ADVANZEON SOLUTIONS, INC. General
The following information should be read in conjunction with the financial
statements and notes thereto and in conjunction with Managements' Discussion and
Analysis of Financial Condition and Results of Operations in our Annual Report
on Form 10-K for the fiscal year ended
This report includes forward-looking statements, the realization of which may be affected by certain important factors discussed previously above under Item 1A, "Risk Factors."
Overview
The Company through its wholly owned subsidiary
Our services start with the identification of the target population and the potential risk the client currently has. We can do this through our SMS Program, which includes the ability to screen every driver to identify if signs and symptoms of sleep apnea are present. We can then take this data and provide the employer with a list of those drivers that should be tested and the statistical likelihood of the percentage of those drivers who will test positive for obstructive sleep apnea (OSA). Together with the employer/union, SMS provides a realistic time frame, actual total cost, and process for testing all drivers who need to be tested. For those drivers testing positive for OSA, we then provide the appropriate treatment such that the driver will meet the DOT requirements and remain on the road. We monitor 365 days per year driver's usage of the treatment device according to DOT standards and we report that usage to all stakeholders as required/permitted. We utilize mathematical algorithms to determine if the driver is predicatively meeting the annual DOT requirements for usage. Using those predictive algorithms, we reach out to those drivers and provide case management, encouragement designed to solve problems such that the driver increases usage, if necessary, and remains compliant.
SMS constructed its model based upon the foregoing principles. The SMS Program
includes all processes attended in sleep apnea screening, testing, treatment,
monitoring and overall management of commercial drivers' as well as their
employers' needs. We have successfully established relationships with national
health care clinic providers, all with certified medical examiner ("CME")
status. These clinics total almost 1,000 throughout the
Revenue is recognized when billed, which is approximately when the testing service is performed, or CPAP machine is shipped.
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During the three-month period ending
During this period, we added a companion product to our CPAP treatment program, a branded sanitizer device. We also have beta tested our WatchPat One device. The WatchPat One device shortens the turnaround time for our home sleep test results by as much as five days. As we anticipate a large surge of drivers going forward, we believe this shortened turnaround time will be a significant, positive decision for our current clients and our new clients to use our services. During the period we continued with our beta testing program with Sleep Cycle. The results have been very positive and we anticipate a full-fledged joint marketing launch to Sleep Cycle customers by mid-year 2021.
We continued our effort to increase our presence with various unions. We
successfully entered into an agreement with a large group of
Sources of Revenue
Three-month periods ended
A quantitative summary of our revenues by source category for the three-month
periods ended
2020 2019 Change
OSA- related $ 127,070 $ 68,173 $ 58,897
Results of Operations
OSA services increased to
Cost of revenues increased to
General and administrative expense
General and administrative expense in total for the three month periods ended
2020 $ 620,126
2019 428,077
Change $ 192,049
Percentage Change 44.86 %
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We evaluate expenses at the Parent company level as well as at our PVMS
subsidiary. Expenses at the Parent company level include overhead and the cost
of being a public entity. Expenses at PVMS are solely related to the OSA
services segment. A breakdown of these expenses for the three month periods
ended
2020 2019 Change Percent Change
Parent (Debtor-In-Possession) $ 359,887 $ 118,096 $ 241,791 204.74 %
PVMS 260,239 309,981 (49,742 ) (16.05 )%
Total $ 620,126 $ 428,077 $ 192,049 44.86 %
Parent Company Level (Debtor-In-Possession)
2020 2019 Change Percent Change
Professional fees $ 266,090 $ 34,329 $ 231,761 675.12 %
Travel expense - - - - %
Board of Directors fees - 37,500 (37,500 ) (100 )%
Office supplies 52 16 36 225 %
Rent expense - 25,255 (25,255 ) (100 )%
Other 93,745 20,996 72,749 346.49 %
Total G & A $ 359,887 $ 118,096 $ 241,791 204.74 %
Explanations of variations by line item follow:
Professional fees increased by
Travel expense stayed relatively the same.
Board of Directors fees decreased by
Rent expense decreased by 25,255 due to office lease moving to subsidiary level
as of
Other general and administrative expense increased by
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PVMS Subsidiary Level
2020 2019 Change Percent Change
Payroll related $ 127,167 $ 129,457 $ (2,290 ) (1.77 )%
Travel and related expense 5,834 60,048 (54,214 ) (90.28 )%
Professional fees 24,745 53,454 (28,709 ) (53.71 )%
Marketing costs 25,685 16,511 9,174 55.56 %
Dues and subscriptions 211 200 11 5.50 %
Office supplies 1,627 13,191 (11,564 ) (87.67 )%
Rent expense 30,115 12,941 17,174 132.71 %
Other 44,855 24,179 20,676 85.51 %
Total G & A $ 260,239 $ 309,981 $ (49,742 ) (16.05 )%
Explanations of variations by line item follow:
Payroll related expenses decreased by
Travel expense decreased by
Professional fees decreased by
Marketing costs increased by
Office supplies decreased by
Rent expense increased by
Other general and administrative expense increased by
Interest expense
Interest expense in total for the three-month periods ended
2020 $ 291,258
2019 383,798
Change $ (92,540 )
Percentage Change (24.11 )%
20
A breakdown of the interest expense for the three-month periods ended
2020 2019 Change
Parent (Debtor-In-Possession) $ 108,570 $ 172,720 $ (64,150 )
PVMS 182,688 211,078 (28,390 )
Total $ 291,258 $ 383,798 $ (92,540 )
Sources of Revenue
Nine-month periods ended
A quantitative summary of our revenues by source category for the nine-month
periods ended
2020 2019 Change
OSA- related $ 358,062 $ 226,549 $ 131,513
Results of Operations
OSA services increased to
Cost of revenues increased to
General and administrative expense
General and administrative expense in total for the nine-month periods ended
2020 $ 1,931,591
2019 1,269,920
Change $ 661,671
Percentage Change 52.10 %
We evaluate expenses at the Parent company level as well as at our PVMS
subsidiary. Expenses at the Parent company level include overhead and the cost
of being a public entity. Expenses at PVMS are solely related to the OSA
services segment. A breakdown of these expenses as
2020 2019 Change Percent Change
Parent (Debtor-In-Possession) $ 899,145 $ 470,917 $ 428,228 90.94 %
PVMS 1,032,446 799,003 233,443 29.22 %
Total $ 1,931,591 $ 1,269,920 $ 661,671 52.10 %
Parent Company Level (Debtor-In-Possession)
Percent
2020 2019 Change Change
Professional fees $ 675,959 $ 245,594 $ 430,365 175.23 %
Travel expense 67 3,815 (3,748 ) (98.24 )%
Board of Directors fees 95,000 112,500 (17,500 ) (15.56 )%
Office supplies 547 336 211 62.80 %
Rent expense - 76,532 (76,532 ) (100 )%
Other 127,572 32,140 95,432 296.93 %
Total general and administrative
Explanations of variations by line item follow:
Professional fees increased
Travel expense decreased
Board of Directors fees decreased
Rent expense decreased
Other general and administrative expense increased by
21
PVMS Subsidiary Level
Percent
2020 2019 Change Change
Payroll related $ 546,910 $ 341,769 $ 205,141 60.02 %
Travel and related expense 81,059 151,372 (70,313 ) (46.45 )%
Professional fees 133,802 135,201 (1,399 ) (1.03 )%
Marketing costs 60,277 33,740 26,537 78.65 %
Dues and subscriptions 419 841 (422 ) (50.18 )%
Office supplies 5,704 30,768 (25,064 ) (81.46 )%
Rent expense 96,048 35,942 60,106 167.23 %
Other 108,227 69,370 38,857 56.01 %
Total general and administrative
Explanations of variations by line item follow:
Payroll related expenses increased
Travel expense decreased
Professional Fees stayed relatively the same.
Marketing costs increased by
Office supplies decreased by
Rent expense increased
Other general and administrative expense increased by
Interest expense
Interest expense in total for the six nine-month periods ended
2020 $ 1,393,659
2019 1,052,991
Change $ 340,668
Percentage Change 32.35 %
22
A breakdown of the interest expense for the nine-month periods ended
2020 2019 Change
Parent (Debtor-In-Possession) $ 745,022 $ 498,905 $ 246,117
PVMS 648,637 554,086 94,551
Total $ 1,393,659 $ 1,052,991 $ 340,668
Financial Condition
Liquidity and Capital Resources
During the nine-month period ended
Short Term: We funded our operations with revenues from sales and private borrowings.
On
During the period we continued toward our goal to be able to uplist our Common
Stock to another trading platform. Among the actions is our attempt to reduce
our stockholder's deficiency by, among, other things, being able to convert a
large portion of our corporate debt to equity. For the nine months ended
Subsequent Events
Subsequent to
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