,956

 

70,658

 

139,030

 

38,559

 

Accrued expenses

466,383

 

350,715

 

660,476

 

495,540

 

Derivative liability

87,553

 

53,488

 

-

 

43,726

 

Deferred revenue

2,593

 

3,470

 

Note Payable

6,822

 

-

 

CONVERTIBLE SECURED DEBENTURE PAYABLE, net of discount of $0 and $0, respectively

1,010,000

 

1,010,000

 

Notes payable

279,879

 

-

 

Convertible note payable

1,010,000

 

1,010,000

 

Current liabilities from discontinued operations

289,983

 

130,572

 

Total current liabilities

1,691,307

 

1,488,331

 

2,379,368

 

1,718,397

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

1,691,307

 

1,488,331

 

2,379,368

 

1,718,397

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' (DEFICIT)

 

 

 

 

COMMITMENTS & CONTINGENCIES

-

 

-

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

Common stock

11,266

 

11,266

 

11,266

 

11,266

 

Additional paid-in capital

1,313,160

 

1,313,160

 

2,210,420

 

1,313,160

 

Accumulated (deficit)

(2,354,212)

 

(2,072,218)

 

Total stockholders' (deficit)

(1,029,786)

 

(747,792)

 

Subscription receivable

Accumulated deficit

(3,898,192)

 

(2,452,777)

 

Total stockholders' deficit

(1,946,511)

 

(1,128,351)

 

Total liabilities and stockholders' deficit

$      661,521

 

$     740,539

 

$  432,857

 

$  590,046

 



Future Healthcare of America and Subsidiaries Balance Sheet (Parenthetical)

 

 

 

Future Healthcare of America Balance Sheet (Parenthetical)

Future Healthcare of America Balance Sheet (Parenthetical)

 

 

Statement of Financial Position

 

September 30,   2017

 

 

December 31, 2016

 

September 30, 2018

 

December 31, 2017

Allowance for doubtful accounts

 

20,200

 

 

20,200

Allowance for doubtful accounts included in current assets from discontinue operations

 

45,200

 

20,200

Common stock authorized

 

200,000,000

 

 

200,000,000

 

200,000,000

 

200,000,000

Common stock par value

 

0.001

 

 

0.001

 

0.001

 

0.001

Common stock outstanding

 

11,265,631

 

 

11,265,631

 

11,265,631

 

11,265,631







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



3




FUTURE HEALTHCARE OF AMERICA

 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

September 30, 2017

 

September 30, 2016

 

September 30, 2017

 

September 30, 2016

 

 

September 30, 2018

 

September 30, 2017

 

September 30, 2018

 

September 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

$

839,585

$

856,039

$

2,790,436

$

2,925,596

 

$

363,607

$

423,306

$

1,138,825

$

1,433,838

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF SERVICES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Cost of Services

 

608,299

 

678,021

 

2,019,050

 

2,227,149

 

 

261,734

 

330,294

 

853,702

 

1,110,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

231,286

 

178,018

 

771,386

 

698,447

 

 

101,873

 

93,012

 

285,123

 

323,171

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

7,365

 

7,870

 

27,652

 

28,450

 

 

4,168

 

4,756

 

17,982

 

22,999

 

General and administrative

 

104,314

 

97,214

 

319,878

 

298,021

 

 

35,617

 

44,259

 

122,529

 

142,241

 

Salaries, wages and related expenses

 

161,957

 

176,297

 

509,693

 

523,392

 

 

110,829

 

100,122

 

306,356

 

305,352

 

Professional and consulting fees

 

17,969

 

23,587

 

85,952

 

103,447

 

 

62,324

 

7,947

 

118,240

 

57,775

 

Total Operating Expenses

 

291,605

 

304,968

 

943,175

 

953,310

 

 

212,938

 

157,084

 

565,107

 

528,367

 

LOSS FROM OPERATIONS

 

(60,319)

 

(126,950)

 

(171,789)

 

(254,863)

 

Loss from continuing operations

 

(111,065)

 

(64,072)

 

(279,984)

 

(205,196)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

142

 

77

 

350

 

279

 

 

85

 

161

 

162

 

232

 

Gain/(loss) on derivative

 

(79,124)

 

63,460

 

(34,065)

 

209,439

 

 

-

 

(79,124)

 

-

 

(34,065)

 

Interest expense

 

(25,492)

 

(25,250)

 

(76,486)

 

(75,750)

 

 

(25,583)

 

(25,492)

 

(77,065)

 

(76,411)

 

Other income (expense)

 

(5)

 

-

 

(4)

 

-

 

 

-

 

-

 

-

 

-

 

Total Other Income (Expense)

 

(104,479)

 

38,287

 

(110,205)

 

133,968

 

INCOME (LOSS) BEFORE INCOME TAXES

 

(164,798)

 

(88,663)

 

(281,994)

 

(120,895)

 

CURRENT INCOME TAX EXPENSE (BENEFIT)

 

-

 

-

 

-

 

-

 

DEFERRED INCOME TAX EXPENSE (BENEFIT)

 

-

 

-

 

-

 

-

 

NET LOSS AVAILABLE TO COMMON

SHAREHOLDERS

$

(164,798)

$

(88,663)

$

(281,994)

$

(120,895)

 

Total Other Expense

 

(25,498)

 

(104,455)

 

(76,903)

 

(110,244)

 

Loss from continuing operations before income

tax

 

(136,563)

 

(168,527)

 

(356,887)

 

(315,440)

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

-

 

-

 

-

 

-

 

Net loss from continuing operations

 

(136,563)

 

(168,527)

 

(356,887)

 

(315,440)

 

 

 

 

 

 

 

 

 

 

Net income (loss) from discontinued operations, net of tax

 

(158,375)

 

3,729

 

(234,994)

 

33,446

 

 

 

 

 

 

 

 

 

 

NET LOSS

$

(294,938)

$

(164,798)

$

(591,881)

$

(281,994)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC INCOME PER COMMON SHARE

$

(0.01)

$

(0.008)

$

(0.03)

$

(0.01)

 

BASIC WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING

 

11,265,631

 

11,265,631

 

11,265,631

 

11,265,631

 

DILUTED INCOME PER COMMON SHARE -

$

(0.01)

$

(0.008)

$

(0.03)

$

(0.01)

 

DILUTED WEIGHTED AVERAGE COMMON

SHARES OUTSTANDING

 

11,265,631

 

11,265,631

 

11,265,631

 

11,265,631

 

Basic and Diluted Loss Per Common Share from continuing operations

$

(0.01)

$

(0.02)

$

(0.03)

$

(0.03)

 

Basic and Diluted Income (Loss) Per Common Share from discontinued operations

$

(0.02)

$

0.00

$

(0.02)

$

0.00

 

Basic and Diluted Loss Per Common Share

$

(0.03)

$

(0.02)

$

(0.05)

$

(0.03)

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Weighted Average Common

Shares Outstanding

 

11,265,631

 

11,265,631

 

11,265,631

 

11,265,631

 









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





4




FUTURE HEALTHCARE OF AMERICA

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



 

Nine Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2017

 

2016

 

2018

 

2017

 

 

 

 

 

 

 

 

Cash Flows from Operating Activities

 

 

 

 

 

 

 

 

Net loss

$

(281,994)

$

(120,895)

Adjustments to reconcile net income to net cash used by

operating activities:

 

 

 

 

Interest to be paid with stock

 

75,750

 

75,750

Depreciation and amortization expense

 

-

 

36

Loss (gain) on derivative instruments

 

34,065

 

(209,439)

Net loss from continuing operations

$

(356,887)

$

(315,440)

Adjustments to reconcile net loss from continuing

operations to net cash used by operating activities:

 

 

 

 

Loss on derivative instruments

 

-

 

34,065

Change in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

(31,007)

 

126,073

 

16,310

 

69,514

Prepaid expenses

 

17,259

 

8,214

 

62,675

 

46,125

Accounts payable

 

47,297

 

(3,974)

 

100,470

 

7,806

Accrued expense

 

39,919

 

(34,707)

 

164,936

 

100,130

Deferred revenue

 

(877)

 

28,036

Net Cash Provided/(Used) by Operating Activities

 

(99,588)

 

(130,906)

Net Cash Used in continuing operations

 

(12,496)

 

(57,800)

Net Cash Used in discontinued operations

 

(32,487)

 

(19,546)

Net Cash Used in Operating Activities

 

(44,983)

 

(77,346)

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

-

 

-

 

 

 

 

Net Cash Provided/ (Used) by Investing

Activities

 

-

 

-

Net Cash Used in Investing Activities

 

-

 

-

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Proceed from insurance financing

 

22,216

 

-

Payments on subscription receivable

 

(270,005)

 

 

Proceed from note payable

 

270,005

 

-

Proceed from related party advance

 

23,000

 

-

Re-payment of related party advance

 

(23,000)

 

-

Re-payment of insurance financing

 

(15,394)

 

-

 

(39,277)

 

(15,420)

Net Cash Provided/ (Used) by Financing

Activities

 

6,822

 

-

Net Cash Used in Financing Activities

 

(39,277)

 

(15,420)

 

 

 

 

 

 

 

 

Net Increase (Decrease) in Cash

 

(92,766)

 

(130,906)

Net Decrease in Cash

 

(84,260)

 

(92,766)

Cash at Beginning of Period

 

206,352

 

481,115

 

144,462

 

206,352

Cash at End of Period

$

113,586

$

350,209

$

60,202

$

113,586

 

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information

 

 

 

 

 

 

 

 

Cash paid during the periods for:

 

 

 

 

 

 

 

 

Interest

 

-

 

-

 

1,315

 

735

Income taxes

 

-

 

-

 

-

 

-


   Supplemental Disclosures of Non-Cash Investing and Financing

     Activities:

  

 

For the Nine Months Ended

 

 

September 30,

NON-CASH EXPENDITURES

 

2017

 

2016

Depreciation expense

 

-

 

36

Interest expense to be paid with stock

 

75,750

 

70,750

Change in FMV of derivative liability

 

79,124

 

(209,439)

Total non-cash expenditures

 

154,874

 

(138,653)

  

 

For the Nine Months Ended

 

 

September 30,

NON-CASH EXPENDITURES

 

2018

 

2017

Prepaid insurance premiums financed

 

49,151

 

22,216





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




5




FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Organization – On June 22, 2012, FAB Universal (FAB) formed Future Healthcare of America (“FHA”), a wholly owned subsidiary. On October 1, 2012, FHA operations were spun-off in a 1 for 1 dividend to the shareholders of record of FAB on September 5, 2012, the record date. On November 14, 2014, FHA organized Future Healthcare Services Corp. (“FHS”), and transferred all the shares of Interim to FHS. Interim Healthcare of Wyoming, Inc. (“Interim”), a Wyoming corporation, a wholly owned subsidiary of FHS, was organized on September 30, 1991.  Interim operates primarily in the home healthcare and healthcare staffing services in Wyoming and Montana.  On April 3, 2007, Interim purchased the operations of Professional Personnel, Inc., d.b.a., Professional Nursing Personnel Pool.  


Consolidation - The financial statements presented reflect the accounts of FHA, FHS and Interim.  All inter-company transactions have been eliminated in consolidation.


Accounting 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, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Management made assumptions and estimates for determining reserve for accounts receivable, obsolete inventory and in determining the impairment of definite life intangible assets and goodwill.  Actual results could differ from those estimated by management.


Cash and Cash Equivalents – The Company considers all highly liquid investments with an original maturity date of three months or less when purchased to be cash equivalents.  At September 30, 2017,2018, the Company had no cash balances in excess of federally insured limits.


Accounts Receivable - Accounts receivable consist of trade receivables arising in the normal course of business. At September 30, 2017 and 2016,2018, the Company has an allowance for doubtful accounts of $20,200,$45,200 in discontinued operations, which reflects the Company's best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. During the nine months ended September 30, 20172018 and 2016,2017, the Company adjusted the allowance forrecorded bad debt by $0.expense of $25,000 and $0, respectively.


Depreciation - Depreciation of property and equipment is provided on the straight-line method over the estimated useful lives.


Income /(Loss) Per Share - The Company computes income (loss) per share in accordance with Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260 Earnings Per Share, which requires the Company to present basic earnings per share and diluted earnings per share when the effect is dilutive (see Note 12)9).


Leases - The Company accounts for leases in accordance with Financial FASB ASC Topic 840, (formerly Statement of Financial Accounting Standards SFAS No. 13 "Accounting for Leases").  Leases that meet one or more of the capital lease criteria of standard are recorded as a capital lease, all other leases are operating leases.


Income Taxes - The Company accounts for income taxes in accordance with FASB ASC Topic 740 Accounting for Income Taxes.  This topic requires an asset and liability approach for accounting for income taxes (see Note 10)7).


Advertising Costs - Advertising costs are expensed as incurred and amounted to $27,653$19,391 and $26,427$27,653 for the periods ending September 30, 20172018 and 2016,2017, respectively.




6




FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued


Fair Value of Financial Instruments – The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.


Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, accounts receivable, prepaid expenses, and accounts payable and accrued expenses approximates their recorded values due to their short-term maturities.


Revenue Recognition - Revenue is generatedOn January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, “Revenue from various payer’s including Medicare, Medicaid, Insurance Companies,Contracts with Customers,” which includes clarifying ASUs issued in 2015, 2016 and various other entities and individuals.  In accordance with FASB ASC Topic 605, 2017 (“new revenue standard”).  The new revenue standard did not have a material impact on revenue recognition.  The Company does not expect the impact of the adoption of the new standard to be material to net income on an ongoing basis.


Revenue is recognized when persuasive evidenceperformance obligations with the customer are satisfied which occurs when services are provided to the customer. Revenue is measured as the amount of an arrangement exists,consideration expected to be received in exchange for providing services. The Company's sales contain performance obligations satisfied at a point in time when the services have been provided,are provided.


Generally, the price of servicestime between when revenue is fixed or determinable,recognized and collectionwhen payment is reasonably assured. Paymentsdue is not significant. Pre-payments received prior to services being providedsatisfaction of performance obligations through the Recovery Audit Program or RAP payments from Medicare are recorded as a liability (deferred revenue) until such services are performed.  Revenue is recorded as netdeferred revenue where contractual adjustmentsliability. Given the insignificant days between revenue recognition and discounts are deducted from Gross Revenue to determine net revenue.receipt of payment, financing components do not exist between the Company and its customers.


Derivative Financial InstrumentsThe Company is required to recognize all of its derivative instruments as either assets or liabilities in the Consolidated Balance Sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated, and is effective, as a hedge and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, or cash flow hedge. Gains and losses related to a hedge are either recognized in income immediately to offset the gain or loss on the hedged item or are deferred and reported as a component of Accumulated Other Comprehensive Income in the Stockholders' Equity and subsequently recognized in Net income when the hedged item affects Net income. The change in fair value of the ineffective portion of a financial instrument is recognized in Net income immediately. The gain or loss related to financial instruments that are not designated as hedges are recognized immediately in Net income.following table disaggregates revenue by category:


 

 

For the nine months ended September 30, 2018

 

Medicare

 

Private Pay

Medicaid

Staffing

Ins.

Total

Montana

-

 

 

215,015

 

138,629

 

704,591

 

80,590

 

1,138,825



Recently Enacted Accounting Standards - In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. On July 9, 2015, the FASB agreed to delay the effective date by one year; accordingly, the new standard is effective for us beginning in the first quarter of 2018 and we expect to adopt it at that time. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected a transition method, nor have we determined the impact of the new standard on our consolidated financial statements.





7




FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued


 

 

For the three months ended September 30, 2018

 

Medicare

 

Private Pay

 

Medicaid

 

Staffing

Ins.

Total

Montana

-

 

 

70,194

 

 

46,975

 

 

219,286

 

27,152

 

363,607


Derivative Financial Instruments – In July 2017, the FASB issued ASU No. 2017-11, (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The new standard applies to issuers of financial instruments with down-round features. A down-round provision is a term in an equity-linked financial instrument (i.e. a freestanding warrant contract or an equity conversion feature embedded within a host debt or equity contract) that triggers a downward adjustment to the instrument’s strike price (or conversion price) if equity shares are issued at a lower price (or equity-linked financial instruments are issued at a lower strike price) than the instrument’s then-current strike price. The purpose of the feature is typically to protect the instrument’s counterparty from future issuances of equity shares at a more favorable price. The ASU amends (1) the classification of such instruments as liabilities or equity by revising the certain guidance relative to evaluating if they must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of freestanding equity-classified instruments. For the Company, this ASU is effective January 1, 2019, with early adoption permitted.


During the period ending September 30, 2018, we adopted the requirements of the new guidance as of January 1, 2018, utilizing the modified retrospective method of transition. As a result, we recorded a cumulative adjustment to retained earnings as of January 1, 2018, to reflect the effect of the new guidance.


The impact of adopting the new guidance resulted in a decrease in the previously recorded derivative liability, an increase in additional paid-in capital and a reduction of retained earnings related to the down-round provisions in the Convertible Note Payable and warrants (see Note 4).


The modified retrospective method of transition requires us to disclose the effect of applying the new guidance on each item included in our 2018 financial statements.


Following are the line items from our balance sheet as of September 30, 2018, that were affected, the amounts that would have been reported under the former guidance, the effects of applying the new guidance, and the balances reported under the new guidance:


 

Amounts that

Effects of

Balance

 

would have

applying

As  

 

been reported

new guidance

reported

Assets:

                     -   

                     -   

                     -   

Liabilities

 

 

 

Derivative liability

            (21,632)

              21,632

                     -   

Stockholder’s Deficit

 

 

 

Accumulated Deficit

        3,022,564

            875,628

        3,898,192

Additional Paid-In Capital

       (1,313,160)

          (897,260)

       (2,210,420)




8




FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued


The following are the line items from the statement of operations for the nine-month period ending September 30, 2018, that were affected, the amounts that would have been reported under the former guidance, the effects of applying the new guidance, and the amounts reported under the new guidance:


Statement of operations

Amounts that would have been reported

Effects of applying new guidance

Balance As Reported

Interest expense

             54,971

              22,094

             77,065

Net income

          (569,787)

            (22,094)

          (591,881)


The following are the line items from the statement of operations for the three-month period ending September 30, 2018, that were affected, the amounts that would have been reported under the former guidance, the effects of applying the new guidance, and the amounts reported under the new guidance:


Statement of operations

Amounts that would have been reported

Effects of applying new guidance

Balance As Reported

Interest expense

             9,647

              15,936

25,583

Net income

          (279,002)

            (15,936)

          (294,938)


Recently Enacted Accounting Standards -In February 2016, the FASB issued changes to the accounting for leases that primarily affect presentation and disclosure requirements. The new standard will require the recognition of a right to use asset and underlying lease liability for operating leases with an initial life in excess of one year. This standard is effective for us beginning in the first quarter of 2019. We have not yet determined the impact of the new standard on our consolidated financial statements.


Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company’s present or future financial statements.


NOTE 2 - GOING CONCERN


The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America, which contemplate continuation of the Company as a going concern.  However, the Company has incurred losses, an accumulated deficit and has a short-term note payable in excess of anticipated cash.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.concern for a period of one year from the issuance of these financial statements. There is no assurance that the Company will be successful in achieving profitable operations.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.


NOTE 3 - PROPERTY & EQUIPMENT– DISCONTINUED OPERATIONS


Effective August 31, 2018, Future Healthcare of America closed the offices of its Casper, Wyoming operations.  During 2018, the Company saw a continued decrease in the utilization of our home healthcare services in Casper, Wyoming. Additionally, we have seen an increase in competition, specifically for Medicare service providers in 2018.  Also, there has been a shortage of Registered Nurses, Physical Therapists and management personnel, leading to higher costs due to having to source the required talent from staffing companies.  This increase in costs coupled with a decrease in business activity, lead to the decision to close the Casper, Wyoming operations. In closing the office, the Company transitioned its clients to new service providers, and terminated employees as the transition happened. The month to month lease was terminated with the landlord on August 31, 2018, and the office was closed the same day. We have one part-time employee, working remotely, primarily on the collection of accounts receivable.



9




FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3 – DISCONTINUED OPERATIONS


Reconciliation of the Carrying Amounts of Major Classes of Asset and Liabilities of the Discontinue Operation to Total Assets and Liabilities That are Presented Separately in the Balance Sheet


 

September 30,  2018

 

December 31, 2017

 

   Carrying amounts of major classes of assets included as part of discontinued operations:

 

 

 

 

     Cash

$     1,044

 

$  13,610

 

     Accounts receivable, net

170,396

 

201,914

 

     Prepaid expenses

5,161

 

4,172

 

   Total current assets of discontinued operations

176,601

 

219,696

 

   Other assets held for sale

-

 

-

 

   Total assets of discontinued operations

$    176,601

 

$  219,696

 

 

 

 

 

 

   Carrying amounts of major classes of liabilities included as part of discontinue operations:

 

 

 

 

     Accounts payable

107,626

 

65,228

 

     Accrued expenses

142,275

 

52,512

 

     Deferred revenue

40,082

 

12,832

 

   Total current liabilities of discontinued operations

289,983

 

130,572

 

   Other liabilities held for sale

-

 

-

 

   Total liabilities of discontinued operations

$  289,983

 

$  130,572

 

 

 

 

 

 


Reconciliation of the Major Classes of Line Items Constituting Pretax Profit (Loss) of Discontinued Operations That are Presented Separately in the Statement of Operations


 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

September 30, 2018

 

September 30, 2017

 

September 30, 2018

 

September 30, 2017

 

 

 

 

 

 

 

 

 

Major classes of line items constituting pretax income (loss) of discontinued operations

 

 

 

 

 

 

 

 

Revenue

$

123,740

$

416,279

$

763,260

$

1,356,598

Cost of Services

 

229,421

 

278,005

 

676,169

 

908,383

Operating Expenses

 

54,285

 

134,522

 

323,718

 

414,808

Other Income

 

(1,591)

 

23

 

(1,633)

 

(39)

Income (loss) of discontinued operations before income tax

 

(158,375)

 

3,729

 

(234,994)

 

33,446

Gain on disposal of discontinued operation before tax

 

-

 

-

 

-

 

-

Total income (loss) on discontinued operations before income tax

 

(158,375)

 

3,729

 

(234,994)

 

33,446

Income tax expense or benefit

 

-

 

-

 

-

 

-

Total profit or loss on discontinue operations that is presented in the statement where net income is presented

$

(158,375)

$

3,729

$

(234,994)

$

33,446

 

 

 

 

 

 

 

 

 

10

 

The following is a summary of property and equipment at:

 


Life

 

September 30,

2017

 

December 31,

2016

 

 

 

 

 

 

 

 

Furniture, fixtures and equipment

2-10 yrs

$

36,384

$

36,384

 

 

 

 

36,384

 

36,384

 

Less: Accumulated depreciation

 

 

(36,384)

 

(36,384)

 

Property & equipment, net

 

$

-

$

-

 



Depreciation expense for the periods ended September 30, 2017 and 2016 was $0 and $36, respectively.

FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 – VARIABLE RATE SENIOR SECUREDNOTES PAYABLE AND CONVERTIBLE DEBENTURE


On September 9, 2013, the Company closed a Subscription Agreement by which one institutional investor purchased a) a Variable Rate Senior Secured Convertible Note payable having a total principal amount of $1,010,000, convertible into common shares of the Company at $0.25 per share and maturing March 9, 2015; b) Warrants to purchase a total of 3,030,000 shares of common stock, at $0.50 per share, exercisable for four years, and c) a greenshoe to purchase a total of 2,000,000 shares of common stock at $0.25 per share, exercisable for one year from the closing date. The note and warrants have a down-round provision, wherein if the Company issues common stock or equity-based instruments with lower prices or strike prices, the note and warrants exercise prices will be adjusted to match the lower prices. On September 9, 2014 the greenshoe expired unexercised.  On March 9, 2015, the Note matured.


As the note has not been paid nor extended, the outstanding principal, plus accrued but unpaid interest, liquidated damages and other amounts, became due and payable at the election of the holder.  The holder has not made such an election. Effective December 14, 2017, the note payable was amended to reduce the conversion price from $0.25 per share to $0.10 per share.


The fair value of the beneficial conversion feature of the warrants and greenshoe totaled $952,254 and was recorded as a derivative liability. The Company recorded a discount on the note for beneficial conversion feature of the note. The $952,254 discount on the beneficial conversion feature was amortized as interest expense over the term of the note. As of September 30, 2017, the Company has amortized $952,254 of the discount, with no remaining unamortized discount being offset against the outstanding balance of the note in the accompanying balance sheet.  As of September 30, 2017,2018, the Company had accrued interest payable on the debenture of $309,552.





8




FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 – NOTE PAYABLE$410,552.


On January 20, 2017,2, 2018, the Company financed the premium for directors’ and officers’ insurance.  The Company borrowed $22,216$26,921 at 6.00% interest, and the note will be repaid in 10 equal installments of $2,883.$3,079.  As of September 30, 2017,2018, the balance of the note payable was $6,822.$3,061.


NOTE 6 – DERIVATIVE FINANCIAL INSTRUMENTS


On January 25, 2018, the Company financed the premium for liability insurance.  The Company entered into a variable rate senior secured convertible debenture, whereinborrowed $22,230 at 6.00% interest, and the Company agreed to register the underlying share, warrants and greenshoe.  The fair valuenote will be repaid in 10 equal installments of the beneficial conversion feature of the warrants and greenshoe was estimated using the Black Scholes pricing model and totaled $952,254 upon issuance and was recorded as a derivative liability.  As of March 9, 2015, and March 31, 2015, the fair value of the unregistered conversion feature of the Note Payable based on the following assumptions (Life 0, risk-free interest rate 0, volatility of 0, and stock price of $.15 and conversion price of $.25) was $0, resulting in the recording of a gain totaling $311,244.$2,287.  As of September 30, 2017,2018, the fairbalance of the note payable was $6,813.


On September 21, 2018 the Company executed a Promissory Note for $275,000 with Alpha Capital Anstalt (“Alpha”). The value of the warrants basednote received shall be exchanges for Series A Preferred Stock of the Company at the time of closing of the Share Exchange Agreement between the Company and the shareholders of Natur Holdings, NV, a Netherlands corporation (“Natur”), pursuant to a Securities Purchase Agreement.  On September 28, 2018, the Company received $270,005 from Alpha and on the following assumptions (Life .94 years, risk free interest rate 1.24%, volatilitysame date, wired $270,005 to Natur.  The difference in the face of 200.32%, stock pricethe note payable and the amount received was due to an error in amount of $.08 and exercise price of $.50) was $87,553, and a loss totaling $79,124 was recorded for the nine months ended September 30, 2017.funds transferred by Alpha.


NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS


The Fair Value Measurement and Disclosure Topic of FASB and ASC:


·

Defines fair value as 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, and establishes a framework for measuring fair value;

·

Establishes a three-level hierarchy for fair value measurement based upon the transparency of inputs to the valuation as of the measurement date;

·

Expands disclosures about financial instruments measured at fair value.


Financial assets and financial liabilities record on the Balance sheet at fair value are categorized based on the reliability of inputs to the valuation techniques as follows:


Level 1: Financial assets and financial liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access.


Level 2: Financial assets and financial liabilities whose values are based on the following:


Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in non-active markets or Valuation models whose inputs are observable, directly, or indirectly, for substantially the full term of the assets or liability


Level 3: Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs may reflect our estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities.











9





FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS - Continued


The following tables summarize Level 1, 2 and 3 financial assets and financial (liabilities) by their classification in the Consolidated Balance Sheet:


As of September 30, 2017:

Level 1

Level 2

Level 3

Derivative liability – Conversion feature of warrants

-

-

(87,553)

As of December 31, 2016

Derivative liability – Conversion feature of warrants

-

-

(53,488)


NOTE 85 - CAPITAL STOCK


Common Stock - The Company has authorized 200,000,000 shares of common stock, $0.001 par value.  As of September 30, 2017,2018, 11,265,631 shares were issued and outstanding.


NOTE 9 – WARRANTS AND GREENSHOEOn September 21, 2018, the Company executed a Promissory Note for $275,000 with Natur. The note shall be exchanged for Series A Preferred Stock of the Company at the time of closing of the Share Exchange Agreement between the Company and Natur.  On September 28, 2018, the Company received $270,005 from Alpha and on the same date, wired $270,005 to Natur for working capital.  The note is recorded as a subscription receivable while the Share Exchange Agreement is pending.


A summary of the status of the warrants granted is presented below for the six months ended:NOTE 6 – WARRANTS


 

September 30, 2017

 

December 31, 2016

 

Shares

 

Weighted Average Exercise Price

 

Shares

 

Weighted Average Exercise Price

Outstanding at beginning of period

3,030,000

$

0.50

 

3,030,000

$

0.50

Granted

-

 

-

 

-

 

-

Exercised

-

 

-

 

-

 

-

Forfeited

-

 

-

 

-

 

-

Expired

-

 

-

 

-

 

-

Outstanding at end of period

3,030,000

$

0.50

 

3,030,000

$

0.50


On September 9, 2013, the Company closed a Subscription Agreement wherein the Company granted warrants to purchase a total of 3,030,000 shares of common stock, at $0.50 per share, exercisable for four years. On September 9, 2017 thesethe expiration date of the warrants werewas extended one year to September 9, 2018. On September 9, 2018 the warrants expired.





FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 106 – WARRANTS - Continued


 A summary of the status of the warrants granted is presented below for the three months ended:


 

September 30, 2018

 

December 31, 2017

 

Shares

 

Weighted Average Exercise Price

 

Shares

 

Weighted Average Exercise Price

Outstanding at beginning of period

3,030,000

$

0.50

 

3,030,000

$

0.50

Granted

-

 

-

 

-

 

-

Exercised

-

 

-

 

-

 

-

Expired

3,030,000

 

0.50

 

-

 

-

Outstanding at end of period

-

$

-

 

3,030,000

$

0.50


NOTE 7 - INCOME TAXES


The Company accounts for income taxes in accordance with FASB ASC Topic 740, Accounting for Income Taxes which requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carryforwards.


Because of the uncertainty surrounding the realization of the loss carryforwards and significant changes in the ownership of the Company, a valuation allowance has been established equal to the tax effect of the loss carryforwards and, therefore, no deferred tax asset has been recognized for the loss carryforwards.  The net deferred tax assets are approximately $1,400,000 as of September 30, 2017,2018, with an offsetting valuation allowance of the same amount. The changes in the valuation allowance for the nine months ended September 30, 2017 was approximately $53,000.




10





FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 118 – LEASES


Operating Lease - The Company leases office space in Casper, Wyoming for $4,892 a month through June 2018.  The Company further leases space in Billings, Montana for $1,525 a month through JuneMay 2020.


The future minimum lease payments for non-cancelable operating leases having remaining terms in excess of one year as of September 30, 20172018 are as follows:


Twelve months ending September 30,

 

 

Lease Payments

2018

 

 

62,328

2019

 

 

18,300

2020

 

 

12,200

2021

 

 

-

Thereafter

 

 

-

Total Minimum Lease Payments

 

$

92,828

Twelve months ending September 30

 

 

Lease Payments

 

2019

 

 

18,300

 

2020

 

 

12,200

 

Total Minimum Lease Payments

 

$

30,500

 


Lease expense charged to operations was $57,578$49,077 and $57,438$57,578 for the nine months ended September 30, 20172018 and 2016,2017, respectively.


NOTE 129 – INCOME/ (LOSS) PER SHARE


The following data shows the amounts used in computing income (loss) per share and the weighted average number of shares of common stock outstanding for the periods presented for the periods ended:


 

 

For the Three Months

 

For the Nine Months

 

 

September 30

 

September 30

 

 

2017

 

2016

 

2017

 

2016

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations available to common stockholders (numerator)

$

(164,798)

$

(88,663)

$

(281,994)

$

(120,895)

Income (loss) available to common stockholders (numerator)

 

(164,798)

 

(88,663)

 

(281,994)

 

(120,895)

Weighted average number of common shares outstanding during the period used in loss per share (denominator)

 

11,265,631

 

11,265,631

 

11,265,631

 

11,265,631


At September 30, 20172018 and 2016,2017, the Company had 3,030,000zero and 3,030,000, respectively, warrants to purchase common stock of the Company at $0.50 per share, and a convertible debenture payable wherein the holder could convert the note and underlying accrued interest into a minimum of 7,620,64810,100,000 and 6,217,870,4,040,000, respectively shares of common stock which were not included in the loss per share computation because their effect would be anti-dilutive.




12




FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10 – COMMITMENTS AND CONTINGENCIES


On June 17, 2016 a complaint was filed with the Wyoming State Department of Labor against the Company, alleging discrimination on the basis of sex and disability.  The complaint did not seek any specific monetary relief.  The complaint was mediated by the Wyoming State Department of Labor. The Wyoming State Department of Labor issued a notice of dismissal for the complaint.  On February 9, 2018, this former employee filed a lawsuit against Interim Healthcare of Wyoming, claiming wrongful termination. After reviewing the facts and circumstances, the Company believes the claims made are weak, at best, and the Company has retained counsel and intends to continue a vigorous defense.


At this time, management cannot reasonably estimate the cost to defend or the outcome of the complaints, and we do not expect it will have a material financial impact on the Company.


On June 30, 2016 a complaint was filed with the Federal Equal Employment Opportunity Commission (EEOC) against the Company, alleging wage discrimination on the basis of sex.  


On June 1, 2018, The U.S. EEOC made a determination that Interim Healthcare of Wyoming violated the Wage discrimination laws (Title VII of the Civil Rights Act of 1964)  by paying a male employee more than female employees. The EEOC has determined that back wages for these individuals plus liquidated damages total $43,593, and the Company has recorded an accrual for $17,593 of this amount, as the remainder is in dispute.  The company has voluntarily entered into the Conciliation Process with the EEOC to reach a resolution of the matter. On September 19, 2018, the Company attended the Conciliation meeting, which the EEOC presented a revised settlement of $133,575 for back wages plus liquidated damages.  The Company and the EEOC did not agree to a resolution.  On September 28, the EEOC file a complaint claiming Interim Healthcare of Wyoming violated the Wage discrimination laws (Title VII of the Civil Rights Act of 1964)  by paying a male employee more than female employees. The Company recorded an accrual totaling $133,575 related to this matter. This accrual is included in the discontinued operations of the Company.


NOTE 11 – RELATED PARTY


During the first six months of 2018, an officer of the Company advanced $23,000 to the company for operating purposes.  The advance bears no interest or maturity.  The advance was repaid during the third quarter of 2018.  


NOTE 1312 - SUBSEQUENT EVENTS


Subsequent eventsOn October 23, 2018 the Company amended its Articles of Incorporation as follows. The Company authorized 2,469.131 shares of Series A Convertible Preferred Stock, $.001 par value and $1,000 stated value.  The Company authorized 100,000 shares of Series B Preferred Stock, $.001 par value and $1,000 stated value.


The Series A Convertible Preferred Stock have no voting rights with liquidation rights of stated value plus unpaid dividends and damages.  The Series A Convertible Preferred Stock is convertible into common shares at $0.030303 per common shares subject to limitations.  A total of 757.575 are convertible at the option of the holder at any time after the original issue date, and a total of 1,711.556 are convertible at any time after the original issue date upon the Corporation amending its Articles of Incorporation to adjust the number of shares of Common Stock sufficient for the conversion of the 1,711.556 the Preferred Stock.  

The Series B Preferred Stock has voting rights equal to the number of whole shares of Common Stock into which the shares would be converted as of the record date with liquidation rights $.01 per share after the rights of the Series A Preferred Shareholders have been evaluated throughsatisfied.  Each share of Series B Preferred Stock is convertible into 1,000 shares of common stock.  Each share of Series B Preferred Stock will convert automatically, without any further action on the date and timepart of this report.



the holder, upon the Corporation amending its Articles of Incorporation to adjust the number of authorized shares of Common Stock to permit the Corporation to issue a sufficient number of shares of




11FUTURE HEALTHCARE OF AMERICA

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - SUBSEQUENT EVENTS - Continued

Common Stock in conversion of the Series B Preferred Stock.  The Corporation undertakes to use its best efforts to adjust the number of authorized shares of Common Stock so as to permit the conversion of the Series B Preferred Stock, within one year of the issuance of the Series B Preferred Stock.





Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations.


Safe Harbor Statement.


Statements made in this Form 10-Q which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business of the Company, including, without limitation, (i) our ability to gain a larger share of the home healthcare industry, our ability to continue to develop services acceptable to our industry, our ability to retain our business relationships, and our ability to raise capital and the growth of the home healthcare industry, and (ii) statements preceded by, followed by or that include the words "may", "would", "could", "should", "expects", "projects", "anticipates", "believes", "estimates", "plans", "intends", "targets", "tend" or similar expressions.


Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond the Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, in addition to those contained in the Company's reports on file with the Securities and Exchange Commission: general economic or industry conditions, nationally and/or in the communities in which the Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, changes in the home healthcare industry, the development of services that may be superior to the services offered by the Company, competition, changes in the quality or composition of the Company's services, our ability to develop new services, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting the Company’s operations, services and prices.


Accordingly, results actually achieved may differ materially from expected results in these statements.  Forward-looking statements speak only as of the date they are made.  The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.


Business Highlights


Based in Casper, Wyoming, and Billings, Montana, FHA’s subsidiary, Interim Healthcare of Wyoming, Inc., a Wyoming corporation (“Interim”), is an independent franchisee of Interim HealthCare that has been serving its community for over 20 years, and is providing a wide range of visiting nurse services to the elderly, wounded and sick. It is one of the 300 independent home health agencies that comprise the Interim HealthCare network. Our business consists of providing healthcare services for those in need.  We record all revenue and expenses and provide all services under one umbrella.  Below is a description of our Home Healthcare and Staffing operations.


As the census (numberOur business is driven by a number of patients utilizing facilities) in the hospitalsdifferent factors and fluctuates we are taking the necessary steps to position ourselves for the ups and downs of the census for these facilities.  significantly as they change.


Our home healthcare service continued to generate the majority of our revenue during the third quarterfirst nine months of 2017.2018 has decreased significantly from the previous year. The decrease in business has been driven by the following factors.


As the need for labor diminishes with the gas and oil wells shutting down in Wyoming, our business has seen dramatic negative impacts with the resulting decrease in population, both in number of clients as well as available personnel. Historically, as the price of gas decreases, the drilling operations stop, and the population has moved to another area to support themselves.  Our operations are also heavily influenced by increases in minimum wage as well as starting wages being offered by all employers in the region.  With the multiple businesses paying higher starting wages, we have seen a decrease in individuals wanting and needing to take employment in the healthcare profession, and we have been unable to continue increasing our starting wages.  Additionally, we have seen an increase in direct competition in the market place for the business and clients we serve.


We have also seen the impact of turn-over in senior management with our clients. As these positions are filled by new personnel, their decisions on utilization of services impacts our businesses, and we have seen a significant decrease in the utilization of our services.



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As a result of financial impact of these factors, we closed the operations in Casper, Wyoming on August 31, 2018.


During the third quarternine months of 2017, FHA2018, FHA’s continuing operations experienced a 2%21% decrease in revenue over the third quarterfirst nine months of 2016.2017.  This was driven by a decreasedecreases in both our Billings, Montana businesses, which was partially off-set by an increasebusinesses. We do not foresee a change in home healthcare businessthis trend through the end of 2018.  We continue to see increased costs to provide services and decreases in Casper, Wyoming.reimbursement rates, reducing margins, and difficulty in retaining qualified personnel, making it difficult to cover overhead costs.  This can be seen in our results during the first nine months of 2018.


During the second thirdnine months of 2017,2018, we have seen a significant decrease in the utilization staffing services in Billings, Montana as facilities that use our services receive directives to remove and reduce the use of staffing services. We’ve also seen significant decreases within our home healthcare services. As for our operations, we anticipate the trends seen in the third quarterfirst nine months of 20172018 to continue into the fourth quarter of 2017.throughout 2018.  We anticipate a continued slowing of the use of our staffing services.  We also anticipate a continued slowing of the utilization of our home healthcare business in Billings.business.  As such, we will continue to evaluate opportunities to expandare evaluating other options outside the realm of services we offer.home healthcare industry.  Promotional activities and operations are being managed as the offices experience fluctuations in the day-to-day activities and as we embark on new business opportunities.  




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Our home healthcare business continues to be a substantial revenue generator for our Company as our country's population ages and new methods of patient data capture become critical components for delivering high quality, affordable healthcare services in a patient's home.  


Home Healthcare


Through trained health care professionals, the Company provides home care services including senior care and pediatric nursing, andnursing; physical, occupational and speech therapy.  The Company offices deliver quality home care and treat each patient with genuine compassion, kindness and respect.  The Company provides health care professionals at all skill levels, including registered nurses, therapists, LPN's and certified home health aides. FHA derives itsis revenue from multiple payer sources.  These include Medicare, Medicaid, Insurance, Medicaid LTW, and Private Payers.  Because our offices are located in areas that do not contain a large population base (less than 200,000 residents), we continually explore opportunities to increase our revenue with our current payer sources and expand through new sources of revenue.   The healthcare team is utilized across all payer sources, including staffing services.  Our customer base comes from referrals from hospitals, rehab facilities, nursing homes, assisted living facilities and previous patients.


In additional to our professional team, we employ a management team at each facility to handle the day to day operations of the office.  This is completed by our Administrators in each location.  We also have a Director of Nursing in each location.  This person is responsible for the day to day oversight of the service providers and ensuring the certified professionals obtain the necessary training to maintain their certificates as well as the training necessary to be in compliance with all regulating organizations.


Staffing


Interim offices provide nurses, nurse aides and management services to hospitals, prisons, schools, corporations and other health care facilities.  Interim’s success is based on our ability to recruit the best health care professionals and the responsiveness of our local managers to fill the needs of our clients in a timely manner.   Additionally, we work with our clients should they decide they would like to hire our service professionals on a full-timefull time basis.  Another key to our success is the personal relationship that our management and sales team build with each of our existing and new clients.  As noted previously, in order to reduce turnover of our service team by providing as many hours as possible, similar to the hours of a full-time employee, we utilize the same service team members across all payer sources.


As each of our businesses is located in smaller based population areas of the country, the competition is significantly heightened and the relationships maintained with our clients become very critical to the continued success of our operations.


As we provide diversified services and accept payments from multiple payer sources, we are not heavily dependent on a few clients in order for our business to be successful.




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Results of Operations


Nine Months Ended September 30, 20172018 and 2016.2017.


During the nine months ended September 30, 2017,2018, FHA recorded revenues of $2,790,436,$1,138,825, a 5%21% decrease over revenues of $2,925,596$1,433,838 for the same period in 2016.2017.  The decrease for 2017 reflects2018 was driven by a significant decrease in revenue withinthe use of our staffing services and our home healthcare services in the Billings, MontanaMontana.  The Casper, Wyoming location with an off-set from an increase in revenue in home healthcare in Casper, Wyoming.  was closed on August 31, 2018.


For the nine months ended September 30, 2017,2018, cost of services totaled $2,019,050,$853,702, a 9%23% decrease compared to $2,227,149$1,110,667 in the comparable period of 2016.2017. This is a reflection of the costs associated with the change in the mixoverall reduction of revenue, with a shift away from staffing combined with an increase in efficiency.revenue. FHA posted a gross profit of $771,386$285,123 during the first nine months of 2018, versus a gross profit of $323,171 for the first nine months of 2017, a decrease of 12%.  


FHA recorded total operating expenses of $565,107 during the first nine months of 2018, a 7% increase as compared to operating expenses of $528,367 in the same period of 2017.  General and administrative expenses totaled $122,529 in the first nine months of 2018 versus $142,241 in the first nine months of 2017, a decrease of 14%, driven by a decrease in recruiting expense.  Consulting fees increased from $57,775 to $118,240 when comparing the first nine months of 2017 versus a gross profit of $698,447 for the first nine months of 2016,2018, driven by an increase of 10%.




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FHA recorded total operatingin legal fees.   Salaries, wages and related expenses of $943,175 during the first nine months of 2017, a 1% decrease as comparedincreased 0% to operating expenses of $953,310 in the same period of 2016.  General and administrative expenses totaled $319,878$306,356 in the first nine months of 2017 versus $298,0212018 from $305,352 in the first nine months of 2016, an increase of 7%, due to an increase in legal fees and insurance expenses.  Consulting fees decreased from $103,447 to $85,952 when comparing the first nine months of 2016 versus 2017.  The decrease was driven by a reduction in outside consultants used in 2017 in our Casper location. Salaries, wages and related expenses decreased to $509,693 in the first nine months of 2017 from $523,392 in 2016, a decrease of 3% due to a decrease in personnel associated with turnover.  Selling expenses in the first nine months of 20172018 were $27,652$17,982 versus $28,450$22,999 in the comparable period of 2016.2017, driven by a decrease in advertising.


For the first nine months of 2016,2018, other incomeexpense included $209,439 for recognition of a gain on the derivative liability and $75,750$77,065 of interest expense on the notenotes payable.


For  By way of comparison, for the first nine months of 2017, other income and expense included $34,065 for recognition of a loss on the derivative liability and $75,750$76,411 of interest expense on the notenotes payable.


FHA’s net loss available to common shareholders was $281,994$591,881 for the first nine months of 2017.2018.  This represents a $161,099110% increase from our net loss of $120,895$281,994 in the first nine months of 2016.2017.


Three Months Ended September 30, 20172018 and 2016.2017.


During the three months ended September 30, 2017,2018, FHA recorded revenues of $839,585,$363,607, a 2%14% decrease over revenues of $856,039$423,306 for the same period in 2016.2017.  The decrease for 2017 reflects2018 was driven by a decrease in revenue withinthe use of our staffing services and our home healthcare services in the Billings, Montana location, with an off-set from an increase in revenue in home healthcare in Casper, Wyoming.Montana.


For the quarter ended September 30, 2017,2018, cost of services totaled $608,299,$261,734, a 10%21% decrease as compared to $678,021$330,294 in the comparable period of 2016.2017. This is a reflection of the costs associated with the change in the mixoverall reduction of revenue, with a shift away from staffing combined with an increase in efficiency, thus resulting inrevenue.  FHA posting aposted gross profit of $231,286$101,873 during the third quarter 2017,2018, versus a gross profit of $178,018$93,012 for the third quarter of 2016,2017, an increase of 30%10%.


FHA recorded total operating expenses of $291,605$212,938 during the third quarter of 2017,2018, a 4% decrease36% increase as compared to operating expenses of $304,968$157,084 in the same period of 2016.2017.  General and administrative expenses totaled $104,314$35,617 in the third quarter of 2018 versus $44,259 in the third quarter 2017, a decrease of 20% driven by a decrease in liability insurance and recruiting fees.  Consulting fees increased to $62,324 from $7,947 when comparing the third quarter of 2018 versus $97,2142017, driven by an increase in legal fees.  Salaries, wages and related expenses increased to $110,829 in the third quarter 2016,of 2018 from $100,122 in 2017, an increase of 4%11%, driven by an increase in office supplies during the third quarter of 2017.  Consulting fees decreased to $17,969 from $23,587 when comparing the third quarter of 2017 versus 2016 due to a decrease usage of outside consultants in 2017 in our Casper location. Salaries, wages, and related expenses decreased to $161,957 in the third quarter of 2017 from $176,297 in 2016, a decrease of 8% due to a decrease in personnel associated with turnover.accrued wages.  Selling expenses in the third quarter of 20172018 were $7,365$4,168 versus $7,870$4,756 in the comparable quarter of 2016.


For the third quarter of 2017, other expense included $79,124 for recognition of a loss on the derivative liability versus a $63,460 gain recognized for the same period in 2016.2017.


FHA’s net loss available to common shareholders was $164,798$294,938 for the third quarter of 2017.2018.  This isrepresents a $76,13579% increase from our net loss of $88,663$164,798 in the third quarter of 2016.2017.


Liquidity and Capital Resources.


Cash on hand was $113,586$60,202 at September 30, 2017,2018, a decrease of $92,766$84,260 from the $206,352$144,462 on hand at December 31, 2016.2017.  Cash used in operations for the nine months ended September 30, 2017,2018, was $99,588,$44,983, versus cash used by in



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operation of $130,906$77,346 for the nine months ended September 30, 2016.2017.  The decrease is a reflectionresult of the increase collection of accounts receivables, couple with our operating results during the first nine months of 2017.results.




14On September 21, 2018, the Company executed a Promissory Note for $275,000 with Natur. The note shall be exchanged for Series A Preferred Stock of the Company at the time of closing of the Share Exchange Agreement between the Company and Natur.  On September 28, 2018, the Company received $270,005 from Alpha and on the same date, wired $270,005 to Natur for working capital.  The note is recorded as a subscription receivable while the Share Exchange Agreement is pending.


The Company has insufficient cash to finance operations and continues to incur losses and accumulated deficit and has a short-term note payable in default in excess of anticipated cash.  These factors raise substantial doubt about the ability of the Company to continue as a going concern. There is no assurance that the Company will be successful in achieving profitable operations or finding additional equity or debt financing.



Item 3. Quantitative and Qualitative Disclosures About Market Risk.  


Not required for smaller reporting companies.


Item 4. Controls and Procedures.


(a)  Evaluation of Disclosure Controls and Procedures


Our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")), which we refer to as disclosure controls, are controls and procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any control system. A control system, no matter how well conceived and operated, can provide only reasonable assurance that its objectives are met. No evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.


As of September 30, 2017,2018, an evaluation was carried out under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls.  Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of such date, the design and operation of these disclosure controls were effective to accomplish their objectives at the reasonable assurance level.


(b)  Changes in Internal Control over Financial Reporting


No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), occurred during the fiscal quarter ended September 30, 20172018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


PART II - OTHER INFORMATION


Item 1.   Legal Proceedings.


On June 17, 2016 and June 30, 2016 two complaints were filed, one with the Federal Equal Employment Opportunity Commission (EEOC)(“EEOC”) and one with the Wyoming State Department of Labor against the Company, alleging discrimination on the basis of sex and disability.  The complaints do not seek any specific monetary relief.  The complaints are being mediated by the Wyoming State Department of Labor.Labor, and the U.S. Equal Employment Opportunity Commission. The Wyoming State Department of Labor issued a notice of dismissal for one of the complaints.  After reviewing the facts and circumstances, the Company believes the claims made are weak, at best, and the Company has retained counsel and intends to continue a vigorous defense. On March 6, 2018, a complaint



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was filed with the Wyoming Court of Natrona County, alleging violation of the Wyoming Fair Employment Practices Act of 1965 for discrimination based upon sex, disability and retaliation.  The complaint does not seek any specific monetary relief. At this time, management cannot reasonably estimate the cost to defend or the outcome of the complaints,complaints.


On June 1, 2018, The U.S. EEOC made a determination that Interim Healthcare of Wyoming violated the Wage discrimination laws (Title VII of the Civil Rights Act of 1964)  by paying a male employee more than female employees. The EEOC has determined that back wages for these individuals plus liquidated damages total $43,593, and we dothe Company has recorded an accrual for $17,593 of this amount, as the remainder is in dispute.  The company has voluntarily entered into the Conciliation Process with the EEOC to reach a resolution of the matter. On September 19, 2018, the Company attended the Conciliation meeting, which the EEOC presented a revised settlement of $133,575 for back wages plus liquidated damages.  The Company and the EEOC did not expect it will haveagree to a material financial impact onresolution.  On September 28, the Company.EEOC file a complaint claiming Interim Healthcare of Wyoming violated the Wage discrimination laws (Title VII of the Civil Rights Act of 1964)  by paying a male employee more than female employees. The Company recorded an accrual totaling $133,575 related to this matter.

 

Item 1A.   Risk Factors.


Not required for smaller reporting companies.


Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds.


None; not applicable.


Item 3.   Defaults Upon Senior Securities.


None; not applicable.




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Item 4.   Mine Safety Disclosures.


None; not applicable.


Item 5.   Other Information.


(a)

None; not applicable.  On May 18, 2018, the Company and Natur Holding B.V., a Netherlands-based holding company (“Natur”), executed a non-binding letter of intent for the Company to acquire all of Natur’s outstanding capital stock pursuant to a reverse triangular merger or share exchange on mutually agreeable terms. Natur is Europe's first hi-tech health food and beverage company with a mission to revolutionize natural juice and snack consumption, allowing consumers to afford a better quality of life through natural and functional nutrition.  See the Company’s Current Report on Form 8-K dated May 18, 2018 and filed with the Securities and Exchange Commission on May 21, 2018.


(b)  During the quarterly period ended September 30, 2017,2018, there were no changes to the procedures by which shareholders may recommend nominees to the Company’s board of directors.


Item 6.   Exhibits.


Exhibit No.

Description


31.1

302 Certification of Christopher J. Spencer


31.2  

302 Certification of John Busshaus


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 906 Certification.



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SIGNATURES


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


                                         FUTURE HEALTHCARE OF AMERICA




Date:

11/9/172/18

 

By:

/s/ Christopher J. Spencer

 

 

 

 

Christopher J. Spencer

 

 

 

 

Chief Executive Officer and President and Director




Date:

11/9/172/18

 

 

/s/ John Busshaus

 

 

 

 

John Busshaus

 

 

 

 

Chief Financial Officer
















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