| SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies
applied in the presentation of the accompanying consolidated financial statements follows: Basis of Presentation The accompanying consolidated financial statements
have been prepared in conformity with GAAP. All amounts referred to in the notes to the consolidated
financial statements are in United States Dollars ($) unless stated otherwise. Use of Estimates The preparation of the consolidated financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported
amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Significant
estimates include assumptions about fair valuation of acquired intangible assets, cash flow and fair value assumptions associated with
measurements of contingent acquisition consideration and impairment of intangible assets and goodwill, valuation of inventory, collection
of accounts receivable, the valuation and recognition of stock-based compensation expense, valuation allowance for deferred tax assets,
borrowing rate consideration for right-of-use (“ROU”) lease assets including related lease liability and useful life of fixed
assets. Revenue Recognition Patient service revenue Patient service revenue is earned for patient
services provided to patients at our NWC facility, functional medicine services provided to patients at our NCFM facility, and physical
therapy services provided to patients at our BTG facility. Patient service revenue is reported at the amount that reflects the consideration
to which the Company expects to be entitled in exchange for providing patient care. These amounts are due from patients and third-party
payors (including health insurers and government programs) and include variable consideration for retroactive revenue adjustments due
to settlement of audits, reviews, and investigations. Generally, the Company bills patients and third-party payors within days after the
services are performed and/or the patient is discharged from the facility. Revenue is recognized as performance obligations are satisfied. Performance obligations are determined based on
the nature of the services provided by the Company. Revenue for performance obligations satisfied over time includes revenue from NCFM
Medical Memberships and Concierge contracts, NWC annual administration fees, and BTG physical therapy bundles. Revenue from NCFM Medical
Memberships and Concierge contracts and NWC annual administration fees, which include bundled products and services that have substantially
the same pattern of transfer to the customer, is recognized over the period of delivery, which is the same as the period of the contract
(typically, one year). Revenue from prepaid BTG physical therapy bundles, for which performance obligations are satisfied over time as
visits are incurred, is recognized based on actual visits incurred in relation to total expected visits. At inception of such contracts,
the Company recognizes contract liabilities for the value of services to be provided and, where applicable, contract assets for recoverable
amounts incurred to obtain a customer contract that would not have incurred if the contract had not been obtained. The Company believes
that these methods provide a faithful depiction of the transfer of services over the term of the performance obligations based on the
inputs needed to satisfy the obligation. Revenue for performance obligations satisfied
at a point in time, which includes all patient service revenue other than NCFM Medical Memberships and Concierge contracts, NWC annual
administration fees, and BTG physical therapy bundles, is recognized when goods or services are provided at the time of the patient visit,
and at which time the Company is not required to provide additional goods or services to the patient. The Company determines the transaction price based
on standard charges for goods and services provided, reduced by contractual adjustments provided to third-party payors, discounts provided
to uninsured patients in accordance with the Company’s policy, and/or implicit price concessions provided to uninsured patients.
Estimates of contractual adjustments and discounts require significant judgment and are based on the Company’s current contractual
agreements, its discount policies, and historical experience. The Company determines its estimate of implicit price concessions based
on its historical collection experience with this class of patients. There were no material changes during the three months ended March
31, 2023 or 2022 to the judgments applied in determining the amount and timing of patient service revenue. Agreements with third-party payors typically provide
for payments at amounts less than established charges. A summary of the payment arrangements with major third-party payors follows:
● Medicare: Certain inpatient acute care services are paid at prospectively determined rates per discharge
based on clinical, diagnostic and other factors. Certain services are paid based on cost-reimbursement methodologies subject to certain
limits. Physician services are paid based upon established fee schedules. Outpatient services are paid using prospectively determined
rates;
● Medicaid: Reimbursements for Medicaid services are generally paid at prospectively determined rates per
discharge, per occasion of service, or per covered member.
● Other: Payment agreements with certain commercial insurance carriers, health maintenance organizations,
and preferred provider organizations provide for payment using prospectively determined rates per discharge, discounts from established
charges, and prospectively determined daily rates. Laws and regulations concerning government programs,
including Medicare and Medicaid, are complex and subject to varying interpretation. As a result of investigations by governmental agencies,
various health care organizations have received requests for information and notices regarding alleged noncompliance with those laws and
regulations, which, in some instances, have resulted in organizations entering into significant settlement agreements. Compliance with
such laws and regulations may also be subject to future government review and interpretation as well as significant regulatory action,
including fines, penalties, and potential exclusion from the related programs. There can be no assurance that regulatory authorities will
not challenge the Company’s compliance with these laws and regulations, and it is not possible to determine the impact, if any,
such claims or penalties would have upon the Company. In addition, the contracts the Company has with commercial payors also provide for
retroactive audit and review of claims. Settlements with third-party payors for retroactive
adjustments due to audits, reviews or investigations are considered variable consideration and are included in the determination of the
estimated transaction price for providing patient care. These settlements are estimated based on the terms of the payment agreement with
the payor, correspondence from the payor and the Company’s historical settlement activity, including an assessment to ensure that
it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated
with the retroactive adjustment is subsequently resolved. Estimated settlements are adjusted in future periods as adjustments become
known, or as years are settled or are no longer subject to such audits, reviews, and investigations. The Company also provides services to uninsured
patients, and offers those uninsured patients a discount, either by policy or law, from standard charges. The Company estimates the transaction
price for patients with deductibles and coinsurance and from those who are uninsured based on historical experience and current market
conditions. The initial estimate of the transaction price is determined by reducing the standard charge by any contractual adjustments,
discounts, and implicit price concessions. Subsequent changes to the estimate of the transaction price are generally recorded as adjustments
to patient service revenue in the period of the change. Patient services provided by NCFM, BTG and AEU are provided on a cash basis and
not submitted through third party insurance providers. Product and Other Revenue Revenue is derived from the distribution of medical
products that are sourced from a third party. The Company recognizes revenue at a point in time when title transfers to customers and
the Company has no further obligation to provide services related to such products, which occurs when the product ships. The Company is
the principal in its revenue transactions and as a result revenue is recorded on a gross basis. The Company has determined that it controls
the ability to direct the use of the product provided prior to transfer to a customer, is primarily responsible for fulfilling the promise
to provide the product to its customer, has discretion in establishing prices, and ultimately controls the transfer of the product to
the customer. Shipping and handling costs billed to customers are recorded in revenue. Contract liabilities related to product revenue
are recognized when payment is received but for which the Company has not met its product fulfillment performance obligation. Sales are made inclusive of sales tax, where such
sales tax is applicable. Sales tax is applicable on sales made in the state of Florida, where the Company has physical nexus. The Company
has determined that it does not have economic nexus in any other states. The Company does not sell products outside of the United States. The Company maintains a return policy that allows
customers to return a product within a specified period of time prior to and subsequent to the expiration date of the product. The Company
analyzes the need for a product return allowance at the end of each period based on eligible products. Cash and Cash Equivalents For financial statement purposes, the Company
considers all highly liquid investments with original maturities of six months or less to be cash and cash equivalents. Accounts at each
institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company had no cash balances
in excess of the FDIC insured limit as of March 31, 2023 or December 31, 2022, respectively. Accounts Receivable Trade receivables related to NWC services billed
to third party payors are carried at the estimated collectible amount. Trade credit is generally extended on a short-term basis; thus
trade receivables do not bear interest. Trade accounts receivable are periodically evaluated for collectability based on past collectability
of the insurance companies, government agencies, and customers’ accounts receivable during the related period which generally approximates
48-52% of total billings. Trade accounts receivable are recorded at this net amount. As of March 31, 2023 and December 31, 2022, the Company’s
gross patient services accounts receivable were $75,623 and $98,180, respectively, and net patient services accounts receivable were $48,966
and $49,777, respectively, based upon net reporting of accounts receivable. The Company also had consulting accounts receivable of $-0-and
$22,506 as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023 and December 31, 2022, the Company’s allowance
for doubtful accounts was $-0- and $-0-, respectively. Other Comprehensive Income The Company does not have any activity that results
in Other Comprehensive Income. Leases Upon transition under ASU 2016-02, the Company
elected the suite of practical expedients as a package applied to all of its leases, including (i) not reassessing whether any expired
or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii)
not reassessing initial direct costs for any existing leases. For new leases, the Company will determine if an arrangement is or contains
a lease at inception. Leases are included as ROU assets within other assets and ROU liabilities within accrued expenses and other liabilities
and within other long-term liabilities on the Company’s consolidated balance sheets. ROU assets and liabilities are recognized at commencement
date based on the present value of lease payments over the lease term. The Company’s leases do not provide an implicit rate. The
Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of
lease payments. The ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is
recognized on a straight-line basis over the lease term. See Note 8 for more complete details on balances as of the reporting periods
presented herein. Inventory Inventory consisting of supplements, is stated
at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. Outdated inventory is directly charged
to cost of goods sold. Goodwill and Intangible Assets Goodwill is recognized as the excess cost of an
acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized, but rather tested
for impairment on an annual basis and more often if circumstances require. Impairment losses are recognized whenever the implied fair
value of goodwill is less than its carrying value. The Company recognizes an acquired intangible
apart from goodwill whenever the intangible arises from contractual or other legal rights, or whenever it can be separated or divided
from the acquired entity and sold, transferred, licensed, rented or exchanged, either individually or in combination with a related contract,
asset or liability. Such intangibles are amortized over their estimated useful lives unless the estimated useful life is determined to
be indefinite. Amortizable intangible assets are being amortized primarily over useful lives of five years. The straight-line method of
amortization is used as it has been determined to approximate the use pattern of the assets. Impairment losses are recognized if the carrying
amount of an intangible that is subject to amortization is not recoverable from expected future cash flows and its carrying amount exceeds
its fair value. No impairment charges were recognized during the three months ended March 31, 2023 or 2022. Concentrations of Credit Risk The Company’s financial instruments that
are exposed to a concentration of credit risk are cash and accounts receivable. There are no patients/customers that represent 10% or
more of the Company’s revenue or accounts receivable. Generally, the Company’s cash and cash equivalents are in checking accounts.
The Company relies on a sole supplier for the fulfillment of substantially all of its product sales made through MOD. Property and Equipment Property and equipment are stated at cost. When
retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the
net difference less any amount realized from disposition, is reflected in earnings. For consolidated financial statement purposes, property
and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives of 5 to 7 years. The
cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. The Company examines the possibility of decreases
in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of
the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. Fair Value of Assets and Liabilities Fair value is the price that would be received
from the sale of an asset or paid to transfer a liability (i.e. an exit price) in the principal or most advantageous market in an orderly
transaction between market participants. In determining fair value, the accounting standards have established a three-level hierarchy
that distinguishes between (i) market data obtained or developed from independent sources (i.e., observable data inputs) and (ii) a reporting
entity’s own data and assumptions that market participants would use in pricing an asset or liability (i.e., unobservable data inputs).
Financial assets and financial liabilities measured and reported at fair value are classified in one of the following categories, in order
of priority of observability and objectivity of pricing inputs:
● Level 1 – Fair value based on quoted prices in active
markets for identical assets or liabilities;
● Level 2 – Fair value based on significant directly
observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market
data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive
markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data;
● Level 3 – Fair value based on prices or valuation techniques that require significant unobservable
data inputs. Inputs would normally be a reporting entity’s own data and judgments about assumptions that market participants would
use in pricing the asset or liability. The fair value measurement level for an asset
or liability is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques should
maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a binomial lattice option
pricing model to estimate the fair value of options, warrants, beneficial conversion features and other Level 3 financial assets and liabilities.
The Company believes that the binomial lattice model results in the best estimate of fair value because it embodies all of the requisite
assumptions (including the underlying price, exercise price, term, volatility, and risk-free interest-rate) necessary to fairly value
these instruments and, unlike less sophisticated models like the Black-Scholes model, it also accommodates assumptions regarding investor
exercise behavior and other market conditions that market participants would likely consider in negotiating the transfer of such an instruments. Stock-Based Compensation The Company accounts for stock-based compensation
to employees and nonemployees under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
718 “Compensation – Stock Compensation” using the fair value-based method. Under this method, compensation cost is measured
at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This
guidance establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services.
It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value
of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. The Company uses a binomial
lattice pricing model to estimate the fair value of options and warrants granted. Income Taxes The Company follows Accounting Standards Codification
subtopic 740-10, Income Taxes (“ASC 740-10”) for recording the provision for income taxes. Deferred tax assets and liabilities
are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted
marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or
benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely
than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred
tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision
for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and
expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current,
depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that
are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences
are expected to reverse and are considered immaterial. No income tax has been provided for the three months ended March 31, 2023 because
the Company has sufficient operating loss carryforwards to offset any net income, including income from capital gains related to the disposal
of discontinued operations, that it may realize in the full year 2023. Moreover, the Company expects to generate a loss for the full year
2023 inclusive of the gain from disposal of discontinued operations recognized in the three months ended March 31, 2023. No income tax
was provided for the three months ended March 31, 2022 since the Company sustained a loss in that period. Due to the uncertainty of the
utilization and recoverability of the loss carry-forwards and other deferred tax assets, management has determined a full valuation allowance
for deferred tax assets, since it is more likely than not that the deferred tax assets will not be realizable. Recurring Fair Value Measurements The carrying value of the Company’s financial
assets and financial liabilities is their cost, which may differ from fair value. The carrying value of cash held as demand deposits,
money market and certificates of deposit, marketable investments, accounts receivable, accounts payable, and accrued liabilities approximated
their fair value. Deemed Dividend Through December 31, 2022, the Company incurred
a deemed dividend on Series B Convertible Preferred Voting Stock (the “Series B Preferred”). As the intrinsic price per share
of the Series B Preferred was less than the deemed fair value of the Company’s common stock on the date of issuance of the Series
B Preferred, the Series B Preferred contained a beneficial conversion feature as described in FASB ASC 470-20, “Debt with Conversion
and Other Options.” The difference in the stated conversion price and estimated fair value of the common stock was accounted for
as a beneficial conversion feature and affected income or loss available to common stockholders for purposes of earnings per share available
to common stockholders. The Company may incur further deemed dividends on certain of its warrants containing a down-round provision equal
to the difference in fair value of the warrants before and after the triggering of the down round adjustment. Net Income (Loss) per Share Basic net income (loss) per common
share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.
During the three months ended March 31, 2023 and 2022, the Company reported a loss from continuing operations. As a result, diluted net
income (loss) per common share is computed in the same manner as basic net income (loss) per common share, even though the Company had
net income in the three months ended March 31, 2023 after adjusting for discontinued operations. The Company excluded all outstanding
stock options, warrants and other dilutive securities from the calculation of diluted net loss per common share because inclusion of
these securities would have been anti-dilutive. As of March 31, 2023 and December 31, 2022, potentially dilutive securities were comprised
of (i) 67,742,315 and 68,109,094 warrants outstanding, respectively, (ii) 5,166,732 and 5,222,982 stock options outstanding, respectively,
(iii) 1,344,087 and 1,651,435 unissued shares subject to future vesting requirements granted pursuant to the Company’s Employee
Incentive Plan, (iv) 2,407,664 and 2,585,542 common shares issuable that are earned but not paid under consulting and director compensation
arrangements, and (v) 13,750,000 and 13,750,000 shares of common stock issuable upon conversion of Series B Preferred. Common stock awards The Company grants common stock awards to non-employees
in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or
the fair value of the awards granted, whichever is more reliably measurable. The fair value measurement date of these awards is generally
the date the performance of services is complete. The fair value of the awards is recognized on a straight-line basis as services are
rendered. The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded
on the consolidated statement of operations in the same manner and charged to the same account as if such settlements had been made in
cash. From time to time, the Company also issues stock awards settleable in a variable number of common shares. Such awards are classified
as liabilities until such time as the number of shares underlying the grant is determinable. Warrants In connection with certain
financing, consulting and collaboration arrangements, the Company has issued warrants to purchase shares of its common stock. The outstanding
warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards.
The Company measures the fair value of the awards using the Black-Scholes pricing model as of the measurement date. The Company uses a
binomial lattice pricing model to estimate the fair value of compensation options and warrants. Warrants issued in conjunction with the
issuance of common stock are initially recorded at fair value as a reduction in additional paid-in capital of the common stock issued.
All other warrants are recorded at fair value as expense over the requisite service period, or at the date of issuance, if there is not
a service period. Certain of the Company’s warrants include a so-called down round provision. The Company accounts for such provisions
pursuant to ASU No. 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity and Derivatives and Hedging Business Segments The Company uses the “management approach”
to identify its reportable segments. The management approach designates the internal organization used by management for making operating
decisions and assessing performance as the basis for identifying the Company’s reportable segments. Using the management approach,
the Company determined that it has three operating segments: Health Services (multi-specialty medical group including the NWC GYN practice,
the NCFM functional medicine practice, the BTG physical therapy practice, and the AEU cosmetic services practice), Digital Healthcare
(develops and markets the “HealthLynked Network,” an online personal medical information and record archive system), and Medical
Distribution (comprised of the operations of MOD, a virtual distributor of discounted medical supplies selling to both consumers and medical
practices). The Company’s ACO/MSO segment was sold on
January 17, 2023. As described in further detail in Note 4, “Discontinued Operations,” this unit’s assets and liabilities
are classified as held for sale as of December 31, 2022 and the unit’s results of operations are classified as “Income (loss)
from operations of discontinued operations” in the three months ended March 31, 2023 and 2022. Recently Adopted Pronouncements In March 2020, the FASB issued ASU 2020-03, “Codification
Improvements to Financial Instruments”: The amendments in this update are to clarify, correct errors in, or make minor improvements
to a variety of ASC topics. The changes in ASU 2020-03 are not expected to have a significant effect on current accounting practices.
The ASU improves various financial instrument topics in the Codification to increase stakeholder awareness of the amendments and to expedite
the improvement process by making the Codification easier to understand and easier to apply by eliminating inconsistencies and providing
clarifications. The ASU is effective for smaller reporting companies for fiscal years beginning after December 15, 2022 with early application
permitted. The Company adopted this standard for the year ended December 31, 2023. The adoption did not have a material effect on the
Company’s consolidated financial statements. In October 2021, the FASB issued guidance which
requires companies to apply Topic 606, Revenue from Contracts with Customers No other new accounting
pronouncements were issued or became effective in the period that had, or are expected to have, a material impact on our consolidated
Financial Statements. |
