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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 September 30, 2021

 

☐ 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 November 9, 2021 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  14
Item 3 Quantitative and Qualitative Disclosures About Market Risk  17
Item 4 Controls and Procedures  17
PART II - OTHER INFORMATION  17
Item 1 Unregistered Sales of Equity Securities and Use of Proceeds  17
Item 2 Exhibits  18
Signatures    19

 

2

 

 

PART I – FINANCIAL STATEMENTS

 

ITEM 1. FINANCIAL STATEMENTS

 

eWELLNESS HEALTHCARE CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(unaudited)

    September 30, 2021     December 31, 2020  
             
ASSETS            
             
CURRENT ASSETS                
Cash   $ 1,620     $ 1,109  
Prepaid expenses     -       3,235  
                 
Total current assets     1,620       4,344  
                 
Property & equipment, net     2,720       3,788  
                 
TOTAL ASSETS   $ 4,340     $ 8,132  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT                
                 
CURRENT LIABILITIES                
Accounts payable and accrued expenses   $ 1,171,669     $ 892,164  
Accrued expenses - related party     134,247       292,762  
Accrued compensation     200,000       200,000  
Convertible debt, net of discount     1,354,882       1,354,882  
Derivative liability     3,195,452       3,925,106  
                 
Total current liabilities     6,056,250       6,664,914  
                 
Total Liabilities     6,056,250       6,664,914  
                 
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 0 shares issued and outstanding, respectively     92       -  
Preferred stock Series D , authorized, 200,000 shares, $.0001 par value, 200,000 and 0 shares issued and outstanding, respectively     20       -  
Preferred stock Series E Convertible , authorized, 2,500,000 shares, $.0001 par value, par value, 1,545,680 and 0 shares issued and outstanding, respectively     155       -  
Common stock, authorized 20,000,000,000 shares, $.001 par value, 17,707,683,627 and 16,862,481,961  issued and outstanding, respectively     17,707,684       16,862,482  
Subscription receivable     (68,338 )     -  
Shares to be issued     -       263  
Additional paid in capital     18,003,412       16,097,866  
Accumulated deficit     (41,695,632 )     (39,618,090 )
                 
Total Stockholders’ Deficit     (6,051,910 )     (6,656,782 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT   $ 4,340     $ 8,132  

 

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 and Nine Months ended September 30, 2021 and 2020

(unaudited)

 

    September 30, 2021     September 30, 2020     September 30, 2021     September 30, 2020  
    Three Months Ended     Nine Months Ended  
    September 30, 2021     September 30, 2020     September 30, 2021     September 30, 2020  
                         
REVENUE   $ -     $ 125,274     $ -     $ 263,429  
                                 
OPERATING EXPENSES                                
Executive compensation     -       102,000       260,000       476,000  
General and administrative     36,434       54,465       247,288       489,708  
Professional fees     1,325,551       94,867       2,106,355       945,448  
                                 
Total Operating Expenses     1,361,985       251,332       2,613,643       1,911,156  
                                 
Loss from Operations     (1,361,985 )     (126,058 )     (2,613,643 )     (1,647,727 )
                                 
OTHER INCOME (EXPENSE)                                
Interest income     -       -       -       1  
Gain (loss) on derivative liability     (1,761,669 )     1,465,693       729,654       (2,734,266 )
Loss on disposal of asset     -       -       -       (3,866 )
Interest expense     (65,115 )     (112,837 )     (193,553 )     (876,870 )
                                 
Net Income (Loss) before Income Taxes     (3,188,769 )     1,226,798       (2,077,542 )     (5,262,728 )
                                 
Income tax expense     -       -       -       -  
                                 
Net Income (Loss)   $ (3,188,769 )   $ 1,226,798     $ (2,077,542 )   $ (5,262,728 )
                                 
Basic and diluted (loss) per common share   $ (0.00 )   $ 0.00     $ (0.00 )   $ (0.00 )
                                 
Weighted average shares outstanding     17,707,683,627       9,749,989,477       17,279,563,597       5,049,047,707  
                                 
Weighted average diluted shares outstanding     25,991,582,032       32,382,204,327       25,563,462,002       27,681,262,557  

 

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 SEPTEMBER 30, 2021 AND 2020

 

    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Receivable     Issued     Capital     Deficit     Deficit  
    Preferred Shares - Series A     Preferred Shares - Series C     Preferred Shares - Series D     Preferred Shares - Series E     Common Shares     Subscription     Shares to be     Additional Paid in     Accumulated     Total Stockholders’  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Receivable     Issued     Capital     Deficit     Deficit  
                                                                                           
                                                                                           
Balance at June 30 2021     696,667     $ 697       920,000     $ 92       200,000     $ 20       265,680     $ 27       17,707,683,627     $ 17,707,684     $ (94,975 )   $ -     $ 16,723,540     $ (38,506,864 )   $ (4,169,779 )
                                                                                                                         
Shares issued to officers, directors and consultants     -       -       -       -       -       -       1,280,000       128       -       -       -       -       1,279,872       -       1,280,000  
                                                                                                                         
Shares issued for cash     -       -       -       -               -       -       -       -       -       26,637       -       -       -       26,637  
                                                                                                                         
Shares issued for preferred share conversions     -       -       -       -               -       -       -       -       -       -       -       -       -       -  
                                                                                                                         
Shares issued for services     -       -       -       -       -       -       -       -       -       -       -       -       -               -  
                                                                                                                         
Net loss     -       -       -       -       -       -       -       -       -       -       -       -       -       (3,188,769 )     (3,188,769 )
                                                                                                                         
Balance at September 30, 2021     696,667     $ 697       920,000     $ 92       200,000     $ 20       1,545,680     $ 155       17,707,683,627     $ 17,707,684     $ (68,338 )   $ -     $ 18,003,412     $ (41,695,632 )   $ (6,051,910 )
                                                                                                                         
Balance at June 30, 2020     476,667       477       -       -       -       -       -       -       7,851,724,496       7,851,725       -       76       21,409,876       (37,351,545 )     (8,089,391 )
                                                                                                                         
Contributed services     -       -       -       -       -       -       -       -       -       -       -       -       54,000       -       54,000  
                                                                                                                         
Shares issued to officers, directors and consultants     55,000       55       -       -       -       -       -       -       -       -       -       -       164,945       -       165,000  
                                                                                                                         
Shares issued for debt conversion     -       -       -       -       -       -       -       -       5,923,625,166       5,923,625       -       -       (5,479,659 )     -       443,966  
                                                                                                                         
Shares issued for services     -       -       -       -       -       -       -       -       -       -       -       102       -       -       102  
                                                                                                                         
Derivative liability     -       -       -       -       -       -       -       -       -       -       -       -       1,146,368       -       1,146,368  
                                                                                                                         
Net loss                                                                                                             1,226,798       1,226,798  
                                                                                                                         
Balance at September 30, 2020     531,667     $ 532       -     $ -       -     $ -       -     $ -       13,775,349,662     $ 13,775,350     $ -     $ 178     $ 17,295,530     $ (36,124,747 )   $ (5,053,157 )

 

NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

 

    Preferred Shares - Series A     Preferred Shares - Series C     Preferred Shares - Series D     Preferred Shares - Series E     Common Shares     Subscription     Shares to be     Additional Paid in     Accumulated     Total Stockholders’  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Receivable     Issued     Capital     Deficit     Deficit  
                                                                                           
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 to officers, directors and consultants     -       -       920,000       92       200,000       20       1,280,000       128       -       -       -       -       2,399,760       -       2,400,000  
                                                                                                                         
Shares issued for cash     -       -       -       -       -       -       350,000       35       -       -       (68,338 )     -       349,965       -       281,662  
                                                                                                                         
Shares issued for preferred share conversions     -       -       -       -       -       -       (84,320 )     (8 )     843,200,000       843,200       -       -       (843,192 )     -       -  
                                                                                                                         
Shares issued for services     -       -       -       -       -       -       -       -       2,001,666       2,002       -       (263 )     (987 )     -       752  
                                                                                                                         
Net profit     -       -       -       -       -       -       -       -       -       -       -       -       -       (2,077,542 )     (2,077,542 )
                                                                                                                         
Balance at September 30, 2021     696,667     $ 697       920,000     $ 92       200,000     $ 20       1,545,680     $ 155       17,707,683,627     $ 17,707,684     $ (68,338 )   $ -     $ 18,003,412     $ (41,695,632 )   $ (6,051,910 )
                                                                                                                         
Balance at December 31, 2019     250,000     $ 250       -     $ -       -     $ -       -     $ -       12,752,084     $ 12,752     $ -     $ 150     $ 23,942,830     $ (30,862,019 )     (6,906,037 )
                                                                                                                         
Contributed services     -       -       -       -       -       -       -       -       -       -       -       -       162,000       -       162,000  
                                                                                                                         
Shares issued to officers, directors and consultants     281,667       282       -       -       -       -       -       -       -       -       -       -       844,718       -       845,000  
                                                                                                                         
Shares issued for debt conversion     -       -       -       -       -       -       -       -       13,761,881,370       13,761,882       -       -       (12,161,555 )     -       1,600,327  
                                                                                                                         
Shares issued for services     -       -       -       -       -       -       -       -       668,332       668       -       28       957       -       1,653  
                                                                                                                         
Shares issued for rounding - 50:1 split     -       -       -       -       -       -       -       -       47,876       48                       (48 )     -       -  
                                                                                                                         
Derivative liability     -       -       -       -       -       -       -       -       -       -       -       -       4,506,628       -       4,506,628  
                                                                                                                         
Net loss     -       -       -       -       -       -       -       -       -       -       -       -       -       (5,262,728 )     (5,262,728 )
                                                                                                                         
Balance at September 30, 2020     531,667     $ 532       -     $ -       -     $ -       -     $ -       13,775,349,662     $ 13,775,350     $ -     $ 178     $ 17,295,530     $ (36,124,747 )   $ (5,053,157 )

 

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

 

5

 

 

eWELLNESS HEALTHCARE CORPORATION

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

(unaudited)

 

    September 30, 2021     September 30, 2020  
    For Nine Months Ended  
    September 30, 2021     September 30, 2020  
             
Cash flows from operating activities                
Net income (loss)   $ (2,077,542 )   $ (5,262,728 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:                
Depreciation and amortization     1,069       5,272  
Contributed services     -       162,000  
Shares issued to officers, directors and consultants     1,120,000       376,750  
Shares issued for consulting services     1,280,752       1,653  
Shares issued for financing costs     -       95,933  
Amortization of debt discount and prepaids     -       771,793  
(Gain) loss on derivative liability     (729,654 )     2,734,266  
Loss on disposal of asset     -       3,866  
Changes in operating assets and liabilities                
Prepaid expense     3,235       (19,707 )
Accounts receivable     -       (192,495 )
Accounts payable and accrued expenses     279,504       638,533  
Accounts payable - related party     -       196,460  
Accrued expenses - related party     (158,515 )     25,489  
Accrued compensation     -       182,887  
                 
Net cash used in operating activities     (281,151 )     (280,028 )
                 
Cash flows from financing activities                
Proceeds from issuance of convertible debt     -       52,800  
Original issue discount and debt issuance costs     -       (7,800 )
Proceeds from issuance of preferred series E     281,662       -  
                 
Net cash provided by financing activities     281,662       45,000  
                 
Net increase (decrease) in cash     511       (235,028 )
                 
Cash, beginning of period     1,109       240,722  
                 
Cash, end of period   $ 1,620     $ 5,694  
                 
Supplemental Information:                
Cash paid for:                
Taxes   $ -     $ -  
Interest Expense   $ -     $ -  
Non cash items:                
Shares issued for debt conversion   $ -     $ 1,600,327  

 

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

 

6

 

 

eWellness Healthcare Corporation

Notes to Consolidated Condensed Financial Statements

September 30, 2021

(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 last quarter of 2020 and 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

September 30, 2021

(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, 2020. 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 nine months ended September 30, 2021 are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2021. 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, 2020.

 

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 nine months ended September 30, 2021, the Company had no revenue. The Company has an accumulated loss of $41,695,632 and a working capital deficit of $6,054,630. 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 September 30, 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   $ 3,195,452     $ -     $ -     $ 3,195,452  
Total Liabilities measured at fair value   $ 3,195,452     $ -     $ -     $ 3,195,452  

 

8

 

 

eWellness Healthcare Corporation

Notes to Consolidated Condensed Financial Statements

September 30, 2021

(unaudited)

 

As of December 31, 2020, 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   $ 3,925,106     $ -     $ -     $ 3,925,106  
Total Liabilities measured at fair value   $ 3,925,106     $ -     $ -     $ 3,925,106  

 

Revenue Recognition

 

The Company recognizes revenue per ASC 606. Revenue is recognized when the services have been completed.

 

Reclassifications

 

Certain prior year amounts have been reclassified to conform with the current year’s presentation. These reclassifications have no impact on the previously reported results.

 

Note 3. Related Party Transactions

 

Throughout the nine months ended September 30, 2021, the officers and directors of the Company incurred business expenses on behalf of the Company. The amounts payable to the officers as of September 30, 2021 and December 31, 2020 were $34,247 and $11,655, respectively. There were no expenses due to the board members, but the Company has accrued directors’ fees of $221,107 and $216,107 as of September 30, 2021 and December 31, 2020, 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 September 30, 2021 and December 31, 2020, respectively.

 

Note 4. Convertible Notes Payable

 

During the nine months ended September 30, 2021, there were no new convertible notes executed. During the nine months ended September 30, 2021, the Company accrued interest payable of $193,552 on previously executed convertible notes payable.

 

Year Ended December 31, 2020

 

In March 2020, the Company executed a 12% Convertible Promissory Note payable to an institutional investor in the principal amount of $52,800. The note, which is due on January 15, 2021, has an original issue discount of $4,800 and transaction costs of $3,000. After 180 days, the convertible note converts into common stock of the Company at a conversion price that shall be equal to 70% of the average of the two lowest per share trading prices for the ten (10) trading days prior to the conversion date. As of December 31, 2020, this note was fully converted and during the year ended December 31, 2020 the Company accrued interest of $2,880.

 

During the year ended December 31, 2020, the Company accrued interest of $330,871 for the 2019 convertible notes that were still outstanding throughout the year.

 

 

9

 

 

eWellness Healthcare Corporation

Notes to Consolidated Condensed Financial Statements

September 30, 2021

(unaudited)

 

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. During the year ended December 31, 2019, the Company authorized the issuance of 1,000,000 shares of preferred stock to officers, directors and consultants as deferred compensation and/or expense. The shares are eligible for conversion after 24 months into 40 shares of common stock per each preferred share. The value of the issued shares was calculated on the basis of 40 shares per preferred share at the common share value on the date of issuance. The deferred compensation value of the shares will vest monthly at 1/24th of the calculated value of $3,000,000 and requisite expense or reduction of accrued compensation and/or accrued directors fees will be recorded. At the recording of the requisite vested share value, the corresponding number of preferred shares will be recorded as being issued. On May 22, 2020, two independent directors resigned and three officers/directors/consultant resigned. Therefore, the vesting of their preferred shares ceased on those dates per the authorization documents. As part of the Settlement and Compromise agreements signed by current officers, director and consultant on February 26, 2021, with effective date October 1, 2020, the shares issued became fully vested at the year ended December 31, 2020.

 

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.

 

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.

 

10

 

 

eWellness Healthcare Corporation

Notes to Consolidated Condensed Financial Statements

September 30, 2021

(unaudited)

 

On May 4, 2021, the Board of Directors issued 350,000 shares of Series E Convertible Preferred Stock for the subscription agreements dated March 1, 2021 at the value of $1.00 per share. Since the full payment of $350,000 had not been received at the period ended September 30, 2021, there is a subscription receivable for $68,338.

 

On May 12, 2021, the Board of Directors authorized the issuance of 200,000 shares of Series D Voting Preferred Stock with a value of $200,000.

 

On May 20, 2021, the Board of Directors authorized the issuance of 920,000 shares of Series C Convertible Preferred Stock with a value of $920,000.

 

On July 1, 2021, the Board of Directors authorized the issuance of 1,280,000 shares of Series E Convertible Preferred Stock with a value of $1,280,000. These shares were issued on July 14, 2021.

 

Common Stock

 

On February 12, 2020, FINRA approved a 1:50 reverse split of the Company’s common stock. As noted throughout this document, all common shares are stated as if the 1:50 reverse split had been completed as of the beginning of the year ended December 31, 2020. Following the approval, the Company’s stock began trading under the symbol “EWLLD”. Due to rounding issues for the reverse split, the Company issued 47,876 additional shares of common stock.

 

On February 14, 2020, the Company filed a Definitive Information Statement on Schedule 14C for the purpose of authorizing the increase in the number of authorized shares of Common Stock from one billion nine hundred million (1,900,000,000) shares of Common Stock to twenty billion (20,000,000,000) shares of Common Stock.

 

Nine Months Ended September 30, 2021

 

During the nine months ended September 30, 2021, the Company issued 2,001,666 shares of common stock for consultant services valued at $752.

 

During the nine months ended September 30, 2021, the Company issued 843,200,000 shares of common stock for conversion of 84,320 shares of preferred series E shares.

 

Nine Months Ended September 30, 2020

 

In January 2020, the Company executed a 12-month advisory services agreement. The Company is to issue 20,000 shares of common stock monthly. The Company issued 80,000 shares of common stock with a value of $126. The Company needs to issue an additional 100,000 shares of common stock with a value of $20. In addition, the Company is to also pay the advisor a monthly fee of $2,500.

 

During the nine months ended September 30, 2020, the Company issued a total of 13,761,881,370 shares of common stock per debt conversion of various convertible notes. The total of the debt conversion was for $1,371,723 of principal, $132,671 of accrued interest and $95,933 of financing costs.

 

During the nine months ended September 30, 2020, the Company issued 668,332 shares of common stock for consultant services valued at $1,653 which includes the advisory services agreement discussed above.

 

11

 

 

eWellness Healthcare Corporation

Notes to Consolidated Condensed Financial Statements

September 30, 2021

(unaudited)

 

Stock Options

 

The following is a summary of the status of all Company’s stock options as of September 30, 2021 and changes during the nine months ended on that date:

 

          Weighted              
    Number
of Stock 		    Average
Exercise 		    Remaining     Intrinsic  
    Options     Price     Life (yrs)     Value  
Outstanding on December 31, 2020     27,000     $ 40.00       .14     $ -  
Granted     -       -                  
Exercised     -       -                  
Cancelled     (27,000 )     -                  
Outstanding on September 30, 2021     -       -       -     $ -  
Options exercisable on September 30, 2021     -     $ -       -     $ -  

 

Warrants

 

The following is a summary of the status of the Company’s warrants as of September 30, 2021 and changes during the nine months ended on that date:

 

          Weighted              
    Number of     Average
Exercise 		    Remaining     Intrinsic  
    Warrants     Price     Life (yrs.)     Value  
Outstanding on December 31, 2020     26,015     $ 12.50       1.2     $ -  
Granted     -       -       -       -  
Exercised     -       -       -       -  
Cancelled     (26,015 )     -       -       -  
Outstanding on September 30, 2021     -     $ -       -     $ -  
Warrants exercisable on September 30, 2021     -     $ -       -     $ -  

 

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. 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.

 

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.

 

12

 

 

eWellness Healthcare Corporation

Notes to Consolidated Condensed Financial Statements

September 30, 2021

(unaudited)

 

The debt discount is amortized over the life of the note and recognized as interest expense. For the nine months ended September 30, 2021 and 2020, the Company amortized the debt discount of $0 and $594,705, respectively.

 

During the nine months ended September 30, 2021, the Company had the following activity in the derivative liability account:

 

    Notes  
Derivative liability at December 31, 2020   $ 3,925,106  
Change in fair value     (729,654 )
Derivative liability at September 30, 2021   $ 3,195,452  

 

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   $ .0005  
Risk free interest rate     .07 %
Stock volatility factor     409.80 %
Years to Maturity     .08  
Expected dividend yield     None  

 

Note 8. Subsequent Events

 

From October 1 until the filing of this report, the Company issued 800,000,000 shares of common stock for conversion of Series E Convertible Preferred shares.

 

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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 nine months ended September 30, 2021 and 2020 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, 2020.

 

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.

 

On May 22, 2020, the Company received and accepted the resignations of Brandon Rowberry and Rochelle Pleskow as independent directors. Their letters of resignation dated May 22, 2020, state that the reason for their resignations were to permit them to pursue other business opportunities and further stated that they have had no disagreements with the operations, policies or practices of the Company. Also, on May 22, 2020, the Company received a letter of resignation from Darwin Fogt, resigning as CEO, President and director of the Registrant and a separate letter of resignation from Curtis Hollister, resigning as CTO and director of the Company. Messrs. Fogt and Hollister are executive officers and principals of Bistromatics Inc., organized under the laws of Canada (“Bistromatics”).

 

On November 12, 2016, the Company entered into a Services Agreement with Bistromatics (the “Bistromatics Agreement”) pursuant to which Bistromatics agreed to provide operational services to the Company for its PHZIO System including development, content editing and training, support and maintenance, billing, hosting and oversight, among other services. Reference is made to the Registrant’s Form 8-K filed on November 21, 2016, which Form 8-K was signed by Darwin Fogt as CEO on behalf of the Registrant, regarding the disclosure of the Bistromatics Agreement. The Services Agreement included a provision granting Bistromatics the right to appoint 40% of the Registrant’s Board of Directors, resulting in the appointment of Messrs. Fogt and Hollister as members of the Company’s Board. Although both Companies continue to abide by the Services Agreement the Company is in arrears in fees to Bistromatics . The Service Agreement expired during the first quarter of 2020 and the parties signed a new agreement on September 15, 2020 which is discussed below.

 

14

 

 

Pursuant to communications between the Company and Darwin Fogt and Curtis Hollister regarding their resignations as executive officers and directors of the Registrant, which resignations were accepted by the Company’s Board on June 1, 2020, Messrs. Fogt and Hollister represented to the Company that Bistromatics and its management will continue to provide support services to the Company’s PHZIO System, In addition, both Darwin Fogt and Curtis Hollister confirmed that they have had no disagreements with the operations, policies or practices of the Company.

 

In connection with the resignation of Darwin Fogt as CEO, the Registrant’s Board of Directors has appointed Douglas MacLellan, who has served as the Company’s Chairman since May 2013, as Chief Executive Officer in addition to continuing to serve as the Chairman of the Board of Directors.

 

Plan of Operations

 

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 last quarter of 2020 and 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.

 

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 and nine months ended September 30, 2021 vs. 2020

 

REVENUES: Total revenues for the nine months ended September 30, 2021 and 2020 were $0 and $263,429. respectively. Total revenues for the three months ended September 30, 2021 and 2020 were $0 and $125,274, respectively.

 

15

 

 

OPERATING EXPENSES: Total operating expenses increased to $2,613,643 for the nine months ended September 30, 2021 from $1,911,156 for the nine months ended September 30, 2020 reflecting a increase of $702,487. The increase resulted from an increase of number of preferred shares issued to consultants offset by decreases in accrued executive compensation and reduction and reduction in financing fees. Total operating expenses increased to $1,361,985 for the three months ended September 30, 2021 from $251,332 for the three months ended September 30, 2020 reflecting an increase of $1,110,653. The increase is a result of an increase in the number of shares of preferred shares issued to consultants offset by a reduction in financing fees and accrued executive compensation.

 

NET INCOME (LOSS): The Company had a net loss of $2,077,542 for the nine months ended September 30, 2021 compared with a net loss of $5,262,727 for the nine months ended September 30, 2020 which reflects a decrease of $3,185,185. The decrease in loss is a result of a change from loss to gain of the derivative liability on convertible debt of $3,463,920, a decrease in interest expense of $683,317 offset by an increase in operating expenses of $702,487 (as outlined above). The Company had a loss of $3,188,769 for the three months ended September 30, 2021, compared with a net income of $1,226,798 for the three months ended September 30, 2020, which reflects an increase of net loss of $4,415,567. The increase is from a change from gain to loss from the derivative liability on convertible debt of $3,227,362, a decrease in interest expense of $47,723 offset by an increase in operating expenses of $1,110,653 (as outlined above).

 

Liquidity and Capital Resources

 

As of September 30, 2021, we had negative working capital of $6,054,630 compared to negative working capital of $6,660,570 as of December 31, 2020. The negative working capital decrease is because of a decrease in derivative liability offset by an increase in accounts payable and accrued expenses. Cash used in operations was $281,151 and $280,028 for the nine months ended September 30, 2021 and 2020, respectively. The increase in cash used in operations is a result of reduction in loss offset by a change from loss to gain of the derivative liability. Cash flows provided by financing activities were $281,662 and $45,000 for the nine months ended September 30, 2021 and 2020, respectively. The increase resulted from the issuance of Preferred Series E stock for cash. The cash balance as of September 30, 2021 was $1,620.

 

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.

 

Off-Balance Sheet Arrangements

 

As of September 30, 2021 and December 31, 2020, 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, 2020, 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.

 

16

 

 

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 September 30, 2021, 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.

 

PART II - OTHER INFORMATION

 

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

 

During the three months ended September 30, 2021, the Company issued 1,280,000 shares of common stock for consultant and advisory services valued at $1,280,000.

 

17

 

 

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.

 

18

 

 

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 November 9, 2021
  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   November 9, 2021
Douglas MacLellan   (Principal Executive Officer)    
         
/s/ David Markowski   Chief Financial Officer and Director   November 9, 2021
David Markowski   (Principal Financial and Accounting Officer)    
         
/s/ Douglas Cole   Director   November 9, 2021
Douglas Cole        

 

19

 

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