| Summary of Significant Accounting Policies | NOTE
2 – Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in the United States, and include the Company and its
wholly-owned subsidiary. All significant inter-company accounts and transactions have been eliminated. 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. Cash
and cash equivalents The
Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or
less to be cash equivalents. Concentration
of Risk Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company maintains
its principal cash balances in various financial institutions. These balances are insured by the Federal Deposit Insurance Corporation
(“FDIC”) up to $250,000. At December 31, 2019 and 2018, $1,289,897 and $1,453,132 were in excess of the FDIC insured
limit, respectively. Accounts
Receivable Accounts receivable are stated at the amount the Company expects to collect from customers. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management has rewarded an allowance for doubtful accounts in the amounts of $5,040 and $0 at December 31, 2019 and 2018 respectively. During 2019, the Company recorded bad debt expense in the amount of $2,146. Management has written off a one-time bad debt customer receivables in the amount of $40,996 during the year ending December 31, 2018. Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. If the financial condition of the Companys customers was to deteriorate and adversely affecting their ability to make payments, additional allowances would be required. Revenue
Recognition In
May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
No. 2014-09, Revenue from Contracts with Customers (Topic 606). The ASU and all subsequently issued clarifying ASUs replaced most
existing revenue recognition guidance in U.S. GAAP. The ASU also required expanded disclosures relating to the nature amount,
timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new standard
effective January 1, 2018, the first day of the Company’s fiscal year. For these reasons, the adoption of this ASU did not
have a significant impact on the Company’s financial statements. Effective
January 1, 2018, the Company adopted guidance issued by the FASB regarding recognizing revenue from contracts with customers.
The revenue recognition policies as enumerated below reflect the Company's accounting policies effective January 1, 2018, which
did not have a materially different financial statement result than what the results would have been under the previous accounting
policies for revenue recognition. CCI’s
revenue results from the consulting services agreements, which included providing services to physicians for billing insurance
companies. The Company has determined the performance obligations in these consulting service agreements relate to the satisfaction
of billing the insurance company on behalf of the physicians. CCI remits billings to insurance companies on behalf of the physicians,
collect the proceeds and remits an agreed upon percentage amount to the physician. The amounts reported as revenue are recorded
net of amounts remitted. The Company follows Staff Accounting Bulletin (“SAB”) No. 104, which states that the revenue
is not earned until the company has been paid by the insurance company at which time it becomes realized or realizable. SCLLC’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. 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
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. The following tables disaggregate revenue by major source for the years ended December 31, 2019 and 2018:
Year
Ended December 31, 2019 Ancillary Program OTC
and Prescription Medication Corporate
(1) Total
Product
Sales $ — $ 674,853 $ — $ 674,853
Consulting
Services 2,792,808 — — 2,792,808
Total
Revenue $ 2,792,808 $ 674,853 $ — $ 3,467,661
Year
Ended December 31, 2018 Ancillary
Program OTC
and Prescription Medication Corporate
(1) Total
Product
Sales $ — $ 1,353,571 $ — $ 1,353,571
Consulting
Services 4,930,352 — — 4,930,352
Total
Revenue $ 4,930,352 $ 1,353,571 $ — $ 6,283,923
(1) The Company's corporate
group is non-revenue generating and supports our two reportable segments Ancillary Program and Prescription. 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 net 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. During the year ended December 31, 2019
and 2018, the Company recorded no loss due to management’s estimate of obsolete inventory, respectively. 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:
December
31,
2019 2018
Machinery
and equipment – 7 years $ 44,497 $ 52,934
Accumulated
depreciation (20,626 ) (15,565 )
Total
property and equipment $ 23,871 $ 37,369 Intangible
Assets Intangible
assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360, “Property,
Plant, and Equipment,” Intangible
assets are tested annually for impairment and are tested for impairment more frequently if events and circumstances indicate that
the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the asset group exceeds
its fair value. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal
factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a
regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability
test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows
if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the
intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of
the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period identified. The
Company calculates fair value of our intangible assets as the present value of estimated future cash flows the Company expects
to generate from the asset using a risk-adjusted discount rate. In determining our estimated future cash flows associated with
our intangible assets, The Company uses estimates and assumptions about future revenue contributions, cost structures and remaining
useful lives of the asset (asset group). During the third quarter 2019, the Company reviewed its customer lists and impaired
approximately 50% of its value, or $1,061,200. Goodwill Goodwill
is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired, and
liabilities assumed in a business acquisition. In accordance with ASC 350, “Intangibles—Goodwill and Other,”
In
January 2017, the FASB issued ASU 2017-04 that eliminates step 2 from the goodwill impairment test. The Company
made the election to early adopt ASU 2017-04 as of January 1, 2018 and the standard was applied on a prospective basis, as
required. In accordance with ASC 350-25-35-3, An entity may first assess qualitative factors, as described in
paragraphs 350-20-35-3A through 35-3G, to determine whether it is necessary to perform the quantitative goodwill impairment
test. Management reviewed the following qualitative factors around its goodwill and believes that the fair value of its
investment in the Company exceeds its carrying amount at December 31, 2019. The
Company reviews the goodwill allocated to each of our reporting units for possible impairment annually as of December 31 and whenever
events or changes in circumstances indicate carrying amount may not be recoverable. When assessing goodwill for impairment, the
Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads
to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If,
after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value
of a reporting unit is less than its carrying amount, then the Company performs a two-step impairment test. If the Company concludes
otherwise, then no further action is taken. The Company also has the option to bypass the qualitative assessment and only perform
a quantitative assessment, which is the first step of the two-step impairment test. In the two-step impairment test, the Company
measures the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated
fair value of the reporting unit. In
assessing the qualitative factors, the Company assesses relevant events and circumstances that may impact the fair value and the
carrying amount of the reporting unit. The identification of relevant events and circumstances, and how these may impact a reporting
unit’s fair value or carrying amount involve significant judgments and assumptions. The judgment and assumptions include
the identification of macroeconomic conditions, industry, and market considerations, cost factors, overall financial performance
and share price trends, and making the assessment as to whether each relevant factor will impact the impairment test positively
or negatively and the magnitude of any such impact. The
carrying amount of each reporting unit is determined based upon the assignment of our assets and liabilities, including existing
goodwill and other intangible assets, to the identified reporting units. Where an acquisition benefits only one reporting unit,
the Company allocates, as of the acquisition date, all goodwill for that acquisition to the reporting unit that will benefit.
Where the Company has had an acquisition that benefited more than one reporting unit, The Company has assigned the goodwill to
our reporting units as of the acquisition date such that the goodwill assigned to a reporting unit is the excess of the fair value
of the acquired business, or portion thereof, to be included in that reporting unit over the fair value of the individual assets
acquired and liabilities assumed that are assigned to the reporting unit. If
the carrying amount of a reporting unit is in excess of its fair value, an impairment may exist, and the Company must perform
the second step of the impairment analysis to measure the amount of the impairment loss, by allocating the reporting unit’s
fair value to its assets and liabilities other than goodwill, comparing the carrying amount of the goodwill to the resulting implied
fair value of the goodwill, and recording an impairment charge for any excess. 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. Advertising Advertising
and marketing expenses are charged to operations as incurred. For the years ended December 31, 2019 and 2018, advertising costs
and marketing expenses were $18,727 and $31,166, respectively. Income
Taxes The
company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.”
Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and
(ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s
financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the
enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available
positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. ASC
Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements
and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a
tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification,
interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions
for any of the reporting periods presented. 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. Accounting
for Business Combinations In
accordance with ASC Topic 805, “Business Combinations,” when accounting for business combinations we are required
to recognize the assets acquired, liabilities assumed, contractual contingencies, noncontrolling interests and contingent consideration
at their fair value as of the acquisition date. These items are recorded on our consolidated balance sheets as of the respective
acquisition dates based upon their estimated fair values at such dates. The results of operations of acquired businesses are included
in the consolidated statements of operations since their respective acquisition dates. The
purchase price allocation process requires management to make significant estimates and assumptions with respect to intangible
assets, estimated contingent consideration payments and/or pre-acquisition contingencies, all of which ultimately affect the fair
value of goodwill established as of the acquisition date. Goodwill acquired in business combinations is assigned to the reporting
unit(s) expected to benefit from the combination as of the acquisition date and is then subsequently tested for impairment at
least annually. If the fair value of the net assets acquired exceeds the purchase price consideration, we record a gain on bargain
purchase. However, in such a case, before the measurement period closes we perform a reassessment to reconfirm whether we have
correctly identified all of the assets acquired and all of the liabilities assumed as of the acquisition date. As
part of our accounting for business combinations we are required to estimate the useful lives of identifiable intangible assets
recognized separately from goodwill. The useful life of an intangible asset is the period over which the asset is expected to
contribute directly or indirectly to the future cash flows of the acquired business. An intangible asset with a finite useful
life shall be amortized; an intangible asset with an indefinite useful life shall not be amortized. We base the estimate of the
useful life of an intangible asset on an analysis of all pertinent factors, in particular, all of the following factors with no
one factor being more presumptive than the other:
● The
expected use of the asset.
● The
expected useful life of another asset or a group of assets to which the useful life of the intangible asset may relate.
● Any
legal, regulatory, or contractual provisions that may limit the useful life.
● Our
own historical experience in renewing or extending similar arrangements, consistent with our intended use of the asset, regardless
of whether those arrangements have explicit renewal or extension provisions.
● The
effects of obsolescence, demand, competition, and other economic factors.
● The
level of maintenance expenditures required to obtain the expected future cash flows from the asset. If
no legal, regulatory, contractual, competitive, economic, or other factors limit the useful life of an intangible asset to the
reporting entity, the useful life of the asset shall be considered to be indefinite. The term indefinite does not mean the same
as infinite or indeterminate. The useful life of an intangible asset is indefinite if that life extends beyond the foreseeable
horizon—that is, there is no foreseeable limit on the period of time over which it is expected to contribute to the cash
flows of the acquired business. Although
we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based in part on historical
experience and information obtained from the management of the acquired entity and are inherently uncertain. Examples of critical
estimates in accounting for acquisitions include but are not limited to:
● future
expected cash flows from sales of products and services and related contracts and agreements;
● discount
and long-term growth rates; and
● the
estimated fair value of the acquisition-related contingent consideration, which is performed using a probability-weighted
income approach based upon the forecasted achievement of post-acquisition pre-determined targets; Recent
Accounting Pronouncements Intangibles
– Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In
January 2017, the FASB issued ASU 2017-04 that simplifies the subsequent measurement of goodwill by eliminating
the second step of the goodwill impairment test. Under the new standard, goodwill impairment should be recognized based on the
amount by which the carrying amount of a reporting unit exceeds its fair value, but should not exceed the total amount of goodwill
allocated to the reporting unit. The amendments in this accounting standard update are to be applied prospectively and are effective
for interim or annual goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted
for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company made the election
to early adopt ASU 2017-04 as of January 1, 2018 and the standard was applied on a prospective basis, as required. Compensation—Stock
Compensation In
May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,”
that provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply
modification accounting. The new guidance became effective for the Company on January 1, 2018 and was applied on a prospective
basis, as required. The adoption of this standard did not have an impact on our consolidated financial statements or the related
disclosures. Income
Statement – Reporting Comprehensive Income 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 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 of 2017 (the “2017 Act”). The ASU must be applied either in the period of
adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in
the 2017 Act is recognized. The Company made the election to early adopt ASU 2018-02 as of January 1, 2018, the standard did not
have an impact on our consolidated financial statements. Leases In
February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASC 842”) that amends the accounting
guidance on leases for both lessees and lessors. The new standard establishes a right-of-use (“ROU”) model that requires
a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases
will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income
statement. The FASB also subsequently issued amendments to the standard, including providing an additional and optional transition
method to adopt the new standard, described below, as well as certain practical expedients related to land easements and lessor
accounting. The amendments in this accounting standard update are effective for the Company on January 1, 2019, with early adoption
permitted. The Company will adopt this accounting standard update effective January 1, 2019. The
accounting standard update originally required the use of a modified retrospective approach reflecting the application of the
standard to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial
statements with the option to elect certain practical expedients. A subsequent amendment to the standard provides an additional
and optional transition method that allows entities to initially apply the new leases standard at the adoption date and recognize
a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s
reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue
to be in accordance with ASC Topic 840 if the optional transition method is elected. The Company plans to adopt the standard using
the optional transition method with no restatement of comparative periods and a cumulative effect adjustment, if any, recognized
as of the date of adoption. The Company does not expect that this standard to have a material effect on its consolidated financial
statements due to the recognition of new ROU assets and lease liabilities for lessee activities. As
part of the implementation process, the Company assessed its lease arrangements and evaluated practical expedient and accounting
policy elections to meet the reporting requirements of this standard. 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. The new standard provides a
number of optional practical expedients in transition. The Company expects to elect the ‘package of practical expedients’
which permits us not to reassess under the new standard the prior conclusions about lease identification, lease classification,
and initial direct costs. The Company does not expect to elect the use-of-hindsight or the practical expedient pertaining to land
easements; the latter not being applicable to the Company. Consequently, on adoption, the Company expected to recognize additional
operating liabilities ranging from $100,000 to $200,000, with corresponding ROU assets of approximately the same amount based
on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. On
July 29, 2019, the Company terminated its Arkansas lease effect October 31, 2019 in accordance with Section 8 of their First Amendment.
On October 6, 2019, the Company entered into a new one year lease in Arkansas beginning on November 1, 2019 with monthly rent
in the amount of $1,210 per month. The
new standard also provides practical expedients for an entity’s ongoing accounting. The Company currently expects to elect
the short-term lease recognition exemption for all leases that qualify. As a result, for those leases that qualify, the Company
will not recognize ROU assets or lease liabilities, including for existing short-term leases of those assets in transition. The
Company also currently expects to elect the practical expedient to not separate lease and non-lease components for the majority
of its leases as both lessee and lessor. |
