Document and Entity Information
Document and Entity Information - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Document and Entity Information: | ||
Entity Registrant Name | TechCare Corp. | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Trading Symbol | tecr | |
Amendment Flag | false | |
Entity Central Index Key | 1,498,067 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 21,511,234 | |
Entity Public Float | $ 2,464,236 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 |
TechCare Corp. - Condensed Cons
TechCare Corp. - Condensed Consolidated Balance Sheets | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Current assets: | |||
Cash and cash equivalents | $ 297,609 | $ 275,041 | |
Other receivables | 178,581 | 23,069 | |
Total current assets | $ 476,190 | $ 298,110 | |
Non-current assets: | |||
Severance pay fund | 8,313 | 5,988 | |
Lonf-term deposit | 12,185 | 5,670 | |
Property and equipment, net | $ 105,674 | $ 100,841 | |
Total non-current assets | 126,172 | 112,499 | |
Total assets | 602,362 | 410,609 | |
Current liabilities: | |||
Accounts payable and accrued expenses | $ 104,723 | 203,962 | |
Option liability | 276,150 | ||
Notes payable and loan | $ 88,015 | 80,026 | |
Total current liabilities | $ 468,888 | $ 283,988 | |
Non-current liability: | |||
Liability for severance pay | 19,560 | 12,663 | |
Total liabilities | $ 488,448 | $ 296,651 | |
Stockholders' equity (deficit): | |||
Preferred stock | [1] | 0 | 0 |
Common stock | 2,151 | 2,038 | |
Accumulated other comprehensive income (loss) | 109,405 | 97,003 | |
Additional paid-in capital | $ 6,718,485 | $ 3,727,610 | |
Stock payable | 80,000 | 0 | |
Accumulated deficit | $ (6,796,127) | $ (3,712,693) | |
Total stockholders' equity (deficit) | 113,914 | 113,958 | |
Total liabilities and stockholders' equity (deficit) | $ 602,362 | $ 410,609 | |
[1] | $0.0001 par value; 500,000,000 shares authorized; 21,511,234 and 20,381,211 issued and outstanding at June 30, 2017 and December 31, 2016, respectively |
TechCare Corp. - Condensed Con3
TechCare Corp. - Condensed Consolidated Statements of Operations | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($)$ / sharesshares | |
Condensed Consolidated Statements of Operations (USD $) | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Expenses: | ||||
Research and development expenses | $ 239,438 | 168,530 | $ 801,613 | 478,634 |
Change in fair value of option liability | 276,150 | 276,150 | ||
General and administrative expenses | $ 171,088 | 64,276 | $ 2,020,014 | 92,164 |
Operating loss | $ 686,676 | $ 232,806 | $ 3,097,777 | $ 570,798 |
Financial expenses (income), net | (4,228) | 567 | (19,191) | 729 |
Loss before income taxes | 682,448 | 233,373 | 3,078,586 | 571,527 |
Tax expenses | 4,848 | |||
Net income/loss | $ 682,448 | $ 233,373 | $ 3,083,434 | $ 571,527 |
Net loss per common stock: | ||||
Basic loss per share | $ / shares | $ (0.03) | $ (0.02) | $ (0.14) | $ (0.04) |
Diluted loss per share | $ / shares | $ (0.03) | $ (0.02) | $ (0.14) | $ (0.04) |
Weighted average number of common stock outstanding: | ||||
Basic | shares | 21,525,468 | 13,816,571 | 21,683,407 | 12,816,571 |
Diluted | shares | 21,525,468 | 13,816,571 | 21,683,407 | 12,816,571 |
Comprehensice loss: | ||||
Net loss | 682,448 | 233,373 | 3,083,434 | 571,527 |
Other comprehensive expense (income) attributable to foreign currency translation | (3,569) | (2,632) | (12,402) | 1,475 |
Comprehensice loss | 678,879 | 230,741 | 3,071,032 | 573,002 |
TechCare Corp. - Condensed Con4
TechCare Corp. - Condensed Consolidated Statements of Cash Flows | 6 Months Ended | |
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | |
Cash flow from operating activities: | ||
Net loss | (3,083,434) | (571,527) |
Adjustments to reconcile net (loss) to net cash (used in) operating activities: | ||
Depreciation expenses | $ 5,251 | $ 6,182 |
Stock issued in relation to consulting services | 52,000 | |
Change in fair value of option liability | 276,150 | |
Stock-based compensation | 2,042,960 | |
Changes in cash attributable to changes in operating assets and liabilities: | ||
Other receivables and prepid expenses | 20,519 | (8,726) |
Accounts payable and accrued expenses | (94,548) | (1,835) |
Liability for severance pay | 5,590 | |
Net cash used in operating activities | $ (775,512) | $ (575,906) |
Cash flow from investing activities: | ||
Severance pay fund | (1,592) | |
Purchase of fixed assets | (4,170) | (20,345) |
Investments in long-term deposit | (6,059) | (5,668) |
Net cash used in investing activities | $ (11,821) | $ (26,013) |
Cash flow from financing activities: | ||
Proceeds from issuance of common stock | 800,000 | $ 165,000 |
Proceeds of funds on account of reverse merge | 248,245 | |
Net cash provided by financing activities | $ 800,000 | $ 413,245 |
Translation adjustment on cash and cash equivalents | 9,901 | 5,608 |
Net increase (decrease) in cash and cash equivalents | $ 22,568 | $ (183,066) |
Cash and cash equivalents - beginning of period | 275,041 | 254,324 |
Cash and cash equivalents - end of period | 297,609 | 71,258 |
Non-cash activity during the period: | ||
Issuance of common stock and warrants | 176,031 | 0 |
Note 1_ Nature of Operations an
Note 1: Nature of Operations and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Note 1: Nature of Operations and Summary of Significant Accounting Policies | NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Nature of operations Techcare Corp. ("Techcare" or the "Company"), formally known as BreedIT Corp. ("BreedIt"), was incorporated under the laws of the State of Delaware on May 26, 2010. The Companys common stock is traded in the United States on the OTCQB Market under the ticker symbol TECR. On February 8, 2016, the Company signed a Merger Agreement with Novomic Ltd. ("Novomic"), a private company incorporated under the laws of the state of Israel. The closing of the merger took place on August 9, 2016 pursuant to which Novomic became a wholly-owned subsidiary of the Company. The merger was structured as a reverse merger. Going Concern During the six months period ended June 30, 2017, the Company had a comprehensive loss of $3.1 million. As of June 30, 2017, the Company had accumulated losses of approximately $6.8 million. Based on the projected cash flows and Company's cash balances as of June 30, 2017, the Company's management is of the opinion that without further fund raising it will not have sufficient resources to enable it to continue advancing its activities including the development, manufacturing and marketing of its products for a period of at least 12 months from the date of issuance of these financial statements. As a result, there is substantial doubt about the Company's ability to continue as a going concern. Managements plans include the continued commercialization of their products, continue taking cost reduction steps and securing sufficient financing through the sale of additional equity securities, debt or capital inflows from strategic partnerships. There are no assurances however, that the Company will be successful in obtaining the level of financing needed for its operations. If the Company is unsuccessful in commercializing its products and securing sufficient financing, it may need to reduce activities, curtail or cease operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. B. Summary of significant accounting policies The accounting policies adopted are consistent with those of the previous financial year. Basis of Presentation The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for fair statement of results for the interim periods presented have been included. The results of operations for the six and the three months ended June 30, 2017 are not necessarily indicative of the results to be expected for the year or for other interim periods or for future years. The consolidated balance sheet as of December 31, 2016 is derived from audited financial statements as of that date; however, it does not include all of the information and footnotes required by GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Companys Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the SEC on May 10, 2017. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Techcare, and its subsidiary, Novomic. All intercompany accounts and transactions have been eliminated in consolidation. |
Note 2_ Recently Issued Account
Note 2: Recently Issued Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Note 2: Recently Issued Accounting Pronouncements | NOTE 2: RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In March 2016, the FASB issued an ASU No. 2016-09, which simplifies certain aspects of the accounting for share-based payments, including accounting for income taxes, classification of awards as either equity or liabilities, classification on the statement of cash flows as well as allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. The ASU is effective for annual reporting periods (including interim periods within those annual reporting periods) beginning after December 15, 2016 and all amendments of the ASU that apply must be adopted in the same period. The adoption by the Company of ASU No. 2016-09 on January 1, 2017, did not have any effect on the Company's consolidated financial statements. |
Note 3_ Restatement
Note 3: Restatement | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Note 3: Restatement | NOTE 3: RESTATEMENT The Company restated the March 31, 2016 financial statements in order to include additional accrued expenses that were not recorded in the previously reported period. |
Note 4_ Stockholders' Equity
Note 4: Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Note 4: Stockholders' Equity | NOTE 4: STOCKHOLDERS' EQUITY Share capital During the six months ended June 30, 2017 the Company entered into several agreements, under which the Company raised an aggregate amount of $800,000 as further detailed below: a. In the first quarter of 2017, the Company entered into an agreement with Zvi Yemini, the Company's Chief Executive Officer and Chairman of the Board through his affiliated entity-"Y.M.Y" pursuant to which the Company issued Y.M.Y 207,039 shares of common stock of the Company at a purchase price of $0.483 per share for a total consideration of $100,000. b. In the first quarter of 2017, the Company entered into several agreements, pursuant to which the Company issued to certain investors 1,242,236 shares of common stock of the Company at a purchase price of $0.483 per share for a total consideration of $600,000. c. In the first quarter of 2017, the Company entered into an agreement, pursuant to which the Company issued 103,520 shares of common stock of the Company and warrants exercisable for a period of 6 months to purchase an additional 15,528 shares at a purchase price of $0.483 per unit for a total consideration of $50,000. d. In the second quarter of 2017, the Company signed an agreement to issue 103,520 shares of common stock of the Company at a purchase price of $0.483 per share for a total consideration of $50,000. As of June 30, 2017, the Company has not yet issued the stock and therefore recorded a stock payable in the consolidated financial statements. In addition, during the second quarter of 2017, the Company entered into agreements with certain investors to issue 162,008 shares of common stock of the Company at a purchase price of $0.483 per share for a total consideration of $78,250. In July 2017, the Company received $28,250 on account of the transaction. In the first quarter of 2017, the Company signed an agreement to issue 300,000 restricted shares of common stock of the Company to a service provider for his consulting services for a term of 18 months. As part of the consulting agreement, the Company also granted the service provider warrants exercisable to purchase 100,000 of the Company's common stock at an exercise price of $1.50 per warrant share exercisable for a period of 24 months commencing the date of the agreement. The total value of the agreement at the date of grant was $146,031. In the second quarter of 2017, the Company signed a service agreement with a service provider pursuant to which the Company will pay a monthly fee and also granted the service provider 70,000 common stock which were issued in April 2017. In the second quarter of 2017, the Company signed a consulting agreement with a service provider pursuant to which the Company will pay a monthly fee and will grant the service provider an option to purchase up to 500,000 common stock of the Company, issued as follows: (1) 50,000 common stock on the execution of the agreement, (2) the remaining 450,000 common stock shall be contingent upon the successful achievement of certain milestones, as described in the agreement. As of June 30, 2017 the Company had not yet issued the stock and, therefore, recorded a stock payable in the amount of $30,000 in the consolidated financial statements. Stock-Based Compensation Stock based awards are accounted for using the fair value method in accordance with ASC 718, Shared Based Payment. The Company's primary type of stock based compensation consists of stock options to directors, employees, officers, consultants, and advisors. The Company uses the Black-Scholes option pricing model in valuing options. During March 2017, the Company granted to certain employees options to purchase 723,027 of the Company's common stock and to non-employees options to purchase 2,000,952 of the Company's common stock for an exercise price of $0.0001. Out of all the option grants, 1,298,737 options were granted to related parties. A summary of the stock option activity for the six-month period ended June 30, 2017: Number of Options Weighted Average Exercise Price U.S Dollar Options outstanding at January 1, 2017 1,666,617 0.0001 Granted 2,723,979 0.0001 Options exercisable at June 30, 2017 4,390,596 0.0001 The options granted during the six months period ended in June 30, 2017 were fully vested on the grant date and exercisable for 2.5 - 5 years. The following assumptions were applied in determining the options fair value on their grant date: Risk-free interest rate 1.54% Expected shares price volatility 70% Expected option term (years) 2.5 - 5 Dividend yield - The Company based the risk-free interest rate on the U.S. Treasury yield curve. The expected term in years represents the period of time that the awards granted are expected to be outstanding. The assumption for dividend yield is zero because the Company has not historically paid dividends nor does it expect to do so in the foreseeable future. The volatility was based on the historical stock volatility of several peer companies, as the Company has limited trading history to use the volatility of its own common stock. Stock-based compensation expense included in the Companys statements of operations were allocated as follows: June 30, 2017 June 30, 2016 US dollars Research and development $ 469,099 $ - General and administrative 1,573,861 - $ 2,042,960 $ - |
Note 5_ Oem Distribution Agreem
Note 5: Oem Distribution Agreement | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Note 5: Oem Distribution Agreement | NOTE 5: OEM DISTRIBUTION AGREEMENT On June 23, 2017, the Company entered into an OEM agreement (the "Agreement") with a medical device and wellness applications company based in the United States (the "OEM Distributor"), according to which the Distributor will manufacture, distribute and sell the Companys Novokid head lice treatment products, in the US, Canada, Brazil, Argentina, Costa Rica and Colombia, all on an exclusive basis, pursuant to and in accordance with the terms and conditions set forth in the Agreement. As part of the Agreement, the OEM Distributor paid a royalty advance of $10,000 and also an amount of $140,000 which is held in an escrow account, until the Company completes certain milestones, as described in the Agreement. Also, as part of the Agreement, the Company granted the OEM Distributor an option to purchase up to 9.09% of the Company's common stock for a total consideration of up to $900,000, exercisable until January 15, 2018. The fair value of the option amounted to $276,150. The key assumptions in the valuation of the option was as follows: Risk-free interest rate 1.14% Expected shares price volatility 70% Expected option term (years) 0.55 Dividend yield - |
Note 6_ Income Taxes
Note 6: Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Note 6: Income Taxes | NOTE 6: INCOME TAXES a. Basis of taxation The Company and its subsidiary are taxed under the domestic tax laws of the jurisdiction of incorporation of each entity. b. Carryforward Tax Losses As of June 30, 2017 and December 31, 2016, the Subsidiary had net operating carry forward tax losses of approximately $1.5 million and $0.9 million, respectively. A full valuation allowance was created against these carry forward tax losses since the realization of any future benefit from these net operating losses cannot be sufficiently assured at June 30, 2017 and December 31, 2016. c. Corporate tax rates The corporate tax rate in Israel was 26.5% in 2015 and 25% in 2016. The regular corporate tax rate starting January 1, 2017 is 24% and starting January 1, 2018 will be 23%. The corporate tax rate in the U.S is approximately 35%. |
Note 7_ Loss Per Share
Note 7: Loss Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Note 7: Loss Per Share | NOTE 7: LOSS PER SHARE Loss per share is based on the loss that is attributed to the stockholders holding common stock, divided by the weighted average number of common stock in issue during the period. For purposes of the calculation of the diluted loss per share, the Company adjusts the loss that is attributed to the holders of the Companys common stock, and the weighted average number of common stock assuming conversion of all of the dilutive potential stock. The potential stock are taken into account only if their effect is dilutive (increases loss per share). |
Note 8_ Fair Value of Financial
Note 8: Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Note 8: Fair Value of Financial Instruments | NOTE 8: FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amount of the Company's financial instruments, including cash equivalents, current assets, accounts payable and accrued liabilities and notes payables approximate their fair value, due to their short term in nature and their carrying amounts approximates the amounts expected to be received or paid. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The Company accounts for option liability as Level 3 since its inputs are unobservable inputs for the liability. The following table is a reconciliation of the change for the financial liability where fair value measurement is estimated utilizing Level 3 inputs: 2017 2016 U.S Dollar Fair value as of January 1, $- $- Change in fair value recognized in statement of operations 276,150 - Fair value as of June 30, $276,150 $- |
Note 9_ Related Party Transacti
Note 9: Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Note 9: Related Party Transactions | NOTE 9: RELATED PARTY TRANSACTIONS For the issuance of Common stock to the Company's Chairman of the board's affiliated entity, other related parties and option grants to the Company's directors, refer to note 4. On February 22, 2017, the Company signed an amendment to the original service agreement with Zvi Yemini, the Company's chairman of the board and his affiliated entity-"Y.M.Y". According to the amendment, Mr. Yemini's monthly payment was increased to 45,000 NIS (approximately $12 thousands) starting February 2017. |
Note 1_ Nature of Operations 14
Note 1: Nature of Operations and Summary of Significant Accounting Policies: Going Concern (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Going Concern | Going Concern During the six months period ended June 30, 2017, the Company had a comprehensive loss of $3.1 million. As of June 30, 2017, the Company had accumulated losses of approximately $6.8 million. Based on the projected cash flows and Company's cash balances as of June 30, 2017, the Company's management is of the opinion that without further fund raising it will not have sufficient resources to enable it to continue advancing its activities including the development, manufacturing and marketing of its products for a period of at least 12 months from the date of issuance of these financial statements. As a result, there is substantial doubt about the Company's ability to continue as a going concern. Managements plans include the continued commercialization of their products, continue taking cost reduction steps and securing sufficient financing through the sale of additional equity securities, debt or capital inflows from strategic partnerships. There are no assurances however, that the Company will be successful in obtaining the level of financing needed for its operations. If the Company is unsuccessful in commercializing its products and securing sufficient financing, it may need to reduce activities, curtail or cease operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Note 1_ Nature of Operations 15
Note 1: Nature of Operations and Summary of Significant Accounting Policies: Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for fair statement of results for the interim periods presented have been included. The results of operations for the six and the three months ended June 30, 2017 are not necessarily indicative of the results to be expected for the year or for other interim periods or for future years. The consolidated balance sheet as of December 31, 2016 is derived from audited financial statements as of that date; however, it does not include all of the information and footnotes required by GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Companys Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the SEC on May 10, 2017. |
Note 1_ Nature of Operations 16
Note 1: Nature of Operations and Summary of Significant Accounting Policies: Principles of Consolidation (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Techcare, and its subsidiary, Novomic. All intercompany accounts and transactions have been eliminated in consolidation. |
Note 4_ Stockholders' Equity_ F
Note 4: Stockholders' Equity: Fair Value, Option, Quantitative Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Tables/Schedules | |
Fair Value, Option, Quantitative Disclosures | Risk-free interest rate 1.14% Expected shares price volatility 70% Expected option term (years) 0.55 Dividend yield - |
Note 4_ Stockholders' Equity_ R
Note 4: Stockholders' Equity: Research and Development (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Tables/Schedules | |
Research and Development | June 30, 2017 June 30, 2016 US dollars Research and development $ 469,099 $ - General and administrative 1,573,861 - $ 2,042,960 $ - |
Note 5_ Oem Distribution Agre19
Note 5: Oem Distribution Agreement: Measurement Inputs, OEM Distribution Agreement (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Tables/Schedules | |
Fair Value, Measurement Inputs, OEM Disclosure | Risk-free interest rate 1.54% Expected shares price volatility 70% Expected option term (years) 2.5 - 5 Dividend yield - |
Note 8_ Fair Value of Financi20
Note 8: Fair Value of Financial Instruments: Fair Value, Liabilities Measured on Recurring Basis (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Tables/Schedules | |
Fair Value, Liabilities Measured on Recurring Basis | 2017 2016 U.S Dollar Fair value as of January 1, $- $- Change in fair value recognized in statement of operations 276,150 - Fair value as of June 30, $276,150 $- |