UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended: March 31, 2019
Or
¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ____________ to ____________

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

For the quarterly period ended: September 30, 2018

Or 

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the transition period from ____________ to ____________ 

Commission File Number: 001-37807

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has 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 ¨x No x¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x No ¨

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

If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 14,070,41714,330,417 shares of common stock on November 13, 2018.May 14, 2019.

PRECHECK HEALTH SERVICES, INC.

NATURE’S BEST BRANDS, INC.INDEX

INDEX

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FORWARD LOOKING STATEMENTS

This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings “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, 2017,2018, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q and information contained in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.

We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

References to “we,” “us,” “our” and words of like import refer to Nature’s Best Brands,PreCheck Health Services, Inc. and its subsidiaries unless the context indicates otherwise.

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PreCheck Health Services, Inc.

PART 1: FINANCIAL INFORMATIONUnaudited Condensed Consolidated Balance Sheets

ITEM 1: FINANCIAL STATEMENTS

		March 31,				December 31,
		2019				2018
ASSETS
Current Assets
Cash		$	30,049			$	4,532
Accounts receivable - related party			30,000				-
Inventories			-				70,000
Prepaid expenses and other current assets			-				2,549
Total Current Assets			60,049				77,081
Property and equipment, net			212,489				-
Net assets held for sale from discontinued operations			177,828				177,828
Other assets			500				-
Total Other Assets			390,817				177,828
TOTAL ASSETS		$	450,866			$	254,909
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued expenses		$	142,222			$	-
Convertible notes payable			413,409				393,124
Convertible notes payable - related party			192,039				188,771
Loans payable - related parties			669,541				387,841
Other current liabilities under discontinued operations			147,865				203,077
Total Current Liabilities			1,565,076				1,172,813
Stockholders' Deficit
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized, no shares issued and outstanding			-				-
Common stock, par value $0.0001 per share, 100,000,000 shares authorized; 14,205,417 and 14,130,417 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively			1,421				1,414
Additional paid-in capital			9,001,538				8,927,795
Accumulated deficit from discontinued operations			(2,503,988	)			(2,450,462	)
Accumulated deficit			(7,613,181	)			(7,396,651	)
Total Stockholders' Deficit			(1,114,210	)			(917,904	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	450,866			$	254,909

NATURE’S BEST BRANDS, INC.

Unaudited Consolidated Balance Sheets

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

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PreCheck Health Services, Inc.

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

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PreCheck Health Services, Inc.

NATURE’S BEST BRANDS, INC.

UnauditedCondensed Consolidated Statements of OperationsStockholders' Deficit (Unaudited)

														Accumulated
														Deficit from
		Common Stock								Additional				Discontinued				Accumulated
		Shares				Amount				Paid-in Capital				Operations				Deficit				Total
Balance, December 31, 2017			8,507,583			$	8,507			$	2,262,865			$	-			$	(1,920,597	)		$	350,775
Fair value of common stock issued for services			197,000				197				184,473												184,670
Common  stock issued for note payable			25,000				25				22,725												22,750
Fair value of warrants issued in conjunction with convertible notes			-				-				155,742				-				-				155,742
Net loss for the three months ended March 31, 2018			-				-				-								(426,304	)			(426,304	)
Balance, March 31, 2018 (unaudited)			8,729,583			$	8,729			$	2,625,805			$	-			$	(2,346,901	)		$	287,633
Balance, December 31, 2018			14,130,417			$	1,414			$	8,927,795			$	(2,450,462	)		$	(7,396,651	)		$	(917,904	)
Fair value of common stock issued for services			50,000				5				48,495				-				-				48,500
Fair value of common stock issued in connection with loan payable			25,000				2				25,248				-				-				25,250
Net loss for the three months ended March 31, 2019			-				-				-				(53,526	)			(216,530	)			(270,056	)
Balance, March 31, 2019 (unaudited)			14,205,417			$	1,421			$	9,001,538			$	(2,503,988	)		$	(7,613,181	)		$	(1,114,210	)

The accompanying notes are an integral part of these unauditedcondensed consolidated condensed financial statementsstatements.

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NATURE’S BEST BRANDS, INC.PreCheck Health Services, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

		Three Months Ended
		March 31,
		2019				2018
Cash Flows from Operating Activities
Net loss		$	(270,056	)		$	(426,304	)
Adjustments to reconcile net loss to net cash used in operating activities from continuing operations:
Loss from discontinued operations			53,526				188,053
Depreciation expense			620				-
Amortization of debt discount			23,553				17,356
Fair value of common stock issued for services			48,500				184,670
Changes in Assets and Liabilities:
(Increase) Decrease in:
Accounts receivable			(30,000	)
Prepaid expenses and other assets			2,049				-
(Decrease) Increase in:
Accounts payable and accrued expenses			142,222				-
Net cash used in operating activities from continuing operations			(29,586	)			(36,225	)
Net cash used in operating activities from discontinued operations			(107,041	)			(160,024	)
Net cash used in operating activities			(136,627	)			(196,249	)
Cash Flows from Investing Activities
Purchases of property and equipment			(143,109	)			-
Net cash used in investing activities from continuing operations			(143,109	)			-
Cash Flows from Financing Activities
Proceeds from issuance of convertible notes			-				212,500
Repayment of bank loan			-				(2,087	)
Advances from related party			-				16,000
Repayment of stockholders loans			-				(30,164	)
Proceeds from convertible notes payable			20,285				-
Proceeds from convertible notes payable - related party			3,268				-
Proceeds from loan from stockholder			64,000				-
Proceeds from loans payable - related parties			217,700				-
Net cash provided by financing activities			305,253				196,249
Net increase in cash			25,517				-
Cash beginning of period			4,532				-
Cash end of period		$	30,049			$	-
Supplemental cash flows disclosures:
Interest paid		$	-			$	-
Taxes paid		$	-			$	-

Non-cash Financing and Investing Activities
Premium on loan payable - related party		$	25,250			$	-
Accretion to additional paid-in capital of premium on convertible notes payable		$	23,553			$	-
Warrants issued in conjunction with convertible notes		$	-			$	155,742
Transfer of notes payable due to related party to convertible notes payable		$	-			$	68,000
Common stock issued for Services		$	-			$	184,670
Common stock issued for payment of Notes Payable		$	-			$	22,750

The accompanying notes are an integral part of these unauditedcondensed consolidated condensed financial statementsstatements.

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NATURE’S BEST BRANDS,PRECHECK HEALTH SERVICES, INC.

Notes to Unaudited Condensed Consolidated Condensed Financial Statements

for the NineThree Months Ended September 30,March 31, 2019 and 2018 and September 30 2017

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Nature’s Best Brands,PreCheck Health Services Inc. (the “Company”) is a Florida corporation organized under the name Hip Cuisine, Inc. on March 19, 2014. The Company changed its corporate name to Nature’s Best Brand,Brands, Inc. on June 15, 2018. 2018 and to PreCheck Health Services, Inc. on January 3, 2019. The Company’s fiscal year end is December 31.

During the fourth quarter of 2018, the Company commenced operations for the U.S. distribution of a medical screening device, the PC8B, which it purchases from a domestic supplier. The PC8B medical device is a screening tool for use by physicians in managing a patient’s health. The Company can give no assurance that it can or will compete in the marketing of medical equipment, operate profitably or generate positive cash flow.

The Company has two subsidiaries, Hip Cuisine, Inc. (“Hip Cuisine”), a Panama corporation, incorporated on February 24, 2014, and Rawkin Juice, Inc., a California corporation incorporated on November 7, 2016. The Company’s fiscal year end iscorporation. Through December 31.

The31, 2018, the Company, through itsthese subsidiaries, operated four restaurants that offeroffered healthy food, coffee and juice, two in Panama and two in California. The Company is in the processAs of discontinuing its restaurant business, and expects to do so in the fourth quarter of 2018. The Company may not be able to sublease or assign its existing leases on a non-recourse basis, in which case,December 31, 2018, the Company will continuehad ceased restaurant operations, although it continues to have obligations under the leases to the extent that any subtenant or assignee does not comply with the lease terms, including the payment of rent.

restaurant leases. The Company plans to change its business direction and negotiate a non-exclusive distribution agreement with a manufacturer of medical device systems used for various forms of screening which provides physicians and medical professionals with useful data utilized for maximizing the management of patients’ health, and upon entering into such an agreement, to market the equipment. The Company has never generated any revenue from such business, and the Company can give no assurance that it can or will ever successfully negotiate a distribution agreement on acceptable terms, compete in the marketing of medical equipment, operate profitably or generate positive cash flow.restaurant operations are treated as discontinued operations.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated significant revenues since inceptionfrom its current business, and is in the process of discontinuinghas discontinued its restaurant business. As at September 30, 2018,of March 31, 2019, the Company has an accumulated deficit from continuing operations of $7,613,181 and accumulated deficit from discontinued operations of $2,503,988. During the three months ended March 31, 2019, the Company incurred a net loss from continuing operations of $2,984,767$216,530 and it sustained an operatinga net loss from discontinued operations of $1,064,170 for the nine months ended September 30, 2018.$53,526, and had a stockholders’ deficit of $1,114,210 as of March 31, 2019. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern for a reasonable period of time.is dependent upon the Company’s ability to raise additional funds and implement its strategies. The accompanying consolidated financial statements do not include any adjustments that might result frombe necessary if the outcome of this uncertainty.Company is unable to continue as a going concern.

As of March 31, 2019, the Company had cash on hand of $30,049. The continuing operations of the Company are dependent upon its ability to develop its proposed business of marketing medical devices used for screening, to raise adequate financing and to commence profitable operations in the future and repay its liabilities arising from normal business operations as they become due. The ability of the Company to raise financing may be impaired by the terms of the Company’s outstanding convertible notes and warrants.

In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2018 financial statements, raised substantial doubt about the Company’s ability to continue as a going concern.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the year ended December 31, 20172018 have been omitted. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the ninethree months September 30, 2018March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018.2019. This report should be read in conjunction with the audited consolidated financial statements and the footnotes thereto included in the Company’s Form 10-K for the year ended December 31, 2017.

Basis of Consolidation

These consolidated condensed financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated.2018.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Consolidation

These condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

Foreign Currency Translation and Re-measurement

The Company’s functional currency and reporting currency is the U.S. dollar. The functional currency of Hip Cuisine, which operated two restaurants in Panama, is the Panamanian Balboa. All transactions initiated in Panamanian Balboa arewere translated into U.S. dollars in accordance with ASC 830-30, “Translation of Financial Statements.” Since the Panamanian Balboa is pegged with the U.S. dollar at par, the Company recognized no gain or loss on foreign exchange translations during the ninethree months ended September 30, 2018March 31, 2019 and September 30, 2017.2018. The operations of Hip Cuisine are reflected in loss from discontinued operations.

Use of Estimates and Assumptions

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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As of September 30, 2018 and December 31, 2017, the Company had $86,555 and $87,102 in cash and cash equivalents, respectively.

Fair Value of Financial Instruments

The Company adopted ASC Topic 820, Fair Value Measurements (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.

The three-level hierarchy for fair value measurements is defined as follows:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets;

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active;

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement

The Company’s financial instruments consist primarily of cash, prepaid expenses,accounts receivable, accounts payable and accrued expenses, convertible notes and stockholder’s loan. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

Concentrations of Credit Risks

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

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During the three months ended March 31, 2019, 100% of the Company’s sales were made to a related party and 100% of the Company’s accounts receivable was from the same related party customer (see Note 4).

Related Parties

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions (see Note 7).transactions.

Prepaid and DepositsInventories

PrepaidAt December 31, 2018, inventories consisted of medical screening devices, the PC8B, purchased from a domestic supplier. The inventories were finished goods and deposits balances relatewere stated at lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method. Beginning with the first quarter of 2019, the Company’s plans are to security deposits for restaurant leases, prepaid rentprimarily license PC8B devices to physicians and prepaid insurance. The prepaid balances and depositsthe Company will retain title to the devices while with the physicians. As such, they will be amortizedclassified as property and equipment, unless it is specifically known certain devices will be sold.

No reserve was considered necessary for slow moving or obsolete inventory as of December 31, 2018, as the related expense is incurred.devices were sold during the three months ended March 31, 2019. The Company continuously evaluates the adequacy of these reserves and makes adjustments to these reserves as required.

Property plant and equipmentEquipment

Property and equipment are stated at cost. The Company’s PC8B devices are classified as property and equipment. At March 31, 2019, all PC8B devices on hand, placed as demo devices or licensed to physicians were classified as property and equipment. PC8B devices are depreciated once they are placed in service. Depreciation is computed oncalculated using the straight-line method. The depreciation and amortization methods are designed to amortizemethod over the cost of the assets over their estimated useful lives in years, of the respective assetsassets. The Company has determined the estimated useful lives of its property and equipment, as follows:

Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.

The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, “Property, Plant and Equipment” (“ASC No. 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the ninethree months ended September 30,March 31, 2019 and 2018, and September 30, 2017, no impairment losses have been identified.

Goodwill and Other Intangible Assets

We account for goodwill and intangible assets in accordance with ASC 350 “Intangibles-Goodwill and Other” (“ASC 350”). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate thatWith the fair valuecessation of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairmentthe restaurant operations at the reporting unit level (operating segmentend of 2018, all the existing leasehold improvements, equipment and furniture in the Company’s possession were either disposed of or one level below an operating segment) on an annual basisreclassified and between annual tests when circumstances indicate that the recoverabilityreported as net assets held for sale from discontinued operations as of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

No impairment loss was recognized for the nine months ended September 30, 2018 and September 30, 2017.

The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.December 31, 2018.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Net Assets Held for Sale from Discontinued Operations

Net assets held for sale from discontinued operations represent equipment and furniture for locations that have met the criteria of “held for sale” accounting, as specified by ASC 360. With the cease of the restaurant operations during the year ended December 31, 2018, all the existing equipment and furniture in the Company’s possession was depreciated through the last date of their usage in respective restaurant locations. The net assets held for sale are being marketed for sale and it is the Company’s intention to complete the sales of these assets during 2019. None of these assets were sold or disposed of during the three months ended March 31, 2019. Net assets held for sale from discontinued operations at March 31, 2019 and December 31, 2018 totaled $177,828.

Revenue Recognition

The Company recognizes revenue from the sale of products and services in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

Step 1: Identify the contract(s) with customers

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to performance obligations

Step 5: Recognize revenue when the entity satisfies a performance obligation

The Company recognizes revenue when it satisfies its obligation by transferring control of the good or service to the customer. A performance obligation is satisfied over time if one of the following criteria are met:

SinceFor PC8B devices sold to physicians or other customers, revenue is generally recognized upon shipment, unless the Company has significant performance obligations still to be completed. All revenue recognized during the three months ended March 31, 2019, were sales of PC8B devices to a related party (see Note 4). The Company also markets the PC8B pursuant to agreements which provide that the Company will place the equipment in the medical facility. Depending on the terms of the agreement with the medical facility, the Company may receive both a monthly fixed fee and a contingent fee based on the tests performed by the medical facility and the medical facility’s insurance reimbursement for which the Company performs billing services for the medical facility with respect to tests performed by the PC8B, in which case the Company’s revenuesprimary performance obligation is to provide billing services for the physician for all PC8B testing completed by the physician. The Company does not invoice a physician until the physician has collected a billing. Billings to physicians for completed services are generatedfixed as documented in the agreement. Revenue under service agreements is generally recognized when productsbilling services are sold with no remaining obligations oncompleted, less a reserve for estimated uncollectable billings. Revenue deferred for estimated uncollectable billings is recognized when the part ofbilling is collected by the physician. At March 31, 2019, the Company had placed one unit in a physician’s offices pursuant to service agreement. However, the Company did not recognize any revenue is recognized atunder service agreement during the time of sale.three months ended March 31, 2019.

Stock-Based Compensation

ASC 718, “Compensation - Stock Compensation,” prescribes accounting and reporting standards for all share-based payment transactions in which employee and non-employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-Based Compensation (continued)

For the three months ended March 31, 2018, the Company accountsaccounted for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity - Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date. Effective January 1, 2019, the Company is accounting for stock-based compensation to non-employees pursuant to Topic 718, with the result that stock-based compensation is treated the same for employees and non-employees.

During the ninethree months ended September 30,March 31, 2019 and 2018, and 2017, the Company incurred stock-based compensation expense of $48,500 and $184,670, respectively, from common stock issued to employees or consultants for services.

Income Taxes

The Company accounts for income taxes using the asset and $251,360 fromliability method in accordance with ASC 740, “Accounting for Income Taxes.” The asset and liability method provides that deferred tax assets and liabilities are recognized for the issuanceexpected future tax consequences of 197,000temporary differences between the financial reporting and 233,000tax bases of assets and liabilities and for operating losses and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. The Company recorded a valuation allowance against its deferred tax assets as of March 31, 2019 and December 31, 2018. As of March 31, 2019 and December 31, 2018, the Company did not have any amounts recorded pertaining to uncertain tax positions.

Basic and Diluted Net Loss per Share

The Company computes loss per share in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing the net loss applicable to common stockholders by the consultants for services.weighted average number of shares of common stock outstanding plus the number of additional shares of common stock that would have been outstanding if all dilutive potential shares of common stock had been issued. For the three months ended March 31, 2019 and 2018, the basic and diluted shares outstanding were the same, as potentially dilutive shares were considered anti-dilutive. For the three months ended March 31, 2019, the 150,000 shares of common stock issuable pursuant to outstanding warrants has been excluded because their impact on the loss per share is anti-dilutive.

Recently Issued Accounting Pronouncements

In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ‘These amendments expand the scope of Topic 718, Compensation—Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. ASU 2018-07 is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company does not currently expect the adoption to have any significant impact on the Company’s financial statements.

The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the Company’s financial statements.

Adoption of New Accounting Standards.

We have adopted the following recent accounting pronouncement in these financial statements with no significant impact on reported financial position, results of operations or cash flow: 

ASU 2014-09, Revenue - Revenue from Contracts with Customers. The new standard, as amended, requires that we recognize revenue in the amount to which we expect to be entitled for delivery of promised goods and services to our customers. The new standard also resulted in enhanced revenue-related disclosures, including any significant judgments and changes in judgments. Additionally, the new standard requires the deferral of incremental direct selling costs to the period in which the related revenue is recognized.

We adopted the standard as of January 1, 2018 using the modified retrospective approach applied to all contracts that were not completed at adoption based on the contract terms in existence at adoption. No adjustment was required to beginning retained earnings as a result of this adoption and none of the enhanced revenue-related disclosures were required.

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NOTE 3 – PROPERTY PLANT AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is computed on the straight-line method. The depreciation methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:

During the nine months ended September 30, 2018 and 2017, the depreciation cost was $147,920 and $109,651, respectively.

		March 31, 2019				December 31, 2018
PC8B equipment, including one device under a service agreement		$	204,000			$	-
Furniture and equipment			4,609				-
Software development			4,500				-
Less accumulated depreciation			(620	)			-
		$	212,489			$	-

At March 31, 2019, included in property are $28,000 for units which are used as demonstration units. During the ninethree months ended September 30, 2018,March 31, 2019, the Company issued 15,834 shares of common stock, valued at $15,674 based on the market price of the common stock on the date of issuance, for leasehold improvements.

NOTE 4 – INTANGIBLE ASSET – TRADEMARKS

The Company acquired rights with respect to three trademarks during 2017 and 2018, as follows:

_______________ 

¹ The Company acquired the rights to the Living Gourmet trademark in February 2017 for which the Company issued 10,000 shares of common stock, valued at $0.63 per share, whichdepreciation expense was the market price of the common stock on the date of the acquisition, from an unaffiliated party, and the Company agreed to pay a royalty of 20% of the net profits, as defined, generated from the use of the trademark. As of September 30, 2018,$620. There was no royalties were payable since the Company did not generate any profits from the trademark.

² On June 15, 2017, the Company issued 8,000 shares of common stock valued at $12,640, based on market price of $1.58 per share, to the managing member of Medidate Coffee Ltd., pursuant to an agreement with Medidate Coffee pursuant to which the Company obtained the exclusive rights to distribute Medidate coffee in Panama, Colombia and Costa Rica and received a 10% membership interest in Medidate Coffee. The Company will pay 20% of net profit derived from the sales of Medidate Coffee sold in Company-owned outlets and 20% of the net profit derived from sales of Medidate Coffee products that were produced in the kitchens of the Company’s restaurants. The Company and Medidate Coffee have the exclusive right to use the Medidate Coffee brand name. As of September 30, 2018, no royalties were payable since the Company did not generate any profits from the sale of the coffee.

³ In May 2018, we were granted a service markdepreciation expense for the heart logo.three months ended March 31, 2018.

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We amortizeWith the cost of our trademarks over the 15-year estimated useful lifecessation of the trademarksrestaurant operations during the year ended December 31, 2018, the Company recognized a loss on a straight line basis.

disposal of leasehold improvements of $279,793.All the existing equipment and furniture under the Company’s possession were depreciated through the last date of their usage in respective restaurant locations and reported as non-current assets held for sale from discontinued operations as of December 31, 2018. The following table sets forthdepreciation is included as part of the amortizationloss from discontinued operations.  Net assets held for the trademarkssale from discontinued operations at September 30, 2018March 31, 2019 and December 31, 2017

NOTE 5 – GOODWILL

Goodwill is generated from the acquisition of net assets from Rawkin Bliss LLC by Rawkin Juice Inc. Based on the Company’s analysis of goodwill as of September 30, 2018 no indicators of impairment exist. No impairment loss on goodwill was recognized for the nine months ended September 30, 2018 and June 30, 2017.totaled to $177,828.

NOTE 6 – BANK LOAN

The Company had the following bank loan outstanding as of September 30, 2018 and December 31, 2017:

During the nine months ended September 30, 2018 and 2017, the interest expense on bank loan was $1,215 and $667.

The following is a schedule by years of future bank loan payment as of September 30, 2018:

NOTE 74 – RELATED PARTY TRANSACTIONS

Chief Executive Officer

During 2018, the Company entered into an employment agreement with its chief executive officer pursuant to which the Company agreed to employ him until October 31, 2021. On November 5, 2018, as compensation for his services pursuant to his employment agreement, the Company issued to the chief executive officer 5,000,000 shares of common stock with a fair value $5,850,000, based on the market price on the date of issuance. The Company agreed to pay him an annual salary of $300,000, which will commence at such time as the Company has raised $2,000,000 from the private placement of its equity securities.

Chief Operating Officer

Employment Agreement

During 2018, the Company entered into an employment agreement with its chief operating officer pursuant to which the Company agreed to employ him until October 31, 2021. The formercompensation for the chief executiveoperating officer who resigned on October 15, 2018, has periodically made interest-free advancesconsists of the issuance to the Company for working capital, andchief operating officer of 750,000 shares of common stock, to be issued in three installments. On November 5, 2018, the Company has made periodic repaymentsissued to the former chief executive. Amounts dueoperating officer the initial 250,000 shares with a fair value of $292,500, based on the market price on the date of issuance. The agreement also calls for the Company to issue 250,000 shares to the former chief executiveoperating officer on accounteach of these advances were $413,087 at September 30, 2018October 31, 2019 and $258,139 at DecemberOctober 31, 2017. The advances are payable on demand.2020.

Related Party Sales

During the ninethree months ended September 30, 2018,March 31, 2019, the Company sold two of its PC8B units to a company owned by the Company’s former chief executiveoperating officer. The total revenue recognized on the sales was $60,000. As of March 31, 2019, a balance of $30,000 was owed by the company controlled by the chief operating officer advanced $282,586 to the Company andrelating to these sales, which is included in Accounts receivable – related party on the Company repaid $127,638 to the former chief executive officer.accompanying March 31, 2019 Balance Sheet.

Loans Payable – Related Parties

During the ninethree months ended September 30, 2017,March 31, 2019, the Company entered into three loan agreements with its chief operating officer and a company owned by the chief operating officer totaling to $215,000. In January 2019, the Company’s chief executiveoperating officer advanced $341,693 toloaned the Company and$25,000, which is to be paid, without interest, from the proceeds of the Company’s next financing. In consideration for the loan, the Company repaid $399,343issued 25,000 shares of its common stock to the chief executiveoperating officer, valued at $25,250, based at the market price of $1.01 per share on the date of issuance. The Company has recorded the fair value of the shares as a financing cost during the three months ended March 31, 2019. In March 2019, the Company borrowed $190,000 from the company owned by the chief operating officer. The loan is unsecured, has an interest rate of eight percent and is due on December 31, 2019. Interest expense on the loans for the three months ended March 31, 2019 was $620. No interest was paid during the three months ended March 31, 2019 and accrued interest was $620 at March 31, 2019. As of March 31, 2019, loans payable to the chief operating officer and the company owned by him of $215,000 were outstanding.

Other Related Party Transactions

On January 2, 2019, the Company entered into an agreement with JAS to perform administrative billing services for the Company relating to service agreements the Company has with medical offices. Pursuant to the agreement, JAS will provide billing services for the physician for all PC8B testing completed by the physician at a fee of $10 or $20 per test, depending on the test. JAS also provides the Company with office space in its offices in Denison, Texas for $500 per month.

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Chief Financial Officer

Convertible Notes Payable – Related Party

During the nine months ended September 30, 2018, the Company’s chief financial officer advanced $60,000 to the Company for working capital, and the Company repaid $99,000 to the chief financial officer. As of September 30, 2018 and December 31, 2017, the chief financial officer’s advances to the Company were $13,000 and $52,000, respectively. The Company owed the chief financial officer accrued interest of $5,615. Advances from the chief financial officer bore interest at 30% per annum.