NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Assisted 4 Living, Inc. (“the Company,”
“we”, “our” or “us”) was incorporated in the state of Nevada on May 24, 2017 and is
based in Sarasota, Florida. The accounting and reporting policies of the Company conform to accounting principles generally accepted
in the United States of America (“GAAP”), and the Company’s fiscal year end is December 31.
As discussed in NOTE 4, on March 23,
2021, we entered into a Plan of Merger with our wholly-owned subsidiary, BPCC Acquisition, Inc., a Florida corporation
(“Merger Sub”) and Banyan Pediatric Care Centers, Inc. (“Banyan”). Under the terms of the Plan of
Merger, Merger Sub merged with and into Banyan with Banyan surviving the merger (the “Surviving Entity”) and
becoming a wholly-owned subsidiary of the Company (the “Merger”). Pursuant to the Merger, we succeeded to the
business of Banyan. The Merger has been treated as a recapitalization and reverse acquisition of the Company for financial
accounting purposes, and Banyan is considered the acquirer for financial reporting purposes. This means that the
Company’s historical financial statements before the Merger have been replaced with the historical financial statements
of Banyan before the Merger in this Quarterly Report and future filings with the SEC
Through Banyan, we operate three pediatric
extended care centers (“PPECs”) is southwest Florida. A PPEC is a nurse-staffed pediatric day care center for medically
complex children age birth to 21 years. Our staff includes Registered Nurses (RNs), Licensed Practical Nurses (LPNs), Certified
Nursing Assistants (CNAs) and Caregivers, who attend to the children’s medical conditions throughout the day in classroom,
dining, play, and clinical settings. Banyan is fully licensed and accepts Florida Medicaid.
We are headquartered at 6801 Energy
Court, Suite 201 Sarasota, Florida 34240.
The
corporate website is www.assisted4living.com.
COVID-19
In
March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic based on the rapid increase in global
exposure. COVID-19 continues to spread throughout the world. We are closely monitoring developments and are taking steps
to mitigate the potential risks related to the COVID-19 pandemic to the Company, its employees, as well as its residential and consulting
clients.
To
date COVID-19 has not substantially negatively impacted our revenues or operations. Our evaluations of our practices, procedures,
and operations, related to COVID-19, is ongoing. Additional updates to policies, procedures and operations will occur as best practices
are adopted and as we deem necessary or advisable, or as further governmental guidance or regulations are implemented.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with
GAAP for interim financial statements and with
the instructions to Form 10-Q and Regulation S-X of the United States Securities and Exchange Commission (“SEC”).
Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United
States of America for annual financial statements.
In the opinion of
management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting
only of normal recurring accruals) to present the financial position of the Company as of March 31, 2021 and the results of operations
and cash flows for the periods presented. The results of operations for the three months ended March 31, 2021 are not necessarily
indicative of the operating results for the full fiscal year or any future period. These unaudited condensed consolidated financial
statements should be read in conjunction with the condensed consolidated financial statements and related notes thereto included
in the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2021. As of March 23, 2021 we had
discontinued operations reflected in the accompanying unaudited condensed consolidated financial statements. As a result
of the Plan of Merger completed on March 23, 2021 (see NOTE 4) we have changed our year end reporting period from November to
December.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Basis
of Consolidation
These condensed
consolidated financial statements include the accounts of the Company and the wholly-owned subsidiaries, Banyan Pediatric Care
Centers, Inc, Banyan Pediatric Care Centers – OPS, LLC, Banyan Pediatric Care Centers – St. Petersburg, LLC, Banyan
Pediatric Care Centers, - Pasco, LLC and Banyan Pediatric Care Centers – Sarasota, LLC and the discontinued operations of
Assisted 2 Live, Inc., the wholly owned subsidiary that was discontinued as of March 23, 2021. All material intercompany balances
and transactions have been eliminated.
Cash and
Cash Equivalents
The Company considers
all short-term investments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents
at March 31, 2021 and December 31, 2020.
Accounts
Receivable
Accounts receivable
primarily consists of amounts due from third-party payers (non-governmental), governmental payers and private pay patients and
is recorded net of allowances for doubtful accounts and contractual discounts. The Company’s ability to collect outstanding
receivables is critical to its results of operations and cash flows. Accordingly, accounts receivable reported in the Company’s
condensed consolidated financial statements is recorded at the net amount expected to be received. The Company’s primary
collection risks are (i) the risk of overestimation of net revenues at the time of billing that may result in the Company receiving
less than the recorded receivable, (ii) the risk of non-payment as a result of commercial insurance companies’ denial of
claims, (iii) the risk that patients will fail to remit insurance payments to the Company when the commercial insurance company
pays out-of-network claims directly to the patient, (iv) resource and capacity constraints that may prevent the Company from handling
the volume of billing and collection issues in a timely manner, (v) the risk that patients do not pay the Company for their self-pay
balances (including co-pays, deductibles and any portion of the claim not covered by insurance) and (vi) the risk of non-payment
from uninsured patients.
The Company’s
accounts receivable from third-party payers are recorded net of estimated contractual adjustments and allowances from third-party
payers, which are estimated based on the historical trend of the Company’s facilities’ cash collections and contractual
write-offs, accounts receivable aging, established fee schedules, relationships with payers and procedure statistics. While changes
in estimated reimbursement from third-party payers remain a possibility, the Company expects that any such changes would be minimal
and, therefore, would not have a material effect on the Company’s financial condition or results of operations. The Company’s
collection policies and procedures are based on the type of payor, size of claim and estimated collection percentage for each
patient account. The Company analyzes accounts receivable at each of the facilities to ensure the proper collection and aged category.
The operating systems generate reports that assist in the collection efforts by prioritizing patient accounts. Collection efforts
include direct contact with insurance carriers or patients and written correspondence.
Allowance
for Doubtful Accounts, Contractual and Other Discounts
Management estimates
the allowance for contractual and other discounts based on its historical collection experience and contracted relationship with
the payers. The services authorized and provided and related reimbursement are often subject to interpretation and negotiation
that could result in payments that differ from the Company’s estimates. The Company’s allowance for doubtful accounts
is based on historical experience, but management also takes into consideration the age of accounts, creditworthiness and current
economic trends when evaluating the adequacy of the allowance for doubtful accounts. An account may be written-off only after
the Company has pursued collection efforts or otherwise determines an account to be uncollectible. Uncollectible balances are
written-off against the allowance. Recoveries of previously written-off balances are credited to income when the recoveries are
made.
Fair Value
of Financial Instruments
The carrying amount
of accounts receivable and accounts payable approximate their respective fair values due to the short- term nature. The carrying
amount of the line of credit and note payable approximates fair values due to their market interest rates. Financial instruments
that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts
receivable.
Property
and Equipment
Property and equipment
are stated at cost, less accumulated depreciation. Additions and improvements to property and equipment are capitalized at cost.
Depreciation of owned assets and amortization of leasehold improvements are computed using the straight-line method over the shorter
of the estimated useful lives of the related assets or the lease term. The cost of assets sold or retired, and the related accumulated
depreciation are removed from the accounts and any resulting gains or losses are reflected in other income (expense) for the year.
Expenditures for maintenance and repairs are charged to expense as incurred.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Goodwill
Our goodwill represents
the excess of the purchase price over the fair value of the net identifiable assets acquired in business combinations. The goodwill
generated from the business combinations is primarily related to the value placed on the employee workforce and expected synergies.
Judgment is involved in determining if an indicator or change in circumstances relating to impairment has occurred. Such changes
may include, among others, a significant decline in expected future cash flows, a significant adverse change in the business climate,
and unforeseen competition. There was no goodwill impairment for the years presented.
The Company tests
goodwill for impairment on an annual basis, and when events or circumstances indicate the fair value of a reporting unit may be
below its carrying value.
Long-Lived
Assets
Long-lived assets
are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
There were no impairments of long-lived assets for the years presented.
Advertising
and Marketing
The Company uses
advertising and marketing to promote its services. Advertising and marketing costs are expensed as incurred.
Net Loss
Per Share
Basic net loss
per common share is computed by dividing net loss applicable to common stockholders by the weighted-average number of common shares
outstanding during the period. Diluted net loss per common share is determined using the weighted-average of common shares outstanding
during the period, adjusted for the dilutive effect of common stock equivalents, consisting of the conversion option embedded
in convertible debt. The weighted-average number of common shares outstanding excludes common stock equivalents because their
inclusion would have an anti-dilutive effect.
Income Taxes
The Company uses
the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined
based on differences between financial reporting and the tax basis of assets, liabilities, the carry forward of operating losses
and tax credits, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected
to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not
be realized.
Any future benefit
arising from losses have been offset by a valuation allowance. Accordingly, no provision for income taxes is reflected in the
condensed consolidated financial statements. The Company records a liability for uncertain tax positions when it is probable that
a loss has been incurred and the amount can be reasonably estimated. Interest and penalties related to income tax matters, if
any, would be recognized as a component of income tax expense. At March 31, 2021 and December 31, 2020, the Company had no liabilities
for uncertain tax positions. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements,
changes in tax law and new authoritative rulings. Currently, the tax years subsequent to 2017 are open and subject to examination
by the taxing authorities.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Use
of Estimates and Assumptions
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting
period. Actual results could differ from these good faith estimates and judgments.
Revenue
Recognition
We follow
ASC 606, “Revenue from Contracts with Customers.” Revenues are recognized when promised goods or services are transferred
to a customer, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.
We derive our revenues from the rendering of services, such as skilled nursing services. The five-step model defined
by ASC 606 requires us to: (i) identify our contracts with customers, (ii) identify our performance obligations
under those contracts, (iii) determine the transaction prices of those contracts, (iv) allocate the transaction
prices to our performance obligations in those contracts and (v) recognize revenue when each performance obligation under
those contracts is satisfied.
Reimbursement
rates to provide skilled nursing services in our PPEC facilities are determined by the Medicaid program. Fees are billed to the
Medicaid program and other payors weekly following the Medicaid billing guidelines.
Reclassification
Certain
amounts from prior periods have been reclassified to conform to the current period presentation.
NOTE
3 – ACCRUED LIABILITIES
Our
accrued liabilities at March 31, 2021 and December 31, 2020 consisted of the following:
SCHEDULE OF ACCRUED LIABILITIES
|
|
|
March
31, 2021
|
|
|
December
31, 2020
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
70,675
|
|
|
$
|
16,298
|
|
|
Credit card
|
|
|
-
|
|
|
|
1,050
|
|
|
Accrued expenses
|
|
|
354,193
|
|
|
|
130,832
|
|
|
Accrued salary
|
|
|
139,952
|
|
|
|
-
|
|
|
Payroll tax
payable
|
|
|
8,070
|
|
|
|
-
|
|
|
Accrued Liabilities
|
|
$
|
572,890
|
|
|
$
|
148,180
|
|
NOTE 4 – BANYAN MERGER
On March 23, 2021,
we entered into a Plan of Merger with Merger Sub and Banyan. Under the terms of the Plan of Merger, Merger Sub merged
with and into Banyan with Banyan as the Surviving Entity and wholly-owned subsidiary of the Company. The Merger was effective
on March 23, 2021.
The Merger has been treated
as a recapitalization and reverse acquisition of the Company for financial accounting purposes, and Banyan is considered the acquirer
for accounting purposes. This means that the Company’s historical financial statements before the Merger have been replaced with
the historical financial statements of Banyan.
In connection with the
Merger, we issued 4,165,418 shares of our common stock in exchange for 49,984,649 outstanding shares of Banyan’s common stock held by
64 shareholders, based on an exchange ratio of one (1) share of our common stock for every twelve (12) shares of Banyan common stock.
We also issued a warrant to purchase 75,000 shares of our common stock (the “Warrant”) in exchange for a warrant to purchase
900,000 shares of Banyan’s common stock. The Warrant is held by one investor and is exercisable for cash only until May 2, 2030 at an
exercise price of $0.38 per share. The number of shares of common stock deliverable upon exercise of the Warrant contains provisions
for standard anti-dilution adjustments.
The Surviving Entity
assumed Banyan’s $2,300,000 of outstanding debt, and the $2,000,000 of such debt that was convertible into 20,000,000 shares of
Banyan common stock was converted at $0.50 per share into 4,000,000 shares of our common stock, effective as of March 30, 2021. The remaining
$300,000 of outstanding debt, evidenced by a promissory note dated November 6, 2020 (the “Note”), accrues interest at the
annual rate of 12%. Interest is payable on the sixth day of each month in the amount of $3,000 until the maturity date of the Note on
November 6, 2021, at which time, the remaining principal balance, if any, is due and payable.
NOTE
5 – DISCONTINUED OPERATIONS
On
April 30, 2021, our Board of Directors (the “Board”) approved the discontinuance of our wholly-owned subsidiary,
Assisted 2 Live, Inc. (the “Discontinued Subsidiary”). The operations of the Discontinued Subsidiary are reflected on our condensed consolidated statement of operations from the date of the Merger as a loss from
discontinued operations in the amount of $9,077.
The
April 30, 2021 Board decision was the result of the Purchase and Sale Option Agreement (the “Option Agreement”)
with Romulus Barr (“Barr”) which we entered into on November 7, 2020. The Option Agreement provided us with the
option to sell all of our interest in Assisted 2 Live, Inc., consisting of 1,000 shares
of common stock of the Discontinued Subsidiary, to Barr in exchange for 200,000 shares
of our common stock (the “Shares”) held by Barr. The returned Shares were cancelled, and included in authorized
but unissued shares of common stock of the Company. The number of issued and outstanding shares of common stock was decreased
by 200,000
as of April 30, 2021.
The
following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations for
the three months ended:
SUMMARY
OF CARRYING AMOUNTS OF ASSETS AND LIABILITIES AND CASH FLOWS OF DISCONTINUED OPERATIONS
|
|
|
March
31, 2021
|
|
|
December
31, 2020
|
|
|
Current assets of discontinued
operations
|
|
$
|
15,928
|
|
|
$
|
-
|
|
|
Non-current
assets of discontinued operations
|
|
|
29,849
|
|
|
|
-
|
|
|
|
|
$
|
45,777
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities of discontinued
operations
|
|
$
|
53,929
|
|
|
$
|
-
|
|
|
|
|
$
|
53,929
|
|
|
$
|
-
|
|
The
following table presents cash flows of discontinued operations for the three months ended March 31:
|
|
|
2021
|
|
|
2020
|
|
|
Net cash used in discontinued
operating activities
|
|
$
|
(14,386
|
)
|
|
$
|
-
|
|
|
Net cash from discontinued investing activities
|
|
|
-
|
|
|
|
-
|
|
|
Net cash from discontinued financing activities
|
|
|
-
|
|
|
|
-
|
|
|
|
|
$
|
(14,386
|
)
|
|
$
|
-
|
|
|
|
|
|
|
Three
months ended March 31,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Net revenues
|
|
$
|
5,362
|
|
|
$
|
-
|
|
|
Cost of net revenues
|
|
|
-
|
|
|
|
-
|
|
|
Gross profit
|
|
|
5,362
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Salary and tax expense
|
|
|
12,890
|
|
|
|
-
|
|
|
General and administrative
|
|
|
763
|
|
|
|
-
|
|
|
Lease expense
|
|
|
733
|
|
|
|
-
|
|
|
Total operating expenses
|
|
|
14,386
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations of discontinued operations
|
|
|
(9,024
|
)
|
|
|
-
|
|
|
Interest and other,
net
|
|
|
(53
|
)
|
|
|
-
|
|
|
Income from discontinued operations before
income taxes
|
|
|
(9,077
|
)
|
|
|
-
|
|
|
Provision for income
taxes
|
|
|
-
|
|
|
|
-
|
|
|
Income from discontinued
operations, net of income taxes
|
|
$
|
(9,077
|
)
|
|
$
|
-
|
|
NOTE
6 – NOTES PAYABLE
Notes
payable at March 31, 2021 and December 31, 2020 consisted of the following:
SCHEDULE OF NOTES PAYABLE
|
|
|
March
31, 2021
|
|
|
December
31, 2020
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
a. Excel Family Partners,
LLLP / Banyan Pediatric Investment, Inc. (Sep 2020)
|
|
$
|
-
|
|
|
$
|
2,000,000
|
|
|
b. NuView Trust Co. (Nov 2020)
|
|
|
300,000
|
|
|
|
300,000
|
|
|
c. Grand Trinity
Plaza, LLC (Dec 2020)
|
|
|
392,397
|
|
|
|
407,500
|
|
|
|
|
$
|
692,397
|
|
|
$
|
2,707,500
|
|
|
|
a)
|
On
September 18, 2020, through Banyan, we entered into a Convertible Note and Securities Purchase Agreement with two
investors for the aggregate principal in the amount of $2,000,000.
The note had a maturity date of September
18, 2022 and an interest rate of 8%
to be paid quarterly. The principal was funded by two investors (“Purchasers”), both related parties. Excel
Family Partners, LLLP invested $1,500,000
and Banyan Pediatric Investments, LLC invested $500,000. The
proceeds of this note were used for operational expenses and for the payment of the remainder of the buildout of the
Pasco County and the Sarasota locations. Written consent from shareholders holding a majority of the issued and
outstanding shares of common stock of Banyan was obtained, not including such shares currently held by the
Purchasers or their affiliates, consenting to the note contemplated hereby, in a form and substance acceptable to the
Purchasers, in their respective reasonable discretion. Both Purchasers were permitted to convert their respective portions of
the note at a conversion price of $0.10
per share. Subsequent to the Merger (see NOTE 4), the Board revised the conversion price of the note to $0.50
per share. Effective March 30, 2021 the Purchasers exercised their right to convert all outstanding principal. As of March
31, 2021 and December 31, 2020, there was $90,740
and $45,589
of accrued interest, respectively and is reflected in accrued interest balances on the condensed consolidated balance
sheet at March 31, 2021 and December 31, 2020.
|
|
|
b)
|
On November 6, 2020, through Banyan, we entered into a one-year note in the principal amount of $300,000 with NuView Trust Company. The note has a 12% interest rate with interest only payments until date of maturity. The proceeds of this no were used for operational expenses and for the payment of the remainder of the buildout of the Pasco County and the Sarasota locations. As of March 31, 2021 and December 31, 2020 there was no accrued interest. (see NOTE 4)
|
|
|
c)
|
On
December 15, 2020, through Banyan Pediatric Care Centers – Pasco, LLC, we entered into
a note payable with Grand Trinity Plaza, LLC in the principal amount of $407,500, which is
guaranteed by Banyan. The term of the note is 48 months with an interest rate of 6%. The
maturity date of the note is January 1, 2025. The note is in conjunction with the 84-month
facility lease for the Pasco County location, pursuant to which the landlord also provided
the construction of the buildout and financed $407,500 of the construction costs.
|
NOTE
7 – LEASEHOLD IMPROVEMENTS
The
Company had the following leasehold improvements as of March 31, 2021 and December 31, 2020:
SCHEDULE
OF LEASESHOLD IMPROVEMENTS
|
|
|
March
31,
2021
|
|
|
December
31, 2020
|
|
|
Amortization
Period
|
|
Leasehold improvements
|
|
$
|
2,669,047
|
|
|
$
|
2,669,047
|
|
|
15-17
years
|
|
Less: amortization
|
|
|
(97,137
|
)
|
|
|
(54,656
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
$
|
2,571,910
|
|
|
$
|
2,614,391
|
|
|
|
During
the year ended December 31, 2020, we recorded $2,669,047
of leasehold improvements. These amounts
include costs related to the build out of the Sarasota location in the amount of $1,245,950.
These costs will be amortized over the expected term of the lease including extensions that management expects to be 15
years. We also recorded costs in
the amount of $1,021,793
related to the New Port Richey location
buildout. The expected amortization of the improvements for the New Port Richey location is 17
years. Also recorded were
$401,303
of improvements as part of the St. Petersburg-Kidz
Club Acquisition. The expected amortization of the improvements for the St. Petersburg location is 15
years.
Amortization
expense for the three months ended March 31, 2021 and 2020 was $42,481
and $0,
respectively.
NOTE
8 – OPERATING LEASES
On
August 24, 2019, through Banyan Pediatric Care Centers-Sarasota, LLC, we entered into an operating lease
with Northeast Plaza Venture I, LLC for the premises located in the Northeast Plaza Shopping Center located on the Northeast corner
of 17th Street & Lockwood Ridge Road, in the County of Sarasota, Florida. The initial term of the lease is five
years with minimum annual rent of $180,000.
The
landlord granted rent abatement for this lease until February 24, 2020.
The
lease end date, including two successive 5-year
renewal options, is January 31, 2035. A right of use asset and lease liability in the amount of $1,899,869
associated with this lease was recognized.
This lease is treated as an operating lease for accounting purposes.
On
October 15, 2019, through Banyan, we entered into an assignment and assumption of lease agreement with The Kidz Club –
St. Pete, LLC whereby we assumed approximately 12,137
square feet of space at the southeast
corner of 3rd Avenue S. and 9th Street N., Webb’s Plaza, St. Petersburg, FL 33701. The minimum annual rent for the first
year of the lease was $113,681.
The current lease termination date, with extensions expected to be exercised, is October
31, 2024. Upon the exercise of each extension
the base rent shall increase by 1.5%.
This assignment of lease was subject to the terms of the Asset Purchase Agreement with The Kidz Club-St. Pete, LLC. A right
of use asset and lease liability in the amount of $875,539
was
recognized in association
with this lease. This lease is treated as an operating lease for accounting purposes.
Effective
April 1, 2020, through Banyan Pediatric Care Centers – Pasco, LLC, we entered into an 84-month
facility lease with Grand Trinity Plaza, LLC for the premises located in the shopping center known as the Grand Trinity Plaza
located in New Port Richey, Florida. The initial term of the lease had a minimum annual base rent of $94,500.
The
landlord granted rent abatement until September 2020. The
lease end date, including two successive 5-year
renewals is August 31, 2037. A right of
use asset and lease liability in the amount of $1,143,743
was
recognized in association
with this lease. This lease is treated as an operating lease for accounting purposes.
On
June 9, 2020, through Banyan, we entered into a 63-month
copier lease with Dex Imaging. The lease was for one copier and a printer. The minimum annual lease payment is $5,376
with annual increases not to exceed 12%
annually. This lease will auto renew in 12-month
increments. The
equipment under this lease has a fixed $1 payment buyout option.
This equipment was purchased for the St. Petersburg location. A right of use asset and lease liability in the amount of
$16,066
was recognized in association
with this lease. This lease is treated as an operating lease for accounting purposes.
On
August 25, 2020, through Banyan, we entered into a 60-month
financing agreement with Ascentium Capital LLC for two 2020 Turtletop Terra Transit passenger buses for the St. Petersburg location.
This
lease is considered an operating lease for accounting purposes because the lease period is less than the economic life of the
asset being leased. Minimum annual rent
payments under this lease are $24,859.
At our discretion, we may exercise a purchase option, by giving written notice no later than 30 days but not more
than 120 days before the expiration of the initial term. The purchase option price is $23,920
for each bus, based on reasonably predicted
fair market value. A right of use asset and lease liability in the amount of $102,393
was
recognized in association
with this lease. This lease is treated as an operating lease for accounting purposes.
On
October 20, 2020, through Banyan, we entered into a 60-month
financing agreement with Ascentium Capital LLC for a 2020 Eldorado National Advance 220 p/t 14 passenger bus for the St. Petersburg
location. This
lease is considered an operating lease for accounting purposes because the lease period is less than the economic life of the
asset being leased. Minimum annual rent
payments under this lease are $13,381.
At our discretion, we may exercise a purchase option, by giving written notice no later than 180 days but not more
than 360 days before the expiration of the initial term. The purchase option price is $12,891
based on reasonably predicted fair market
value. A right of use asset and lease liability in the amount of $55,345
was
recognized in association
with this lease. This lease is treated as an operating lease for accounting purposes.
In
accordance with ASC 842, we recorded the operating lease right of use asset and lease liability as follows:
SCHEDULE
OF OPERATING LEASE RIGHT OF USE ASSET AND LEASE LIABILITY
|
|
|
March
31, 2021
|
|
|
December
31,2020
|
|
|
Right of Use (ROU) asset
|
|
$
|
3,917,812
|
|
|
$
|
3,977,988
|
|
|
|
|
March
31, 2021
|
|
|
December
31, 2020
|
|
|
Operating lease liability:
|
|
|
|
|
|
|
|
|
|
Current
|
|
$
|
198,759
|
|
|
$
|
189,397
|
|
|
Non-Current
|
|
|
3,821,666
|
|
|
|
3,864,321
|
|
|
Total
|
|
$
|
4,020,425
|
|
|
$
|
4,053,718
|
|
NOTE
8 – OPERATING LEASES (CONTINUED)
Maturity
of Operating Lease Liability for fiscal year ended December 31,
SCHEDULE
OF MATURITY OF OPERATING LEASE LIABILITY
|
|
|
|
2021
|
|
|
2021 (nine months)
|
|
$
|
156,105
|
|
|
2022
|
|
|
213,747
|
|
|
2023
|
|
|
232,829
|
|
|
2024
|
|
|
251,264
|
|
|
2025
|
|
|
267,134
|
|
|
After 2025
|
|
|
2,899,346
|
|
|
Total lease liability
|
|
$
|
4,020,425
|
|
Information
associated with the measurement of our remaining operating lease obligations as of March 31, 2021 is as follows:
The
operating leases range from a term of 2.48
years to 16.68
years with a weighted average lease term
of 13.35 years.
The
weighted average discount rate is 6.07%.
The
lease expense for the three months ended March 31, 2021 and 2020 was $141,675
and $24,061,
respectively.
NOTE
9 - EQUITY
Preferred
Stock
We
have authorized 25,000,000
preferred shares with a par value of 0.0001
per share. The Board is authorized to divide the
authorized preferred shares into one or more series, each of which shall be so designated as to distinguish the shares
thereof from the shares of all other series and classes. As of March 31, 2021 and December 31, 2020, we had no classes
of preferred shares designated.
Common
Stock
We
have authorized 100,000,000
common shares with a par value of $0.0001
per share. Each common share entitles the holder to one
vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought. As of March 31, 2021,
we had 35,395,418 common
shares issued and outstanding.
NOTE
9 – EQUITY (CONTINUED)
Fiscal
Year 2021
On
March 23, 2021, we entered into a Plan of Merger with Banyan (See NOTE 4).
In
connection with the Merger, we issued 4,165,418 shares of our common stock in exchange for 49,984,649 outstanding shares of Banyan’s
common stock held by 64 shareholders, based on an exchange ratio of one (1) share of our common stock for every twelve (12) shares
of Banyan common stock.
In
conjunction with the Merger, the previously issued 31,230,000
shares of common stock of the Company
prior to the Merger were deemed issued for the Merger.
During the
period of February 11, 2021 through March 31, 2021 we issued shares of common stock at $0.50
per share for an aggregate consideration of $3,540,000
On
March 31, 2021, we had recorded a liability to issue shares in the amount of $325,000
to record stock purchases of 650,000
common shares at $0.50
per share that were to be issued in the
following month, April 2021. On March 30, 2021, the Noteholders of the $2,000,000
convertible note exercised their right
to convert the note (see NOTE 4). The shares were not issued as of March 31,2021. The conversion was recorded as
a liability to issue shares in the amount of $2,000,000,
as reflected on our condensed consolidated balance sheet.
Fiscal
Year 2020
During
the year ended December 31, 2020, $140
was received
against a subscription receivable balance for the 2019 authorization of the issuance of Founders shares. On December 31,
2020, we had a subscription receivable of $30
for shares issued where payments were
not received.
On
September 19, 2020, we issued 2,000,000
restricted common shares to a noteholder
for the conversion of $500,000
of note principal.
Warrants
In
association with the September 27, 2019 Asset Purchase Agreement (The Kidz Club St Pete, LLC), we issued 75,000
common stock warrants (post-merger exchange
adjusted) having an exercise price of $0.38
per share. These warrants have an expiration
of September
27, 2029.
SCHEDULE
OF WARRANTS OUTSTANDING
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Weighted-
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Remaining
|
|
Aggregate
|
|
|
|
|
|
|
|
Exercise
|
|
|
Contractual
|
|
Intrinsic
|
|
|
|
|
Shares
|
|
|
Price
|
|
|
Term
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
at January 1, 2020
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
75,000
|
|
|
$
|
0.38
|
|
|
10.0
Years
|
|
$
|
-
|
|
|
Expired
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
at December 31, 2020
|
|
|
75,000
|
|
|
$
|
0.38
|
|
|
9.74
Years
|
|
$
|
-
|
|
|
Outstanding
at January 1, 2020
|
|
|
75,000
|
|
|
|
0.38
|
|
|
9.74
Years
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
Expired
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
and exercisable March 31, 2020
|
|
|
75,000
|
|
|
$
|
0.38
|
|
|
9.49
Years
|
|
$
|
-
|
|
NOTE
10 – RELATED
PARTY TRANSACTIONS
On
February 1, 2021 (the “Effective Date”), we signed an employment agreement with our new CEO, Louis Collier
(“Collier”). Collier will be paid a base salary of $400,000,
which will be reassessed and renegotiated in good faith after we are profitable over a fiscal year. Collier will also
receive a signing bonus of $150,000,
which will be payable as follows: $50,000
within five days of the Effective Date
(paid); $50,000
within 90 days of the Effective Date;
and $50,000
within 180 days of the Effective Date.
Collier will also be issued 1,250,000
phantom shares within ten days after the
approval and adoption a Phantom Equity Plan. The phantom shares will be subject to a phantom unit interest award
agreement, which will set forth the vesting of the phantom shares.
On
March 23, 2021, we entered into a Plan of Merger (See NOTE 4) whereas we assumed debt of $2,000,000
that was convertible into 20,000,000
shares of common stock. After the
Merger the debt was converted into 4,000,000 restricted common shares of the Company at $0.50
per share. One of the debt holders is
majority owned by a director of the Company. As of March 31, 2021, these shares were not issued and are reflected as share
liability on our condensed consolidated balance sheet.
During
the three months ended March 31, 2021 and 2020, we compensated members of the Board $20,769
and $0,
respectively.
As
of March 31, 2021, we had accrued payroll of $60,000
and accrued interest on that payroll in
the amount of $4,340
for the President and the
Chief Financial Officer of Banyan. These unpaid amounts were the result of 2020 furloughed salaries. Interest is being
accrued on these unpaid balances effective May 15, 2020 at a rate of 8%
per annum and is reflected in accrued interest balance as of March 31, 2021 and December 31, 2020 on the condensed consolidated
balance sheet. Accrued salaries of $60,000 is reflected in accrued liabilities at March 31, 2021 and December 31,
2020 on the condensed consolidated balance sheet.
NOTE
11 – SUBSEQUENT
EVENTS
We
have evaluated subsequent events from March 31, 2021 through
the date these financial statements were issued and determined the following events require disclosure:
Subsequent
to March 31, 2021, we issued additional shares of restricted common stock as follow: (i) 1,150,000
shares to five (5) investors at
a price of $0.50
per share for aggregate proceeds of $575,000,
including $325,000
issuance to satisfy the liability
to issue shares; and (ii) 4,000,000
shares for note conversion.
On
April 30, 2021, pursuant to the Option Agreement, the number of issued and outstanding shares of
common stock was decreased by 200,000
(see NOTE 5).
Discontinued
Operations
See
NOTE 5 – DISCONTINUED OPERATIONS regarding the discontinuance of the operations in our wholly-owned subsidiary, Assisted
2 Live, Inc.
Trillium
Healthcare Group, LLC
On
April 29, 2021, we entered into a Third Amendment (the “Third Amendment”) to a Membership Interest
Purchase Agreement dated as of January 29, 2021 (the “Purchase Agreement”), by and among the Company, Richard
T. Mason (“Mason”), G. Shayne Bench (“Bench”) and Trillium Healthcare Group, LLC, a Florida
limited liability company (“Trillium”) to acquire all of the issued and outstanding ownership interests of
Fairway Healthcare Properties, LLC and Trillium Healthcare Consulting, LLC from Trillium.
Among
other things, the Third Amendment extends the date to May
28, 2021, after which either party may terminate the Purchase Agreement if the closing has not yet occurred.