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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2022

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number 000-55203

 

 

eWELLNESS HEALTHCARE CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada   90-1073143

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

     
1126 S Federal Hwy #464, Fort Lauderdale, FL   33316
(Address of principal executive offices)   (Zip Code)

 

(855) 470-1700

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(g) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common shares   EWLL   OTC

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Ruble 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
   
Non-accelerated filer ☐ (Do not check if a smaller reporting company) Smaller reporting company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes ☐ No

 

Emerging growth company

 

The number of shares of Common Stock, $0.001 per share par value, outstanding on May 16, 2022 was 18,507,683,628.

 

 

 

 

 

 

Table of Contents

 

    Page
PART I - FINANCIAL INFORMATION 3
Item 1 Financial Statements 3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12
Item 3 Quantitative and Qualitative Disclosures About Market Risk 14
Item 4 Controls and Procedures 14
PART II - OTHER INFORMATION 15
Item 1 Unregistered Sales of Equity Securities and Use of Proceeds 15
Item 2 Exhibits 15
Signatures   16

 

2

 

 

PART I – FINANCIAL STATEMENTS

 

ITEM 1. FINANCIAL STATEMENTS

 

eWELLNESS HEALTHCARE CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(unaudited)

 

                 
    March 31, 2022     December 31, 2021  
             
ASSETS                
                 
CURRENT ASSETS                
Cash   $ 238     $ 11,177  
Prepaid expenses     -       -  
                 
Total current assets     238       11,177  
                 
Property & equipment, net     442       2,387  
                 
TOTAL ASSETS   $ 680     $ 13,564  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT                
                 
CURRENT LIABILITIES                
Accounts payable and accrued expenses   $ 1,360,681     $ 1,223,278  
Accrued expenses - related party     123,701       144,471  
Accrued compensation     200,000       200,000  
Loan payable     36,033       1,662  
Convertible debt, net of discount     1,354,882       1,354,882  
Derivative liability     2,978,091       1,447,008  
                 
Total current liabilities     6,053,388       4,371,301  
                 
Total Liabilities     6,053,388       4,371,301  
                 
COMMITMENTS AND CONTINGENCIES     -       -  
                 
STOCKHOLDERS’ DEFICIT                
Preferred stock Series A, authorized, 20,000,000 shares, $.001 par value, 696,667 and 696,667 shares issued and outstanding, respectively     697       697  
Preferred stock Series C, authorized, 1,000,000 shares, $.0001 par value, 920,000 and 920,000 shares issued and outstanding, respectively     92       92  
Preferred stock Series D, authorized, 200,000 shares, $.0001 par value, 200,000 and 200,000 shares issued and outstanding, respectively     20       20  
Preferred stock Series E Convertible, authorized, 2,500,000 shares, $.0001 par value, par value, 1,465,680 and 1,465,680 shares issued and outstanding, respectively     147       147  
Common stock, authorized 20,000,000,000 shares, $.001 par value, 18,507,683,627 and 18,507,683,627 issued and outstanding, respectively     18,507,684       18,507,684  
Additional paid in capital     17,203,420       17,203,420  
Accumulated deficit     (41,764,768 )     (40,069,797 )
                 
Total Stockholders’ Deficit     (6,052,708 )     (4,357,737 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT   $ 680     $ 13,564  

 

The accompanying notes are an integral part of these consolidated condensed financial statements

 

3

 

 

eWELLNESS HEALTHCARE CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

For the Three Months ended March 31, 2022 and 2021

(unaudited)

 

                 
    Three Months Ended  
    March 31, 2022     March 31, 2021  
             
OPERATING EXPENSES                
General and administrative     8,863       23,167  
Professional fees     90,130       13,820  
                 
Total Operating Expenses     98,993       36,987  
                 
Loss from Operations     (98,993 )     (36,987 )
                 
OTHER INCOME (EXPENSE)                
Gain (loss) on derivative liability     (1,531,083 )     1,777,408  
Loss on disposal of asset     (225 )     -  
Interest expense     (63,808 )     (63,809 )
                 
Net Income (Loss) before Income Taxes     (1,694,109 )     1,676,612  
                 
Income tax expense     (862 )     -  
                 
Net Income (Loss)   $ (1,694,971 )   $ 1,676,612  
                 
Basic and diluted (loss) per common share   $ (0.00 )   $ 0.00  
                 
Weighted average basic and diluted shares outstanding     18,507,738,023       16,863,518,920  

 

The accompanying notes are an integral part of these consolidated condensed financial statements

 

4

 

 

eWELLNESS HEALTHCARE CORPORATION

RECONCILIATION OF STOCKHOLDERS’ DEFICIT

(unaudited)

 

THREE MONTHS ENDED MARCH 31, 2022 AND 2021

 

                                                                                                                 
    Preferred Shares - Series A     Preferred Shares - Series C     Preferred Shares - Series D     Preferred Shares - Series E     Common Shares     Shares     Additional           Total  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     to be Issued     Paid in Capital     Accumulated Deficit     Stockholders’ Deficit  
                                                                                     
Balance at December 31, 2021     696,667     $ 697       920,000     $ 92       200,000     $ 20       1,465,680     $ 147       18,507,683,627     $ 18,507,684     $ -     $ 17,203,420     $ (40,069,797 )   $ (4,357,737 )
                                                                                                                 
Net loss     -       -       -       -       -       -       -       -       -       -       -       -       (1,694,971 )     (1,694,971 )
                                                                                                                 
Balance at March 31, 2022     696,667     $ 697       920,000     $ 92       200,000     $ 20       1,465,680     $ 147       18,507,683,627     $ 18,507,684     $ -     $ 17,203,420     $ (41,764,768 )   $ (6,052,708 )
                                                                                                                 
Balance at December 31, 2020     696,667     $ 697       -     $ -       -     $ -       -     $ -       16,862,481,961     $ 16,862,482     $ 263     $ 16,097,866     $ (39,618,090 )   $ (6,656,782 )
                                                                                                                 
Shares issued for services     -       -       -       -       -       -       -       -       1,701,666       1,702       (68 )     (1,033 )     -       601  
                                                                                                                 
Net loss     -       -       -       -       -       -       -       -       -       -       -       -       1,676,612       1,676,612  
                                                                                                                 
Balance at March 31, 2021     696,667     $ 697       -     $ -       -     $ -       -     $ -       16,864,183,627     $ 16,864,184     $ 195     $ 16,096,833     $ (37,941,478 )   $ (4,979,569 )

 

The accompanying notes are an integral part of these consolidated condensed financial statements

 

5

 

 

eWELLNESS HEALTHCARE CORPORATION

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

(unaudited)

 

                 
    Three Months Ended  
    March 31, 2022     March 31, 2021  
             
Cash flows from operating activities                
Net income (loss)   $ (1,694,971 )   $ 1,676,612  
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
               
Depreciation and amortization     299       402  
Shares issued for consulting services     -       601  
Amortization of debt discount and prepaids     -       3,235  
(Gain) loss on derivative liability     1,531,083       (1,777,408 )
Loss on disposal of asset     225       -  
Changes in operating assets and liabilities                
Prepaid expense     -       (5,000 )
Overdraft cash     -       3,487  
Accounts payable and accrued expenses     138,824       95,700  
Accounts payable - related party     -       -  
Accrued expenses - related party     (20,770 )     1,262  
                 
Net cash used in operating activities     (45,310 )     (1,109 )
                 
Cash flows from financing activities                
Loan payable     34,371       -  
                 
Net cash provided by financing activities     34,371       -  
                 
Net increase (decrease) in cash     (10,939 )     (1,109 )
                 
Cash, beginning of period     11,177       1,109  
                 
Cash, end of period   $ 238     $ -  
                 
Supplemental Information:                
Cash paid for:                
Taxes   $ 862     $ -  
Interest Expense   $ -     $ -  
Non-cash items:                
Shares issued for debt conversion   $ -     $ -  

 

The accompanying notes are an integral part of these consolidated condensed financial statements

 

6

 

 

eWellness Healthcare Corporation

Notes to Consolidated Condensed Financial Statements

March 31, 2022

(unaudited)

 

Note 1. The Company

 

The Company and Nature of Business

 

eWellness Healthcare Corporation (the “eWellness”, “Company”, “we”, “us”, “our”) was incorporated in the State of Nevada on April 7, 2011. The Company has generated minimal revenues to date.

 

eWellness Healthcare Corporation is the first physical therapy telehealth company to offer real-time distance monitored assessments and treatments. On September 15, 2020, the Company and Bistromatics signed an agreement that transferred all worldwide marketing and Intellectual Property Rights or claims to the Company’s Phzio, Phzio TeleRehab and MSK 360 platforms to Bistromatics in return for a 15% ownership in Bistromatics. This agreement eliminated all past due professional fees of $748,832. The transfer of rights was completed on December 31, 2020.

 

During the first quarter of 2021, the Company’s Board of Directors and management determined that while it would continue its efforts and resources involving physical therapy and telemedicine, it would also pursue other health-related business opportunities. With the Company’s announced plan to diversify its health-related business beyond its telemedicine operations, which telemedicine operations will continue, the Company has engaged in negotiations with a recently formed private Nevada company controlled by a third party, American Health Protection, Inc.(“AMHP”), for a potential business combination. In connection with such negotiations, the Company’s Board of Directors on March 8, 2021, approved the organization of EWLL Acquisition Corp. under the laws of Nevada as a new wholly owned subsidiary of the Company (“EWLL Acquisition”). The purpose of the formation of EWLL Acquisition was in contemplation of its merger with and into AMHP which would be the surviving entity and become a wholly owned subsidiary of the Company.

 

Pursuant to the Company’s intentions referenced above, the Company on May 18, 2021, entered into an Agreement and Plan of Merger by and between the Company, EWLL Acquisition and AMHP pursuant to which AMHP merged with EWLL Acquisition, with AMHP being the surviving entity and becoming a wholly owned subsidiary of the Company, subject to filing of Articles of Merger with the State of Nevada. On July 14, 2021, the Company filed the requisite Articles of Merger with the State of Nevada and, as a result, AMHP became a wholly owned subsidiary of the Company and EWLL Acquisition ceased to exist.

 

On April 19, 2021, the Company filed a DEF 14C to disclose to the stockholders the ratification and approval by Joint Written Consent, based upon the unanimous approval by our Board of Directors and the consent of the Majority Consenting Stockholders, of the corporate actions to file an amendment to its Amended and Restated Articles of Incorporation to: (i) change the name of the Company from eWellness Healthcare Corporation to American Health Protection Corp. (“Name Change”); (ii) change the par value of the Company’s common stock and preferred stock from $0.001 per share to $0.0001 per share (“Par Value Change”); and (iii) implement the 1:2,000 reverse split of our Common Stock and the shares underlying conversion of the Company’s securities convertible into Common Stock together with the shares reserved for such conversions, on a one for two thousand (1:2,000) basis (“Reverse Split”). The Name Change, Par Value Change and Reverse Split are sometimes referred to as the “Corporate Actions”, which Corporate Actions must be approved by FINRA. Following the filing of this Form 10Q, the application to FINRA will be filed for approval of these actions.

 

7

 

 

eWellness Healthcare Corporation

Notes to Consolidated Condensed Financial Statements

March 31, 2022

(unaudited)

 

Note 2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense notes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. The accounting policies followed for quarterly financial reporting conform with the accounting policies disclosed in Note 2 to the Notes to Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, all adjustments necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2022. The unaudited consolidated condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these good faith estimates and judgments.

 

Going Concern

 

For the three months ended March 31, 2022, the Company had no revenue. The Company has an accumulated loss of $41,764,768 and a working capital deficit of $6,053,150. The Company’s ability to continue operations is dependent upon the Company’s ability to raise additional capital and to ultimately achieve sustainable revenues and profitable operations, of which there can be no guarantee. The Company intends to finance its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Fair Value of Financial Instruments

 

As of March 31, 2022, the Company had the following assets and liabilities measured at fair value on a recurring basis.

 

    Total     Level 1     Level 2     Level 3  
Derivative Liability   $ 2,978,091     $ -     $ -     $ 2,978,091  
Total Liabilities measured at fair value   $ 2,978,091     $ -     $ -     $ 2,978,091  

 

8

 

 

eWellness Healthcare Corporation

Notes to Consolidated Condensed Financial Statements

March 31, 2022

(unaudited)

 

As of December 31, 2021, the Company had the following assets and liabilities measured at fair value on a recurring basis.

 

    Total     Level 1     Level 2     Level 3  
Derivative Liability   $ 1,447,008     $ -     $ -     $ 1,447,008  
Total Liabilities measured at fair value   $ 1,447,008     $ -     $ -     $ 1,447,008  

 

Note 3. Related Party Transactions

 

Throughout the three months ended March 31, 2022, the officers and directors of the Company incurred business expenses on behalf of the Company. The amounts payable to the officers as of March 31, 2022 and December 31, 2021 were $23,701 and $33,701, respectively. There were no expenses due to the board members, but the Company has accrued directors’ fees of $221,107 and $221,107 as of March 31, 2022 and December 31, 2021, respectively. Because the Company is not yet profitable the officers have agreed to defer compensation. The Company had accrued executive compensation of $200,000 and $200,000 as of March 31, 2022 and December 31, 2021, respectively.

 

Note 4. Convertible Notes Payable

 

During the three months ended March 31, 2022, there were no new convertible notes executed. During the three months ended March 31, 2022, the Company accrued interest payable of $63,808 on previously executed convertible notes payable.

 

Year Ended December 31, 2021

 

During the year ended December 31, 2021, there were no new convertible notes executed. During the year ended December 31, 2021, the Company accrued interest payable of $258,778 on previously executed convertible notes payable.

 

Note 5. Equity Transactions

 

Preferred Stock

 

The total number of shares of Series A Preferred Stock which the Company shall have authority to issue is 20,000,000 shares with a par value of $0.001 per share.

 

In April 2021, the Board of Directors issued a Certificate of Designations, Preferences, Rights and Limitations of Series C Convertible Preferred Stock. The Board authorized that the Company shall have the authority to issue 1,000,000 shares with a par value of $.0001 per share to be issued to persons designated by the Board. The Series C Preferred Stock has no stated maturity and will not be subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Holder decides to convert the shares of Series C Preferred Stock.

 

In April 2021, the Board of Directors issued a Certificate of Designations, Preferences and Rights Limitations of Series D Preferred Stock. The Board authorized that the Company shall have the authority to issue 200,000 shares with a par value of $.0001 per share to be issued to persons designated by the Board. The Series D Preferred Stock has no stated maturity and will not be subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Holder decides to convert the shares of Series D Preferred Stock.

 

9

 

 

eWellness Healthcare Corporation

Notes to Consolidated Condensed Financial Statements

March 31, 2022

(unaudited)

 

In April 2021, the Board of Directors issued a Certificate of Designations, Preferences and Rights of Series E Convertible Preferred Stock. The Board authorized that the Company shall have authority to issue 2,500,000 shares with a par value of $.0001 per share. The Board of Directors may determine to : (i) issue a number of Series Preferred in a private placement at an offering price of $1.00 per share; (ii) issue the Series E Preferred in consideration for the cancellation of shares of the Company’s Series A Preferred held by the Corporation’s officers, directors and key personnel based on terms and conditions that the Board of Directors may determine; and (iii) issue the shares of Series E Preferred for such other purposes as the Board of Directors may determine.

 

The Series C, Series D and Series E Preferred Stock will rank, with respect to rights to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of the Corporation, (i) senior to all classes or series of the Corporation’s Common Stock, par value $0.001 per share (“Common Stock”), and to all other equity securities issued by the Corporation ; and (ii) effectively junior to all existing and future indebtedness (including indebtedness convertible into our Common Stock or Preferred Stock) of the Corporation and to any indebtedness and other liabilities of (as well as any preferred equity interest held by others) existing subsidiaries of the Corporation. The term “equity securities” shall not include convertible debt securities. The Holders of the Series D Preferred Stock have the right, on all matters subject to the vote of the capital stock of the Corporation, to have the collective vote equal to 70% of the total of all voting capital stock of the Corporation, notwithstanding the number of shares of voting capital stock, including shares of common stock, that may be outstanding from time to time.

 

At the three months ended March 31, 2022, there were 696,667 shares of Preferred Series A stock outstanding; 920,000 shares of Preferred Series C stock outstanding; 200,000 shares of Preferred Series D stock outstanding and 1,465,680 shares of Preferred Series E Convertible stock outstanding.

 

Common Stock

 

Three Months Ended March 31, 2022

 

During the three months ended March 31, 2022, the Company issued no additional shares of common stock.

 

Three Months Ended March 31, 2021

 

During the three months ended March 31, 2021, the Company issued 1,701,666 shares of common stock for consultant services valued at $601.

 

Note 6. Commitments, Contingencies

 

The Company may be subject to lawsuits, administrative proceedings, regulatory reviews or investigations associated with its business and other matters arising in the normal conduct of its business. On August 12, 2020, a former consultant filed suit in the Superior Court of the State of California for Breach of Contract and non-payment of fees per said contract. At the time of the suit, the Company owed to the vendor for contractual fees the total of $24,339. On March 14, 2022, the Company accepted a Stipulation and Proposed Order for the payment of $38,000 to the former consultant with the first payment of $5,000 being due immediately and additional $5,000 payments to be paid every 60 days thereafter until the total of $38,000 is paid.

 

10

 

 

eWellness Healthcare Corporation

Notes to Consolidated Condensed Financial Statements

March 31, 2022

(unaudited)

 

Note 7. Derivative Valuation

 

The Company evaluated the convertible debentures and associated warrants in accordance with ASC Topic 815, “Derivatives and Hedging,” and determined that the conversion feature of the convertible promissory notes was not afforded the exemption for conventional convertible instruments due to their variable conversion rates. The notes have no explicit limit on the number of shares issuable, so they did not meet the conditions set forth in current accounting standards for equity classification. Therefore, these have been characterized as derivative instruments. The Company records the notes under ASU paragraph 815-15-25-4, whereby there would be a separation into a host contract and derivative instrument. The Company records the notes and warrants in their entirety at fair value, with changes in fair value recognized in earnings.

 

During the three months ended March 31, 2022, the Company had the following activity in the derivative liability account:

 

    Notes  
Derivative liability at December 31, 2021   $ 1,447,008  
Change in fair value     1,531,083  
Derivative liability at March 31, 2022   $ 2,978,091  

 

For purposes of determining the fair market value of the derivative liability, the Company used Black Scholes option valuation model. The significant assumptions used in the Black Scholes valuation of the derivative are as follows:

 

Stock price at valuation date   $ .0003  
Risk free interest rate     .17 %
Stock volatility factor     414.04 %
Years to Maturity     .08  
Expected dividend yield     None  

 

8. Subsequent Events

 

The Company has evaluated events through the issuance date of the financial statements and concluded there were no other events or transactions during this period that required recognition or disclosure in its financial statements.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report include forward-looking statements. These forward-looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements including, but not limited to, variability of our future revenues and financial performance; risks associated with product development and technological changes; the acceptance of our products in the marketplace by potential future customers; general economic conditions. You should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.

 

The following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the financial statements of eWellness Healthcare Corporation for the three months ended March 31, 2022 and 2021 and should be read in conjunction with such financial statements and related notes included in this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

 

THE COMPANY

 

Overview

 

The Company believes that it was the first physical therapy telehealth company to offer real-time distance monitored assessments and treatments. Our business model was to have large-scale employers use our PHZIO platform as a fully PT monitored corporate musculoskeletal treatment (“MSK”) wellness program. The Company’s PHZIO home physical therapy assessment and exercise platform was designed to achieve a market presence in the $30 billion physical therapy market, the $4 billion MSK market and the $8 billion corporate wellness industry. PHZIO is the first real-time remote monitored 1-to-many MSK physical therapy platforms for home use.

 

Plan of Operations

 

During the first quarter of 2021, the Company’s Board of Directors and Management determined that while it would continue its efforts and resources involving physical therapy and telemedicine, it would also pursue other health-related business opportunities. With the Company’s announced plan to diversify its health-related business beyond its telemedicine operations, which telemedicine operations will continue, the Company has engaged in negotiations with a recently formed private Nevada company controlled by a third party, American Health Protection, Inc.(“AMHP”), for a potential business combination. In connection with such negotiations, the Company’s Board of Directors on March 8, 2021, approved the organization of EWLL Acquisition Corp. under the laws of Nevada as a new wholly owned subsidiary of the Company (“EWLL Acquisition”). The purpose of the formation of EWLL Acquisition was in contemplation of its merger with and into AMHP which would be the surviving entity and become a wholly owned subsidiary of the Company.

 

12

 

 

On April 19, 2021, the Company filed a DEF 14C to disclose to the stockholders the ratification and approval by Joint Written Consent, based upon the unanimous approval by our Board of Directors and the consent of the Majority Consenting Stockholders, of the corporate actions to file an amendment to its Amended and Restated Articles of Incorporation to: (i) change the name of the Company from eWellness Healthcare Corporation to American Health Protection Corp. (“Name Change”); (ii) change the par value of the Company’s common stock and preferred stock from $0.001 per share to $0.0001 per share (“Par Value Change”); and (iii) implement the 1:2,000 reverse split of our Common Stock and the shares underlying conversion of the Company’s securities convertible into Common Stock together with the shares reserved for such conversions, on a one for two thousand (1:2,000) basis (“Reverse Split”). The Name Change, Par Value Change and Reverse Split are sometimes referred to as the “Corporate Actions”, which Corporate Actions must be approved by FINRA. Following the filing of this Form 10Q, the Company will file the FINRA application for approval of these actions.

 

Pursuant to the Company’s intentions referenced above, the Company on May 18, 2021, entered into an Agreement and Plan of Merger by and between the Company, EWLL Acquisition and AMHP pursuant to which AMHP merged with EWLL Acquisition, with AMHP being the surviving entity and becoming a wholly owned subsidiary of the Company, subject to filing of Articles of Merger with the State of Nevada. On July 14, 2021, the Company filed the requisite Articles of Merger with the State of Nevada and, as a result, AMHP became a wholly owned subsidiary of the Company and EWLL Acquisition ceased to exist.

 

Results of Operations of eWellness for the three months ended March 31, 2022 vs. 2021

 

REVENUES: There were no revenues for the three months ended March 31, 2022 and 2021.

 

OPERATING EXPENSES: Total operating expenses increased to $98,993 for the three months ended March 31, 2022 from $36,987 for the three months ended March 31, 2021 reflecting an increase of $62,006. The increase resulted from an increase of professional fees for legal and accounting/auditing offset by decreases in travel and meal expenses.

 

NET INCOME (LOSS): The Company had a net loss of $1,694,971 for the three months ended March 31, 2022 compared with a net income of $1,676,612 for the three months ended March 31, 2021 which reflects an increase in loss of $3,371,583. The increase in loss is a result of a change from gain to loss of the derivative liability on convertible debt of $3,308,491 and an increase in operating expenses of $62,006 (as outlined above).

 

Liquidity and Capital Resources

 

As of March 31, 2022, we had negative working capital of $6,053,150 compared to negative working capital of $4,360,124 as of December 31, 2021. The negative working capital increase is because of a increase in derivative liability and increase in accounts payable and accrued expenses. Cash used in operations was $45,310 and $1,109 for the three months ended March 31, 2022 and 2021, respectively. The increase in cash used in operations is a result of increase in loss and a change from gain to loss of the derivative liability. Cash flows provided by financing activities were $34,371 and $0 for the three months ended March 31, 2022 and 2021, respectively. The increase resulted from an increase of loan payable. The cash balance as of March 31, 2022 was $238.

 

We do not have sufficient cash on hand to operate. Our ability to meet our obligations and continue to operate as a going concern is highly dependent on our ability to obtain additional financing. We cannot predict whether this additional financing will be in the form of equity or debt or be in another form. We may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In any of these events, we may be unable to implement our current plans which circumstances would have a material adverse effect on our business, prospects, financial conditions and results of operations.

 

Contingencies

 

The Company may be subject to lawsuits, administrative proceedings, regulatory reviews or investigations associated with its business and other matters arising in the normal conduct of its business.

 

13

 

 

Off-Balance Sheet Arrangements

 

As of March 31, 2022 and December 31, 2021, respectively, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

 

Contractual Obligations and Commitments

 

From time to time the Company may become a party to litigation matters involving claims against the Company. The Company believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.

 

Critical Accounting Policies

 

Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2021, for disclosures regarding the Company’s critical accounting policies and estimates, as well as any updates further disclosed in our interim financial statements as described in this Form 10-Q.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Smaller reporting companies are not required to provide this disclosure.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of disclosure controls and procedures.

 

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of March 31, 2022, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules, regulations and forms, and (ii) that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in the Company’s internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

14

 

 

PART II - OTHER INFORMATION

 

ITEM 1. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

During the three months ended March 31, 2022, the Company issued no new shares of common stock.

 

ITEM 2 EXHIBITS

 

  (a) The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.

 

Exhibit No.   Description
3.1(a)   Articles of Amendment to the Amended and Restated Articles of Incorporation, dated February 14, 2020 filed in the Company’s 10K for the period ended December 31, 2019.
3.2   Bylaws (Incorporated by reference to Exhibit 3(b) to the Registration Statement on Form S-1 filed on May 15, 2012)
10.30   Agreement between the Company and Bistromatics, Inc. Dated September 15, 2020 transferring Intellectual Property Rights to the Company’s Phzio, Phzio TeleRehab and MSK 360 platforms in Exchange for debt forgiveness and 15% of Bistromatics, Inc. (Incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on September 24, 2020)
10.31   Agreement and Plan of Merger dated May 18, 2021 between EWLL Acquisition Corp. and American Health Protection, Inc., filed with the Company’s Form 10Q for June 30, 2021 filed on August 23, 2021.
31.1   Certification of CEO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2   Certification of CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1   Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2   Certification of CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS   Inline XBRL Instance Document
101.SCH   Inline XBRL Taxonomy Extension Schema Document
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

15

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

eWellness Healthcare Corporation

(Registrant)

 

By: /s/ Douglas MacLellan   Date May 16, 2022
  Douglas MacLellan    
  Chief Executive Officer    

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signature   Title   Date
         
/s/ Douglas MacLellan   Chief Executive Officer and Chairman of the Board   May 16, 2022
Douglas MacLellan   (Principal Executive Officer)    
         
/s/ David Markowski   Chief Financial Officer and Director   May 16, 2022
David Markowski   (Principal Financial and Accounting Officer)    
         
/s/ Douglas Cole   Director   May 16, 2022
Douglas Cole        

 

16

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