| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
accompanying unaudited condensed consolidated financial statements of the Company (“Financial Statements”) have been prepared
in accordance with GAAP for interim financial statements and with the instructions to Form 10-Q and Regulation S-X of the United States
Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting
principles generally accepted in the United States of America for annual financial statements. In
the opinion of management, the accompanying 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 September 30, 2021, and the results of operations
and cash flows for the periods presented. The results of operations for the nine months ended September 30, 2021, are not necessarily
indicative of the operating results for the full fiscal year or any future period. These condensed consolidated Financial Statements
should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual
Report on Form 10-K filed with the SEC on March 1, 2021 and Current Report on Form 8-K on June 2, 2021. As of April 30, 2021, we had
discontinued operations reflected in the accompanying condensed consolidated Financial Statements. As a result of the Plan of Merger
completed on March 23, 2021 (see NOTE 3) we have changed our year end reporting period from November to December. Capital
Requirements, Liquidity and Going Concern Considerations These
condensed consolidated Financial Statements are prepared using the generally accepted accounting principles applicable to a going concern,
which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Although we had cash and
accounts receivable in the amount of approximately $ 11.4 6.5 20.6 6.9 As
a result of these factors, we determined it was necessary to review our cash flow for 2021 and an overall analysis of market trends to
determine whether or not we have sufficient liquidity to continue as a going concern for a period of at least twelve months from the
date of this Quarterly Report. We also determined it was necessary to take certain corporate actions, including reducing discretionary
expenses (and reduced reliance on agency staffing), improving revenue (including added Therapy and Rehab services), and raising additional
capital, in order to ensure we have sufficient liquidity to continue as a going concern for a period of at least twelve months from the
date of this Quarterly Report. During
the three months ended September 30, 2021 we sold 5.0
million
shares for an aggregate total of $ 5.0
million. This capital raise will be used for
additional growth through acquisitions and for working capital. However, no assurances can be given that we will be successful. If management
is not able to timely and successfully raise additional capital and/or refinance indebtedness, the implementation of the Company’s
business plan, financial condition and results of operations will be materially affected. Basis
of Consolidation These
condensed consolidated Financial Statements include the accounts of the Company and the wholly-owned subsidiaries, Banyan Pediatric Care
Centers – OPS, LLC, Banyan Pediatric Care Centers – St. Petersburg, LLC, Banyan Pediatric Care Centers, - Pasco, LLC and
Banyan Pediatric Care Centers – Sarasota, LLC and the discontinued operations of Assisted 2 Live, Inc., the wholly owned subsidiary
that was discontinued as of April 30, 2021. All material intercompany balances and transactions have been eliminated. The condensed consolidated
Financial Statements also include the accounts of the Trillium Subsidiaries from June 10, 2021, the effective date of the transaction
with Trillium. Use
of Estimates and Assumptions The
preparation of the condensed consolidated 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 date of the condensed
consolidated financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses
during the reporting period. Actual results could differ from these good faith estimates and judgments. Cash
and Cash Equivalents The
Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. The Company had
no Accounts
Receivable Accounts
receivable primarily consists of amounts due from third-party payers (non-governmental), governmental payers and private pay patients
and is recorded net of contractual allowances and reserves for doubtful accounts. The Company’s ability to collect outstanding
receivables is critical to its results of operations and cash flows. Accordingly, accounts receivable reported in the Company’s
Financial Statements is recorded at the net amount expected to be received. The Company’s primary collection risks are (i) the
risk of overestimation of net revenues at the time of billing that may result in the Company receiving less than the recorded receivable,
(ii) the risk of non-payment as a result of commercial insurance companies’ denial of claims, (iii) the risk that patients will
fail to remit insurance payments to the Company when the commercial insurance company pays out-of-network claims directly to the patient,
(iv) resource and capacity constraints that may prevent the Company from handling the volume of billing and collection issues in a timely
manner, (v) the risk that patients do not pay the Company for their self-pay balances (including co-pays, deductibles and any portion
of the claim not covered by insurance) and (vi) the risk of non-payment from uninsured patients. The
Company’s accounts receivable from third-party payers are recorded net of estimated contractual adjustments and allowances from
third-party payers, which are estimated based on the historical trend of the Company’s facilities’ cash collections and contractual
write-offs, accounts receivable aging, established fee schedules, relationships with payers and procedure statistics. While changes in
estimated reimbursement from third-party payers remain a possibility, the Company expects that any such changes would be minimal and,
therefore, would not have a material effect on the Company’s financial condition or results of operations. The Company’s
collection policies and procedures are based on the type of payor, size of claim and estimated collection percentage for each patient
account. The Company analyzes accounts receivable at each of the facilities to ensure the proper collection and aged category. The operating
systems generate reports that assist in the collection efforts by prioritizing patient accounts. Collection efforts include direct contact
with insurance carriers or patients and written correspondence. Allowance
for Doubtful Accounts, Contractual and Other Discounts Management
estimates the allowance for contractual and other discounts based on its historical collection experience and contracted relationship
with the payers. The services authorized and provided and related reimbursement are often subject to interpretation and negotiation that
could result in payments that differ from the Company’s estimates. The Company’s allowance for doubtful accounts is based
on historical experience, but management also takes into consideration the age of accounts, creditworthiness and current economic trends
when evaluating the adequacy of the allowance for doubtful accounts. An account may be written-off only after the Company has pursued
collection efforts or otherwise determines an account to be uncollectible. Uncollectible balances are written-off against the allowance.
Recoveries of previously written-off balances are credited to income when the recoveries are made. COVID-19
Pandemic and CARES Act Funding COVID-19
Pandemic. In January 2020, the Secretary of the U.S. Department of Health and Human Services (“HHS”) declared a national
public health emergency due to a novel strain of coronavirus. In March 2020, the World Health Organization declared the outbreak of COVID-19,
a disease caused by this coronavirus, a pandemic. The resulting measures to contain the spread and impact of COVID-19 and other developments
related to COVID-19 have materially affected the Company’s results of operations during 2020. Where applicable, the impact resulting
from the COVID-19 pandemic during the year ended December 31, 2020, has been considered, including updated assessments of the recoverability
of assets and evaluation of potential credit losses. As a result of the COVID-19 pandemic, federal and state governments have passed
legislation, promulgated regulations and taken other administrative actions intended to assist healthcare providers in providing care
to COVID-19 and other patients during the public health emergency. Sources of relief include the Coronavirus Aid, Relief and Economic
Security Act (the “CARES Act”), which was enacted on March 27, 2020, the Paycheck Protection Program and Health Care Enhancement
Act (the “PPPHCE Act”), which was enacted on April 24, 2020, and the Consolidated Appropriations Act, 2021 (the “CAA”),
which was enacted on December 27, 2020. In total, the CARES Act, PPPHCE Act and the CAA authorize $178 billion in funding to be distributed
to hospitals and other healthcare providers through the Public Health and Social Services Emergency Fund (the “PHSSEF”).
In addition, the CARES Act provide for an expansion of the Medicare Accelerated and Advance Payment Program whereby inpatient acute care
hospitals and other eligible providers were able to request accelerated payment of up to 100 The
Company’s accounting policies for the recognition of these stimulus monies is as follows: Pandemic
Relief Funds Trillium
received an aggregate of $ 13,487,923
in PHSSEF payments, of which $ 4,242,796
was applied during 2020. Prior to the acquisition
date of June 10, 2021 Trillium had recognized $ 7,081,557
as other operating income.
During the three and nine-month period ended September 30, 2021 we recognized $ 1,385,162
as other operating income resulting
in a remaining balance of $ 778,408
which is classified on the balance sheet as Deferred
HHS Revenue. The recognition of amounts received is conditioned upon the provision of care for individuals with possible or actual cases
of COVID-19 after January 31, 2020, certification that payment will be used to prevent, prepare for and respond to coronavirus and shall
reimburse the recipient only for healthcare-related expenses or lost revenues, as defined by HHS, that are attributable to coronavirus,
as well as receipt of the funds. Amounts are recognized as a reduction to operating costs and expenses only to the extent the Company
is reasonably assured that underlying conditions have been met. The
Company’s assessment of whether the terms and conditions for amounts received are reasonably assured of having been met considers,
among other things, the CARES Act, the CAA and all frequently asked questions and other interpretive guidance issued by HHS, including
the Post-Payment Notice of Reporting Requirements issued on January 15, 2021 (the “January 15, 2021 Notice”) and frequently
asked questions issued by HHS on January 28, 2021 which clarified previously issued guidance, as well as expenses incurred attributable
to the coronavirus and the Company’s results of operations during such period as compared to the Company’s budget. Such guidance,
specifically the various Post-Payment Notice of Reporting Requirements and frequently asked questions issued by HHS, set forth the allowable
methods for quantifying eligible healthcare related expenses and lost revenues. Only healthcare related expenses attributable to coronavirus
that another source has not reimbursed and is not obligated to reimburse are eligible to be claimed. On the basis of guidance available
at the time, the Company’s estimate of lost revenues was first based on the negative change in year-over-year net patient care
operating revenue, then on the negative change in year-over-year net patient care operating income and finally on the difference between
budgeted and actual revenue for calendar year. The calculation as of September 30, 2021 is in accordance with the CAA which indicates
that lost revenues may be calculated pursuant to frequently asked questions published by HHS in June 2020, including the difference between
a provider’s budgeted and actual revenue if such budget had been established prior to March 27, 2020. The use of funds calculation
as of September 30, 2021 takes into account expenses attributable to each respective entity, which primarily relate to incremental labor
and supply costs, as well as lost revenues. General fund distributions were allocated among subsidiaries according to total unreimbursed
losses. Targeted distributions were not allocated or transferred among subsidiaries. While the CAA, January 15, 2021 Notice and frequently
asked questions published by HHS on January 28, 2021 indicate that targeted distribution payments may be allocated or transferred to
subsidiaries, distinct conditions exist for such allocations or transfers including that the parent organization have a “direct
ownership relationship” with the subsidiary who received the targeted distribution payment. Additionally, the subsidiary that was
the recipient of the targeted distribution payment retains responsibility for reporting to HHS on the use of such funds even if they
are transferred or allocated to other subsidiaries. There are significant uncertainties as to the meaning and interpretation of conditions
specific to the allocation or transfer of targeted distribution payments such that as of September 30, 2021, the Company is not reasonably
assured that it can or will choose to comply with such conditions in order to allocate or transfer targeted distribution payments. HHS’
interpretation of the underlying terms and conditions of such PHSSEF payments, including auditing and reporting requirements, continues
to evolve. Additional guidance or new and amended interpretations of existing guidance on the terms and conditions of such PHSSEF payments
may result in changes in the Company’s estimate of amounts for which the terms and conditions are reasonably assured of being met,
and any such changes may be material. Additionally, any such changes may result in the Company’s inability to recognize additional
PHSSEF payments or may result in the de recognition of amounts previously recognized, which (in any such case) may be material. Medicare
Accelerated Payments The
Company recorded payments under the Medicare Accelerated and Advance Payment program in accordance with FASB ASC 606 and has recorded
amounts as a contract liability under FASB ASC 606-10-45-2. The contract liability will be reduced over time as revenue is recognized
for claims submitted for services provided after the recoupment period begins. Effective October 1, 2020, the program was amended such
that providers are required to repay accelerated payments beginning one year after the payment was issued. After such one-year period,
Medicare payments owed to providers will be recouped according to the repayment terms. The repayment terms specify that for the first
11 months after repayment begins, repayment will occur through an automatic recoupment of 25% of Medicare payments otherwise owed to
the provider. At the end of the eleven-month period, recoupment will increase to 50% for six months. At the end of the six months (or
29 months from the receipt of the initial accelerated payment), Medicare will issue a letter for full repayment of any remaining balance,
as applicable. In such event, if payment is not received within 30 days, interest will accrue at the annual percentage rate of four percent
(4%) from the date the letter was issued and will be assessed for each full 30-day period that the balance remains unpaid. As of September
30, 2021, $ 1,671,698 The
company receives a substantial portion of our revenues from the Medicare and Medicaid programs. Included in Managed Care and other third-party
payors is operating revenues from insurance companies with which we have insurance provider contracts, Medicare managed care, insurance
companies for which we do not have insurance provider contracts, workers’ compensation carriers and non-patient service revenue,
such as rental income and cafeteria sales. In the future, we generally expect the portion of revenues received from the Medicare and
Medicaid programs to increase over the long-term due to the general aging of the population and the impact of the Affordable Care Act.
The Affordable Care Act has increased the number of insured patients in states that have expanded Medicaid, which in turn, has reduced
the percentage of revenues from self-pay patients. However, it is unclear whether the trend of increased coverage will continue, due
in part to the impact of the COVID-19 pandemic and the elimination of the financial penalty associated with the individual mandate, effective
January 1, 2019. Further, the Affordable Care Act imposes significant reductions in amounts the government pays Medicare managed care
plans. Moreover, the trend toward increased enrollment in Medicare and Medicaid managed care may adversely affect our operating revenue.
An executive order issued in October 2019 seeks to accelerate this shift away from traditional fee-for-service Medicare to Medicare managed
care. We may also be impacted by regulatory requirements imposed on insurers, such as minimum medical-loss ratios and specific benefit
requirements. Furthermore, in the normal course of business, managed care programs, insurance companies and employers actively negotiate
the amounts paid to hospitals. Our relationships with payors may be impacted by price transparency initiatives and out-of-network billing
restrictions. There can be no assurance that we will retain our existing reimbursement arrangements or that these third-party payors
will not attempt to further reduce the rates they pay for our services. Net
operating revenues include amounts estimated by management to be reimbursable by Medicare and Medicaid under prospective payment systems
and provisions of cost-based reimbursement and other payment methods. In addition, we are reimbursed by non-governmental payors using
a variety of payment methodologies. Amounts we receive for the treatment of patients covered by Medicare, Medicaid and non-governmental
payors are generally less than our standard billing rates. We account for the differences between the estimated program reimbursement
rates and our standard billing rates as contractual allowance adjustments, which we deduct from gross revenues to arrive at net operating
revenues. Final settlements under some of these programs are subject to adjustment based on administrative review and audit by third
parties. We account for adjustments to previous program reimbursement estimates as contractual allowance adjustments and report them
in the periods that such adjustments become known. Fair
Value of Financial Instruments The
carrying amount of accounts receivable and accounts payable approximate their respective fair values due to the short- term nature. The
carrying amount of the line of credit and note payable approximates fair values due to their market interest rates. Financial instruments
that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Property
and Equipment Property
and equipment are stated at cost, less accumulated depreciation. Additions and improvements to property and equipment are capitalized
at cost. Depreciation of owned assets and amortization of leasehold improvements are computed using the straight-line method over the
shorter of the estimated useful lives of the related assets or the lease term. The cost of assets sold or retired, and the related accumulated
depreciation are removed from the accounts and any resulting gains or losses are reflected in other income (expense) for the year. Expenditures
for maintenance and repairs are charged to expense as incurred. Goodwill Our
goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in business combinations.
The goodwill generated from the business combinations is primarily related to the value placed on the employee workforce and expected
synergies. Judgment is involved in determining if an indicator or change in circumstances relating to impairment has occurred. Such changes
may include, among others, a significant decline in expected future cash flows, a significant adverse change in the business climate,
and unforeseen competition. There was no goodwill impairment for the periods presented. The
Company tests goodwill for impairment on an annual basis, and when events or circumstances indicate the fair value of a reporting unit
may be below its carrying value. Long-Lived
Assets Long-lived
assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
There were no impairments of long-lived assets for the years presented. Advertising
and Marketing The
Company uses advertising and marketing to promote its services. Advertising and marketing costs are expensed as incurred. Earnings
(Loss) Per Share Basic
Earnings (loss) per common share is computed by dividing net loss applicable to common stockholders by the weighted-average number of
common shares outstanding during the period. Diluted earnings per common share is determined using the weighted-average of common shares
outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of the conversion option embedded
in convertible debt. The weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion
would have an anti-dilutive effect. Fixed
grantee stock options (fixed awards) and nonvested stock (including restricted stock) shall be included in the computation of diluted
earnings per common share. Even though their issuance may be contingent upon vesting, they shall be considered to be contingently
issuable shares. Because issuance of performance based stock options (and performance based nonvested stock) is contingent upon satisfying
conditions in addition to the mere passage of time, those options and non vested stock shall be considered to be contingently issuable
shares in the computation of diluted earnings per common share. The
dilutive effect of outstanding call options and warrants (and their equivalents) are reflected in diluted earnings per common share by
application of the treasury stock method unless another method is required. Equivalents of options and warrants include nonvested stock
granted under a share based payment arrangement, stock purchase contracts, and partially paid stock subscriptions. Antidilutive contracts
such as purchased put options and purchased call options shall be excluded from diluted earnings per common share. The
Company has included shares issuable under its 2021 Incentive Award Plan in deriving its fully diluted earnings per common share using
the Treasury Method in accordance with ASC 260-10-45. Income
Taxes The
Company uses the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are
determined based on differences between financial reporting and the tax basis of assets, liabilities, the carry forward of operating
losses and tax credits, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected
to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized. Any
future benefit arising from losses have been offset by a valuation allowance. Accordingly, no provision for income taxes is reflected
in the condensed consolidated financial statements. The Company records a liability for uncertain tax positions when it is probable that
a loss has been incurred and the amount can be reasonably estimated. Interest and penalties related to income tax matters, if any, would
be recognized as a component of income tax expense. At September 30, 2021 and December 31, 2020, the Company had no liabilities for uncertain
tax positions. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and
new authoritative rulings. Currently, the tax years subsequent to 2017 are open and subject to examination by the taxing authorities. Revenue
Recognition We
follow ASC 606, “Revenue from Contracts with Customers.” Revenues are recognized when promised services are transferred to
a customer, in an amount that reflects the consideration that we expect to receive in exchange for those services. We derive our revenues
from the rendering of services, such as skilled nursing services. The five-step armodel defined by ASC 606 requires us to: (i)
identify our contracts with customers, (ii) identify our performance obligations under those contracts, (iii) determine the transaction
prices of those contracts, (iv) allocate the transaction prices to our performance obligations in those contracts and (v) recognize revenue
when each performance obligation under those contracts is satisfied. Reimbursement
rates to provide services in our facilities are determined by the fee schedules set by the government programs and negotiated in contracts
with non-governmental third-party payors and private pay patients. Fees are billed to the payors and private pay patients weekly and
monthly following billing guidelines and contract requirements. Net
Patient Revenue Net
operating revenues are recorded at the transaction price estimated by the Company to reflect the total consideration due from patients
and third-party payors in exchange for providing services in patient care. These services are considered to be a single performance obligation
and have a duration of less than one year. Revenues are recorded as these services are provided. The transaction price, which involves
significant estimates, is determined based on the Company’s standard charges for the services provided, with a reduction recorded
for price concessions related to third party contractual arrangements as well as patient discounts and other patient price concessions. The
collection of outstanding receivables for Medicare, Medicaid, managed care payers, other third-party payers and patients is our primary
source of cash and is critical to our operating performance. The primary collection risks relate to uninsured patient accounts, including
patient accounts for which the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient responsibility
amounts (deductibles and copayments) remain outstanding. Implicit price concessions relate primarily to amounts due directly from patients.
Estimated implicit price concessions are recorded for all uninsured accounts, regardless of the aging of those accounts. Accounts are
written off when all reasonable internal and external collection efforts have been performed. The
estimates for implicit price concessions are based upon management’s assessment of historical write-offs and expected net collections,
business and economic conditions, trends in federal, state and private employer health care coverage and other collection indicators.
Management relies on the results of detailed reviews of historical write-offs and collections at facilities that represent a majority
of our revenues and accounts receivable. Reclassification Certain
amounts from prior periods have been reclassified to conform to the current period presentation. |
