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Item 7.01 Regulation FD Disclosure.
Registrant has been engaged in completing a restatement of its financial reports contained in its previous filings on Form 10-Q for the periods ending June 30, 2019 and September 30, 2019 and completing the audit of its financial statements for the year ended December 31, 2019 to include its Form 10-K for the year ended December 31, 2019. The restatements and audit have been difficult but are in the final stages and the Form 10-K for the year ended December 31, 2019 is nearly complete. The filing must complete final review of our independent accounting firm and will then be filed. Filing is expected before year end. The quarterly Form 10-Q filings for the First, Second and Third Quarters of 2019 are prepared and will be completed and reviewed as soon as the final audit results for the year ended December 31, 2019 are approved. All future filings with the SEC will be made on a timely basis, including the Form 10-K for the year ended December 31, 2020.
The delinquent filings for 2019 resulted from a number of unexpected and unavoidable issues, including:
1. Our previous independent accounting firm advised us in January 2020 that it did not have the capacity to undertake the audit for 2019 and resigned the engagement. This resignation was unexpected and there was no prior indication of any issues. The resignation was reported on Form 8-K filed on January 13, 2020.
2. On January 29, 2020, we engaged our current independent accounting firm, Rosenberg Rich Baker Berman P.A. (“RRBB”) as reported on Form 8-K filed on January 31, 2010. RRBB had no prior information regarding our company and undertook a complete review of prior filings and financial reports, resulting in a determination that certain items related to the acquisition of the CareClix operating software in April 2019 and the issuance of convertible notes in April and May 2019 had been reported incorrectly. This determination required us to retain an outside consulting group to complete a valuation of the assets acquired as a business combination and to restate the reporting of the convertible notes to reflect a derivative feature of those notes.
3. The COVID-19 pandemic significantly affected the business and operations of the company as it moved into the telemedicine market as a result of the acquisition of the CareClix telemedicine software. On March 30, 2020, the company filed a Form 8-K report advising that we would be taking advantage of the extended filing period contained in SEC Release No. 34-88465.
4. In April 2020, the SEC included the Company shares in a temporary trading suspension of a number of public telemedicine companies, to which the company responded by a Form 8-K filing dated April 14, 2020. The temporary trading suspension expired after two weeks and subsequently, the company requested and received from the SEC a letter advising that there was no investigation of the company underway. The suspension did, however, result in the automatic termination of the trading of the company shares on the OTC Markets, which has affected additional fund-raising efforts of the company. In turn, the company had difficulty expanding staff to meet demands of the business and could not expand staff to assist with the financial reporting or expansion of the business.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 18, 2020 CareClix Holdings, Inc.
By: /s/ Charles O. Scott
Name: Charles O. Scott
Title: CEO
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