ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
following discussion should be read in conjunction with our unaudited financial statements and notes thereto included herein.
In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and
elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities
and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future
operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates
and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies,
many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These
uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed
in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward-looking statements.,
The
independent registered public accounting firm’s report on the Company’s financial statements as of April 30, 2017,
and for each of the years in the two-year period then ended, includes a “going concern” explanatory paragraph, that
describes substantial doubt about the Company’s ability to continue as a going concern.
History
Medical
Innovation Holdings, Inc. (“MedHold,” “we,” “us,” “Company”) was incorporated
on June 23, 1998 in the state of Colorado as Colorado Community Broadcasting, Inc. In 2005, the Company changed its name to Medina
International Holdings, Inc. We changed our name to Medical Innovation Holdings, Inc. effective September 15, 2016, and our name
change with FINRA was approved. The Company’s Stock trades on the OTC Market under the symbol “MIHI”.
On
April 29, 2016, we completed a Definitive Agreement by which we acquired the business concepts, plan, and intellectual property
of Medical Innovations Holdings, and thereafter, divested Harbor Guard Boats, Inc. (“Harbor”) business to the former
management, thereby releasing $3,112,599 in debt associated with the Harbor assets and business. The Harbor assets had not generated
any significant revenue for several years, and required major capital to relaunch and manufacture boats, in a very competitive
market. The Board deemed it was in the best interest of the shareholders to move in a new business direction with the elimination
of a large amount of debt that had been carried. The Company issued 351 million common shares (post-reverse split 1 for 10) for
the new Medical Innovations assets and business plan, and 30 Series “A” Convertible Preferred shares were transferred
to Medhold, and the Company received 35 million shares of common stock from prior management to retire to treasury in conjunction
with the simultaneous divestiture of the old Harbor subsidiary and the relief of $3,112,599 in debt from the Company liabilities.
Our
majority shareholders as of June 24, 2016 also approved a reverse split (1 for 10 old common shares) effective September 15, 2016
for which a Definitive Form 14C was filed and mailed to shareholders. We have changed control, divested the Company of its prior
operations including old assets and liabilities and restructured to continue in the business described in this filing. Our corporate
offices are located at 5805 State Bridge Road, Suite G-328, Duluth, Georgia 30097 and our telephone number is (866) 883-3793.
On
June 28, 2016, the Company formed a wholly-owned subsidiary, BKare Diagnostics, Inc. (“BKare”), in the state of Georgia.
BKare is a full-scale provider of high quality laboratory and pharmaceutical services providing personalized services for small
and mid-size medical practices and Virtual Health Medical Providers. All BKare Referral Laboratories are certified to provide
services to Medicare, Medicaid, HMO and all private and commercial insurance companies. Their personalized services include custom
testing protocols, tailored to meet client’s needs and includes services as an online private portal to order tests, supplies,
online results 24 hours per day with board certified pathologists.
On
August 9, 2016, the Company formed a wholly-owned subsidiary, 3PointCare, Inc. (“3P”), in the state of Georgia to
provide services to the Company for the administration, scheduling, claims processing, technical support, as well as delivering
medical and health related services. The subsidiary is in the development stage.
On
September 8, 2016, MedHold’s wholly owned subsidiary, 3P, entered into a Management Services Agreement to exclusively provide
management services to TeleLife MD, Inc. The Company will be the exclusive provider to TeleLife. The agreement has an initial
term of 10 years together with certain renewal rights. TeleLife MD is a multi-disciplinary specialty care practice formed to provide
telemedicine services to patients in rural underserved areas in various states.
On
November 14, 2016, the Company announced that its wholly owned subsidiary, BKare, entered into a Marketing & Services Agreement
with Vantari Genetics. Under the agreement BKare will provide certain marketing and other services to the Company’s network
of clients and Vantari will provide genetic based testing and conduct the molecular laboratory and toxicology testing services.
Vantari is a nationally known molecular diagnostic services and toxicology company, and has experience with the development and
delivery of molecular laboratory and toxicology testing. It offers full array of genetic testing across the health spectrum, from
pharmacogenetics to non-invasive prenatal testing and testing for inherited cancers.
On
January 24, 2017, the Company entered into an exclusive agreement for Moody Capital Solutions, Inc., to be the Company’s
investment banker in connection with the Company’s efforts to secure financing and to make strategic acquisitions.
On
January 13, 2017, the Company entered into a Letter of Intent (LOI) with a Florida-based nutraceutical company, Renaissance Health
Publishing, LLC (“RHP”). Under the agreement, the Company will acquire 100% of the assets of RHP in a cash and stock
transaction valued between $2.5-$3.5 million. RHP will provide a proprietary product line with specialized formulations along
with Trademark product names. Also with the acquisition, the Company will receive a more robust customer base, existing staff
and management, and certain marketing material designed to promote RHP product line. RHP is a nationally known research and development
company recognized for its portfolio of physician-developed, natural health supplements designed to provide their customers with
a better quality of life.
On
June 27, 2017, the Company entered into an Asset Purchase Agreement with RHP, details of which are included in the Form 8-K filed
on July 3, 2017.
On
April 26, 2017, the Company entered into a LOI with a Florida-based international consulting company (“BBVI”). Under
the agreement MIHI will acquire 100% of the assets of BBVI in a stock transaction. BBVI will provide immediate access to its strategic
client/customer base, share in the sale, ordering, and delivery of products and services to its customers. The acquisition would
potentially provide revenue and profits for MIHI once the transaction is complete along with the beginning of building out a global
footprint for the Company. The transaction is contingent on the delivery of audited financials. BBVI has been providing strategic
consulting services to MIHI for the last year and a half. Through this relationship, the Company has been working with MIHI to
expand its presence into international markets. BBVI has been successful in introducing MIHI to these markets and has taken the
lead in penetrating certain foreign markets with high-level business professionals and government entities/individuals. This has
resulted in securing government bids that may allow MIHI to fulfill the orders and book the resulting revenue.
Our
business plan is to establish a nationwide, state by state, multi-disciplinary medical specialist provider/practice network, staffed
by 16 types of Physician Specialists who will serve the rural patient population within the States it practices, via a seamless,
comprehensive, sophisticated telemedicine program. Our platform is designed to bring unparalleled access to quality healthcare
in real time, as needed, and create huge cost savings and efficiencies. Our fully integrated practice management system provides
EMR/EHR, patient scheduling, real time insurance verification, billing, video conferencing and all systems in an end to end technology
platform coupled with all the components of a dynamic telehealth delivery system. Our telemedicine platform brings together many
different modalities of telemedicine to create a virtual multi-specialty practice within our referring partner’s primary
clinic practice. Our business model is designed to increase the access to specialty providers, including, neurology, dermatology,
ENT, tele-stroke, management of high risk pregnancy, mental health, dermatology, endocrinology, pediatrics, cardiology, nephrology,
pulmonology, OBGYN, maternal and fetal and others.
Corporate
Structure:
MEDICAL
INNOVATION HOLDINGS, INC.
(A
Colorado Corporation)
|
|
|
|
|
|
3PointCare,
Inc.
(A Georgia Corporation)
|
|
BKare
Diagnostics, Inc.
(A Georgia Corporation)
|
The
Problem We Solve
Our
Management believes government officials, healthcare executives, healthcare practitioners including physicians, and noted academics
recognize that the current medical system is dysfunctional and not in line with the intended goals of effective, affordable and
accessible healthcare.
Our
Management believes the current medical system and its technological advances as well as the current regulatory trajectory are
trapped in outdated, high cost, and ineffective business models. Our mission is to implement cost-effective technological management
and develop business models around them to make health care and wellness more affordable and accessible.
Our
plan is to have state licensed medical practice locations managed by our Management Services Organization (“MSO”).
Our MSO staff and Medical Director will have the necessary backgrounds in their service area and be responsible for business development,
clinic and service delivery, and profit and loss.
Sales
and Marketing
Our
sales and marketing strategy is to present our specialty practice medical services to underserved rural patients in the setting
of their primary practice provider. We intend to offer a business-oriented approach to practice management systems, differing
from the current medical model. Our model is to enhance medicine for patients, and offer the most efficient administrative system
solution for medical practices. We believe we can do that because our business model and profit motive is aligned properly with
patient goals and successful outcomes.
We
intend to work to leverage success with client practices by implementing for each practice a strategy to use our telehealth platform
and our focused management system demonstrating measurable patient and medical professional satisfaction results.
We
believe sales and marketing also includes recruiting and developing relationships with candidate health practitioners, unaffiliated
care facilities, and medical specialists who will provide efficient service without excessive overhead. Therefore, marketing our
service involves enlisting primary care physicians who are interested in expanding their patient base and care services, and increasing
their profits through elimination of the excessive administrative staffs. We intend to transmit images electronically through
our HIPPA compliant PACS System (acronym for Picture Archiving Communication and Storage). We utilize the eclinicalworks integrated
platform to manage all functions of our medical practices. Our Services Agreement grants the Company access to the technology
platform and systems, which are licensed.
Key
Success Drivers
Our
Management believes there is a relatively low cost in opening an MSO to operate across the United States. Our business model is
scalable and efficient. However, there is a relatively high barrier to entry in developing a fully integrated platform of trained
telehealth practitioners with primary care referring partners.
We
believe executing solid operations and market strategy is key. Here are our perceived drivers to success:
|
●
|
Operational
Excellence
|
|
|
|
|
●
|
Marketing
to Physicians and Deploying Locations
|
|
|
|
|
●
|
Marketing
and Servicing to Clinics
|
|
|
|
|
●
|
Building
Relationships and Enlisting Specialists to Perform Diagnosis
|
|
|
|
|
●
|
Staff
Training and Service Excellence
|
|
|
|
|
●
|
Integrity
in honoring the value-chain, the patient, and the payers by minimizing the administrative costs with conservative treatments
and effective documented outcomes
|
Competition
Our
current competition is mostly based on the current “dysfunctional” large hospital / holding company medical model.
Our primary competition is various hospitals conglomerates, and local health groups.
The
local groups are typically either hospital-based health services or independent primary care physicians who may not be focused
on availability of add-on expertise through our model.
Neither
the large conglomerate hospital chain nor the local hospital-based groups may soon adopt our model because of the burden of their
overhead and capital costs. Moreover, their revenue model is based on treatment delivery to specific geographic areas within driving
distance not broader efficient health solutions. Their expertise, overhead structure, revenue model and mindset simply preclude
them from breaking out of their current business models.
OUR
TELEHEALTH BUSINESS PLAN
GENERAL
Our
premise is the current healthcare delivery system, which serves the 87 million rural US patients, is inadequate. Because specialists
are primarily based in urban areas, rural patients do not have direct access to these specialists and are forced to travel great
distances, wasting time and money to get the care they need. Because of this, the care continuum is beginning to embrace the new
models of communication; information transfer and collaboration in order to fulfill the required healthcare needs of those patients.
A transformation of the traditional health system is underway in the US, which incentivizes providers, payers and patients toward
improved quality and lower costs.
We
believe telemedicine has the ability to greatly improve the accessibility and quality of medical services by extending the reach
and increasing the efficiency of the existing system. Succinctly stated, we intend to establish a nationwide multi-disciplinary
specialist provider/practice network, staffed by 16 types of specialists who serve the rural patient population via a telemedicine
program. This platform will bring unparalleled access to quality healthcare in real time, as needed, and create huge cost savings
and efficiencies. Our fully integrated practice management system provides electronic medical records/electronic health records
(“EMR/EHR”), patient scheduling, real time insurance verification, billing, video conferencing and all systems in
an end to end technology platform coupled with all the components of a seamless telehealth delivery system.
Our
proprietary telemedicine platform brings together many different modalities of telemedicine to create a virtual multi-specialty
practice within our referring partner’s primary clinic practice. Our business model is designed to greatly increase the
access to specialty providers, including, neurology, dermatology, ear nose and throat (“ENT”), tele-stroke, management
of high-risk pregnancy, psychiatry, dermatology, endocrinology, pediatrics, cardiology, nephrology, pulmonology, OBGYN, maternal
and fetal, and others.
Our
plan is to develop an extensive and robust specialty telemedicine program in the US with the capability to implement telemedicine
programs and develop networks throughout the 50 states and eventually around the world.
OUR
COMPANY
3P
is the newly formed operating MSO subsidiary of our Company and is being developed to:
|
●
|
Manage,
improve and promote the availability and provision of specialized healthcare services in rural and underserved areas.
|
|
|
|
|
●
|
Empower
our rural primary clinic referring partners with new revenue streams, improved profitability and better care for their patients.
|
|
|
|
|
●
|
Reduce
the service barriers that exist for patients in remote areas or otherwise living at a significant distance from needed medical
resources.
|
One
hallmark of our business model is the recruitment of top specialists in each state making that collective expertise available
and accessible to the largest amount of participating healthcare facilities and primary healthcare providers and their patients.
This network model maximizes the ability of people in isolated areas to transcend distance and obtain specialty care close to
home. The model and our management team intends to provide expertise and services to primary care organizations and providers
seeking a reliable, high quality and cost effective means to access specialty healthcare for its patients.
Our
Core Business: Our Management Service Organization (MSO) and Friendly PC (Medical Practice) structure
We
are an applied telehealth platform with three integrated components.
1.
Our MSO, 3P, Inc., is powered by an integrated end-to-end software system that enables our team to manage all aspects of our Specialty
Medical Practices. We handle all aspects of managing the delivery of our physician services in the delivery of telemedicine/telehealth
in consultation encounters.
2.
The multi-state Specialty Medical Practice, TeleLifeMD, Inc.
3.
Loaning and installing of the telemedicine platform and peripherals to our referring partner clinics/ primary care doctor offices.
These become the pipeline for patients into our specialty medical practice.
THE
MARKET
We
Believe the Time is Right
:
The
US is the world’s largest national economy with over $18.6 trillion of annual economic activity. This is more than one fifth
of the world’s total economic output. Healthcare, a key economic driver, comprises approximately 18% of the nation’s
gross domestic product, with Americans spending more than any other country on their care at $10,345 per person in 2016.
Yet despite devoting many resources to this industry, the U.S. has consistently ranked lower in many measures of health and wellness
including: life expectancy, infant mortality, and diabetes care. The government has made numerous attempts throughout the nation’s
history in reforming healthcare with few successes. A big stride in healthcare reform came in 2010 with the signing of the Patient
Protection and Affordable Care Act (ACA). Although the ACA intends to reduce costs and improve quality within the U.S. healthcare
system, many agree that the key to achieving that goal will not be legislation, but technology.
The
two major sweeping changes from the ACA that will have tremendous impact on the U.S. healthcare system, should they stay in place
through regulatory changes, are Accountable Care Organizations (ACOs) and nearly universal coverage. According to the ACA, ACOs
are networks of physicians, hospitals, and other providers that take both clinical and financial responsibility for the care of
patients. By breaking individual silos among hospitals, pharmacies, home health care agencies, hospices, primary care physicians,
and other providers, ACOs attempt to make it easier for all of these providers to coordinate a patient’s care. We face the
risk that the ACA is modified or replaced with new healthcare laws, and that many of our base assumptions will change as a result.
The Company believes that our business will adapt to any future healthcare reforms.
The
implications of ACOs are that technology will be more important in the delivery of healthcare to improve patient outcomes and
keep costs down. As patients leave the hospital or a primary care doctor’s office to return home, care will need to be maintained
and coordinated. For this to take place, technologies that collect health data, promote communication among providers and patients,
and that facilitate treatment will need to be implemented. Many of these technologies fall under the telemedicine umbrella, which
will be discussed later in this plan. A key facet to remember is that technology is the bridge that fills the gap between all
these providers (pharmacies, hospitals, primary care doctors, nurses, etc.) and since coordination is needed to comply with the
ACO mandate, more companies will seek out the services of telemedicine and health technology companies. The Company is uncertain
about what changes to healthcare laws may affect these premises, however, the Company believes that its services will be beneficial
to the market, regardless of the healthcare laws.
Telemedicine
is the provision of healthcare services by physicians from one location to patients at another. Telemedicine has gained momentum
in the last 50 years thanks to improvements in technology, changes in healthcare policy, and increased consumer demand for such
services. Telemedicine not only encompasses technologies related to patient-doctor communication, but also tools used in the delivery
and management of diseases, wellness, critical care, and post-acute care.
The
deployment of telemedicine services is increasing in tandem with the development of telecommunications technology. The shortage
of physicians in rural and remote areas is providing the opportunity for telemedicine to increase its services to millions of
patients. This widespread deployment of services will continue at a rapid pace for the foreseeable future.
Telemedicine
applications are increasing due to the high prevalence of chronic diseases, consistent need for improved quality services and
rising elderly population across countries which demand telemedicine to deliver improved products with higher patient satisfaction.
Rapid pace of innovation among hardware and software vendors, along with the speed and coverage of broadband and mobile technologies
is enabling the availability and optimized delivery of healthcare.
The
continuing rise in healthcare costs, the change from fee-based payment models to value-based payment models and the current and
projected shortage of physicians are driving healthcare providers and technology companies to collaborate and innovate to address
these challenges. In addition, there is tremendous patient demand for access to affordable care. Consumers are playing a more
direct role in their care. Physicians are demanding better ways to provide that care.
We
believe consumer demand will cause telehealth to become “mainstream” health care.
|
●
|
Consumers
want telemedicine.
|
|
|
|
|
●
|
The
greatest impact of telemedicine is on the patient, their family and their community.
|
|
|
|
|
●
|
Using
telemedicine technologies reduces travel time and stress for the patient.
|
|
|
|
|
●
|
Over
the past 15 years several studies have documented patient satisfaction and support for telehealth services. Such services
offer patients the access to providers that might not be available otherwise, as well as medical services without the need
to travel long distances.
|
THE
POTENTIAL MARKET FOR 3P
Based
on our telehealth strategy, 3P and TeleLifeMD will focus on penetrating into markets where there are favorable telemedicine reimbursement
regulations. The acceptance of telemedicine throughout the states is expanding the potential market for us. Taking into consideration
physician practices, hospitals, nursing homes and skilled nursing facilities and urgent care centers, we estimate the immediate
market includes over 500,000 potential referral partners in the U.S. Currently there are 60-80 million patients in Medically Underserved
Areas (MUAs) as defined by the federal government. This represents a large market segment in the rural areas we wish to serve.
Primary
Target Customers
|
|
Approximate
Addressable Market
|
|
|
|
Hospitals
|
|
5,724
of which 1,984 are rural
|
Nursing
Homes
|
|
15,465
|
Urgent
Care Clinics
|
|
9,300
|
Physicians
|
|
468,819
|
Emerging:
Employers (Fortune 500)
|
|
500
(each with multiple locations)
|
The
initial and primary focus for 3P will be to build an MSO capable of servicing each state where we intend to operate, create a
professional medical corporation, managed by a Medical Director and recruit the necessary part time medical specialist employees
required to serve our patients. This model will be expanded and scaled with solid leadership in developing, delivering and managing
comprehensive telehealth solutions. The expansion of the model and market penetration will be achieved with a direct to referring
primary practice sales and marketing strategy. We intend to follow or chart best practices for the specialty medicine telemedicine
delivery model.
Hospitals:
Hospitals
and health systems in the U.S. are undergoing a dramatic shift in their business models due to a number of forces that may be
expected to eventually turn the industry on its head — from providers concerned with the volume of services they provide,
to providers who focus on offering high-value services that emphasize keeping populations healthy
|
●
|
There
are 5,724 hospitals in the U.S., according to the American Hospital Association. (2015)
|
|
|
|
|
●
|
Of
all hospitals in the U.S. 1,984, or 35 percent, serve rural communities and are considered rural hospitals.
|
|
|
|
|
●
|
Of
rural hospitals, 1,328 have been designated as Critical Access Hospitals by CMS.2 CAHs are rural hospitals with no more than
25 beds and are at least 35 miles (15 miles in areas with mountainous terrain or only secondary roads) away from another hospital.
|
Our
target for Nursing Homes:
There
are estimated to be 15,000 nursing homes in the U.S., as a result of studies conducted by leading institutions (Source: Dartmouth,
Commonwealth Fund), showed that based on the reduced hospitalization rates of the more telemedicine engaged facilities, Medicare
might see up to $150,000 in savings per nursing home per year. We believe the annual cost of the telemedicine service is estimated
at $36,000 per nursing home per year, suggesting that there could be $114,000 in net savings per year.
Top
Telemedicine Encounters:
|
●
|
Mental
Health (medication management, screening/assessment)
|
|
|
|
|
●
|
Wound
Care (wound images, diagnosis/treatment)
|
|
|
|
|
●
|
Episodic
Care (non-emergent issues – sore throat, flu, etc.)
|
Benefits
for the Resident:
|
●
|
Decrease
transports to the emergency department
|
|
|
|
|
●
|
Decrease
stress on the resident and family
|
|
|
|
|
●
|
Decrease
the chances of a fall
|
|
|
|
|
●
|
Decrease
hospital acquired illness
|
Our
Target for K-12 Schools:
The
approximate number of K-12 Schools both private and public in the US is 132,800. (Source: National Center for Education Statistics,
NCES). According to the Center for Education Reform, of the total number of schools, about 2,000 have School Based Health Centers
(SCHCs), and, few of these are using telehealth. This market segment can experience significant growth with an access solution,
which we intend to offer.
Health
has a direct impact on student learning (improves education, absenteeism and the learning experience.
For
Schools our business intends to offer solutions resolving an unfulfilled need:
|
●
|
Increased
access to primary and episodic care (many would not have otherwise).
|
|
|
|
|
●
|
Mental
Healthcare
|
|
|
|
|
●
|
Specialists
|
|
|
|
|
●
|
Oral
Healthcare
|
|
|
|
|
●
|
Pharmacy
|
Our
Program Benefits:
|
●
|
Students
like the technology
|
|
|
|
|
●
|
School-based
health centers are five minutes or 50 feet from the student’s world
|
|
|
|
|
●
|
Increase
in yearly medical visits
|
|
|
|
|
●
|
3.4
hours saved from parents missing work (avg. of $43 in lost wages) per year
|
|
|
|
|
●
|
Reduced
emergency department visits (avg. savings per family $224) per year
|
|
|
|
|
●
|
Creates
a true system of care for the student
|
Our
Target for Urgent Care Facilities (Estimated at over 9,000 Facilities):
Based
upon a statement on their website from the American Academy of Urgent Care Medicine, the growth and development of Urgent Care
Medicine should be no surprise to anyone. Fueled by frustration over long waits in the emergency room (for non-emergency care),
and a reduction in available primary care appointments (often resulting in patients waiting for weeks to see their primary care
physician), a new growth spurt for the Urgent Care industry began in the mid-1990s and continues today. The public’s desire
for immediate access to quality and affordable medical care has been the driving force behind this monumental growth.
We
intend to develop this market.
THE
TELEHEALTH TOOLS AND SERVICES
The
following is a detailed description of the products and services that our operating subsidiary, 3P, intends to provide.
Our
Proposed Process:
Our
in-house dedicated business development team identifies referring primary clinic locations where their patient base will benefit
from our solution and we:
|
●
|
Provide
detailed site assessment for equipment needs based on medical specialty and available connectivity.
|
|
|
|
|
●
|
Order
equipment, install equipment, and train all staff and providers.
|
|
|
|
|
●
|
Carry
out ongoing education and support for the program.
|
|
|
|
|
●
|
Implement
telehealth program, monitor use, and track use and outcomes associated with goals and objectives.
|
Our
Proposed Telehealth Services Include:
|
●
|
Training
and implementation of telehealth for specialist practitioners and presenting sites by our field based Liaisons’
|
|
|
|
|
●
|
Network
Infrastructure/mobility/flexibility
|
|
|
|
|
●
|
Centralized
Scheduling
|
|
|
|
|
●
|
Image
grid and cloud-based PACS system to enable access to CT scans and MRIs remotely by physicians.
|
|
|
|
|
●
|
Credentialing
Assistance
|
|
|
|
|
●
|
24/7
IT and Program Support
|
Our
Proposed Network Technology and Architecture:
Our
proposed specialty practice network is designed to be a highly secure environment and a working IP network that allows access
to the Internet. Videoconference, either point-to-point or multipoint, is readily available to all users for consultations, education
and business applications.
The
network is expandable in both scope and size. The network platform has an integrated electronic health record system practice
management, insurance eligibility for claims, billing and all other functions of a practice and supports an image grid and PACS
system to enable access to CT scans and MRIs, and to then store and forward images. In addition, the network has enough capacity
to take on considerably more applications as desired or needed.
Dedicated
Support
3P
provides 24 hour per day help desk support. The maintenance program and help desk support gives us a single point of contact for
quick problem resolution.
Scheduling
System
Our
licensed software scheduling system is manned by our staff and is integrated into our platform. This advanced, user-friendly scheduling
system coordinates all patient / facility / physician / distant learning appointments.
Back
office practice Management
We
are using the Eclinical works EMR and practice management system to manage all aspects of our medical practices. Our front office,
mid office and back office team does real time eligibility, claims and secondary claims, claims management, billing etc.
Credentialing
Support/ Management
To
meet the physician credentialing requirements of partnering hospitals and institutions, 3P assists with the process to credential
and privilege clinicians / practitioners who provide telemedicine consultations via the network. All providers must meet the minimum
standards of criminal background and certification specific (varies with license, education, training, experience, and competence)
screening, as well as additional quality controls.
3P’s
Telehealth practice offers our partners technology services, patient services, comprehensive program services and educational
services.
The
Benefits of 3P’s service offering:
|
●
|
Our
network supports the ability to read images, CT scan, MRI, and other diagnostic resources.
|
|
|
|
|
●
|
We
provide a comprehensive telehealth program including centralized scheduling, credentialing support, 24/7 IT support, dedicated
telehealth liaison, as well as training and on-going education for site staff.
|
3P
offers a value proposition to its referring partners:
|
●
|
Increased
and enhanced access to our specialty services
|
|
|
|
|
●
|
Increased
revenues to physicians by increasing their patient volumes
|
|
|
|
|
●
|
Increased
revenues to hospitals through patient retention
|
|
|
|
|
●
|
Alignment
with value-based payment models
|
|
|
|
|
●
|
Improved
patient outcomes
|
|
|
|
|
●
|
Overall
healthcare delivery optimization and cost reduction
|
MARKETING
AND SALES STRATEGY
We
intend our business and growth will come through direct presentations to primary care facilities and may also grow by word of
mouth and referrals, which we hope will develop a brand and positive reputation. We intend to operate with a dedicated field sales
and marketing team. Generally, each state where we operate will be staffed by one business development team member per 20 county
territories. The business development and revenue growth may also come from the visibility and efforts of the leadership team,
along with the support of business developers in the field. In order to sustain our success, maintain the integrity of our brand,
keep pace with rising demand, ride the rapid expansion of the market and capture more market share, we must obtain the required
funding, estimated at $5,000,000 which is not committed at this time.
Our
sales and marketing strategy is outlined below.
Market
Development Strategies
a.
Our initial focus is to grow the core business: Align solutions, go-to-market strategy and tactics for each of our existing customer
market segments where believe there are proven need, benefit, and return on investment.
b.
Target Prospects: We will solicit the following:
|
i)
|
Nursing
Homes
|
|
|
|
|
ii)
|
Hospitals
|
|
|
|
|
iii)
|
Urgent
Care Facilities
|
|
|
|
|
iv)
|
Schools
|
|
|
|
|
v)
|
Correctional
Facilities
|
|
|
|
|
vi)
|
Physicians
|
c.
We intend to prioritize and drive sales growth where State Laws support telehealth.
|
i.
|
States:
There are currently 35 States where we would target expansion
|
d.
We intend to launch to “policy friendly” telemedicine States
|
i.
|
7
States with American Telemedicine Association top composite score (GA, CO, VA, TN, MS, NM, CA)
|
|
|
|
|
ii.
|
30
States plus DC ranked second highest for telemedicine “friendly”
|
Sales
and Distribution Strategy
We
plan that sales will be driven through a combination of a 3P direct sales force and strategic partner/indirect channels (in a
“sell with” and “sell through” model). Our strategy will also be to develop and monetize partnerships
to promote business and revenue opportunities throughout the ecosystem.
Partnering
and “marketing cooperative” relationships with hardware, software, service providers, healthcare systems, insurance
companies and others may help provide the synergy for growth in our traditional telehealth consulting and managed services lines.
Lead generation and referral may come from partners and strategic alignment with several industry leaders with the applied application
being the genesis for sales and services.
Sales
Velocity
Our
sales strategy will incorporate a process to facilitate sales to enable scale, operational marketing success and sustainability
(with continuous improvements to increase sales velocity) to include:
|
●
|
Implement
a sales funnel methodology and ongoing sales process (qualification, prioritization, revenue forecasting, performance tracking).
|
|
|
|
|
●
|
Invest
and implement a customer relationship management (CRM) platform for visibility, opportunity development and management.
|
|
|
|
|
●
|
Create
sales enablement tools: training, baseline proposals, and value propositions by market segment, pricing, etc. to enable, replicate
success and empower sales executives and partner distribution channels.
|
|
|
|
|
●
|
Procure
business intelligence and lead generation tools (for target lists, sales leads).
|
Plans
to Expand Brand Awareness
We
plan to hire/invest in marketing/messaging expertise to drive brand awareness
i.
We plan to market the 3P brand to be known for:
|
●
|
Renowned
telehealth experts
|
|
|
|
|
●
|
Passion,
commitment and partnership collaboration
|
|
|
|
|
●
|
Advocates
and champions for the integrity of telemedicine
|
ii.
We plan to pro-actively increase visibility of our projects and thought leadership through active participation in social media
outlets
iii.
We plan to continue to participate in healthcare technology/telehealth conferences, panels
iv.
We plan to host conferences, webinars with strategic partners
v.
We plan to create marketing communications (newsletters to network partners, prospects, distribution partners, employees)
vi.
We plan to engage with key technology hardware and software technology partners.
vii.
We plan to maintain active participation and sponsorship in professional industry and technology associations.
viii.
We plan to create a world-class “experience” center – to showcase and demo the virtual care center and patient
centered medical home.
ix.
We plan to forge strategic alliances for differentiation and market visibility.
REVENUE
MODEL
The
3P Telehealth revenue model and projections are based upon performance, expansion of core telehealth services, and implementation
of new and telehealth service lines. Opportunities for revenue from additional telehealth services lines will be realized over
the next five years in the areas of consumer telehealth, consulting, and home healthcare. The national projections include revenue
associated with these areas with the most robust being home healthcare. It is believed that the migration of telehealth into the
home and to the consumer may account for a larger portion of health services revenue in the future.
Management
believes that given the growing market and changes in healthcare i.e., Affordable Care Act, penalties for readmissions, and financial
rewards for high quality care and lower cost care, the potential market and pricing options for our core business and additional
telehealth services lines is robust.
Competition
and Defensibility:
There
are a broad range of telehealth products and services available to today’s health care industry. The healthcare industry,
in its current state, is uncoordinated and fragmented across the care continuum. There is no shortage of technology companies
rapidly innovating to address these challenges. However, like the healthcare industry, the myriad of hardware, software and platform
solution offerings are also uncoordinated and fragmented. Each, typically addresses one particular aspect of the continuum of
care or its product represents only one piece of the entire “telemedicine network” ecosystem. This leaves healthcare
providers and systems confused and overwhelmed with how best to implement a telehealth program.
We
intend to be a specialty telehealth medical practice management provider utilizing a proprietary technology and hardware platform
to deliver those services to patients via our referring physicians. 3P intends to orchestrate, deliver, train and manage an end-to-end
customized telehealth program for its primary care referring partners. We believe 3P is unique in its approach and the assets
that it brings to the marketplace. 3P brings the healthcare and technology providers together to create a full and comprehensive
healthcare delivery system.
We
intend to break down the silos and coordinate an entire program to create a cohesive, holistic solution for healthcare delivery.
Our key differentiator we believe is our ability to optimize, deliver and manage across the entire patient-centered medical home
(“PCMH”) spectrum.
Renaissance
Health Publishing-Asset Acquisition
On
June 27, 2017, the Registrant entered into an Asset Acquisition Agreement with Renaissance Health Publishing LLC. a Florida Limited
Liability Company.
The
consideration of the Asset Acquisition shall be due and payable as follows:
Purchase
and Sale of Assets
.
Subject
to the terms and conditions set forth in this Agreement, Seller does hereby sell, convey, transfer, assign and deliver to Buyer,
and Buyer does hereby purchase from Seller, all of the goodwill and all of the assets used by or in connection with the Business,
tangible or intangible, wherever located (the assets being transferred hereunder are collectively referred to as the “
Purchased
Assets
”), including without limitation, all inventory of products and supplies and work in progress owned by Seller,
all of Seller’s contracts (including, without limitation, all of Seller’s real property, computer, telephone and equipment
leases) (collectively, the “
Assigned Contracts
”), prepaid expenses, machinery and equipment, manufacturer’s
warranties, licenses, consents and permits, customer lists, training materials, trademarks, trade names, servicemarks, copyrights,
techniques, know-how, show-how and other intangibles, except for the assets specifically set forth on
Schedule 2.1
hereto
(the “
Excluded Assets
”).
Purchase
Price
.
The
consideration to be paid to Seller for the Purchased Assets (the “
Purchase Price
”) shall consist of:
a)
a cash payment at Closing of $1,000,000 (the “
Closing Date Payment
”), payable via certified check or wire transfer
of immediately available funds to an account that shall have been designated by Seller to Buyer prior to Closing; and
b)
payment of: (x) four times Seller’s earnings before interest, taxes, depreciation and amortization (“
EBITDA
”)
for the 12 month period ending on the last day of the calendar month immediately preceding the month in which the audit is completed
(the “
Audit Date”),
as determined by an audit of Seller’s financial statements conducted by Assurance
Dimensions, Inc. (the “
Auditor
”), plus (y) the value of Seller’s fully-paid inventory (calculated at
Seller’s actual cost) of supplements and pre-printed direct mail pieces as of the Closing, minus (z) the Closing Date Payment
(the “
Formula Payment
”). The Formula Payment shall be payable pursuant to the Convertible Promissory Note attached
as
Exhibit “A
” hereto (the “
Convertible Note
”) and the obligations of Buyer under the Convertible
Note shall be secured by the Security Agreement in the form attached as
Exhibit “B
” hereto. Seller shall be
required to execute an inter-creditor agreement with the Senior Lender in form and substance reasonably satisfactory to the Senior
Lender pursuant to which the Seller shall subordinate the priority of its lien on the collateral described in the Security Agreement
to the lien on such collateral arising under the Senior Loan documents.
Allocation
of Purchase Price
.
Within
five days after the Closing Date, Seller shall deliver a schedule allocating the Purchase Price (the “
Allocation Schedule
”).
The Allocation Schedule shall be prepared in accordance with Section 1060 of the Code. The Allocation Schedule shall be deemed
final unless Buyer notifies Seller in writing that Buyer objects to one or more items reflected in the Allocation Schedule within
five (5) days after delivery of the Allocation Schedule to Buyer. In the event of any such objection, Seller and Buyer shall negotiate
in good faith to resolve such dispute;
provided, however,
that if Seller and Buyer are unable to resolve any dispute with
respect to the Allocation Schedule within thirty (30) days after the delivery of the Allocation Schedule to Buyer, such dispute
shall be resolved by the Auditor or, if the Auditor is unable to serve, another impartial nationally recognized firm of independent
certified public accountants mutually appointed by Buyer and Seller. The fees and expenses of such accounting firm shall be borne
equally by Seller and Buyer. Seller and Buyer agree to file their respective IRS Forms 8594 and all federal, state and local tax
returns in accordance with the Allocation Schedule.
No
Assumption of Liabilities
.
Buyer
does not and shall not assume any debts, obligations or liabilities of any nature whatsoever of the Seller arising before or after
the date hereof or in connection with any of the Purchased Assets or the Business of Seller (the “
Excluded Liabilities
”)
other than the liabilities of the Seller disclosed on
Schedule 2.4
hereto (the “
Assumed Liabilities
”).
Seller agrees to satisfy and discharge the Excluded Liabilities as the same shall become due. Buyer agrees to satisfy and discharge
the Assumed Liabilities as the same shall become due.
Non-assignable
Assets
.
Notwithstanding
anything to the contrary in this Agreement, and subject to the provisions of this Section 2.5, to the extent that the sale, assignment,
transfer, conveyance or delivery, or attempted sale, assignment, transfer, conveyance or delivery, to Buyer of any Purchased Asset
would result in a violation of applicable Law, or would require the consent, authorization, approval or waiver of a Person who
is not a party to this Agreement or an Affiliate of a party to this Agreement (including any Governmental Entity), and such consent,
authorization, approval or waiver shall not have been obtained prior to the Closing, this Agreement shall not constitute a sale,
assignment, transfer, conveyance or delivery, or an attempted sale, assignment, transfer, conveyance or delivery, thereof; provided,
however, that, subject to the satisfaction or waiver of the conditions contained in Section 8.1 hereof, the Closing shall occur
notwithstanding the foregoing without any adjustment to the Purchase Price on account thereof. Following the Closing, Seller and
Buyer shall use commercially reasonable efforts, and shall cooperate with each other, to obtain any such required consent, authorization,
approval or waiver. Once such consent, authorization, approval or waiver is obtained, Seller shall sell, assign, transfer, convey
and deliver to Buyer the relevant Purchased Asset to which such consent, authorization, approval or waiver relates for no additional
consideration.
To
the extent that any Purchased Asset cannot be transferred to Buyer following the Closing pursuant to this Section 2.5, Buyer and
Seller shall use commercially reasonable efforts to enter into such arrangements (such as subleasing, sublicensing or subcontracting)
to provide to the Parties the economic and, to the extent permitted under applicable Law, operational equivalent of the transfer
of such Purchased Asset to Buyer as of the Closing and the performance by Buyer of its obligations with respect thereto. Buyer
shall, as agent or subcontractor for Seller pay, perform and discharge fully the liabilities and obligations of Seller thereunder
from and after the Closing Date. To the extent permitted under applicable Law, Seller shall, at Buyer’s expense, hold in
trust for and pay to Buyer promptly upon receipt thereof, such Purchased Asset and all income, proceeds and other monies received
by Seller to the extent related to such Purchased Asset in connection with the arrangements under this Section 2.5. Seller shall
be permitted to set off against such amounts all direct costs associated with the retention and maintenance of such Purchased
Assets.
The
Asset Acquisition Agreement contains customary representations and warranties and pre and post-closing covenants of each party
and customary closing conditions. Breaches of the representations and warranties will be subject to customary indemnification
provisions, subject to specified aggregate limits of liability. The registrant has not completed the funding of this acquisition,
and with the execution of this agreement it allows the Registrant to source funding for this acquisition. The foregoing summary
description of the terms of the Asset Acquisition Agreement may not contain all information that is of interest to the reader.
For further information regarding the terms and conditions of the Asset Acquisition Agreement, this reference is made to such
agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by this reference as filed on Form 8-K with the Securities
and Exchange Commission
On
August 7, 2017 Medical Innovation Holdings, Inc. (“MIHI”), a Colorado corporation (the “Company”) entered
into a Letter of Intent (“LOI”) with Orange Care Group of Miami lakes Florida. Medical Innovation Holdings,
Inc. is to provide Information Technology management services to practices enrolled in Orange Care Group’s Accountable Care
Organizations, including Total Care ACO, LLC d/b/a Orange Accountable Care of New York, Orange Accountable Care of New Jersey,
LLC, Orange Accountable Care of Texas, LLC, Orange Accountable Care of South Florida, LLC or Orange Accountable Care Organization
of South Florida, LLC (collectively known as “ACO”).
It
is the understanding of the parties to this LOI that the products and services which Manager will provide to providers,
practices and physicians that are members of the ACO (“ACO Participants”) will support the ACO’s mission of
Advancing Care Information in connection with the provision of healthcare services by such ACO Participants to their patients
who are Medicare beneficiaries
The
term of this LOI shall not be less than five months and at the end of such five-month period, an option to renew for a
term of not less than one year.
Compensation
for the Services provided by MIHI pursuant to this Agreement is according to the following schedule:
|
●
|
A
$50,000 set up fee will be paid to MIHI by Orange Care Group upon signing of this Agreement by Orange Care Group. Such fee
shall be used by MIHI to initiate performance of the services listed in Exhibit A.
|
|
|
|
|
●
|
MIHI
shall charge ACO providers, practices and physicians who elect to purchase any of the products and services being provided
by MIHI a 20% service fee on a cost plus basis of Fair Market Value for any fee for service. This fee will be subject to negotiation
by MIHI with Orange Care Group, its providers, practices and physicians.
|
The
above description of the LOI is intended as a summary only and is qualified in its entirety by the terms and conditions
set forth therein, and may not contain all information that is of interest to the reader. For further information regarding the
terms and conditions of the Letter of Intent, this reference is made to the Letter of Intent, which was filed on Form 8-K on August
8, 2014 and is incorporated herein by this reference.
On
September 15, 2017 The Company entered into an MOU with Kevin Swint to become the Company’s COO the MOU provides for the
issuance of common stock of up to 1,000,000 shares of common stock to be issued in increments of 200,000 shares to be received
upon signing of the MOU and further issuances of 200,000 shares are to be issued on the anniversary date of the MOU over a four
year period and salary of $10,000 per month. As of January 31, 2018 200,000 shares were issued to Mr. Swint on November 15, 2017.
RESULTS
OF OPERATIONS
The
Company recognized revenues of $0 during the three months ended January 31, 2018.
The
Company recognized revenues of $48,000 during the nine months ended January 31, 2018.
During
the three months ended January 31, 2018, we incurred general and administrative expenses of $285,644, which were mainly due to
the ongoing costs of operations of a fully reporting company.
During
the nine months ended January 31, 2018, we incurred general and administrative expenses of $647,501which were mainly due to the
ongoing costs of operations of a fully reporting company.
During
the three months ended January 31, 2018, the Company recognized a net loss of $498,960 due to the general and administrative
expenses.
During
the nine months ended January 31, 2018, the Company recognized a net loss of $1,142,927 due to the general and administrative
expenses.
LIQUIDITY
AND CAPITAL RESOURCES
As
of January 31, 2018, the Company had $6,461of cash and equivalents. The Company’s total current liabilities were $1,568,875
as of January 31, 2018, which was mainly accounts payable of $282,572 and accrued expenses of $582,648, and notes payable of $514,344.
At January 31, 2018, the Company’s current liabilities exceeded current assets by $1,562,414.
For
the nine month period ended January 31, 2018 the Company received $361,000 of cash from financing activities.
The
Company did not have any investment activities during the nine months ended January 31, 2018 or 2017.
The
Company has an accumulated deficit, as of January 31, 2018, of $2,658,317 compared to $1,562,939 as of April 30, 2017, an increase
of $1,095,378 in the nine-month period.
Going
Concern
The
Company’s auditors issued a “going concern” statement as part of their opinion in the Audit Report for the year
ended April 30, 2017 and for each of the years in the two-year period then ended, including a “going concern” explanatory
paragraph, that describes substantial doubt about the Company’s ability of the Company to continue as a “going concern.”
Short
Term
On
a short-term basis, we do not generate revenues sufficient to cover operations. Based on prior history, we will continue to have
insufficient revenue to satisfy current and recurring liabilities as we continue to develop our operations. For short term needs
we will be dependent on receipt, if any, of offering proceeds.
Need
for Additional Financing
We
do not have capital sufficient to meet our cash needs. We will have to seek loans or equity placements to cover such cash needs.
No commitments to provide additional funds have been made by our management or other stockholders. Accordingly, there can be no
assurance that any additional funds will be available to us to allow it to cover our expenses as they may be incurred.
There
is no assurance the Company will be profitable, the Company may not be able to successfully develop, manage or market its products
and services, the Company may not be able to attract or retain qualified executives and personnel, the Company’s products
and services may become obsolete, government regulation may hinder the Company’s business, additional dilution in outstanding
stock ownership may be incurred due to the issuance of more shares, warrants and stock options, or the exercise of warrants and
stock options, and other risks inherent in the Company’s businesses.
The
Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise
after the date hereof. Readers should carefully review the factors described in other documents the Company files from time to
time with the Securities and Exchange Commission, including the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q
filed by the Company and any Current Reports on Form 8-K filed by the Company.
Contractual
Obligations and Other Commercial Commitments
The
Company does not have sufficient capital to meet its cash needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934. Management will have to seek loans or equity placements to cover such cash
needs and cover outstanding payables. Lack of existing capital may be a sufficient impediment to prevent the Company from accomplishing
its goal of expanding operations. There is no assurance that the Company will be able to carry out our business. No commitments
to provide additional funds have been made by the Company’s management or other shareholders. Accordingly, there can be
no assurance that any additional funds will be available to the Company to cover its expenses as they are incurred.
Irrespective
of whether the Company’s cash assets prove to be inadequate to meet its operational needs, the management might seek to
compensate providers of services by issuances of stock in lieu of cash.
Off-Balance
Sheet Arrangements
In
accordance with the definition under SEC rules, the following qualify as off-balance sheet arrangements:
|
a)
|
Any
obligation under certain guarantees or contracts;
|
|
|
|
|
b)
|
A
retained or contingent interest in assets transferred to an unconsolidated entity or similar entity or similar arrangement
that serves as credit, liquidity, or market risk support to that entity for such assets;
|
|
|
|
|
c)
|
Any
obligation under certain derivative instruments; and
|
|
|
|
|
d)
|
Any
obligation under a material variable interest held by the registrant in an unconsolidated entity that provides financing,
liquidity, market risk, or credit risk support to the registrant, or engages in leasing, hedging, or research and development
services with the registrant.
|
The
following will address each of the above items pertaining to the Company.
As
of January 31, 2018, we do not have any obligation under certain guarantees or contracts as defined above.
As
of January 31, 2018, we do not have any retained or contingent interest in assets as defined above.
As
of January 31, 2018, we hold one derivative financial instrument.
Accounting
for Derivative Instrument and Hedging Activities, as amended.
As
of January 31, 2018, we did not participate in transactions that generate relationships with unconsolidated entities or financial
partnerships, such as entities often referred to as structured finance or special purpose entities (“SPEs”), which
would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited
purposes. As of January 31, 2018 and April 30, 2017, we were not involved in any unconsolidated SPE transactions.
Dividends
The
Company has not declared or paid any cash dividend on its common stock and does not anticipate paying dividends for the foreseeable
future.