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Going Concern Matters and Liquidity
3 Months Ended
Mar. 31, 2017
Going Concern Matters and Liquidity [Abstract]  
GOING CONCERN MATTERS AND LIQUIDITY

NOTE 3 – GOING CONCERN MATTERS AND LIQUIDITY

 

As of March 31, 2017, the Company had a working capital deficit of $902,162 and accumulated deficit $2,601,340. For the three months ended March 31, 2017, the Company had a net loss of $477,121 and net cash used by operating activities of $325,190. Net cash used in investing activities was $5,147. Net cash provided by financing activities was $329,221, resulting principally from $210,000 from the proceeds of the sale of 2,100,000 shares of common stock and $135,000 proceeds from related party loans.

 

The Company’s cash balance and revenues generated are not currently sufficient and cannot be projected to cover its operating expenses for the next twelve months from the date of this report. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans include attempting to improve its business profitability and its ability to generate sufficient cash flow from its operations to meet its needs on a timely basis, obtaining additional working capital funds through equity and debt financing arrangements, and restructuring on-going operations to eliminate inefficiencies to raise cash balance in order to meet its anticipated cash requirements for the next twelve months from the date of this report. However, there can be no assurance that these plans and arrangements will be sufficient to fund the Company’s ongoing capital expenditures, working capital, and other requirements. Management intends to make every effort to identify and develop sources of funds. The outcome of these matters cannot be predicted at this time. There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all.

 

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital and achieve profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

 

During the year ended December 31, 2016, HLKD (i) received proceeds of $374,000 from the sale of 6,167,500 shares of common stock, (ii) received net proceeds of $475,000 from the issuance of convertible promissory notes with a combined face value of $600,000, and (iii) entered into the Investment Agreement pursuant to which the investor has agreed to purchase up to $3,000,000 of HLKD common stock over a three-year period starting upon registration of the underlying shares, with such shares put to the investor by the Company pursuant to a specified formula that limits the number of shares able to be put to the investor to the number equal to the average trading volume of the Company’s common shares for the five consecutive trading days prior to the put notice being issued. During the three months ended March 31, 2017, the Company received $210,000 from the sale of 2,100,000 shares of its common stock and $135,000 from the issuance of unsecured promissory notes to its founder, Dr. Michael Dent. In April 2017, the Company sold 1,850,000 shares of common stock to five investors at $0.10 per share and received $185,000 in proceeds.

 

The Company intends that the cost of implementing its development and sales efforts related to the HealthLynked Network, as well as maintaining its existing and expanding overhead and administrative costs, will be funded principally by cash received by the Company from the put rights associated with the $3,000,000 Investment Agreement. The Company expects to repay its outstanding convertible notes, of which $550,000 face value matures on July 7, 2017 and $50,000 on July 11, 2017, from outside funding sources, including but not limited to amounts available upon the exercise of the put rights granted to the Company under the Investment Agreement, sales of equity, loans from related parties and others. No assurances can be given that the Company will be able to access sufficient outside capital in a timely fashion in order to repay the convertible notes before they mature. In order to access cash available under the Investment Agreement, the Company’s common stock must be listed on a recognized stock exchange or market and the shares underlying the arrangement must be subject to an effective registration statement. If the Company is unable to meet these requirements, it will not have access to funds under the Investment Agreement. There can be no assurances that the Company will be able to meet these requirements, and if the Company is unable to do so then it will be required to seek alternative financing. There can be no assurances that such alternative financing sources will be available. If necessary funds are not available, the Company’s business and operations would be materially adversely affected and in such event, the Company would attempt to reduce costs and adjust its business plan.