UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2017

 

Commission file number: 333-206839

 

HEALTH-RIGHT DISCOVERIES, INC.

(Exact name of registrant as specified in its charter)

 

Florida	45-3588650
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

 

18851 NE 29th Avenue, Suite 700, Aventura, Florida 33180

(Address of Principal Executive Offices)

 

(305) 705-3247

(Registrant’s telephone number, including area code)

 

(Former name, former address and former fiscal year, if changed since last report)

 

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 ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

 

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

 

Large Accelerated Filer ¨	Accelerated Filer ¨
Non-accelerated filer ¨	Smaller reporting company x

 

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

 

The number of shares outstanding of the registrant’s common stock, $0.001 par value, as of May 11, 2017 was 17,533,332 shares.

 

 

TABLE OF CONTENTS

 

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Balance Sheets as of March 31, 2017 (unaudited) and December 31, 2016	3
	Statements of Operations for the three months ended March 31, 2017 and 2016 (unaudited)	4
	Statements of Cash Flows for the three months ended March 31, 2017 and 2016 (unaudited)	5
	Notes to Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	11
Item 3.	Quantitative Disclosures About Market Risk.	13
Item 4.	Controls and Procedures.	13
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	14
Item 1A.	Risk Factors.	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	14
Item 3.	Defaults Upon Senior Securities.
Item 4.	Mine Safety Disclosures.	14
Item 5.	Other information.	14
Item 6.	Exhibits.	14
SIGNATURES		14

 

 

HEALTH-RIGHT DISCOVERIES, INC.

BALANCE SHEETS

(Unaudited)

 

		March 31, 2017				December 31, 2016
ASSETS
CURRENT ASSETS:
Cash		$	278			$	18,373
Inventories			-				-
Prepaid expenses
Total Current Assets			278				18,373
TOTAL ASSETS		$	278			$	18,373
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Loans payable - related parties		$	200,357			$	193,662
Salaries payable - related party			182,000				169,000
Other current liabililty			8,589				25,261
Total Current Liabilities			390,946				387,923
STOCKHOLDERS' DEFICIENCY
Preferred Stock, .001 par value, 5,000,000 shares authorized  No shares issued and outstanding March 31, 2017 and 2016			-				-
Common Stock, .001 par value, 100,000,000 shares authorized  17,533,332 and 17,533,332 shares issued and outstanding  March 31, 2017 and December 31, 2016, respectively			17,533				17,533
Additional Paid in Capital			589,717				589,717
Accumulated Deficit			(997,918	)			(976,800	)
TOTAL STOCKHOLDERS' DEFICIENCY			(390,668	)			(369,550	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY		$	278			$	18,373

 

The accompanying notes are an integral part of these financial statements

 

 

HEALTH-RIGHT DISCOVERIES, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

 

		Three Months Ended March 31,
		2017				2016
Sales		$	-			$	4,076
Cost of Sales			-				1,320
Gross Profit			-				2,756
COSTS AND EXPENSES:
General and administrative			18,767				67,527
Interest expense - related parties			2,352				5,636
Total Cost and expenses			21,119				73,163
Loss before income tax provision			(21,119	)			(70,407	)
Income tax provision			-				-
NET LOSS		$	(21,119	)		$	(70,407	)
Loss per common share			(0.00	)			(0.00	)
Weighted average common shares outstanding			17,533,332				17,331,672

 

The accompanying notes are an integral part of these financial statements

 

 

HEALTH-RIGHT DISCOVERIES, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

 

		Three Months Ended March 31,
		2017				2016
OPERATING ACTIVITIES:
Net loss		$	(21,119	)		$	(70,407	)
Adjustments to reconcile net loss to net  cash used in operating activities:
Stock based compensation			-				40,000
Accrued salary to related party			13,000				-
Changes in operating assets and liabilities
Accounts Payable			(16,672	)
Inventories			-				1,059
Credit card payable			-				(195	)
Accrued interest			2,352				5,350
Accrued expenses			-				860
NET CASH USED IN OPERATING ACTIVITIES			(22,439	)			(23,333	)
FINANCING ACTIVITIES:
Proceeds of loan from related parties			4,344				25,000
Repayment of related party loan			-				(1,010	)
NET CASH PROVIDED BY FINANCING ACTIVITIES			4,344				23,990
INCREASE (DECREASE) IN CASH			(18,095	)			657
CASH - BEGINNING OF YEAR			18,373				1,957
CASH - END OF YEAR		$	278			$	2,614

 

The accompanying notes are an integral part of these financial statements

 

  

HEALTH-RIGHT DISCOVERIES, INC.

Notes to Financial Statements

 

NOTE 1 – Business

 

Health-Right Discoveries, Inc. (“the Company”) was formed under the laws of the State of Florida on October 12, 2011 under the name Four Plex Partners, Inc. The company changed its name to Health-Right Discoveries, Inc. on March 22, 2012. The Company’s business is to develop and market an innovative portfolio of both prescription nutritional, OTC monograph and natural products that primarily focus on factors relating to stress-induced conditions and diseases.

 

NOTE 2 - Summary of Significant Accounting Policies

 

Use of Estimates

 

The preparation of the financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) 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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Certain of the Company’s estimates could be affected by external conditions, including those unique to its industry, and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates that could cause actual results to differ from its estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and record adjustments when necessary.

 

Cash

 

The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents.

 

Revenue Recognition

 

The Company follows the guidance of the Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition”. We record revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the selling price to the customer is fixed or determinable and collectability of the revenue is reasonably assured. The Company has not experienced any significant returns from customers and accordingly, in management’s opinion, no reserve for returns has been provided.

 

Inventories

 

Inventories, which consist of the Company’s product held for resale, are stated at the lower of cost, determined using the first-in, first-out, and net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose of the product.

 

If the Company identifies excess, obsolete or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified.  Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Company's statements of operations.

 

 

Fair Value Measurements

 

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

 

The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates are comparable to rates of returns for instruments of similar credit risk.

 

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 — quoted prices in active markets for identical assets or liabilities

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

 

The Company does not have any assets or liabilities measured at fair value on a recurring basis.

 

Stock-based compensation

 

The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, the fair value of the award is calculated on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock for common shares; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, the fair value of the award on the date of grant is calculated in the same manner as employee awards. However, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised.

 

Advertising

 

Advertising and marketing expenses are charged to operations as incurred.

 

 

Income Taxes

 

The company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

  

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented.

 

NOTE 3 – Going Concern

 

The accompanying 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 generated minimal revenues since inception. The Company has sustained losses since inception, and has a stockholders’ deficiency of $390,668 at March 31, 2017. These factors among others raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time.  

 

The continuing operations of the Company are dependent upon its ability to continue 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 accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 4 – Stockholders’ Equity

 

The Company has authorized 100,000,000 shares of common stock $.001 par value and 5,000,000 shares of preferred stock $.001 par value.

 

During the three months ended March 31, 2017 the Company did not issue any shares of common stock.

 

During the period ended March 31, 2016, the Company issued 400,000 shares of common stock for services rendered which were valued at $40,000. The Company valued these shares based on the per share price in which unaffiliated investors purchased shares of common stock in a private placement.

 

NOTE 5 – Related Party

 

Since inception, the Company has relied in large part on loans from James Pande and David Hopkins, its principal shareholders, to fund its operations.

 

 

Since inception, Mr. Pande advanced money to help fund the Company’s operations. During the three months ended March 31, 2017 there were no advances on this note. These borrowings bear interest at 3% per annum with no maturity date. The balance due as of March 31, 2017 and December 31, 2016 was $31,921 and $31,312, respectively, including accrued interest.

 

The Company has a secured promissory note with Jim Pande. These borrowings bear interest at 3% per annum with no maturity date. The balance due as of March 31, 2017 and December 31, 2016 was $15,563 and $15,451, respectively, including accrued interest.

 

Effective July 30, 2015 the Company entered into a secured future advance promissory note with Mr. Pande for a total amount of $75,000. During the three months ended March 31, 2017 the Company borrowed $0 in regards to this note. The note bears interest at 7.5% per annum and matures on July 31, 2017. The balance due as of March 31, 2017 and December 31, 2016 was $83,098 and $81,711, respectively, including accrued interest.

 

Since inception, Mr. Hopkins has also advanced money to help fund the Company’s operations. During the three months ended March 31, 2017, he advanced $1,000. These borrowings bear interest at 3% per annum with no maturity date. The balance due as of March 31, 2017 and December 31, 2016 was $4,105 and $3,080 respectively, including accrued interest.

 

Since inception, Mr. Hopkins advanced money to fund the Company’s operations. In 2013, he converted certain advances and accrued salary into a secured demand promissory note. These borrowings bear interest at 3% per annum with no maturity date. The balance due as of March 31, 2017 and December 31, 2016 was $31,125 and $30,903, respectively, and is subordinated to the future advance promissory note issued to Mr. Pande.

 

The Company’s President has made loans to the Company through direct charges on his credit card to pay for working capital purposes. The balance due as of March 31, 2017 and December 31, 2016 was $34,545 and $31,205, respectively, including accrued interest. The founder is charging the Company 0% interest on the unpaid monthly balances associated with this loan, which is the interest being charged on the card.

 

The Company’s board of directors approved a salary to the Company’s president in the amount of $52,000 per annum plus a car allowance of $600 per month. As of March 31, 2017 and December 31, 2016 the amount unpaid and accrued amount aggregated is $182,000 and $169,000, respectively. Effective in August 2013, the president waived his car allowance which amount has not been accrued since that date. The president resumed his car allowance in July of 2015 and is owed $2,400 as of March 31, 2017.

 

NOTE 6 – Credit card payable

 

The Company utilizes a credit card for working capital purposes. The card has a credit limit of $9,000, with a balance of $0 and $0 outstanding at March 31, 2017 and December 31, 2016, respectively.

 

 

NOTE 7 – Income Taxes

 

As of March 31, 2017, the Company had approximately $997,918 of federal and state net operating loss carryovers (“NOLs”) which begin to expire in 2031.  Utilization of the NOLs may be subject to limitation under the Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under regulations.  

 

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.  Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.  Based on the assessment, management has established a full valuation allowance against the entire deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.

 

The Company files U.S. federal and state of Florida tax returns that are subject to audit by tax authorities beginning with the year ended December 31, 2013. The Company’s policy is to classify assessments, if any, for tax and related interest and penalties as tax expense.

 

NOTE 8 – Subsequent events

 

Management has evaluated subsequent events through, the date which the financial statements were available to be issued.

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Unless the context otherwise requires, references in this report to “HRD,” “Health-Right,” “the Company,” “we,” “our” and “us” refers to Health-Right Discoveries, Inc.

 

Forward-Looking Statements

 

Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein particularly in view of the current state of our operations, the inclusion of such information should not be regarded as a statement by us or any other person that our objectives and plans will be achieved. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

 

Background

 

Health-Right was founded as a natural biotech company that seeks to combine science and nutrition to develop branded ingredients, formulations and products that seek to provide a better quality of life for consumers who primarily suffer from stress-induced viruses and diseases. The Company developed a formulation platform by utilizing and scientifically combining various natural ingredients to help positively influence the interrelationship between stress and the immune system. The Company initially applied the formulation platform to Advanced H-Plex Defense Formula 11, its first product (“H-Plex Defense”), an all-natural dietary supplement whose formulation sought to address less than optimal nutrition and nutritional deficiencies to aid persons afflicted with Herpes Simplex Virus 1. Despite test marketing H-Plex Defense through the end of 2014 and positive customer feedback, HRD has been unable to raise sufficient capital to complete development of and commercialize H-Plex Defense.

 

Accordingly, during 2016 and to date in 2017, the Company shifted its focus to identifying and exploring various opportunities for growth and revenue generation through the acquisition of other products, technologies or companies in the natural biotech, healthcare, nutraceutical and related fields.

 

To date, the Company has generated limited revenues and has operated with limited capital. The Company will require significant capital to implement its refocused business plan.  There can be no assurance that the Company can raise the necessary funds, on favorable terms or otherwise.  Failure to obtain sufficient capital will substantially harm the Company’s prospects.

 

Recent Developments

On April 26, 2017, HRD entered into a letter of intent to acquire 100% of two related Arkansas entities engaged in providing in-office ancillary opportunities and third party billing to physicians and medical clinics, Common Compounds, Inc and EzPharmaRx, LLC (collectively, the “CCI/EzRx”) for up to $6,100,000 in cash and 1,751,850 “restricted” shares of our common stock. $3,600,000 in cash is to be paid and the shares of our common stock are to be issued at closing. The $2,500,000 balance of the cash portion of the purchase price is to be paid by the issuance of a promissory note (the “Note”) at closing. The Note will be non-interest bearing and will be payable in five equal annual installments of $500,000 on the first, second, third, fourth and fifth anniversaries of the of closing, which installments shall be reduced to $377,400 (with a corresponding reduction in the cash portion of the purchase price), if CCI/EzRx fails to meet certain financial targets for the years ending December 31, 2017 and 2018, to be agreed upon by the parties in the definitive transaction documentation. Each installment of principal under the Note may, at the option of the holder, be converted on its due date into shares of our common stock at a conversion price equal to 50% of “fair market value,” which is defined as the average closing price for our common stock on the principal market on which they are traded during the thirty (30) trading days prior to the applicable due date, provided that the conversion price shall not be lower than $2.00 per Share.

 

Consummation of the proposed acquisition is subject to negotiation and execution of definitive transaction documentation containing the foregoing terms, as well as other terms and conditions customary for agreements of that type and nature and HRD securing the necessary capital to close the acquisition. Accordingly, there can be no assurance that we will be able to successfully close the proposed acquisition.

 

Corporate Information

 

The Company was incorporated in the state of Florida on October 11, 2011 under the name “Four Plex Partners, Inc.” and changed its name to “Health-Right Discoveries, Inc.” on March 22, 2012.

 

Our executive offices are located at 18851 NE 29th Avenue, Suite 700, Aventura, Florida 33180 and our telephone number is (305) 705-3247. Our corporate website is www.health-right.com. Information appearing on our corporate website is not part of this report.

 

 

Results of Operations

 

Three months ended March 31, 2017 compared to three months ended March 31, 2016

 

We had no revenues for the three months ended March 31, 2017 as compared to $4,076 for the three months ended March 31, 2016, reflecting the effective cessation of trial-marketing of H-Plex Defense in the 2017 period. Reflecting the foregoing, cost of sales declined to $0 in the 2017 period from $1,320 in the 2016 period, which resulted in gross profit of $0 in the 2017 quarter, as compared to $2,756 in the 2016 quarter.

 

General and administrative costs were $18,767 for the three months ended March 31, 2017 as compared to $67,527 in the comparable period in 2016, reflecting limitations in 2017 of the Company’s capital resources related to the implementation of the its business plan. Interest expense to related parties was $2,352 in the 2017 period, as compared to $5,636 in the 2016 period, attributable primarily to shareholder loans.

 

Net losses for the three months ended March 31, 2017 and March 31, 2016, were $21,119 and $70,407, respectively.

 

Liquidity and Capital Resources

 

As of March 31, 2017, total assets were $278, as compared to $18,373 on December 31, 2016. Total current liabilities as of March 31, 2017 were $390,946, as compared to $387,923 as of December 31, 2016, reflecting the increase in principal balance of shareholder loans.

  

Net cash used in operating activities was $22,438 for the three months ended March 31, 2017, as compared to the $23,333 for the same period in 2016.

 

Net cash provided by financing activities in the 2017 period was $4,344, as compared to $23,990 in the 2016 period reflecting shareholder loans, offset, in the 2016 period by a $1,010 repayment of shareholder loans.

 

Our primary source of capital to develop and implement our business plan has been from private placements of our securities and shareholder loans.

 

The Company will require additional financing to complete development to commercially launch and market its planned products. Our independent auditors report for the year ended December 31, 2016 includes an explanatory paragraph strategy that our lack of revenues and working capital raise substantial doubt about our ability to continue a growing concern. While we are seeking to raise additional financing, either through government grants and loans or additional securities or offerings, there can be no assurance that additional financing will be available to the Company when needed, on favorable terms or otherwise. Moreover, any such additional financing may dilute the interests of existing shareholders. The absence of additional financing, when needed, could cause the Company to delay implementation of its business plan in whole or in part, curtail its business activities and seriously harm the Company and its prospects.

  

 

Item 3.

Quantitative Disclosures About Market Risks.

 

As a “smaller reporting company,” we are not required to provide the information required by this Item.

 

Item 4.

Controls and Procedures.

 

Management’s Report on Disclosure Controls and Procedures

 

Our President, as our sole executive officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, as of March 31, 2017, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the Securities and Exchange Commission (the “SEC”), including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our President, as our Principal Executive, Financial and Accounting Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our President has concluded that as of March 31, 2017, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described in Item 9A(b) of our Annual Report on Form 10-K for the year ended December 31, 2016.

 

Our President does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officer has determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

Changes in Internal Controls Over Financial Reporting

 

There were no changes in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II - OTHER INFORMATION

 

Item 1.

Legal Proceedings.

 

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

  

Item 1A.

Risk Factors.

 

As a “smaller reporting company,” we are not required to provide the information required by this Item.

 

Item 2..

Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 4..

Mine Safety Disclosures.

 

Not applicable.

 

Item 5..

Other Information.

. 

None.

 

Item 6.

Exhibits.

 

Exhibit Number		Description of Exhibit
31.1		Section 302 Certification
32.1		Section 906 Certification

 

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 thereunto duly authorized.

 

	HEALTH-RIGHT DISCOVERIES, INC.
Dated:  May 11, 2017	By:	/s/ David Hopkins
		David Hopkins, President
		(Principal Executive, Financial and Accounting Officer)