Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | May 22, 2019 | May 01, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | Advanzeon Solutions, Inc. | ||
Entity Central Index Key | 0000022872 | ||
Document Type | 10-K | ||
Trading Symbol | CHCR | ||
Document Period End Date | Dec. 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 Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 2,037,061 | ||
Entity Common Stock, Shares Outstanding | 67,361,656 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 25,036 | $ 18,200 |
Accounts receivable | 24,890 | 961 |
Other | 828,996 | 62,833 |
Total current assets | 878,922 | 81,994 |
NON-CURRENT ASSETS | ||
Leasehold improvements, net | 299 | 898 |
Total non-current assets | 299 | 898 |
TOTAL ASSETS | 879,221 | 82,892 |
Loans payable: | ||
Related parties | 737,023 | 19,923 |
Due to shareholder | 3,000,000 | |
Account payable | 700,067 | 946,841 |
Current portion of long-term debt | 10,087,939 | 8,461,795 |
Contingent liability | 642,659 | 489,995 |
Accrued interest-related party | 5,017,708 | |
Other accrued expenses | 14,614,772 | 13,170,753 |
Total current liabilities | 26,782,460 | 31,107,015 |
TOTAL LIABILITIES | 26,782,460 | 31,107,015 |
STOCKHOLDERS' DEFICIENCY | ||
Preferred stock | ||
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 66,661,656 and 63,063,685 shares issued and outstanding | 666,617 | 630,637 |
Additional paid in capital | 28,012,007 | 27,235,066 |
Accumulated deficit | (54,581,873) | (59,411,526) |
Total stockholders' deficiency | (25,903,239) | (31,024,123) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY | 879,221 | 82,892 |
Series C Convertible Preferred [Member] | ||
STOCKHOLDERS' DEFICIENCY | ||
Preferred stock | 10 | 521,700 |
Series D Convertible Preferred [Member] | ||
STOCKHOLDERS' DEFICIENCY | ||
Preferred stock | ||
Remaining Preferred stock [Member] | ||
STOCKHOLDERS' DEFICIENCY | ||
Preferred stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 50 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, issued | 66,661,656 | 63,063,685 |
Common stock, outstanding | 66,661,656 | 63,063,685 |
Series C Convertible Preferred [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 50 |
Preferred stock, authorized | 14,400 | 14,400 |
Preferred stock, issued | 10,434 | 10,434 |
Preferred stock, outstanding | 10,434 | 10,434 |
Series D Convertible Preferred [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 50 |
Preferred stock, authorized | 7,000 | 7,000 |
Preferred stock, issued | 250 | 250 |
Preferred stock, outstanding | 250 | 250 |
Remaining Preferred stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 50 |
Preferred stock, authorized | 978,600 | 978,600 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||
Obstructive sleep apnea (OSA) - related | $ 524,172 | $ 564,117 |
Total revenues | 524,172 | 564,117 |
Costs and expenses: | ||
Costs of revenues | 261,170 | 286,332 |
Selling, general and administrative | 1,745,094 | 4,708,930 |
Depreciation and amortization | 599 | 598 |
Total costs and expenses | 2,006,863 | 4,995,860 |
Operating loss | (1,482,691) | (4,431,743) |
Other income (expense): | ||
Interest expense | (1,436,974) | (1,441,583) |
Legal settlement (See Note 15) | 215,848 | (17,031) |
Setttlement of prior accounting services | (240,000) | |
Extinguishment of loan due to shareholder | 7,771,140 | |
Tax penalty | (50) | |
Other income | 2,380 | |
Total other income (expense) | 6,312,344 | (1,458,614) |
Net income (loss) | $ 4,829,653 | $ (5,890,357) |
PER SHARE INFORMATION | ||
Basic | $ 0.07 | $ (0.09) |
Weighted average number of common shares outstanding | 65,362,240 | 63,063,685 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY | 12 Months Ended |
Dec. 31, 2018USD ($)shares | |
Series C Convertible Preferred Stock [Member] | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Beginning balance | $ 521,700 |
Beginning balance (in shares) | shares | 10,434 |
Stock issued for settlement of accounting services | |
Stock issued for settlement of accounting services (in shares) | shares | |
Issuance of stock options | |
Issuance of stock options (in shares) | shares | |
Par value adjustment to Series C Convertible Perferred Stock | $ (521,690) |
Net income | |
Ending balance | $ 10 |
Ending balance (in shares) | shares | 10,434 |
Common Stock [Member] | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Beginning balance | $ 630,637 |
Beginning balance (in shares) | shares | 63,063,685 |
Stock issued for settlement of accounting services | $ 20,000 |
Stock issued for settlement of accounting services (in shares) | shares | 2,000,000 |
Issuance of stock options | $ 15,980 |
Issuance of stock options (in shares) | shares | 1,597,971 |
Par value adjustment to Series C Convertible Perferred Stock | |
Net income | |
Ending balance | $ 666,617 |
Ending balance (in shares) | shares | 66,661,656 |
Additional Paid-in Capital [Member] | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Beginning balance | $ 27,235,066 |
Stock issued for settlement of accounting services | 220,000 |
Issuance of stock options | 35,251 |
Par value adjustment to Series C Convertible Perferred Stock | 521,690 |
Net income | |
Ending balance | 28,012,007 |
Accumulated Deficit [Member] | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Beginning balance | (59,411,526) |
Stock issued for settlement of accounting services | |
Issuance of stock options | |
Par value adjustment to Series C Convertible Perferred Stock | |
Net income | 4,829,653 |
Ending balance | (54,581,873) |
Beginning balance | (31,024,123) |
Stock issued for settlement of accounting services | $ 240,000 |
Stock issued for settlement of accounting services (in shares) | shares | 2,000,000 |
Issuance of stock options | $ 51,231 |
Net income | 4,829,653 |
Ending balance | $ (25,903,239) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 4,829,653 | $ (5,890,357) |
Adjustments to reconcile net income (loss) to net cash used in operating activities | ||
Depreciation and amortization expense | 599 | 598 |
Stock issued for settlement of accounting services | 240,000 | |
Extinguishment of loan due to shareholder and interest | (7,771,140) | |
Changes in assets and liabilities: | ||
Accounts receivable | (23,929) | (961) |
Other current assets | (1,035,163) | 34,749 |
Accounts payable | 528,226 | 70,684 |
Contingent liability | 152,664 | 489,995 |
Accrued interest-related party | (246,568) | 1,132,002 |
Other accrued expense | 1,641,510 | 2,902,440 |
Net cash used in operating activities | (1,684,148) | (1,260,850) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from promissory notes | 1,772,763 | 1,570,000 |
Repayment of notes | (81,779) | (480,000) |
Notes payable, related party-net | (5,000) | |
Net cash provided by financing activities | 1,690,984 | 1,085,000 |
Net increase/(decrease) in cash | 6,836 | (175,850) |
Cash - Beginning of Year | 18,200 | 194,050 |
CASH - END OF YEAR | 25,036 | 18,200 |
Cash paid during the year for: | ||
Interest | ||
Income taxes | ||
Schedule of non-cash inversting transactions | ||
Convertible promissory note converted to common stock | $ 51,231 |
DESCRIPTION OF THE COMPANY'S BU
DESCRIPTION OF THE COMPANY'S BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE COMPANY'S BUSINESS AND BASIS OF PRESENTATION | NOTE 1 DESCRIPTION OF THE COMPANY’S BUSINESS AND BASIS OF PRESENTATION The consolidated financial statements include the accounts of Advanzeon Solutions, Inc. and its wholly-owned subsidiaries, each with their respective subsidiaries (collectively referred to herein as, the “Company”, “Advanzeon”, “we”, “us”, or “our”). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNFICANT ACCOUNTING POLICIES Established in 1969, Advanzeon Solutions, Inc., (formerly Comprehensive Care Corp.) (“Advanzeon”, “we”, “Parent”, or the “Company”), through its wholly-owned subsidiary Pharmacy Value Management Solutions, Inc., and its wholly-owned subsidiaries during 2015, and partly in 2016, provided managed care services by acting as the administrator for certain administrative service agreements in the behavioral health and substance abuse fields. We primarily offered these services to commercial, Medicare, Medicaid, Children’s Health Insurance Program (“CHIP”) health plans, as well as self-insured companies. Our managed care operations consisted solely of servicing administrative service agreements. Starting in July of 2015, we implemented our comprehensive sleep apnea program, called “SleepMaster Solutions” ™. SleepMaster Solutions (“SMS”) utilizes an administrative system for the convenient identification/testing and therapy of Obstructive Sleep Apnea (“OSA”). We partnered with a national health care provider by initiating a sleep apnea wellness program whereby we screened, tested and when needed, offered a treatment programs for treating this disorder. We also contracted with a union to treat its driver members. Beginning in 2017, our only business was our SMS sleep apnea program. The Company has elected to not adopt the option available under United States generally accepted accounting principles (“GAAP”) to measure any eligible financial instruments or other items at fair market value at this time. Accordingly, the Company measures all of its assets and liabilities on the historical cost basis of accounting, except as otherwise required by GAAP. Inter-company accounts and transactions have been eliminated in consolidation. Certain minor reclassifications of prior period amounts have been made to conform to the current year presentation. Use of Estimates Accounts Receivable Leasehold Improvements Fair Value Measurements The carrying amounts and estimated fair values of long-term debt at December 31, 2018 and 2017 are as follows: 2018 2017 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Convertible promissory notes $ 10,087,939 $ — $ 8,461,795 $ — Loans payable related party 737,023 — 3,019,923 — $ 10,824,962 $ — $ 11,481,718 $ — Revenue recognition Cost of Revenues Legal Defense Costs Income Taxes Management has evaluated our tax positions taken or to be taken on income tax returns that remain subject to examination (i.e., tax years 2008 and thereafter federally), and has concluded that there have been no uncertain tax positions (as defined in GAAP) taken that require recognition or disclosure in the consolidated financial statements. In the event of any income tax-related interest or penalties are incurred, they would be included in general and administrative expense. Stock Options and Warrants We use a Black-Scholes valuation model to estimate the fair value of options and warrants on the measurement date and for determining the allocation of the relative values of debt and warrants. In applying the model, we use level 3 inputs, as defined by GAAP, consisting of historical data and management judgment to estimate the expected terms of the instruments. Expected volatility is based on the historical volatility of our traded stock. We do not expect to pay dividends for the period of the expected life of the instruments, and therefore we assume no expected dividend. The assumed risk-free rates used are based on the U.S. Treasury yield curve with the same expected terms as those of the equity instruments at the time of grant. The following table lists the assumptions utilized in applying the Black-Scholes valuation model for options and warrants. Year ended December 31, 2018 2017 Expected volatitily 160 % 160 % Expected life (in years) of options 2 3 Expected life (in years) of warrants 1/2 1/2 Risk-free interest rate range, options 1.5 % 1.5 % Risk-free interest rate range, warrants 1.5 % 1.5 % Expected divident yield 0 % 0 % PER SHARE DATA For the periods presented, since losses would produce anti-dilution, no diluted loss per common share is presented. The following table sets forth the computation of basic loss per common share: Year ended December 31, 2018 2017 Numerator: Net income (loss) attributable to common stockholders $ 4,829,653 $ (5,890,357 ) Denominator: Weighted average common shares 65,362,240 63,063,685 Basic income (loss) per share attributable to common stockholders $ 0.07 $ (0.09 ) Recent Accounting Standards Update In February 2016, the FASB issued ASU 2016-02, “Leases,” which significantly changes the accounting for a lessee. Under previous guidance, lessees did not have to record a lease it designated as operating on its balance sheet. Under the new guidance, a lessee must record a liability for lease payments (referred to as the lease liability) and an asset for the right to use the leased asset during the lease term (referred to as the right of use asset) for all leases, regardless of whether they are designated as finance or operating leases. If a lessee has a lease with a term of 12 months of less, it may make an accounting policy election (by leased asset class) not to recognize lease assets or lease liabilities. This election generally requires the lessee to recognize lease expense on a straight-line basis over the lease term. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018 for public entities, not-for-profit entities that have issued (including conduit bond obligors) securities that are traded, listed, or quoted on an exchange or an over-the-counter market, and employee benefit plans that file financial statements with the United States Securities and Exchange Commission (SEC). All other entities must apply the ASU to annual periods beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Any entity may early adopt the ASU. Management has determined that when this guidance is adopted the impact will be properly reflected in the financial statements and notes thereto. Reclassification |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Other Current Assets | |
OTHER CURRENT ASSETS | NOTE 3 OTHER CURRENT ASSETS Other current assets as of December 31, 2018 and 2017 consist of the following: 2018 2017 Due from escrow account $ 472,788 $ 29,068 Loans to others — 400 Security and lease deposits 13,500 3,500 Prepaid expenses 5,248 29,865 Miscellaneous receivable 334,509 — Capitalized portion of lease 2,951 — Other current asset $ 828,996 $ 62,833 Miscellaneous receivable consists of $24,617 owed to the Company for prepaid accounting fees paid to a previous accounting firm the Company used and no longer uses. The remaining $309,892 is Legal Settlement (see Note 15). |
LEASEHOLD IMPROVEMENTS
LEASEHOLD IMPROVEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
LEASEHOLD IMPROVEMENTS | NOTE 4 LEASEHOLD IMPROVEMENTS Leasehold improvement, net, consists of the following at December 31, 2018 and 2017: 2018 2017 Leasehold improvement $ 2,992 $ 2,992 Less accumulated amortization (2,693 ) (2,094 ) Leasehold improvement - net $ 299 $ 898 Amortization expense for the years ended December 31, 2018 and 2017 is $599 and $598, respectively. |
RELATED PARTY AND SHAREHOLDER L
RELATED PARTY AND SHAREHOLDER LOANS PAYABLE | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY AND SHAREHOLDER LOANS PAYABLE | NOTE 5 RELATED PARTY AND SHAREHOLDER LOANS PAYABLE The Company has received financing from Management to the Company as well as from members of our Board of Directors. These individuals are deemed to be related parties to the Company and their indebtedness must be disclosed separately. As of December 31, 2018 and 2017, balances were as follows: 2018 2017 Loans payable related party $ 737,023 $ 19,923 Due to shareholder — 3,000,000 $ 737,023 $ 3,019,923 During the first quarter of 2018, $910,010 was reclassified from accounts payable to loans payable related party. During the third quarter of 2018, the Company wrote off the due to shareholder balance and accrued interest totaling $7,771,140 as disclosed in Note 12. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 6 NOTES PAYABLE As of December 31, 2018 and 2017, the balance was as follows: 2018 2017 Notes payable $ 10,087,939 $ 8,461,795 Break-out of debt between the parent company and our subsidiary PVMS is as follows: 2018 2017 Advanzeon parent $ 5,010,016 $ 5,035,795 PVMS subsidiary 5,077,923 3,426,000 $ 10,087,939 $ 8,461,795 At PVMS, the sum total of notes issued, and their dollar values were as follows: 2018 2017 Number of notes issued 31 39 Dollar value $ 1,751,923 $ 1,570,000 All notes are short-term in nature, one year maturity date. All debt issued has a stated interest rate of 12% per year. At PVMS, the sum total of notes converted to stock year-to-date and their dollar values were as follows: 2018 2017 Number of notes converted 1 — Dollar value $ 50,000 $ — |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2018 | |
Common Stock | |
COMMON STOCK | NOTE 7 COMMON STOCK During the year ended December 31, 2018, the Company issued 2,000,000 shares of common stock for a legal settlement. The shares were issued at a value of $0.12 per share or for a total value of $240,000. In addition, the Company issued 1,597,971 shares for the conversion of a promissory note of $50,000 and accrued interest of $1,231. The stock was issued at a value of $0.03 per share. We relied on Section 4(a)(1) of the Securities Act of 1933, as amended, as the exception from registration under the Act. During the year ended December 31, 2017, no stock was sold or issued. |
PAR VALUE ADJUSTMENT TO PREFERR
PAR VALUE ADJUSTMENT TO PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2018 | |
Par Value Adjustment To Preferred Stock | |
PAR VALUE ADJUSTMENT TO PREFERRED STOCK | NOTE 8 PAR VALUE ADJUSTMENT TO PREFERRED STOCK On September 28, 2018 the Company filed a Certificate of Correction, which can be found as Exhibit 3 within the Form 10-K report for the year ended December 31, 2017 filed January 29, 2019. Within this exhibit the Company decreased the par value of the Preferred Stock from $50 per share to $.001 per share. |
CONTINGENT LIABILITY
CONTINGENT LIABILITY | 12 Months Ended |
Dec. 31, 2018 | |
Contingent Liability | |
CONTINGENT LIABILITY | NOTE 9 CONTINGENT LIABILITY Contingent liability consisted of the following items as of December 31, 2018: (1) a lawsuit against the Company for $450,000 from the son of a deceased promissory note holder. This matter has been dismissed twice by the judge but is ongoing due to appeals. (2) interest payable to the same person listed in (1) in the amount of $171,247. (3) Advanzeon won a decision on a court case against Universal Healthcare. The attorney's fees relating to this matter total $21,412. This fee will be paid out of the proceeds of the case when collected. As of December 31, 2018 and 2017, the balance of this indebtedness is as follows: 2018 2017 Legal settlement payable $ — $ 39,995 Disputed note payable 450,000 450,000 Disputed interest payable 171,247 — Pending attorney fees 21,412 — Contingent liability $ 642,659 $ 489,995 In 2018, we have reclassified the Legal Settlement Payable of $39,995 to Accounts Payable. |
ACCRUED INTEREST-RELATED PARTY
ACCRUED INTEREST-RELATED PARTY | 12 Months Ended |
Dec. 31, 2018 | |
Consolidated Statements Of Operations | |
ACCRUED INTEREST-RELATED PARTY | NOTE 10 ACCRUED INTEREST-RELATED PARTY As of December 31, 2018 and 2017, balances of accrued interest on this indebtedness were as follows: 2018 2017 Accrued interest-related party $ — $ 5,017,708 During the second quarter of 2018, a total of $4,771,140 was written off to extinguishment of loan due to shareholder. The remaining balance of $246,568 was reclassified as accrued interest payable (non-related party). |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Other Accrued Liabilities | |
OTHER ACCRUED LIABILITIES | NOTE 11 OTHER ACCRUED LIABILITIES As of December 31, 2018 and 2017, balances of other accrued liabilities were as follows: 2018 2017 Management compensation $ 8,873,802 $ 8,873,802 Accrued interest-non-related party 4,809,644 2,632,159 Board of Director fees 900,000 600,000 State fees 21,000 — Payroll tax liabilities 2,927 11,522 Other 7,399 1,053,270 Total other accrued liabilities $ 14,614,772 $ 13,170,753 In 2018, other accrued liabilities of $1,053,270 has been reclassified to its proper categories; $696,989 has been reclassified to accrued interest-non-related party, $196,260 to loan payable related party, $150,000 to accrued board of directors fees, $10,021 was a reversal of the December 31, 2017 year-end accrual of wages, subcontractor fees, and commissions. |
EXTINGUISHMENT OF LOAN DUE TO S
EXTINGUISHMENT OF LOAN DUE TO SHAREHOLDER | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
EXTINGUISHMENT OF LOAN DUE TO SHAREHOLDER | NOTE 12 EXTINGUISHMENT OF LOAN DUE TO SHAREHOLDER An expired promissory note and the accrued interest were written off to extinguishment of loan due to shareholder due in accordance with Florida Law 95.11 (2)(b) on the expiration of debt. The principal amount of $3,000,000 and accrued interest of $4,771,140 was written off. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended |
Dec. 31, 2018 | |
Legal Proceedings | |
LEGAL PROCEEDINGS | NOTE 13 LEGAL PROCEEDINGS With the exception of the matters set forth below, all of the legal proceedings for the year ended December 31, 2018 are disclosed in our annual report on Form 10-K filed on January 29, 2019. On May 15, 2018, the Company was awarded $269,750 during the final settlement of litigation in connection with overpaid fees owed to the Company. In a related matter to the Katzman litigation, on January 10, 2017, the Company brought an action against Melanie Damian et al. Case number 17-CA-00252, Thirteenth Judicial Circuit Court, Hillsborough County, FL. The Company alleges abuse of process based upon wrongful collection practices including wrongful garnishment of bank accounts. The matter has been dismissed by mutual consent. In an action entitled Pharmacy Value Management Services Inc. v. Hartman et al, Case No. 8:17-cv-132-T-35TBM (M.D. Fla.) – a settlement pursuant to the mediation in the matter was reached and executed on March 18, 2018. Pursuant to the settlement Defendants paid the sum of $70,000. During January 2019, the Company settled a legal dispute with Rotech Healthcare, Inc. The total settlement was for $146,671 to be paid to Rotech during 2019, which is included in accounts payable as of December 31, 2018. The Company intends to either negotiate and/or move to the court to reopen the settlement based upon, among other things, mutual mistakes. The Company has, to date, abided by the settlement. As referred to in Note 3, $309,892 of these awarded settlements are still outstanding as of December 31, 2018. |
EQUITY INSTRUMENTS
EQUITY INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
EQUITY INSTRUMENTS | NOTE 14 EQUITY INSTRUMENTS Our Series C preferred stock is currently convertible into common stock at the rate of 316.28 common shares for each share of Series C preferred, adjustable for any dilutive issuances of common occurring in the future. Series C preferred shares vote with the common stockholders on an as-converted basis. The shares are nonparticipating except that dividends, when declared by our Board of Directors on the common stock, must be paid on the Series C stock on an as-converted basis before any dividends are paid on our common stock. The Series C is also cumulative with respect to dividends on common stock and junior series of preferred stock. Other significant rights and preferences of the Series C preferred include: ● the right to vote as a separate class to appoint five directors of the Company, and ● liquidation preferences, whereby the Series C holders have a claim against our assets senior to the claim of the holders of our common stock in the event of our liquidation, dissolution or winding-up (the value of the liquidation preference is $250 per share, or approximately $2,608,500 at December 31, 2018 and 2017). We also have a class of convertible preferred stock, Series D, for which 7,000 shares are authorized and 250 shares were outstanding at December 31, 2018. The shares, which were granted in January 2012, do not vest until the tenth anniversary of the grant date. Such shares were issued in exchange for the cancellation of 120 previously granted warrants to purchase Series D shares. Once vested, a Series D preferred share will be convertible at any time into 100,000 shares of common stock, subject to adjustment in the event of any common stock dividend, split, combination thereof or other similar recapitalization, without additional consideration. Prior to vesting and thereafter, each Series D convertible preferred share is entitled to all voting, dividend, liquidation and other rights accorded a share of Series D convertible preferred stock. As to dividends, the Series D stock is noncumulative. If a dividend is declared on the common stock, each share of Series D stock is entitled to receive a dividend equal to 50% of the dividend declared for the common stock as if the Series D stock had been converted. Despite their nonvested status, voting rights of each share nevertheless consist of the right to cast the number of votes equal to those of 500,000 shares of common stock. Unless otherwise required by applicable law, holders of shares of Series D have the right to vote together with holders of common stock as a single class on all matters submitted to a vote of our stockholders. STOCK INCENTIVE COMPENSATION PLANS WARRANTS: To Purchase Common Stock During the year ended December 31, 2018, warrants were issued as parts of financing transactions to consultants and to members of our Board of Directors. The status of outstanding warrants for the year ended December 31, 2018 is as follows: Warrants Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2018 41,873,984 0.18 2.96 years — Granted 9,073,613 Forfeited, expired or cancelled (2,675,000 ) Exerciseable at December 31, 2018 48,272,597 0.20 1.77 years — We recognized no compensation costs during the year ended December 31, 2018 due to the issuance of these securities. OPTIONS: From time-to-time, we grant stock options as compensation for services to our employees, non-employee directors and certain consultants (“grantees”) allowing grantees to purchase our common stock pursuant to stockholder-approved stock option plans. We currently have one active incentive qualified option plan, 2009 Equity Compensation Plan, that provides for the granting of stock options, stock appreciation rights, limited stock appreciation rights, restricted preferred stock, and common stock grants to grantees. Grants issued under the Plans may qualify as incentive stock options (“ISOs”) under Section 422A of the Internal Revenue Code of 1986, as amended. Options for ISOs may be granted for terms of up to ten years. For the 2009 Equity Compensation Plan, the vesting period is determined by our Compensation and Stock Option Committee. The exercise price for ISOs must equal or exceed the fair market value of the underlying shares on the date of grant. The Plan also provide for the full vesting of all outstanding options under certain change of control events. The maximum number of common shares authorized for issuance under the plan is 50,000,000. We did not issue any options during the year ended December 31, 2018. The information regarding the options is set forth below. 2018 2017 Shares available 50,000,000 50,000,000 Options outstanding (Directors and employees) 3,695,000 3,695,000 Options exerciseable (Directors and employees) 3,680,000 3,680,000 In addition, under our Non-employee Directors’ Stock Option Plan, we are authorized to issue non-qualified stock options to our non-employee directors for up to 1,000,000 common shares. Each non-qualified stock option is exercisable at a price equal to the average of the closing bid and asked prices of the common stock in the over-the-counter market for the most recent preceding day there was a sale of the stock prior to the grant date. Grants of options vest in accordance with vesting schedules established by our Board of Directors’ Compensation and Stock Option Committee. Upon joining our Board of Directors, directors receive an initial grant of 25,000 options for common shares. As of December 31, 2018, there were 10,000,000 shares available for option grants and 2,678,000 options for common shares outstanding under the non-qualified directors’ plan. A summary of activity for the year ended December 31, 2018 is as follows: Warrants Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2018 6,407,500 0.28 3.25 years — Granted — Forfeited, expired or cancelled — Exerciseable at December 31, 2018 6,407,500 0.28 3.25 years — The following table summarizes information about options granted and vested during the year ended December 31, 2018. 2018 2017 Options granted 0 0 Weighted-average grant-date fair value ($) N/A N/A Options vested 0 0 Fair value of vested options N/A N/A During 2018, we granted no options for common shares to employees, non-employee directors and consultants. A summary of common stock options outstanding and exercisable as of December 31, 2018 follows: Options Outstanding Exercise Price Range Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Options Exercisable Weight-Average Exercise Price of Exercisable Options 6,407,500 0.28 0.25-0.65 9.85 — N/A |
LEGAL SETTLEMENTS
LEGAL SETTLEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Legal Settlements | |
LEGAL SETTLEMENTS | NOTE 15 LEGAL SETTLEMENTS Legal settlements were as follows: 2018 2017 Universal Healthcare settlement (1) $ 269,750 $ — John Hartman settlement (1)(2) 70,000 — Rotech litigation (1) (112,421 ) — Katzman litigation (11,481 ) (17,031 ) Total legal settlement $ 215,848 $ (17,031 ) (1) See Note 13 Legal Proceedings (2) Of the $70,000 settlement, $29,858 was paid to the Company in April of 2018. The Company is currently pursuing repayment of prior accounting fees paid to a previous accounting firm. The Company has filed a complaint and recorded a receivable of $24,617 for the fees paid. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 16 INCOME TAXES The Company did not provide for income taxes with respect to differences between financial loss and taxable loss arising from the timing of when certain transactions are recorded for book purposes versus tax purpose. The Company has not filed federal or state income tax returns since 2012. The financial statements do not reflect any fines or penalties that may or may result from not filing the various income returns. In prior years the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. For the 2018 tax year the Company had net operating loss carryforwards of approximately $40,900,000 for tax purposes. The carryforwards are available to offset taxable income of future periods and begin to expire after the Company’s 2024 tax year. Realization of the deferred tax benefit related to the carryforward is dependent upon the Company generating sufficient taxable income in the future, against which the loss can be offset, which is not guaranteed. Deferred income taxes reflect the net tax effect of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as tax benefits of net operating loss carryforwards. The significant components of the Company’s deferred tax assets and liabilities relate to the following: 2018 2017 Net operating loss carryfoward $ 40,910,571 $ 45,740,224 Depreciation — — Net deferred tax assts and before valuation allowance 40,910,571 45,740,224 Less: Valuation allowance (40,910,571 ) (45,740,224 ) Net deferred tax assets $ — $ — For financial reporting purposes, the Company has incurred losses in previous years. Based on the available objective evidence, including the Company’s previous losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets as of December 31, 2018. The effective income tax rate varied from the statutory Federal tax rate as follows: 2018 2017 Federal statutory rate 21 % 34 % Effect of net operating losses (21 )% (34 )% Effective income tax rate — % — % The company’s effective tax rate is lower than what would be expected if the federal statutory rate were applied to income (loss) before taxes, primarily due to net operating loss carryforwards. On December 22, 2017, the President signed into law the Tax Cuts and Jobs Act (H.R.1) (the “Act”). The Act includes a number of changes to existing tax law impacting businesses including, among other things, a permanent reduction in the corporate income tax rate from 34% to 21%. The rate reduction applies to tax years beginning on or after January 1, 2018. As a result of the reduction in the corporate income tax rate under the Act, the Company had to revalue its net deferred tax liability, for the year ended December 31, 2017. The did not change the Company’s net income for the year ended December 31, 2018. |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Dec. 31, 2018 | |
Operating Lease | |
OPERATING LEASES | NOTE 17 OPERATING LEASES We leased our Tampa corporate office and paid annual rent of $99,485 and $95,086 for the years ended December 31, 2018 and 2017, respectively. The term of the lease is for 5 years beginning in May 2014 and ending on June 30, 2019. We currently lease approximately 3,133 square feet and pay approximately $8,229 per month. The lease was renegotiated in 2019 and verbally agreed to have a three-year extension with no rent increase. We consider the condition of the leased property to be average and adequate for our current needs. In our Tampa office, we maintain clinical operations, business development, accounting, financial and regulatory reporting and other management information symptoms information systems, and provider and member service functions. Total lease expenses of the current lease during the year ended December 31, 2019 is $49,374. We leased our Huntington Beach office and paid annual rent of $25,900 in 2018. The term of the lease is for 1 year beginning April 18, 2018 and ending April 30, 2019. We currently pay $3,700 per month. The lease has been extended on a month to month basis at a monthly rent of $4,000. We consider the condition of our leased property to be average and adequate for our current needs. Total expenses through the conclusion of the current lease during the year ended December 31, 2019 is $14,800. The Company leases a vehicle for the CEO to be used for business. The term of the lease is 3 years beginning July 9, 2018 and ending July 9, 2021. The Company pays a monthly rate of $893. |
OTHER MATTERS
OTHER MATTERS | 12 Months Ended |
Dec. 31, 2018 | |
Other Matters | |
OTHER MATTERS | NOTE 18 OTHER MATTERS During the year ended December 31, 2018, we funded our operations from revenues and new debt issuances. We will continue to fund our operations from these sources until we are able to produce operating revenue sufficient to cover our cost structure. In the event we are not able to secure such funding, our operations will be adversely affected. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 19 SUBSEQUENT EVENTS In accordance with ASC Topic 855, “ Subsequent Events During 2019, the Company renegotiated the Tampa office lease and verbally agreed to a three-year extension of the lease with no increase in payments. The Huntington Beach lease has been extended during 2019 on a month to month basis at a monthly rate of $4,000. Issuance of debt and warrants Subsequent to the balance sheet date, the Company has issued $480,000 of promissory notes. All of the debt matures in 2020 and has a stated interest rate of 12% and is unsecured. Concurrent with the issuance of debt, the Company has issued 1,517,823 warrants at an average exercise price of $0.17. At the time of issuance, all warrants had a three or five year term. Issuance of common stock The Company has issued 700,000 shares subsequent to December 31, 2018 as follows: On March 21, 2019, the Company issued 200,000 shares of its common stock to its Securities Exchange Commission counsel, who elected to take common stock in the Company as partial payment of its legal fees. Additionally, on March 29, 2019, the Company issued 500,000 shares of its common stock to an existing shareholder and warrant holder, who elected to exercise his warrants to purchase 500,000 shares of the Company's common stock for $15,000. The warrants were issued during May of 2017. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates |
Accounts Receivable | Accounts Receivable |
Leasehold Improvements | Leasehold Improvements |
Fair Value Measurements | Fair Value Measurements The carrying amounts and estimated fair values of long-term debt at December 31, 2018 and 2017 are as follows: 2018 2017 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Convertible promissory notes $ 10,087,939 $ — $ 8,461,795 $ — Loans payable related party 737,023 — 3,019,923 — $ 10,824,962 $ — $ 11,481,718 $ — |
Revenue recognition | Revenue recognition |
Cost of Revenues | Cost of Revenues |
Legal Defense Costs | Legal Defense Costs |
Income Taxes | Income Taxes Management has evaluated our tax positions taken or to be taken on income tax returns that remain subject to examination (i.e., tax years 2008 and thereafter federally), and has concluded that there have been no uncertain tax positions (as defined in GAAP) taken that require recognition or disclosure in the consolidated financial statements. In the event of any income tax-related interest or penalties are incurred, they would be included in general and administrative expense. |
Stock Options and Warrants | Stock Options and Warrants We use a Black-Scholes valuation model to estimate the fair value of options and warrants on the measurement date and for determining the allocation of the relative values of debt and warrants. In applying the model, we use level 3 inputs, as defined by GAAP, consisting of historical data and management judgment to estimate the expected terms of the instruments. Expected volatility is based on the historical volatility of our traded stock. We do not expect to pay dividends for the period of the expected life of the instruments, and therefore we assume no expected dividend. The assumed risk-free rates used are based on the U.S. Treasury yield curve with the same expected terms as those of the equity instruments at the time of grant. The following table lists the assumptions utilized in applying the Black-Scholes valuation model for options and warrants. Year ended December 31, 2018 2017 Expected volatitily 160 % 160 % Expected life (in years) of options 2 3 Expected life (in years) of warrants 1/2 1/2 Risk-free interest rate range, options 1.5 % 1.5 % Risk-free interest rate range, warrants 1.5 % 1.5 % Expected divident yield 0 % 0 % |
PER SHARE DATA | PER SHARE DATA For the periods presented, since losses would produce anti-dilution, no diluted loss per common share is presented. The following table sets forth the computation of basic loss per common share: Year ended December 31, 2018 2017 Numerator: Net income (loss) attributable to common stockholders $ 4,829,653 $ (5,890,357 ) Denominator: Weighted average common shares 65,362,240 63,063,685 Basic income (loss) per share attributable to common stockholders $ 0.07 $ (0.09 ) |
Recent Accounting Standards Update | Recent Accounting Standards Update In February 2016, the FASB issued ASU 2016-02, “Leases,” which significantly changes the accounting for a lessee. Under previous guidance, lessees did not have to record a lease it designated as operating on its balance sheet. Under the new guidance, a lessee must record a liability for lease payments (referred to as the lease liability) and an asset for the right to use the leased asset during the lease term (referred to as the right of use asset) for all leases, regardless of whether they are designated as finance or operating leases. If a lessee has a lease with a term of 12 months of less, it may make an accounting policy election (by leased asset class) not to recognize lease assets or lease liabilities. This election generally requires the lessee to recognize lease expense on a straight-line basis over the lease term. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018 for public entities, not-for-profit entities that have issued (including conduit bond obligors) securities that are traded, listed, or quoted on an exchange or an over-the-counter market, and employee benefit plans that file financial statements with the United States Securities and Exchange Commission (SEC). All other entities must apply the ASU to annual periods beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Any entity may early adopt the ASU. Management has determined that when this guidance is adopted the impact will be properly reflected in the financial statements and notes thereto. |
Reclassification | Reclassification |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of carrying and estimated fair values of financial instruments | The carrying amounts and estimated fair values of long-term debt at December 31, 2018 and 2017 are as follows: 2018 2017 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Convertible promissory notes $ 10,087,939 $ — $ 8,461,795 $ — Loans payable related party 737,023 — 3,019,923 — $ 10,824,962 $ — $ 11,481,718 $ — |
Schedule of assumptions for options and warrants | The following table lists the assumptions utilized in applying the Black-Scholes valuation model for options and warrants. Year ended December 31, 2018 2017 Expected volatitily 160 % 160 % Expected life (in years) of options 2 3 Expected life (in years) of warrants 1/2 1/2 Risk-free interest rate range, options 1.5 % 1.5 % Risk-free interest rate range, warrants 1.5 % 1.5 % Expected divident yield 0 % 0 % |
Schedule of computation of basic loss per common share | For the periods presented, since losses would produce anti-dilution, no diluted loss per common share is presented. The following table sets forth the computation of basic loss per common share: Year ended December 31, 2018 2017 Numerator: Net income (loss) attributable to common stockholders $ 4,829,653 $ (5,890,357 ) Denominator: Weighted average common shares 65,362,240 63,063,685 Basic income (loss) per share attributable to common stockholders $ 0.07 $ (0.09 ) |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Current Assets | |
Schedule of other current assets | Other current assets as of December 31, 2018 and 2017 consist of the following: 2018 2017 Due from escrow account $ 472,788 $ 29,068 Loans to others — 400 Security and lease deposits 13,500 3,500 Prepaid expenses 5,248 29,865 Miscellaneous receivable 334,509 — Capitalized portion of lease 2,951 — Other current asset $ 828,996 $ 62,833 |
LEASEHOLD IMPROVEMENTS (Tables)
LEASEHOLD IMPROVEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of leasehold improvement | Leasehold improvement, net, consists of the following at December 31, 2018 and 2017: 2018 2017 Leasehold improvement $ 2,992 $ 2,992 Less accumulated amortization (2,693 ) (2,094 ) Leasehold improvement - net $ 299 $ 898 |
RELATED PARTY NOTES PAYABLE (Ta
RELATED PARTY NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of related party notes payable | As of December 31, 2018 and 2017, balances were as follows: 2018 2017 Loans payable related party $ 737,023 $ 19,923 Due to shareholder — 3,000,000 $ 737,023 $ 3,019,923 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable [Abstract] | |
Schedule of notes payable | As of December 31, 2018 and 2017, the balance was as follows: 2018 2017 Notes payable $ 10,087,939 $ 8,461,795 |
Schedule of break-out of debt | Break-out of debt between the parent company and our subsidiary PVMS is as follows: 2018 2017 Advanzeon parent $ 5,010,016 $ 5,035,795 PVMS subsidiary 5,077,923 3,426,000 $ 10,087,939 $ 8,461,795 |
Schedule of notes issued | At PVMS, the sum total of notes issued, and their dollar values were as follows: 2018 2017 Number of notes issued 31 39 Dollar value $ 1,751,923 $ 1,570,000 |
Schedule of summary of notes | At PVMS, the sum total of notes converted to stock year-to-date and their dollar values were as follows: 2018 2017 Number of notes converted 1 — Dollar value $ 50,000 $ — |
CONTINGENT LIABILITY (Tables)
CONTINGENT LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Contingent Liability | |
Schedule of contingent liability | As of December 31, 2018 and 2017, the balance of this indebtedness is as follows: 2018 2017 Legal settlement payable $ — $ 39,995 Disputed note payable 450,000 450,000 Disputed interest payable 171,247 — Pending attorney fees 21,412 — Contingent liability $ 642,659 $ 489,995 |
ACCRUED INTEREST-RELATED PARTY
ACCRUED INTEREST-RELATED PARTY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Consolidated Statements Of Operations | |
Schedule of accrued interest-related party | As of December 31, 2018 and 2017, balances of accrued interest on this indebtedness were as follows: 2018 2017 Accrued interest-related party $ — $ 5,017,708 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Accrued Liabilities | |
Schedule of other accrued liabilities | As of December 31, 2018 and 2017, balances of other accrued liabilities were as follows: 2018 2017 Management compensation $ 8,873,802 $ 8,873,802 Accrued interest-non-related party 4,809,644 2,632,159 Board of Director fees 900,000 600,000 State fees 21,000 — Payroll tax liabilities 2,927 11,522 Other 7,399 1,053,270 Total other accrued liabilities $ 14,614,772 $ 13,170,753 |
EQUITY INSTRUMENTS (Tables)
EQUITY INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of warrant activity | The status of outstanding warrants for the year ended December 31, 2018 is as follows: Warrants Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2018 41,873,984 0.18 2.96 years — Granted 9,073,613 Forfeited, expired or cancelled (2,675,000 ) Exerciseable at December 31, 2018 48,272,597 0.20 1.77 years — |
Schedule of options outstanding and exercisable | The information regarding the options is set forth below. 2018 2017 Shares available 50,000,000 50,000,000 Options outstanding (Directors and employees) 3,695,000 3,695,000 Options exerciseable (Directors and employees) 3,680,000 3,680,000 |
Schedule of option activity | A summary of activity for the year ended December 31, 2018 is as follows: Warrants Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2018 6,407,500 0.28 3.25 years — Granted — Forfeited, expired or cancelled — Exerciseable at December 31, 2018 6,407,500 0.28 3.25 years — |
Summary of options granted and vested | The following table summarizes information about options granted and vested during the year ended December 31, 2018. 2018 2017 Options granted 0 0 Weighted-average grant-date fair value ($) N/A N/A Options vested 0 0 Fair value of vested options N/A N/A |
Summary of common stock options outstanding and exercisable | A summary of common stock options outstanding and exercisable as of December 31, 2018 follows: Options Outstanding Exercise Price Range Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Options Exercisable Weight-Average Exercise Price of Exercisable Options 6,407,500 0.28 0.25-0.65 9.85 — N/A |
LEGAL SETTLEMENTS (Tables)
LEGAL SETTLEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Legal Settlements | |
Schedule of legal settlements | Legal settlements were as follows: 2018 2017 Universal Healthcare settlement (1) $ 269,750 $ — John Hartman settlement (1)(2) 70,000 — Rotech litigation (1) (112,421 ) — Katzman litigation (11,481 ) (17,031 ) Total legal settlement $ 215,848 $ (17,031 ) (1) See Note 13 Legal Proceedings (2) Of the $70,000 settlement, $29,858 was paid to the Company in April of 2018. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets and liabilities | The significant components of the Company’s deferred tax assets and liabilities relate to the following: 2018 2017 Net operating loss carryfoward $ 40,910,571 $ 45,740,224 Depreciation — — Net deferred tax assts and before valuation allowance 40,910,571 45,740,224 Less: Valuation allowance (40,910,571 ) (45,740,224 ) Net deferred tax assets $ — $ — |
Schedule of statutory federal tax rate | The effective income tax rate varied from the statutory Federal tax rate as follows: 2018 2017 Federal statutory rate 21 % 34 % Effect of net operating losses (21 )% (34 )% Effective income tax rate — % — % |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of carrying and estimated fair values of financial instruments | ||
Financial Instrument Carrying Amount | $ 10,824,962 | $ 11,481,718 |
Debt instrument, Fair Value Disclosure | ||
Convertible Promissory Notes [Member] | ||
Schedule of carrying and estimated fair values of financial instruments | ||
Financial Instrument Carrying Amount | 10,087,939 | 8,461,795 |
Debt instrument, Fair Value Disclosure | ||
Loans Payable Related Party [Member] | ||
Schedule of carrying and estimated fair values of financial instruments | ||
Financial Instrument Carrying Amount | 737,023 | 3,019,923 |
Debt instrument, Fair Value Disclosure |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of assumptions for options and warrants | ||
Expected volatility | 160.00% | 160.00% |
Expected dividend yield | 0.00% | 0.00% |
Stock Option [Member] | ||
Schedule of assumptions for options and warrants | ||
Expected life (in years) | 2 years | 3 years |
Risk-free interest rate range | 1.50% | 1.50% |
Warrant [Member] | ||
Schedule of assumptions for options and warrants | ||
Risk-free interest rate range | 1.50% | 1.50% |
Warrant [Member] | Maximum [Member] | ||
Schedule of assumptions for options and warrants | ||
Expected life (in years) | 2 years | 2 years |
Warrant [Member] | Minimum [Member] | ||
Schedule of assumptions for options and warrants | ||
Expected life (in years) | 1 year | 1 year |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | ||
Net income (loss) attributable to common stockholders | $ 4,829,653 | $ (5,890,357) |
Denominator: | ||
Weighted average common shares | 65,362,240 | 63,063,685 |
Basic income (loss) per share attributable to common stockholders (in dollars per share) | $ 0.07 | $ (0.09) |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - Leasehold Improvements [Member] | 12 Months Ended |
Dec. 31, 2018 | |
Minimum [Member] | |
Useful Life | 2 years |
Maximum [Member] | |
Useful Life | 12 years |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Other Current Assets | ||
Due from escrow account | $ 472,788 | $ 29,068 |
Loans to others | 400 | |
Security and lease deposits | 13,500 | 3,500 |
Prepaid expenses | 5,248 | 29,865 |
Miscellaneous receivable | 334,509 | |
Capitalized portion of lease | 2,951 | |
Other Current Asset | $ 828,996 | $ 62,833 |
OTHER CURRENT ASSETS (Details N
OTHER CURRENT ASSETS (Details Narrative) - USD ($) | May 15, 2018 | Dec. 31, 2018 |
Other Current Assets | ||
Miscellaneous receivable of prepaid expenses | $ 24,617 | |
Litigation settlement awarded | $ 269,750 | $ 309,892 |
LEASEHOLD IMPROVEMENTS (Details
LEASEHOLD IMPROVEMENTS (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Leases [Abstract] | ||
Leasehold improvement | $ 2,992 | $ 2,992 |
Less accumulated amortization | (2,693) | (2,094) |
Leasehold improvement - net | $ 299 | $ 898 |
LEASEHOLD IMPROVEMENTS (Detai_2
LEASEHOLD IMPROVEMENTS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | ||
Amortization expense | $ 599 | $ 598 |
RELATED PARTY AND SHAREHOLDER_2
RELATED PARTY AND SHAREHOLDER LOANS PAYABLE (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transactions [Abstract] | ||
Loans payable related party | $ 737,023 | $ 19,923 |
Due to shareholder | 3,000,000 | |
Total | $ 737,023 | $ 3,019,923 |
RELATED PARTY AND SHAREHOLDER_3
RELATED PARTY AND SHAREHOLDER LOANS PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2018 | Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |||
Promissory notes payable related party | $ 246,568 | $ 910,010 | |
Accured Interest | $ 7,771,140 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Notes Payable [Abstract] | ||
Notes payable | $ 10,087,939 | $ 8,461,795 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Notes payable | $ 10,087,939 | $ 8,461,795 |
Advanzeon Parent [Member] | ||
Notes payable | 5,010,016 | 5,035,795 |
Pharmacy Value Management Solutions Inc.[Member] | ||
Notes payable | $ 5,077,923 | $ 3,426,000 |
NOTES PAYABLE (Details 2)
NOTES PAYABLE (Details 2) - Pharmacy Value Management Solutions Inc.[Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of notes issued | 31 | 39 |
Dollar value | $ 1,751,923 | $ 1,570,000 |
NOTES PAYABLE (Details 3)
NOTES PAYABLE (Details 3) - Pharmacy Value Management Solutions Inc.[Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of notes converted | 1 | |
Dollar value | $ 50,000 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) | 12 Months Ended |
Dec. 31, 2018 | |
Maturity date | P1Y |
Description of interest rate | All debt issued has a stated interest rate of 12% per year. |
Short Term One Note [Member] | |
Stated interest rate | 12.00% |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Common Stock | |
Number of shares issued for legal settlement | shares | 2,000,000 |
Share price | $ / shares | $ 0.12 |
Stock issued for settlement of accounting services, value | $ 240,000 |
Number of shares issued in debt conversion | shares | 1,597,971 |
Number of shares issued in debt conversion | $ 50,000 |
Accrued interest | $ 1,231 |
Number of shares issued in debt conversion (in dollars per shares) | $ / shares | $ 0.03 |
PAR VALUE ADJUSTMENT TO PREFE_2
PAR VALUE ADJUSTMENT TO PREFERRED STOCK (Details Narrative) - $ / shares | Dec. 31, 2018 | Sep. 28, 2018 | Dec. 31, 2017 |
Par Value Adjustment To Preferred Stock | |||
Previous preferred stock, par value (in dollars per share) | $ 0.001 | $ 50 | $ 50 |
Adjusted preferred stock, par value (in dollars per share) | $ .001 |
CONTINGENT LIABILITY (Details)
CONTINGENT LIABILITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Contingent Liability | ||
Legal settlement payable | $ 39,995 | |
Disputed note payable | $ 450,000 | 450,000 |
Disputed interest payable | 171,247 | |
Pending attorney fees | 21,412 | |
Total Contingent Liability | $ 642,659 | $ 489,995 |
CONTINGENT LIABILITY (Details N
CONTINGENT LIABILITY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Legal settlement payable | $ 39,995 | |
Disputed interest payable | $ 171,247 | |
Attorney fees | 21,412 | |
Son of Former Note Holder [Member] | ||
Contingent liability | 450,000 | $ 450,000 |
Legal settlement payable | ||
Disputed interest payable | 171,247 | |
Attorney fees | $ 21,412 |
ACCRUED INTEREST-RELATED PART_2
ACCRUED INTEREST-RELATED PARTY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements Of Operations | ||
Accrued interest-related party | $ 5,017,708 |
ACCRUED INTEREST-RELATED PART_3
ACCRUED INTEREST-RELATED PARTY (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2018 | Mar. 31, 2018 | |
Consolidated Statements Of Operations | |||
Accrued interest-related party | $ 4,771,140 | $ 4,771,140 | |
Promissory notes payable related party | $ 246,568 | $ 910,010 |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Other Accrued Liabilities | ||
Management compensation | $ 8,873,802 | $ 8,873,802 |
Accrued interest-non-related party | 4,809,644 | 2,632,159 |
Board of Director fees | 900,000 | 600,000 |
State fees | 21,000 | |
Payroll tax liabilities | 2,927 | 11,522 |
Other | 7,399 | 1,053,270 |
Total other accrued liabilities | $ 14,614,772 | $ 13,170,753 |
OTHER ACCRUED LIABILITIES (De_2
OTHER ACCRUED LIABILITIES (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Other Accrued Liabilities | ||
Other accrued liabilities | $ 1,053,270 | |
Accured interest | 696,989 | |
Loan Payable | 196,260 | |
Board of Director fees | $ 150,000 | |
Accrual of wages, subcontractor fees, and commissions | $ 10,021 |
EXTINGUISHMENT OF LOAN DUE TO_2
EXTINGUISHMENT OF LOAN DUE TO SHAREHOLDER (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Principal amount | $ 3,000,000 | |
Accrued interest-related party | $ 4,771,140 | $ 4,771,140 |
LEGAL PROCEEDINGS (Details Narr
LEGAL PROCEEDINGS (Details Narrative) - USD ($) | May 15, 2018 | Jan. 31, 2019 | Dec. 31, 2018 |
Litigation settlement awarded | $ 269,750 | $ 309,892 | |
Subsequent Event [Member] | Rotech Healthcare Inc [Member] | |||
Litigation settlement awarded | $ 146,671 | ||
Trademarks [Member] | |||
Litigation settlement awarded | $ 70,000 |
EQUITY INSTRUMENTS (Details)
EQUITY INSTRUMENTS (Details) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Shares | |
Outstanding balance at beginning | 41,873,984 |
Granted | 9,073,613 |
Forfeited, expired or cancelled | (2,675,000) |
Exercisable at ending | 48,272,597 |
Weighted Average Exercise Price | |
Outstanding balance at beginning | $ / shares | $ 0.18 |
Exercisable at ending | $ / shares | $ 0.20 |
Weighted Average Remaining Contractual Term | |
Outstanding balance at beginning | 2 years 11 months 17 days |
Exercisable at ending | 1 year 9 months 7 days |
Aggregate Instrinsic Value | |
Outstanding balance at beginning | $ | |
Exerciseable balance at ending | $ |
EQUITY INSTRUMENTS (Details 1)
EQUITY INSTRUMENTS (Details 1) - shares | Dec. 31, 2018 | Dec. 31, 2017 |
Shares available | 1,000,000,000 | 1,000,000,000 |
Stock Option [Member] | ||
Shares available | 50,000,000 | 50,000,000 |
Options outstanding | 6,407,500 | |
Stock Option [Member] | Directors and Employees [Member] | ||
Options outstanding | 3,695,000 | 3,695,000 |
Options exercisable | 3,680,000 | 3,680,000 |
EQUITY INSTRUMENTS (Details 2)
EQUITY INSTRUMENTS (Details 2) - Stock Option [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options | ||
Outstanding balance at beginning | 6,407,500 | |
Granted | 0 | |
Forfeited, expired or cancelled | ||
Outstanding balance at ending | 6,407,500 | |
Exercisable at ending | 6,407,500 | |
Weighted Average Exercise Price | ||
Outstanding balance at beginning | $ 0.28 | |
Outstanding balance at ending | $ 0.28 | |
Exercisable at ending | $ 0.28 | |
Weighted Average Remaining Contractual Term | ||
Outstanding balance at beginning | 3 years 3 months | |
Outstanding balance at ending | 3 years 3 months | |
Aggregate Instrinsic Value | ||
Outstanding balance at beginning | ||
Outstanding balance at ending |
EQUITY INSTRUMENTS (Details 3)
EQUITY INSTRUMENTS (Details 3) - Stock Option [Member] - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options granted | 0 | |
Options vested | 0 | 0 |
EQUITY INSTRUMENTS (Details 4)
EQUITY INSTRUMENTS (Details 4) - Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options Outstanding | 6,407,500 | |
Exercise Price Range | $ 0.28 | |
Weighted Average Exercise Price | $ 0.28 | |
Weighted Average Remaining Contractual Term | 3 years 3 months | |
Options Exercisable | 6,407,500 | |
Minimum [Member] | ||
Weighted Average Exercise Price | $ 0.25 | |
Maximum [Member] | ||
Weighted Average Exercise Price | $ 0.65 |
EQUITY INSTRUMENTS (Details Nar
EQUITY INSTRUMENTS (Details Narrative) | 12 Months Ended | |
Dec. 31, 2018USD ($)Number$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | |
Number of directors to be appointed | Number | 5 | |
Series D convertible preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Maximum number of common shares authorized for issuance | 1,000,000,000 | 1,000,000,000 |
Stock Option [Member] | ||
Maximum number of common shares authorized for issuance | 50,000,000 | 50,000,000 |
Common Stock [Member] | ||
Conversion rate of preferred stock into common stock | $ / shares | $ 316.28 | |
Non Qualified Directors Plan [Member] | ||
Non qualified stock options to our non employee directors | 1,000,000 | |
Options available for grant, initially | 25,000 | |
Options available for grant | 10,000,000 | |
Options outstanding | 2,678,000 | |
Series D Convertible Preferred Stock [Member] | ||
Series D convertible preferred stock, authorized shares | 7,000 | |
Preferred stock, shares outstanding | 250 | |
Preferred stock, vesting period | 10 years | |
Number of warrants cancelled in exchange of share issue | 120 | |
Convertible preferred stock, shares issued upon conversion | 100,000 | |
Preferred stock voting rights | Equal to of 500,000 shares of common stock | |
Dividend issued treated as conversion percent | 50.00% | |
Convertible Preferred Stock [Member] | ||
Liquidation preference per share value | $ / shares | $ 250 | $ 250 |
Liquidation preference value | $ | $ 2,608,500 | $ 2,608,500 |
LEGAL SETTLEMENTS (Details)
LEGAL SETTLEMENTS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | ||||
Total legal settlement | $ 215,848 | $ (17,031) | ||||
Universal Healthcare Settlement [Member] | ||||||
Total legal settlement | [1] | 269,750 | ||||
John Hartman Settlement [Member] | ||||||
Total legal settlement | $ 29,858 | 70,000 | [1],[2] | [1],[2] | ||
Rotech litigation [Member] | ||||||
Total legal settlement | [1] | (112,421) | ||||
Katzman Litigation [Member] | ||||||
Total legal settlement | $ (11,481) | $ (17,031) | ||||
[1] | See Note 13 Legal Proceedings | |||||
[2] | Of the $70,000 settlement, $29,858 was paid to the Company in April of 2018. |
LEGAL SETTLEMENTS (Details Narr
LEGAL SETTLEMENTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Total legal settlement | $ 215,848 | $ (17,031) | |||
Accounting fees | 24,617 | ||||
John Hartman Settlement [Member] | |||||
Total legal settlement | $ 29,858 | $ 70,000 | [1],[2] | [1],[2] | |
[1] | Of the $70,000 settlement, $29,858 was paid to the Company in April of 2018. | ||||
[2] | See Note 13 Legal Proceedings |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryfoward | $ 40,910,571 | $ 45,740,224 |
Depreciation | ||
Net deferred tax assts and before valuation allowance | 40,910,571 | 45,740,224 |
Less: Valuation allowance | (40,910,571) | (45,740,224) |
Net deferred tax assets |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | Dec. 22, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 21.00% | 21.00% | 34.00% |
Effect of net operating losses | (21.00%) | (34.00%) | |
Effective income tax rate |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Dec. 22, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | |||
Operating loss carryforwards | $ 40,900,000 | ||
Previous corporate income tax rate | 34.00% | ||
Current corporate income tax rate | 21.00% | 21.00% | 34.00% |
OPERATING LEASE (Details Narrat
OPERATING LEASE (Details Narrative) | Jan. 02, 2019USD ($) | Dec. 31, 2018USD ($)ft² | Dec. 31, 2017USD ($) | Dec. 31, 2019USD ($) |
Vehicle [Member] | CEO [Member] | ||||
Payments for rent per month | $ 893 | |||
Operating lease extension term | 3 years | |||
Tampa Corporate Office [Member] | ||||
Rental Expences | $ 99,485 | $ 95,086 | ||
Operating lease term | 5 years | |||
Area of land | ft² | 3,133 | |||
Payments for rent per month | $ 8,229 | |||
Operating lease extension term | 3 years | |||
Tampa Corporate Office [Member] | Subsequent Event [Member] | ||||
Operating lease extension term | 3 years | |||
Total lease expenses of the current lease | $ 49,374 | |||
Huntington Beach Office [Member] | ||||
Rental Expences | $ 25,900 | |||
Operating lease term | 1 year | |||
Payments for rent per month | $ 3,700 | |||
Rent of extended lease (per month) | $ 4,000 | |||
Huntington Beach Office [Member] | Subsequent Event [Member] | ||||
Rent of extended lease (per month) | $ 4,000 | |||
Current operating lease expenses | $ 14,800 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Mar. 29, 2019 | Mar. 21, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Number of shares issued for services (in shares) | 2,000,000 | |||
Tampa Corporate Office [Member] | ||||
Operating lease extension term | 3 years | |||
Huntington Beach Office [Member] | ||||
Rent of extended lease (per month) | $ 4,000 | |||
Subsequent Event [Member] | ||||
Number of shares issued for services (in shares) | 200,000 | |||
Number of shares issued (in shares) | 700,000 | |||
Subsequent Event [Member] | Shareholder And Warrant Holder [Member] | ||||
Number of shares issued (in shares) | 500,000 | |||
Number of shares issued, value | $ 15,000 | |||
Subsequent Event [Member] | Tampa Corporate Office [Member] | ||||
Operating lease extension term | 3 years | |||
Subsequent Event [Member] | Huntington Beach Office [Member] | ||||
Rent of extended lease (per month) | $ 4,000 | |||
Subsequent Event [Member] | Unsecured Promissory Notes [Member] | ||||
Face amount | $ 480,000 | |||
Maturity date | All of the debt matures in 2020 | |||
Interest rate | 12.00% | |||
Subsequent Event [Member] | Warrant [Member] | ||||
Number of warrant issued | 1,517,823 | |||
Exercise price of warrants (in dollars per share) | $ 0.17 | |||
Subsequent Event [Member] | Warrant [Member] | Maximum [Member] | ||||
Warrant term | 5 years | |||
Subsequent Event [Member] | Warrant [Member] | Minimum [Member] | ||||
Warrant term | 3 years |