Health-Right Discoveries (HRDV) 10-Q 11 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 14, 2018
Document And Entity Information
Entity Registrant Name	Health-Right Discoveries, Inc.
Entity Central Index Key	1,537,663
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		22,869,191
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
CURRENT ASSETS:
Cash	$ 1,783,986	$ 1,458,942
Accounts receivable, net	481,056	471,112
Inventories	30,219	32,580
Total Current Assets	2,295,261	1,962,634
Property and Equipment, net	22,212	10,592
Intangible assets, net	4,080,434	4,196,717
Goodwill	3,313,226	3,313,226
TOTAL ASSETS	9,711,133	9,483,169
CURRENT LIABILITIES:
Accounts payable and accrued expenses	1,343,984	1,346,317
Loans payable - related parties		33,512
Salaries payable - related party	157,000	182,000
Current portion - notes payable, net of discounts of $399,252 March 31, 2018 and December 31, 2017, respectively	265,196	265,196
Total Current Liabilities	1,766,180	1,827,025
Long-term Liabilities:
Notes payable, net of discounts of $658,026 and $757,829 March 31, 2018 and December 31, 2017, respectively	6,177,526	6,077,713
Deferred tax liability	1,031,241	980,212
Total long-term liabilities	7,208,767	7,057,925
Total liabilities	8,974,947	8,884,950
STOCKHOLDERS' EQUITY (DEFICIENCY)
Preferred Stock, .001 par value, 5,000,000 shares authorized No shares issued and outstanding March 31, 2018 and December 31, 2017, respectively
Common Stock, .001 par value, 100,000,000 shares authorized 22,869,191 shares issued and outstanding March 31, 2018 and December 31, 2017, respectively	22,869	22,869
Additional Paid in Capital	1,117,967	1,117,967
Accumulated Deficit	(404,650)	(542,617)
Total stockholders' equity (deficiency)	736,186	598,219
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)	$ 9,711,133	$ 9,483,169

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Notes payable, discounts current	$ 399,252	$ 399,252
Notes payable, discounts noncurrent	$ 658,026	$ 757,829
Preferred Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred Stock, authorized	5,000,000	5,000,000
Preferred Stock, issued	0	0
Preferred Stock, outstanding	0	0
Common Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common Stock, authorized	100,000,000	100,000,000
Common Stock, issued	22,869,191	22,869,191
Common Stock, outstanding	22,869,191	22,869,191

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Revenue	$ 1,924,832
Cost of Revenue	376,096
Gross Profit	1,548,736
COSTS AND EXPENSES:
General and administrative	1,103,462	18,767
Interest expense - related parties		2,352
Interest expenses - other	256,278
Total Cost and expenses	1,359,740	21,119
Income (loss) before income tax provision	188,996	(21,119)
Income tax provision	51,029
NET INCOME (LOSS)	$ 137,967	$ (21,119)
Income (loss) per common share (in dollars per share)	$ 0.01	$ 0
Weighted average common shares outstanding - basic and diluted (in shares)	22,869,191	17,533,332

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
OPERATING ACTIVITIES:
Net income (loss)	$ 137,967	$ (21,119)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation expense	986
Amortization	116,283
Non-cash interest	99,813
Deferred income tax benefit	51,029
Changes in operating assets and liabilities
Accounts receivable	(9,944)
Inventories	2,361	(16,672)
Accounts payable and accrued expenses	(2,332)
Accrued salary to related party	(25,000)	13,000
Accrued interest		2,352
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	371,163	(22,439)
INVESTING ACTIVITIES:
Purchase of property and equipment	(12,607)
NET CASH USED IN INVESTING ACTIVITIES	(12,607)
FINANCING ACTIVITIES:
Proceeds of loan from related parties		4,344
Repayment of related party loan	(33,512)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(33,512)	4,344
INCREASE (DECREASE) IN CASH	325,044	(18,095)
CASH - BEGINNING OF PERIOD	1,458,942	18,373
CASH - END OF PERIOD	1,783,986	278
Supplemental disclosures of cash flow information:
Cash paid for interest	159,374
Cash paid for income taxes

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	NOTE 1 – Summary of Significant Accounting Policies The significant accounting policies of Health-Right Discoveries, Inc. and its subsidiaries (collectively, the “ Company HRD 2017 Form 10-K Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States (“ GAAP Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Certain of the Company’s estimates could be affected by external conditions, including those unique to its industry, and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates that could cause actual results to differ from its estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and record adjustments when necessary. Inventories Inventories, which consist of the Company’s product held for resale, are stated at the lower of cost, determined using the first-in, first-out, or net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose of the product. If the Company identifies excess, obsolete or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Company’s statements of operations. In the first quarter of 2018 and 2017, the Company recorded a loss of $-0- due to management’s estimate of obsolete inventory. Property and Equipment Property and equipment are stated at cost. Expenditures for additions are capitalized, repairs and maintenance are expensed as incurred. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are as follows: March 31, 2018 December 31, 2017 Machinery and equipment – 7 years $ 31,801 $ 19,195 Accumulated depreciation (9,589 ) (8,603 ) Total property and equipment $ 22,212 $ 10,592 Financial Instruments and Fair Value Measurements The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of judgment, and therefore cannot be determined with precision. Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments: ● Cash and cash equivalents, restricted cash, operating lease related receivables, and accounts payable ● Goodwill, other intangible assets, and long-lived assets held and used: Stock-based compensation The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, the fair value of the award is calculated on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock for common shares; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, the fair value of the award on the date of grant is calculated in the same manner as employee awards. However, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding, noted above. Recent Accounting Pronouncements Revenue Recognition As of January 1, 2018, the Company adopted ASU 2014-09 and all subsequent ASUs that modified ASC 606. As part of the implementation process the Company performed an analysis to identify accounting policies that needed to change and additional disclosures that are required. The Company considered factors such as customer contracts with unique revenue recognition considerations, the nature and type of goods and services offered, the degree to which contracts include multiple performance obligations or variable consideration, and the pattern in which revenue is currently recognized, among other things. All of the Company’s revenue streams were evaluated, and similar performance obligations resulted under the new standard. In addition, the Company considered recognition under the new standard and concluded the timing of the Company’s revenue recognition will remain the same. The Company has also evaluated the changes in controls and processes that are necessary to implement the new standard, and no material changes were required. CCI’s revenue predominantly represents consulting services agreements, which included providing services to physicians for billing insurance companies. The amounts reported as revenue are net of amounts remitted. EZ’s revenue from the sale of products are recognized when the sale is consummated and title is transferred. The Company and customer enter into an agreement which outlines the place and date of sale, purchase price, payment terms, and the assignment of rights and warranties from the Company to the customer. Management has identified the promise in the sale contract to be the transfer of ownership of the asset. Management believes the asset holds standalone value to the customer as it is not dependent on any other services for functionality purposes and therefore is distinct within the context of the contract and as described in ASC 606-10. As such, management has identified the transfer of the asset as the performance obligation. The transaction price is set at a fixed dollar amount per fixed quantity (number of assets) and is explicitly stated in each contract. Sales revenue is based on a set price for a set number of assets, which is allocated to the performance obligation discussed above, in its entirety. The Company has determined the date of transfer to the customer to be the date the customer obtains control and title over the asset and the date which revenue is to be recognized and payment is due. As such, there is no impact to the timing and amounts of revenue recognized for equipment sales related to the implementation of ASC 606. Accounting for Leases In February 2016, the FASB issued an accounting standard update that amends the accounting guidance on leases. The intent of this ASU is to increase transparency and comparability among organizations recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Lessors will account for leases using an approach that is substantially equivalent to existing U.S. GAAP for sales-type leases, direct financing leases and operating leases. Unlike current guidance, however, a lease with collectability uncertainties may be classified as a sales-type lease. If collectability of lease payments, plus any amount necessary to satisfy a lessee residual value guarantee, is not probable, lease payments received will be recognized as a deposit liability and the underlying assets will not be derecognized until collectability of the remaining amounts becomes probable. The ASU is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company plans to adopt this guidance on January 1, 2019, that standard’s effective date, and is currently in the process of determining the impact that the updated accounting guidance will have on the consolidated financial statements and related disclosures. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued an accounting standard update that provides guidance on the following eight specific cash flow classification issues: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. Current GAAP does not include specific guidance on these eight cash flow classification issues. The amendments of this ASU are effective for reporting periods beginning after December 15, 2017, with early adoption permitted. We will adopt this accounting standard update effective January 1, 2018. The provisions of this update will not have a material impact on our consolidated statements of cash flows. Tax Cuts and Jobs Act In February 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” to address stakeholder concerns about the guidance in current U.S. GAAP that requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The Company is currently evaluating the timing, methods and impact of adopting this new standard on the consolidated financial statements.

Acquisition

Acquisition	3 Months Ended
	Mar. 31, 2018
Business Combinations [Abstract]
Acquisition	NOTE 2 – Acquisitions The Company modified its business plan from building a platform of products in the nutraceutical and dietary supplement space to seeking acquisitions in the healthcare field. HRD identified two target companies for sale that fit their plan going forward of acquiring small, profitable, privately held companies in the healthcare space that generate at least $5 million in revenue and $1 million in EBITDA. On September 29, 2017, the Company finalized a securities purchase agreement with CCI and EZRX to purchase 100% of their outstanding interests for $6.1 million plus 1,751,580 shares of its common stock. In accordance with the acquisition method of accounting, the Company allocated the consideration to the net tangible and identifiable intangible assets based on their estimated fair values which were determined by an independent valuation performed by a third party. Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets. The following table presents the consideration of net assets purchased: Cash $ 3,600,000 1,751,580 shares of common stock issued 175,158 Note payable 2,500,000 Imputed interest (763,558 ) Total Purchase Price $ 5,511,600 The assets acquired and liabilities assumed as part of our acquisition were recognized at their fair values as of the effective acquisition date, September 29, 2017, based upon an appraisal from a third party. The following table summarizes the fair values assigned to the assets acquired and liabilities assumed. Cash $ 81,359 Current assets 759,710 Other non-current assets 11,167 Intangible assets 4,313,000 Goodwill 3,313,226 Current liabilities (1,343,880 ) Deferred tax liability (1,622,982 ) Net assets acquired $ 5,511,600 Acquisition costs of $410,000 were incurred and expensed for the year December 31, 2017. As part of the acquisition the company recognized deferred tax liabilities of $1,622,982 related to the unamortized identifiable intangible assets acquired in the amount of $4,313,000 using a blended 37.63% tax rate. The following table provides unaudited pro forma results of operations for the three months ended March 31, 2017 as if the acquisitions had been consummated as of the beginning of that period presented. The pro forma results include the effect of certain purchase accounting adjustments, such as the estimated changes in depreciation and amortization expense on the acquired intangible assets. However, pro forma results do not include any anticipated cost savings or other effects of the planned integration of the companies. Accordingly, such amounts are not necessarily indicative of the results if the acquisition has occurred on the dates indicated, or which may occur in the future. (Unaudited) Pro Forma Results Three months ended March 31, 2017 Revenues $ 1,232,278 Income before income taxes $ 82,224 Basic and fully diluted earnings (loss) per share $ 0.00

Intangible Assets

Intangible Assets	3 Months Ended
	Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	NOTE 3 – Intangible Assets Amortizing Estimates Gross Intangible Assets Useful Life Carrying Amount Customer Lists 10 years $ 2,653,000 Tradenames 15 years 377,000 IP Technologies 10 years 819,000 Non-compete 5 years 464,000 4,313,000 Less: Accumulated Amortization (232,566 ) $ 4,080,434 The amortization expense related to the intangible assets was $116,283 and $0 as of March 31, 2018 and 2017, respectively. The valuation of the assets acquired and liabilities assumed in connection with this acquisition was based on fair values at the acquisition date. The assets purchased and liabilities assumed for these acquisitions have been reflected in the accompanying consolidated balance sheets.

Notes payable

Notes payable	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Notes payable	NOTE 4 – Notes payable The Company obtained a secured convertible note with a lender for $5 million, interest is payable monthly, at 12.75% per annum, the note matures on September 29, 2020. The note can be converted at any time in whole or in part at $0.44 per share. In addition, the lender received 3,584,279 shares of common stock valued at $0.10 per share along with a 2% original issue discount. The total amount of the discount is $493,345. The Company had incurred $34,917 in loan costs. Both the discount and loan costs are presented as a reduction of the note payable. The Company, as part of consideration for the purchase of CCI and EZRX, obtained a $2.5 million note payable. The note is non-interest bearing with 5 annual payments of $500,000, matures on September 30, 2022. Interest has been imputed at 12.75% per annum. Upon each annual payment date the holder may elect to convert the annual installment of the principal amount due into shares of common stock at $2 per share. March 31, December 31, 2018 2017 Note payable – monthly interest, 12.75% per annum, matures on September 29, 2020 $ 5,000,000 $ 5,000,000 Less discounts (411,121 ) (452,233 ) Note payable – monthly interest, 12.75% per annum, matures on September 30, 2022 2,500,000 2,500,000 Less discounts (646,157 ) (704,858 ) Subtotal 6,442,722 6,342,909 Less: current portion, net of discount $399,252 265,196 265,196 Long- term portion $ 6,177,526 $ 6,077,713 Principal payments on the above notes mature as follows: Year ending December 31: 2018 $ 265,196 $ 265,196 2019 301,057 301,057 2020 5,341,766 5,341,766 2021 387,980 387,980 2022 440,443 440,443 Thereafter $ 6,736,442 $ 6,736,442

Related Party

Related Party	3 Months Ended
	Mar. 31, 2018
Related Party Transactions [Abstract]
Related Party	NOTE 5 – Related Party Since inception, the Company has relied in large part on loans from James Pande and David Hopkins, its principal shareholders, to fund its operations. Mr. Pande and Mr. Hopkins advanced money to help fund the Company’s operations. Interest rates ranged from 2.9% - 7.5%, per annum. The balance due as of March 31, 2018 and December 31, 2017 was $0, respectively. The related party loan balance of $33,512 as of December 31, 2017 represents reimbursed expenses owed to shareholder. As of March 31, 2018 and December 31, 2017, the Company has unpaid and accrued salary to its President in the amount of $157,000 and $182,000, respectively. On January 10, 2018, the Company entered into employment agreement with David Hopkins, its President, effective as of January 1, 2018. Pursuant to the employment agreement, Mr. Hopkins assumed the additional position of Chief Executive Officer of the Company. The employment agreement is for an initial term of three (3) and automatically renews for additional three (3) year periods, provided that the Company achieves Adjusted EBITDA (as defined) of $3,500,000 for any calendar year during the initial term and any renewal term. The employment agreement provides for an initial base salary of $175,000. In the event in any calendar year during the initial term or any renewal term, HRD achieves Adjusted EBITDA of $3,500,000, Mr. Hopkins’ annual base salary shall automatically increase to $250,000 and in the event in any calendar year during the initial term or any renewal term, the Company achieves Adjusted EBITDA of $5,000,000, his annual base salary shall automatically increase to $325,000. Mr. Hopkins will also receive a $600 per month car allowance while the employment agreement is in effect. In addition to the foregoing, pursuant to the employment agreement, Mr. Hopkins was granted an option to purchase 525,000 shares of HRD common stock under the Company’s 2015 Stock Incentive Plan at an exercise price of $0.35 per share. The option vests in six equal semi-annual installments commencing June 30, 2018, expires the ten (10) years from the date of grant and is otherwise subject to the terms of the Incentive Plan.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2018
STOCKHOLDERS' EQUITY (DEFICIENCY)
Stockholders' Equity	NOTE 6 – Stockholders’ Equity The Company has authorized 100,000,000 shares of common stock $.001 par value and 5,000,000 shares of preferred stock $.001 par value. On September 29, 2017, the Company issued 1,751,580 shares of common stock for the purchase of CCI and EZRX (see Note 2). Also, on September 29, 2017, the Company issued 3,584,279 shares of its common stock in connection with its $5 million note (see Note 4).

2015 Incentive Stock Plan

2015 Incentive Stock Plan	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
2015 Incentive Stock Plan	NOTE 7 – 2015 Incentive Stock Plan Our 2015 Incentive Stock Plan (the “ Incentive Plan

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes	NOTE 8 – Income Taxes Income tax expense for the three months ended March 31, 2018 and 2017 was $51,029 and $-0-, respectively. The effective tax rates for the three months ended March 31, 2018 and 2017 were 27% and 38.5%, respectively. The 2018 tax rate reflects the enactment of the Tax Cuts and Jobs Act of 2017 (the “Act”) which made significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017. As of December 31, 2017, the Company had approximately $566,304 of federal and state net operating loss carryovers (“NOLs”) which begin to expire in 2031. Utilization of the NOLs may be subject to limitation under the Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under regulations. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against the entire deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized. The Company files U.S. federal and state of Florida and Arkansas tax returns that are subject to audit by tax authorities beginning with the year ended December 31, 2013. The Company’s policy is to classify assessments, if any, for tax and related interest and penalties as tax expense.

Business Segment Information

Business Segment Information	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Business Segment Information	NOTE 9 – Business Segment Information The Company has two reportable segments (ancillary program and prescription medicine) supported by a corporate group which conducts activities that are non-segment specific. The following table present selected financial information about the Company’s reportable segments for the three months ended March 31, 2018. For the three months ended March 31, 2018 Consolidated Ancillary Program Prescription Medicine Corporate Revenues $ 1,924,832 $ 1,444,060 $ 480,772 $ — Cost of Revenue 376,096 — 376,096 — Long-lived assets 7,415,872 6,395,764 1,020,108 — Income (loss) before income tax 188,996 671,897 95,523 (578,424 ) Identifiable assets 4,102,646 3,082,538 1,020,108 — Depreciation and amortization 120,179 986 — 119,193 The Company only had one reportable segment for the three months ended March 31, 2017.

Subsequent events

Subsequent events	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
Subsequent events	NOTE 10 – Subsequent Events The Company has evaluated subsequent events through the date that the financial statements were issued and determined that there were no subsequent events requiring adjustment to or disclosure in the financial statements.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. Therefore, they do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statement and notes thereto included in the 2017 Form 10-K for the year ended December 31, 2017. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2018 and the results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operating results for the full fiscal year or any future period.
Use of Estimates	Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Certain of the Company’s estimates could be affected by external conditions, including those unique to its industry, and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates that could cause actual results to differ from its estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and record adjustments when necessary.
Inventories	Inventories Inventories, which consist of the Company’s product held for resale, are stated at the lower of cost, determined using the first-in, first-out, or net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose of the product. If the Company identifies excess, obsolete or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Company’s statements of operations. In the first quarter of 2018 and 2017, the Company recorded a loss of $-0- due to management’s estimate of obsolete inventory.
Property and Equipment	Property and Equipment Property and equipment are stated at cost. Expenditures for additions are capitalized, repairs and maintenance are expensed as incurred. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are as follows: March 31, 2018 December 31, 2017 Machinery and equipment – 7 years $ 31,801 $ 19,195 Accumulated depreciation (9,589 ) (8,603 ) Total property and equipment $ 22,212 $ 10,592
Financial Instruments and Fair Value Measurements	Financial Instruments and Fair Value Measurements The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of judgment, and therefore cannot be determined with precision. Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments: ● Cash and cash equivalents, restricted cash, operating lease related receivables, and accounts payable ● Goodwill, other intangible assets, and long-lived assets held and used:
Stock-based compensation	Stock-based compensation The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, the fair value of the award is calculated on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock for common shares; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, the fair value of the award on the date of grant is calculated in the same manner as employee awards. However, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised.
Earnings (Loss) Per Share	Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding, noted above.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Revenue Recognition As of January 1, 2018, the Company adopted ASU 2014-09 and all subsequent ASUs that modified ASC 606. As part of the implementation process the Company performed an analysis to identify accounting policies that needed to change and additional disclosures that are required. The Company considered factors such as customer contracts with unique revenue recognition considerations, the nature and type of goods and services offered, the degree to which contracts include multiple performance obligations or variable consideration, and the pattern in which revenue is currently recognized, among other things. All of the Company’s revenue streams were evaluated, and similar performance obligations resulted under the new standard. In addition, the Company considered recognition under the new standard and concluded the timing of the Company’s revenue recognition will remain the same. The Company has also evaluated the changes in controls and processes that are necessary to implement the new standard, and no material changes were required. CCI’s revenue predominantly represents consulting services agreements, which included providing services to physicians for billing insurance companies. The amounts reported as revenue are net of amounts remitted. EZ’s revenue from the sale of products are recognized when the sale is consummated and title is transferred. The Company and customer enter into an agreement which outlines the place and date of sale, purchase price, payment terms, and the assignment of rights and warranties from the Company to the customer. Management has identified the promise in the sale contract to be the transfer of ownership of the asset. Management believes the asset holds standalone value to the customer as it is not dependent on any other services for functionality purposes and therefore is distinct within the context of the contract and as described in ASC 606-10. As such, management has identified the transfer of the asset as the performance obligation. The transaction price is set at a fixed dollar amount per fixed quantity (number of assets) and is explicitly stated in each contract. Sales revenue is based on a set price for a set number of assets, which is allocated to the performance obligation discussed above, in its entirety. The Company has determined the date of transfer to the customer to be the date the customer obtains control and title over the asset and the date which revenue is to be recognized and payment is due. As such, there is no impact to the timing and amounts of revenue recognized for equipment sales related to the implementation of ASC 606. Accounting for Leases In February 2016, the FASB issued an accounting standard update that amends the accounting guidance on leases. The intent of this ASU is to increase transparency and comparability among organizations recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Lessors will account for leases using an approach that is substantially equivalent to existing U.S. GAAP for sales-type leases, direct financing leases and operating leases. Unlike current guidance, however, a lease with collectability uncertainties may be classified as a sales-type lease. If collectability of lease payments, plus any amount necessary to satisfy a lessee residual value guarantee, is not probable, lease payments received will be recognized as a deposit liability and the underlying assets will not be derecognized until collectability of the remaining amounts becomes probable. The ASU is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company plans to adopt this guidance on January 1, 2019, that standard’s effective date, and is currently in the process of determining the impact that the updated accounting guidance will have on the consolidated financial statements and related disclosures. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued an accounting standard update that provides guidance on the following eight specific cash flow classification issues: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. Current GAAP does not include specific guidance on these eight cash flow classification issues. The amendments of this ASU are effective for reporting periods beginning after December 15, 2017, with early adoption permitted. We will adopt this accounting standard update effective January 1, 2018. The provisions of this update will not have a material impact on our consolidated statements of cash flows. Tax Cuts and Jobs Act In February 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” to address stakeholder concerns about the guidance in current U.S. GAAP that requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The Company is currently evaluating the timing, methods and impact of adopting this new standard on the consolidated financial statements.

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Property and Equipment	Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are as follows: March 31, 2018 December 31, 2017 Machinery and equipment – 7 years $ 31,801 $ 19,195 Accumulated depreciation (9,589 ) (8,603 ) Total property and equipment $ 22,212 $ 10,592

Acquisition (Tables)

Acquisition (Tables)	3 Months Ended
	Mar. 31, 2018
Business Combinations [Abstract]
Consideration of net assets purchased	The following table presents the consideration of net assets purchased: Cash $ 3,600,000 1,751,580 shares of common stock issued 175,158 Note payable 2,500,000 Imputed interest (763,558 )
Schedule of allocation of purchase cost	The following table summarizes the fair values assigned to the assets acquired and liabilities assumed. Cash $ 81,359 Current assets 759,710 Other non-current assets 11,167 Intangible assets 4,313,000 Goodwill 3,313,226 Current liabilities (1,343,880 ) Deferred tax liability (1,622,982 ) Net assets acquired $ 5,511,600
Acquisition, Pro Forma Information	(Unaudited) Pro Forma Results Three months ended March 31, 2017 Revenues $ 1,232,278 Income before income taxes $ 82,224 Basic and fully diluted earnings (loss) per share $ 0.00

Intangible Assets (Tables)

Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Amortizing Estimates Gross Intangible Assets Useful Life Carrying Amount Customer Lists 10 years $ 2,653,000 Tradenames 15 years 377,000 IP Technologies 10 years 819,000 Non-compete 5 years 464,000 4,313,000 Less: Accumulated Amortization (232,566 ) $ 4,080,434

Notes payable (Tables)

Notes payable (Tables)	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Schedule of note payable	March 31, December 31, 2018 2017 Note payable – monthly interest, 12.75% per annum, matures on September 29, 2020 $ 5,000,000 $ 5,000,000 Less discounts (411,121 ) (452,233 ) Note payable – monthly interest, 12.75% per annum, matures on September 30, 2022 2,500,000 2,500,000 Less discounts (646,157 ) (704,858 ) Subtotal 6,442,722 6,342,909 Less: current portion, net of discount $399,252 265,196 265,196 Long- term portion $ 6,177,526 $ 6,077,713
Schedule of Principal payments on maturity	Principal payments on the above notes mature as follows: Year ending December 31: 2018 $ 265,196 $ 265,196 2019 301,057 301,057 2020 5,341,766 5,341,766 2021 387,980 387,980 2022 440,443 440,443 Thereafter $ 6,736,442 $ 6,736,442

Business Segment Information (T

Business Segment Information (Table)	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Business Segment Information	The following table present selected financial information about the Company’s reportable segments for the three months ended March 31, 2018. For the three months ended March 31, 2018 Consolidated Ancillary Program Prescription Medicine Corporate Revenues $ 1,924,832 $ 1,444,060 $ 480,772 $ — Cost of Revenue 376,096 — 376,096 — Long-lived assets 7,415,872 6,395,764 1,020,108 — Income (loss) before income tax 188,996 671,897 95,523 (578,424 ) Identifiable assets 4,102,646 3,082,538 1,020,108 — Depreciation and amortization 120,179 986 — 119,193

Summary of Significant Accoun22

Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Machinery and equipment, estimated useful life	7 years
Machinery and equipment	$ 31,801	$ 19,195
Accumulated depreciation	(9,589)	(8,603)
Total property and equipment	$ 22,212	$ 10,592

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Accounting Policies [Abstract]
Obsolete inventory	$ 0	$ 0

Acquisition (Details)

Acquisition (Details) - Common Compounds Inc EzPharmaRx LLC	Sep. 29, 2017USD ($)
Cash	$ 3,600,000
1,751,580 shares of common stock issued	175,158
Note payable	2,500,000
Imputed interest	(763,558)
Total Purchase Price	$ 5,511,600

Acquisition (Details 1)

Acquisition (Details 1) - Common Compounds Inc EzPharmaRx LLC	Sep. 29, 2017USD ($)
Cash	$ 81,359
Current assets	759,710
Other non-current assets	11,167
Intangible assets	4,313,000
Goodwill	5,511,600
Current liabilities	(1,343,880)
Deferred tax liability	(1,622,982)
Net assets acquired	$ 5,511,600

Acquisition (Details 2)

Acquisition (Details 2)	3 Months Ended
	Mar. 31, 2017USD ($)$ / shares
Business Combinations [Abstract]
Revenues	$ 1,232,278
Income before income taxes	$ 82,224
Basic and fully diluted earnings (loss) per share | $ / shares	$ 0

Acquisition (Details Narrative)

Acquisition (Details Narrative) - USD ($)	1 Months Ended	12 Months Ended
	Sep. 29, 2017	Dec. 31, 2017
Acquisition costs		$ 410,000
Common Compounds Inc EzPharmaRx LLC
Purchase price	$ 6,100,000
Common stock issued for acquisition	1,751,580
Cash	$ 3,600,000
Non-interest-bearing note	2,500,000
Payable	$ 500,000
Interest on non-interest-bearing	12.75%
Deferred tax liability	$ (1,622,982)
Identifiable intangible assets acquired	$ 4,313,000
Blended tax rate	37.63%

Intangible Assets (Details)

Intangible Assets (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Intangible Assets, Gross	$ 4,313,000
Less: Accumulated Amortization	(232,566)
Intangible Assets, Net	$ 4,080,434	$ 4,196,717
Customer Lists [Member]
Estimates useful life	10 years
Intangible Assets, Gross	$ 2,653,000
Trade Names [Member]
Estimates useful life	15 years
Intangible Assets, Gross	$ 377,000
IP Technologies [Member]
Estimates useful life	10 years
Intangible Assets, Gross	$ 819,000
Noncompete [Member]
Estimates useful life	5 years
Intangible Assets, Gross	$ 464,000

Intangible Assets (Details Narr

Intangible Assets (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense related the intangible assets	$ 116,283

Notes payable (Details)

Notes payable (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Less discounts	$ (399,252)	$ (399,252)
Subtotal	6,442,722	6,342,909
Less: current portion, net of discount $399,252	265,196	265,196
Long- term portion	6,177,526	6,077,713
Notes Payable One [Member]
Note payable	5,000,000	5,000,000
Less discounts	(411,121)	(452,233)
Notes Payable Two [Member]
Note payable	2,500,000	2,500,000
Less discounts	$ (646,157)	$ (704,858)

Notes payable (Details 1)

Notes payable (Details 1) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Debt Disclosure [Abstract]
Year ending December 31 2018	$ 265,196	$ 265,196
Year ending December 31 2019	301,057	301,057
Year ending December 31 2020	5,341,766	5,341,766
Year ending December 31 2021	387,980	387,980
Year ending December 31 2022	440,443	440,443
Thereafter	$ 6,736,442	$ 6,736,442

Notes payable (Details Narrativ

Notes payable (Details Narrative) - USD ($)	1 Months Ended
	Sep. 29, 2017	Mar. 31, 2018	Dec. 31, 2017
Common stock issued		22,869,191	22,869,191
Discount		$ 399,252	$ 399,252
Loan costs		$ 6,442,722	$ 6,342,909
Lender
Financing Cost	$ 5,000,000
Interest rate	12.75%
Maturity Date	Sep. 29, 2020
Common stock issued	3,584,279
Price per Share	$ 0.10
Discount	$ 493,345
Loan costs	34,917
Promissory note	2,500,000
Common Compounds Inc EzPharmaRx LLC
Financing Cost	$ 2,500,000
Maturity Date	Sep. 30, 2022
Price per Share	$ 2
Annual payment	$ 500,000
Interest imputed rate	12.75%
Common Compounds Inc EzPharmaRx LLC | Lender
Common stock issued	3,584,279

Related Party (Details Narrativ

Related Party (Details Narrative) - USD ($)	Jan. 10, 2018	Mar. 31, 2018	Dec. 31, 2017
Mr. James. Pande [Member] | Secured Promissory [Member]
Outstanding amount		$ 0	$ 0
Mr. James. Pande [Member] | Secured Promissory [Member] | Minimum [Member]
Borrowing bear interest rate		2.90%
Mr. James. Pande [Member] | Secured Promissory [Member] | Maximum [Member]
Borrowing bear interest rate		7.50%
Mr. David Hopkins [Member]
Base Salary	$ 175,000	$ 325,000
Car allowance per month		600
Unpaid compensation expenses to officers		$ 157,000	182,000
Option granted		525,000
Option exerciseable price		$ 0.35
Term		10 years
Shareholder [Member]
Related party loan			$ 33,512

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)	1 Months Ended
	Sep. 29, 2017	Mar. 31, 2018	Dec. 31, 2017
Common stock, authorized		100,000,000	100,000,000
Common stock, par value (in dollars per share)		$ 0.001	$ 0.001
Stock issued		22,869,191	22,869,191
Preferred stock, authorized		5,000,000	5,000,000
Preferred stock, par value (in dollars per share)		$ 0.001	$ 0.001
Lender
Stock issued	3,584,279
Common Compounds Inc EzPharmaRx LLC
Value of share issued for services	$ 5,000,000
Common Compounds Inc EzPharmaRx LLC | Seller
Stock issued	1,751,580
Common Compounds Inc EzPharmaRx LLC | Lender
Stock issued	3,584,279

2015 Incentive Stock Plan (Deta

2015 Incentive Stock Plan (Details Narrative) - 2015 Stock Option Incentive Plan [Member]	3 Months Ended
	Mar. 31, 2018$ / sharesshares
Stock issued for option plan	3,000,000
Number of share issued for services	1,266,666
Option exerciseable price | $ / shares	$ 0.35

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Income tax expense	$ 51,029	$ 0
Effective tax rates	27.00%	38.50%
Federal and state net operating loss carryovers	$ 566,304
Operating Loss Carryforwards, Expiration Date	Dec. 31, 2031
Description of utilization of NOLs	Utilization of the NOLs may be subject to limitation under the Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under regulations.
Change in tax rate	21.00%

Business Segment Information (D

Business Segment Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenues	$ 1,924,832
Cost of Revenue	376,096
Long-lived assets	7,415,872
Income (loss) before income tax	188,996	$ (21,119)
Identifiable assets	4,102,646
Depreciation and amortization	120,179
Ancillary Program [Member]
Revenues	1,444,060
Cost of Revenue
Long-lived assets	6,395,764
Income (loss) before income tax	671,897
Identifiable assets	3,082,538
Depreciation and amortization	986
Prescription Medicine [Member]
Revenues	480,772
Cost of Revenue	376,096
Long-lived assets	1,020,108
Income (loss) before income tax	95,523
Identifiable assets	1,020,108
Depreciation and amortization
Corporate [Member]
Revenues
Cost of Revenue
Long-lived assets
Income (loss) before income tax	(578,424)
Identifiable assets
Depreciation and amortization	$ 119,193

Business Segment Information 38

Business Segment Information (Details Narrative)	3 Months Ended
	Mar. 31, 2018Number
Segment Reporting [Abstract]
Number of reportable segment	1