DOCS, INC. – 10-Q – Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Information
This Quarterly Report on Form 10-Q contains forward-looking statements. When
used in this Quarterly Report on Form 10-Q, the words "anticipate," "believe,"
"estimate," "will," "plan," "seeks," "intend," and "expect" and similar
expressions identify forward-looking statements. Although we believe that our
plans, intentions, and expectations reflected in any forward-looking statements
are reasonable, these plans, intentions, or expectations may not be achieved.
Our actual results, performance, or achievements could differ materially from
those contemplated, expressed, or implied, by the forward-looking statements
contained in this Quarterly Report on Form 10-Q. Important factors that could
cause actual results to differ materially from our forward-looking statements
are set forth in this Quarterly Report on Form 10-Q All forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the cautionary statements set forth in this
Quarterly Report on Form 10-Q. Except as required by federal securities laws, we
are under no obligation to update any forward-looking statement, whether as a
result of new information, future events, or otherwise.
Critical Accounting Policies
There have been no material changes to our critical accounting policies and
estimates from the information provided in Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations", included in our
Annual report on Form 10-K for the fiscal year ended
Business of the Issuer Company History
We were incorporated on
Activities to date have been limited primarily to organization, initial
capitalization, establishing administrative offices in
the date of this offering circular, the Company has obtained developed its
business plan and established administrative offices, as well as brought its
Medical Director,
operations.
15
Company Overview
development activities, which include the following:
1. Formation of the Company; 2. Development ofThe Docs, Inc. business plan; 3. Obtaining capital through a private placement ofThe Docs, Inc.'s preferred stock; and 4. Developing a strategy to identify potential clients.
The Company currently operates from its headquarters at an administrative office
at
controlled by
office.
six patient rooms, a reception area, three additional administrative rooms, a
procedure room, one bathroom, one storage room and an employee break room
totaling approximately 1,800 square feet at
begins offering its services to patients. This space will then be offered to
healthcare professionals to see clients.
In addition to serving patients in Primary Care, the Company will also serve
specific areas, including Endocrinology, Podiatry, Interventional Cardiology,
Nutrition, and Non-Narcotic Pain Management.
become fully operational. In order to generate revenues,
address the following areas:
1. Identify individuals that are in need of the Company's services.
2. Complete the stock offering, registration of shares and apply for listing
on the OTC Markets OTCQB.
3. Raise an additional $1,000,000 for the needed working capital to obtain
commercial office space, hire and train appropriate staff, and market the
Company's services.
We do not have sufficient capital to become fully operational and financing is
not currently available to us. We will require additional funding to sustain
operations.
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There is no assurance that we will have revenue in the future or that we will be
able to secure the necessary funding to develop our business. Without additional
funding, which is currently not available to us, it is most likely that our
business model will fail, and we shall be forced to cease operations.
We are a small, start-up company that has not generated any revenues and has no
current contracts in place. Since our inception on
30, 2022
common stockholders of
management views that it requires funding for two separate areas of the
company's business. This first includes funding to build the actual business
operations of the Company and the second concerns the paying for the legal and
accounting expenses to keep the Company full reporting.
Management does not believe we have sufficient funds to pay for legal and
accounting expenses to maintain our status as full reporting company for the
next twelve (12) months. Based on this shortfall, management has agreed to
donate sufficient funds to the company to keep it operational for the next
twelve (12) months. Management has determined that an additional
be needed to build its business operations to its full capacity. These funds
will help finance the renting of additional office space, the hiring and
training of additional employees, and the marketing efforts needed to fully
launch our operations. In the meantime, management plans to initiate its
business operations on a limited basis, by building a customer base and
operating where it has the capacity to do so. Whether or not the Company raises
any funds in this offering, it still plans to launch its business plan. If the
Company is successful in raising the amount of this offering,
funds would be used to further our business operations and pay for costs and
fees related to this offering.
As a small startup company that has yet to begin operations, there can be no
assurance that the actual expenses incurred will not materially exceed our
estimates in maintaining our fully reporting status. As a result, our
independent auditors have expressed substantial doubt about our ability to
continue as a going concern in the independent auditors' report to the financial
statements included in the registration statement.
Services to Physicians Overview
The growing complexity of the healthcare delivery system has led many healthcare
facilities to increasingly engage third-party providers to provide medical
coverage and administrative functions to improve productivity, increase the
overall quality of care and reduce administrative costs. We believe the primary
clinical areas served are specialties that are extremely important lines of
service for the overall provision of care provided by the physicians with which
we contract. The market for services these specialties tends to be highly
fragmented and is predominantly served by smaller group practices.
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the state of
In addition, the Company is one of only three members in the state of
be part of Doctor's Health Network, a multi-specialist health network, giving
the Company access to physicians needed in our market segment. The physicians we
serve will benefit from certain trends including the following:
Opportunities created by healthcare reform. The healthcare sector is
periodically subject to regulatory, legislative and other political reform
initiatives, at the federal and state level, that significantly impact
government healthcare programs, reimbursement models, and health insurance
coverage. Recent reform initiatives include efforts to shift governmental
reimbursement models away from fee for service methodologies toward value-based
approaches. In particular, under the Medicare Access and CHIP Reauthorization
Act of 2015 (MACRA), physicians will receive payment incentives or reductions
based on their performance with respect to clinical quality, efficiency,
clinical improvement activities and meaningful use of electronic health records.
We believe our continuing focus on clinical excellence and monitoring the
clinical quality of our services positions us favorably to benefit from the
shift toward value-based reimbursement models. Other initiatives have increased
access to health insurance, including the Patient Protection and Affordable Care
Act, as amended by the Health Care and Education Reconciliation Act of 2010
(Health Reform Law), and other healthcare reform measures. The Health Reform Law
has also increased the obligation of healthcare providers to provide coordinated
care and held providers accountable for showing measurable patient outcomes. The
Health Reform Law has been modified by congressional action since its enactment,
including the repeal of the mandate requiring substantially all
obtain qualifying health insurance coverage, and may in the future be repealed
or further modified as leaders in both the executive and legislative branches of
government have stated their intention to do so.
Increased competition for specialty physicians. With a growing and aging
population in
increasingly outpacing the supply of qualified practitioners. We believe there
will be a shortage of physicians in each of our specialties occurring in the
next ten years. This growing shortage has led to increasing challenges in
recruiting and retaining specialty physicians among hospitals, ASCs and other
healthcare facilities, which we believe we can service in part by utilizing
other allied healthcare professionals, such as certified registered nurse
anesthetists, advanced registered nurse practitioners and physician assistants.
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Strategy
We intend to grow the revenue and profitability of our services to physicians
segment by:
Delivering distinctive service to our client base to drive strong same-contract
growth. While we have yet to begin operations, we believe the foundation we will
build our service business lies in how we will service our affiliate physicians.
To ensure that we strengthen client relationships, we will pursue the following
key strategies:
• Help physicians expand their capabilities through management expertise,
enhancements in internal physician recruiting, credentialing and
onboarding organizations, develop our provider quality metrics
capabilities and investment in reimbursement technologies;
• Aide physicians to provide their health system clients with a compelling
and diverse suite of clinical solutions to deliver on our customers'
mandate for increased clinical quality, patient satisfaction and
coordination of care;
• work with our clients to develop increased efficiencies through the
application of best practice information regarding physician staffing and
procedural turnaround;
• advance relationships with national managed care companies to facilitate
favorable contract terms and more efficient revenue cycle management;
• collaborate with hospitals, ASCs and other healthcare facilities to
improve their operations by leveraging the clinical leadership of our
affiliate physicians at clients' facilities; and
• Contract with and retain high quality physicians and healthcare
professionals by providing clinical resources, comprehensive
administrative practice support, competitive compensation and career
opportunities.
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Enhancing profitability by achieving further operating efficiencies. While we
are currently a startup company that has yet to begin operations, we believe we
will improve the operating efficiency of our services to physicians business as
we grow. Our infrastructure is designed to achieve economies of scale by
enhancing profitability with revenue growth without compromising the quality of
operations or clinical care. We believe our processes related to managed care
contracting, billing, coding, collection and compliance will drive a track
record of effective and efficient revenue cycle management. We will make
investments in infrastructure, including management information systems that we
believe will enable us to improve clinical quality and key client metrics while
reducing the cost of our physicians to provide their patient's with care. At the
patient level, telemedicine technologies not only streamline the delivery of
services that can include rural areas in our region, but also provide service to
those with mobility impairments, and places our clients in a better position to
leverage these services with their payors.
Revenue From Services to Physicians
Revenue from services to physicians is derived principally from offering our
facilities, such as exam rooms, equipment, office space and office and billing
services to physicians who derive their fee for service revenue from third-party
payors. We will record revenue at the time services are provided to our
contracted physicians, net of a contractual allowance and provision for
uncollectibles.
We will also recognize revenue for services provided during a particular period
but not yet billed. Expected collections are estimated based on fees and
negotiated payment rates in the case of third-party payors, the specific
benefits provided for under each patient's healthcare plan, mandated payment
rates under the Medicare and Medicaid programs, and historical cash collections.
Our provision for uncollectibles includes the estimate of uncollectible balances
due from uninsured patients, uncollectible co-pay and deductible balances due
from insured patients and special charges, if any, for uncollectible balances
due from managed care, commercial and governmental payors. We record net revenue
from uninsured patients at its estimated realizable value, which includes a
provision for uncollectible balances, based on historical cash collections, net
of recoveries.
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We will provide the majority of billing for our affiliated physicians through
our internal billing function. We will also selectively utilize third-party
revenue cycle management providers to perform billing. Additionally, we will
invest in applications that provide the foundation for the day-to-day operations
of our services to physicians, including facilities-based billing and
office-based billing.
Retroactive adjustments, recoupments or refund demands may change amounts
realized from third-party payors. Retroactive adjustments to amounts previously
reimbursed can and do occur on a regular basis as a result of reviews and
audits. Additional factors that could complicate our billings on behalf of
physicians we serve include:
• disputes between payors as to which party is responsible for payment;
• the difficulty of adherence to specific compliance requirements, diagnosis
coding and various other procedures mandated by the government; and
• failure to obtain proper physician credentialing and documentation in
order to bill governmental payors.
Implications of Being an "Emerging Growth Company
As a public reporting company with less than
last fiscal year, we qualify as an "emerging growth company" under the Jumpstart
our Business Startups Act of 2012, or the JOBS Act. An emerging growth company
may take advantage of certain reduced reporting requirements and is relieved of
certain other significant requirements that are otherwise generally applicable
to public companies. In particular, as an emerging growth company we:
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o· are not required to obtain an attestation and report from our auditors on
our management's assessment of our internal control over financial
reporting pursuant to the Sarbanes-Oxley Act of 2002;
o· are not required to provide a detailed narrative disclosure discussing our
compensation principles, objectives and elements and analyzing how those
elements fit with our principles and objectives (commonly referred to as
"compensation discussion and analysis);
o· are not required to obtain a non-binding advisory vote from our
stockholders on executive compensation or golden parachute arrangements
(commonly referred to as the "say-on-pay," "say-on-frequency" and
"say-on-golden-parachute" votes);
o· are exempt from certain executive compensation disclosure provisions
requiring a pay-for-performance graph and CEO pay ratio disclosure;
o· may present only two years of audited financial statements and only two
years of related Management's Discussion & Analysis of Financial Condition
and Results of Operations, or MD&A;
o· are eligible to claim longer phase-in periods for the adoption of new or
revised financial accounting standards under §107 of the JOBS Act; and
o· are exempt from any PCAOB rules relating to mandatory audit firm rotation
and any requirement to include an auditor discussion and analysis
narrative in our audit report.
We intend to take advantage of all of these reduced reporting requirements and
exemptions, including the longer phase-in periods for the adoption of new or
revised financial accounting standards under §107 of the JOBS Act. Our election
to use the phase-in periods may make it difficult to compare our financial
statements to those of non-emerging growth companies and other emerging growth
companies that have opted out of the phase-in periods under §107 of the JOBS
Act.
Certain of these reduced reporting requirements and exemptions were already
available to us due to the fact that we also qualify as a "smaller reporting
company" under
required to obtain an auditor attestation and report regarding management's
assessment of internal control over financial reporting; are not required to
provide a compensation discussion and analysis; are not required to a
pay-for-performance graph or CEO pay ratio disclosure; and may present only two
years of audited financial statements and related MD&A disclosure.
22
Under the JOBS Act, we may take advantage of these reduced reporting
requirements and exemptions for up to five years after our initial sale of
common equity pursuant to a registration statement declared effective under the
Securities Act of 1933, or such earlier time that we no longer meet the
definition of an emerging growth company. In this regard, the JOBS Act provides
that we would cease to be an "emerging growth company" if we have more than
billion
common stock held by non-affiliates, or issue more than
non-convertible debt over a three-year period. Furthermore, under current
rules we will continue to qualify as a "smaller reporting company" for so long
as we (1) have a public float (i.e., the market value of common equity held by
non-affiliates) of less than
recently completed second fiscal quarter; or (2) for so long as we have a public
float of zero, have annual revenues of less than
recently completed fiscal year.
Competition
The segment providing services to physicians is highly fragmented, and we
consider our primary competitors to be local physician group practices. On a
regional and national basis, we compete with companies such as Mednax Inc.,
Health
Clinical Partners
Patents, Trademarks Licenses and Other Intellectual Property
None. Properties
The Company's corporate headquarters are located at:
103,
officer of the company. The Company does not own any real property.
23
RESULTS OF OPERATIONS
For the three and nine month periods ending
recognized no revenues.
For the three-month period ending
operating losses of
where the Company incurred total operating losses of
impairment charge of
and diluted for the period ending as compared to a net loss applicable to common
shareholders of
year.
For the nine-month period ending
operating losses of
2021
impairment charge of
basic and diluted for the period ending as compared to a net loss applicable to
common shareholders of
last year.
Going Concern
Our ability to continue as a going concern is contingent upon the successful
completion of additional financing arrangements and our ability to achieve and
maintain profitable operations.
Therefore, management plans to raise equity capital to finance the operating and
capital requirements of the Company. While the Company is devoting its best
efforts to achieve the above plans, there is no assurance that any such activity
will generate funds that will be available for operations. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern.
Summary of product research and development that we will perform for the term of
our plan of operation.
We have no plans to perform any product research and development at this time.
Expected purchase or sale of plant and significant equipment
Management is currently identifying if additional equipment is needed in its
operations, but none is planned at this time.
Significant changes in the number of employees
We currently have no employees. We are dependent upon our officers for our
future business development. As our operations expand, we anticipate the need to
hire additional employees, consultants and professionals; however, the exact
number is not quantifiable at this time.
24
Liquidity and Capital Resources
As of
total current assets of
current liabilities of
The Company has limited financial resources available, which has had an adverse
impact on the Company's liquidity, activities and operations. These limitations
have adversely affected the Company's ability to obtain certain projects and
pursue additional business. Without realization of additional capital, it would
be unlikely for the Company to continue as a going concern. Management intends
to raise additional debt or equity financing to fund ongoing operations and
necessary working capital. However, there is no assurance that such financing
plans will be successful or be obtained in amounts sufficient to meet the
Company's needs.
Notwithstanding,
be unable to continue operations in the future.
will require additional capital in order to develop its business.
may use a combination of equity and/or debt instruments to funds its growth
strategy or enter into a strategic arrangement with a third party.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results or operations, liquidity,
capital expenditures or capital resources that is material to investors.
Critical Accounting Policies and Estimates
Revenue Recognition: The Company recognizes revenue related to product sales
when (i) persuasive evidence of the arrangement exists, (ii) shipment has
occurred, (iii) the fee is fixed or determinable, and (iv) collectability is
reasonably assured.
Recent Pronouncements
The Company's management has evaluated all the recently issued accounting
pronouncements through the filing date of these financial statements and does
not believe that any of these pronouncements will have a material impact on the
Company's financial position and results of operations.
25
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