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Document and Entity Information

v2.4.0.8
Document and Entity Information
9 Months Ended
Sep. 30, 2014
Nov. 17, 2014
Document And Entity Information    
Entity Registrant Name eWELLNESS HEALTHCARE Corp  
Entity Central Index Key 0001550020  
Document Type 10-Q  
Document Period End Date Sep. 30, 2014  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   16,421,000
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2014  

Condensed Consolidated Balance Sheets

v2.4.0.8
Condensed Consolidated Balance Sheets (USD $)
Sep. 30, 2014
Dec. 31, 2013
CURRENT ASSETS    
Cash $ 2,474   
Advances - related party 683   
Prepaid Expenses 32,491 4,770
Total current assets 35,648 4,770
Property & equipment, net 3,442 4,074
TOTAL ASSETS 39,090 8,844
CURRENT LIABILITIES    
Accounts payable and accrued expenses 154,016   
Accounts payable - related party 52,616   
Accrued compensation 219,500   
Contingent liability 90,000   
Convertible loans payable 130,000   
Total current liabilities 646,132   
Total Liabilities 646,132   
STOCKHOLDERS' EQUITY (DEFICIT)    
Preferred stock, authorized, 10,000,000 shares, $.001 value, 0 shares issued and outstanding      
Common stock, authorized 350,000,000 shares, $.001 par value, 15,603,000 and 9,000,000 issued and outstanding, respectively 15,603 9,000
Shares to be issued 58,000   
Additional Paid in Capital 890,554 561,538
Accumulated deficit (1,571,199) (561,694)
Total Stockholder's Equity (Deficit) (607,042) 8,844
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 39,090 $ 8,844

Condensed Consolidated Balance Sheets (Parenthetical)

v2.4.0.8
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2014
Dec. 31, 2013
Statement of Financial Position [Abstract]    
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, shares authorized 350,000,000 350,000,000
Common stock, par value $ 0.001 $ 0.001
Common stock, shares issued 15,603,000 9,000,000
Common stock, shares outstanding 15,603,000 9,000,000

Condensed Consolidated Statements of Operations (Unaudited)

v2.4.0.8
Condensed Consolidated Statements of Operations (Unaudited) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Income Statement [Abstract]        
TOTAL REVENUE            
OPERATING EXPENSES        
Executive compensation 186,000 169,116 558,000 235,333
General and administrative 54,849 11,841 164,609 34,520
Professional fees 13,234    187,483   
Contingent liability expense 90,000    90,000   
Research and development - related party    902 30 2,706
Total Operating Expenses 344,083 181,859 1,000,122 272,559
Net Loss from Operations (344,083) (181,859) (1,000,122) (272,559)
OTHER INCOME (EXPENSE)        
Interest income       7   
Interest expense, related parties (1,011)    (1,619)   
Interest expense (7,587)    (7,771)   
Net Loss before Income Taxes (352,681) (181,859) (1,009,505) (272,559)
Income tax expense          (50)
Net Loss $ (352,681) $ (181,859) $ (1,009,505) $ (272,609)
Basic and diluted (loss) per share $ (0.02) $ (0.01) $ (0.07) $ (0.03)
Basic and diluted weighted average shares outstanding 15,603,000 9,000,000 15,414,048 9,000,000

Condensed Consolidated Statements of Cash Flows (Unaudited)

v2.4.0.8
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Cash flows from operating activities    
Net loss $ (1,009,505) $ (272,609)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 1,348   
Contributed services 292,500 238,833
Expenses paid by shareholders    24,676
Shares issued for services 41,500 9,000
Imputed interest - related party 1,619   
Changes in operating assets and liabilities    
Advances - related parties (683)   
Prepaid expense (28,437)   
Accounts payable and accrued expenses 154,016   
Accounts payable - related party 52,616 100
Contingent liability 90,000   
Accrued compensation 219,500   
Net cash used in operating activities (185,526)   
Cash flows from financing activities    
Proceeds from issuance of common stock      
Common stock subscribed 58,000   
Convertible loan payable 130,000   
Net cash provided by financing activities 188,000   
Net increase (decrease) in cash 2,474   
Cash, beginning of period      
Cash, end of period 2,474   
Cash paid for:    
Taxes    50
Interest Expense      

The Company

v2.4.0.8
The Company
9 Months Ended
Sep. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
The Company

Note 1. The Company

 

The Company and Nature of Business

 

eWellness Healthcare Corporation (f/k/a Dignyte, Inc.), (the “Company”, “we”, “us”, “our”) was incorporated in the State of Nevada on April 7, 2011, to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company has generated no revenues to date. Prior to the Share Exchange Agreement discussed below, other than issuing shares to its original shareholder, the Company never commenced any operational activities.

Summary of Significant Accounting Policies

v2.4.0.8
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2014
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The interim financial information of the Company as of periods ended September 30, 2014 and September 30, 2013 is unaudited. The balance sheet as of December 31, 2013 is derived from audited financial statements of eWellness Corporation. The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense footnotes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. The accounting policies followed for quarterly financial reporting conform to the accounting policies disclosed in ASU 2014-10. In the opinion of management, all adjustments which are necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the nine months ended September 30, 2014 are not necessarily indicative of the results that can be expected for the entire year ending December 31, 2014. The unaudited financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2013 and the Form 8-K filed on August 6, 2014.

 

Share Exchange Agreement

 

On April 11, 2014, Digntye, Inc. (“Dignyte”), a publicly held Nevada corporation and eWellness Corporation (“Private Co”), a privately held company incorporated in Nevada, executed a Share Exchange Agreement (or “Initial Exchange Agreement”). Prior to the execution and delivery of the final Amended and Restated Share Exchange Agreement (the “Agreement”), the Board of Directors of Dignyte approved the Agreement and the transactions contemplated thereby. Similarly, the Board of Directors of the Private Co. approved the exchange. On April 25, 2014, immediately prior to the execution and delivery of the Agreement, Dignyte amended its certificate of incorporation to change its corporate name from “Dignyte, Inc.” to “eWellness Healthcare Corporation.”

 

Pursuant to the Agreement, eWellness Healthcare Corporation issued 9,200,000 shares of unregistered common stock, $.001 par value (the “common stock”) to the shareholders of the Private Co. in exchange for all outstanding shares of the Private Co.’s common stock. In addition, our former chief executive officer agreed: (i) to tender 5,000,000 shares of common stock back to the Company for cancellation; (ii) assign from his holdings, an additional 2,500,000 shares to the shareholders of the Private Co. resulting in a total of 11,700,000 shares owned by those shareholders; and, (iii) to a further assignment of an additional 2,100,000 shares to other parties as stated therein (collectively, the “CEO Stock Actions”).

 

As the parties satisfied all of the closing conditions, on April 30, 2014, we closed the Share Exchange. As a result, the Private Co. shareholders own approximately 76.97% of our issued and outstanding common stock, after giving effect to CEO Stock Actions.

 

Following the Share Exchange, we abandoned our prior business plan and we are now pursuing the Private Co.’s historical businesses and proposed businesses. The Private Co. is the surviving company under the share exchange and became a wholly owned subsidiary of the Company.

 

Prior to the Share Exchange Agreement, Dignyte was considered a shell company, as defined in SEC Rule 12b-2. For financial reporting purposes, the Share Exchange represents a “reverse merger” rather than a business combination. Consequently, the transaction is accounted for as a reverse-merger and recapitalization. eWellness Corporation is the acquirer for financial reporting purposes and Dignyte, Inc. is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the transactions are those of eWellness Corporation and are recorded at the historical cost basis of eWellness Corporation, and the consolidated financial statements after completion of the transaction include the assets, liabilities and operations of eWellness Healthcare Corporation, and eWellness Corporation from the closing date of the transaction. Additionally all historical equity accounts and awards of eWellness Corporation, including par value per share, share and per share numbers, have been adjusted to reflect the number of shares received in the transaction.

 

Private Co. is in the initial phase of developing a unique telemedicine platform that offers Distance Monitored Physical Therapy Programs (“DMpt”) to pre-diabetic, cardiac and health challenged patients, through contracted physician practices and healthcare systems specifically designed to help prevent patients that are pre-diabetic from becoming diabetic. The Company’s activities are subject to significant risks and uncertainties, including failure to secure funding to operationalize the Company’s business plan.

 

The foregoing description of the Share Exchange Agreement does not purport to be complete and is qualified in its entirety by the Share Exchange Agreement, a copy of which is attached to the Company’s Current Report on Form 8-K/A as filed with the Securities and Exchange Commission on August 6, 2014. At the execution of the Share Exchange Agreement, the total number of shares of common stock outstanding was 15,200,000.

 

Use of Estimates

 

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 at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these good faith estimates and judgments.

 

Going Concern

 

The accompanying financial statements have been presented on the basis that it is a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the period ended September 30, 2014, the Company has no revenues. As of September 30, 2014, the Company had an accumulated deficit of $1,571,199 and current liabilities of $646,132 (including $90,000 contingently reserved and $130,000 payable to investors as more fully described in Note 8).

 

These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company will need to obtain additional financings to meet their current obligations (including amounts owed to investors) and to fund future development activities. As result of a Rule 419 violation (see Note 8), these fund raising activities will be very challenging, and perhaps, not possible. Failure to obtain additional financings will have a material, adverse impact on the Company’s operations and financial condition.

 

Deferred Offering and Acquisition Costs

 

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs will be charged against the capital raised. Should the offering be terminated, the deferred offering costs will be charged to operations during the period in which the offering is terminated. Direct acquisition costs will be expensed as incurred.

 

Fair Value of Financial Instruments

 

The Company complies with the accounting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, Fair Value Measurements, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

 

The guidance also establishes a fair value hierarchy for measurements of fair value as follows:

 

Level 1 – quoted market prices in active markets for identical assets or liabilities.

 

Level 2 – inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

As of September 30, 2014 and 2013, the Company did not have Level 1, 2, or 3 financial assets or liabilities.

 

Cash and Cash Equivalents

 

Cash and cash equivalents includes all cash deposits and highly liquid financial instruments with an original maturity to the Company of three months or less.

 

Property and Equipment

 

Property and equipment consists of assets with useful lives longer than one year. Useful lives for assets have been determined to be 5 years for the Company.

 

Revenue Recognition

 

The Company has yet to realize revenues from operations. Once the Company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

 

Research and Development

 

Research and development is primarily related to developing and improving methods related to our distance monitored physical therapy program. Research and development expenses are expensed when incurred. During the nine month periods ended September 30, 2014 and 2013, there were $30 and $2,706 of research and development expenses, respectively, incurred that were paid by a related party.

 

Loss per Common Share

 

The Company follows ASC Topic 260 to account for the loss per share. Basic loss per common share calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per common share calculations are determined by dividing net loss by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. As the Company has no common stock equivalents and has incurred losses for the period ended September 30, 2014, no dilutive shares are added into the loss per share calculations.

 

Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements presentation.

 

In May 2014, the Financial Accounting Standards Board issued accounting guidance on revenue recognition. The amended guidance will enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Improved disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. This guidance will be effective for fiscal 2017 and will be required to be applied retrospectively. We will evaluate the impact of this pronouncement on our financial statements when we commence operations and begin to generate revenue.

Property and Equipment

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Property and Equipment
9 Months Ended
Sep. 30, 2014
Property, Plant and Equipment [Abstract]  
Property and Equipment

Note 3. Property and Equipment

 

Property and equipment consists of computer equipment that is stated at cost $4,215 less accumulated depreciation of $773 at September 30, 2014. Depreciation expense was $632 for the period ended September 30, 2014. Depreciation expense is computed using the straight-line method over the estimated useful life of the assets, which is five years for computer equipment.

Related Party Transactions

v2.4.0.8
Related Party Transactions
9 Months Ended
Sep. 30, 2014
Related Party Transactions [Abstract]  
Related Party Transactions

Note 4. Related Party Transactions

 

A company for which the Company’s former Secretary-Treasurer and CFO is also serving as CFO, has paid $57,930 on the Company’s behalf. The amount outstanding as of September 30, 2014 was $52,616. During the period ended September 30, 2014, the Company recorded $1,619 imputed interest on the amount owed to the related party.

 

In June, 2014, the Company entered into a license agreement with a company for whom one of our directors is an officer. The agreement is for a perpetual license to use the programming code created by a video management platform as a base to develop our telemedicine video service. The license fee is $20,000 which is due in installments through September 15, 2014. Intellectual property developed as a result of this license will be our property; but the licensing company will retain the intellectual property for the original code base. We may resell or license the resulting telemedicine platform for an extended license fee of $10,000 for each additional instance the code base will be used. On September 30, 2014, a license agreement amendment was signed wherein the payment of the license fee was extended to December 31, 2014. The licensing fee of $20,000 is being amortized over a ten-year life.

Income Taxes

v2.4.0.8
Income Taxes
9 Months Ended
Sep. 30, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

Note 5. Income Taxes

 

The tax provision for interim periods is determined using an estimate of the Company’s effective tax rate for the full year adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates its estimate of the annual effective tax rate, and if the estimated tax rate changes, the Company makes a cumulative adjustment.

 

At September 30, 2014 and December 31, 2013, the Company has a full valuation allowance against its deferred tax assets, net of expected reversals of existing deferred tax liabilities, as it believes it is more likely than not that these benefits will not be realized.

 

The Company did not identify any material uncertain tax positions of the Company on returns that have been filed or that will be filed. The Company has not had operations and has deferred items consisting entirely of

unused Net Operating Losses.. Since it is not thought that this Net Operating Loss will ever produce a tax benefit, even if examined by taxing authorities and disallowed entirely, there would be no effect on the

financial statements.

 

The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits within income tax expense. For the periods ended September 30, 2014, and September 30, 2013 the Company did not recognize nor accrue for any interest or penalties.

Convertible Notes Payable

v2.4.0.8
Convertible Notes Payable
9 Months Ended
Sep. 30, 2014
Debt Disclosure [Abstract]  
Convertible Notes Payable

Note 6. Convertible Notes Payable

 

On March 31, 2014, the Company issued a $30,000 Promissory Note with an interest rate of 12% per annum. Principal and all accrued interest is due and payable on December 31, 2014. The note is automatically converted, upon successful completion of a private placement into the same securities issued in such placement. The conversion rate shall be the price per share realized by investors in the private placement and therefore, the conversion rate and securities to be issued have not yet been determined.

 

On April 22, 2014, the Company issued a $100,000 Promissory Note with an interest rate of 12% per annum. Principal and all accrued interest is due and payable on December 31, 2014. The note is automatically converted, upon successful completion of a private placement into the same securities issued in such placement. The conversion rate shall be the price per share realized by investors in the private placement and therefore, the conversion rate and securities to be issued have not yet been determined.

 

Due to the 419 Violation (See Note 8), the Company will be requesting the Promissory Note holders to reconfirm their investment and initial desire to have such notes converted into the private placement.

Preferred and Common Stock

v2.4.0.8
Preferred and Common Stock
9 Months Ended
Sep. 30, 2014
Equity [Abstract]  
Preferred and Common Stock

Note 7. Preferred and Common Stock

 

Preferred Stock

 

The total number of shares of preferred stock which the Company shall have authority to issue is 10,000,000 shares with a par value of $0.001. There have been no preferred shares issued as of September 30, 2014.

 

Common Stock

 

The total number of shares of common stock with the Company shall have authority to issue is 350,000,000 shares with a par value of $0.001. Holders of shares of common stock are entitled to cast one vote for each share held at all stockholders’ meetings for all purposes including the election of directors. The common stock does not have cumulative voting rights. As of the period ended September 30, 2014, the Company has 15,603,000 shares of $0.001 par value common stock issued and outstanding.

 

On May 8, 2014, the Company issued 403,000 shares of common stock to non-employees which vested immediately and recorded $41,500 of consulting services expense. The Company records the stock-based compensation awards issued to non-employees and other external entities for goods and services at either the fair market value of the goods received or services rendered or the instruments issued in exchange for such services, whichever is more readily determinable.

 

On or about July 8, 2014, the Company received $3,000 from an accredited investor for the Company’s pending private placement. The shares have not yet been issued.

 

On or about July 28, 2014, the Company received $25,000 from an accredited investor for the Company’s pending private placement. The shares have not yet been issued.

 

On or about August 15, 2014, the Company received $30,000 from an accredited investor for the Company’s pending private placement. The shares have not yet been issued.

 

The Company is currently conducting an offering of up to $1,200,000 convertible secured notes and may conduct an initial closing upon receipt of $100,000 (the “Minimum Offering Amount”). 

Commitments, Contingencies

v2.4.0.8
Commitments, Contingencies
9 Months Ended
Sep. 30, 2014
Commitments and Contingencies Disclosure [Abstract]  
Commitments, Contingencies

Note 8. Commitments, Contingencies

 

The corporate offices of the Company are located at 11825 Major Street, Culver City, California. These facilities are furnished rent free by one of the Company’s shareholders. An imputed rent expense of $500 per month was recorded to the Statements of Operations and recorded as Additional Paid in Capital on the Balance Sheet for the period ended September 30, 2014.

 

In May 2014, the Company signed an Office Service Agreement for office space in New York, New York. A deposit of $8,937 was paid and recorded in prepaid expense. The utilization of the office space began on August 1, 2014.

 

In June 2014, the Company signed a consulting services agreement for the issuance of 168,000 shares of the Company’s common stock; the shares were issued in October, 2014.

 

Prior to the Share Exchange, we were considered a “blank check” company and a “shell” company. The closing of the Initial Exchange Agreement with Private Co. was conditioned upon certain, limited customary representations and warranties, as well as, among other things, our compliance with Rule 419 (“Rule 419) of Regulation C under the Securities Act of 1933, as amended (the “Securities Act”) and the consent of our shareholders as required under Rule 419. Accordingly, we conducted a “Blank Check” offering subject to Rule 419 (the “Rule 419 Offering”) and filed a Registration Statement on Form S-1 to register the shares of such offering; the Registration Statement was declared effective on September 14, 2012. We used 10% of the subscription proceeds as permitted under Rule 419 and the amount remaining in the escrow trust as of the date of the closing of the Share Exchange was $90,000 (the “Trust Account Balance”).

 

However, Rule 419 required that the Share Exchange occur on or before March 18, 2014, but due to normal negotiations regarding the transactions and the parties’ efforts to satisfy all of the closing conditions, the Share Exchange did not close on such date. Accordingly, after numerous discussions with management of both parties, they entered into an Amended and Restated Share Exchange Agreement (the “Share Exchange Agreement”) to reflect a revised business combination structure, pursuant to which we would: (i) file a registration statement on Form 8-A (“Form 8A”) to register our common stock pursuant to Section 12(g) of the Exchange Act, which we did on May 1, 2014 and (ii) seek to convert the participants of the Rule 419 Offering into participants of a similarly termed private offering (the “Converted Offering”), to be conducted pursuant to Regulation D, as promulgated under the Securities Act. We received consent from all of the participants of the Rule 419 Offering to instead direct their funds to be used to purchase shares of the Company’s restricted common stock in the Converted Offering (the “Consent”). We believed this also avoided the further administrative work for the investors of necessitating sending checks back and forth.

 

However, pursuant to Rule 419(e)(2)(iv), “funds held in the escrow or trust account shall be returned by first class mail or equally prompt means to the purchaser within five business days [if the related acquisition transaction does not occur by a date that is 18 months after the effective date of the related registration statement].” As set forth above, rather than physically return the funds, we sought confirmation from the investors of the Rule 419 Offering to instead invest their escrowed funds to into the Converted Offering, unless they informed us that they wanted their funds returned to them. The consent document, which was essentially a form of rescission notice, was given to the investors along with a private placement memorandum describing the Converted Offering and explained that any investor who elected not to participate in the Converted Offering would get 90% of their funds physically returned (pursuant to Rule 419(b)(2)(vi), a blank check company is entitled to use 10% of the proceed/escrowed funds; therefore, if a return of funds is required, only 90% of the proceed/escrowed funds need be returned).

 

By virtue of their specific instructions in the Consent, to direct their portion of the Trust Account Balance to purchase shares in the Converted Offering, we believe took reasonable steps to inform investors of the situation and provided them with an appropriate opportunity to maintain their investment in the Company, if they so chose, or to have their funds physically returned. And therefore, believed we constructively complied with Rule 419, which at the time, we thought was sufficient.

 

Prior to this Report, we have received various comments from the SEC with regard to our disclosure and assessment related to our use of Rule 419. After providing responses and analysis as to why we believe we did not violate Rule 419, based upon latest communications with SEC personnel reviewing same, they do not agree with the Company’s assessments provided prior hereto. Comments and communications indicate that Rule 419 requires a physical return of funds if a 419 offering cannot be completed because a business combination was not consummated within the required time frame; constructive return is not permitted. Additionally, more recent SEC communications question the way in which we carried out the related financing after the Share Exchange was not complete by the required deadline imposed by Rule 419.

 

As a result of these communications and past comments, we think it is necessary to disclose that we did not comply with the requirements of Rule 419, which required us to physically return the funds previously submitted to escrow pursuant to the Rule 419 Offering. As a result of our failure to comply with Rule 419, the SEC may bring an enforcement action or commence litigation against us for failure to strictly comply with Rule 419. If any claims or actions were to be brought against us relating to our lack of compliance with Rule 419, we could be subject to penalties (including criminal penalties), required to pay fines, make damages payments or settlement payments. In addition, any claims or actions will impair our ability to raise additional financings, could force us to expend significant financial resources to defend ourselves, could divert the attention of our management from our core business and could harm our reputation. In light of the uncertainty of this issue and while Management evaluates the best and most appropriate way to resolve same, management determined to create a reserve on the Company’s Balance Sheet for the $90,000 that was subject to the Consent.

 

It is not possible at this time to predict whether or when the SEC may initiate any proceedings, when this issue may be resolved or what, if any, penalties or other remedies may be imposed, and whether any such penalties or remedies would have a material adverse effect on our consolidated financial position, results of operations, or cash flows. Litigation and enforcement actions are inherently unpredictable, the outcome of any potential lawsuit or action is subject to significant uncertainties and, therefore, determining at this time the likelihood of a loss, any SEC enforcement action and/or the measurement of the amount of any loss is complex. Consequently, we are unable to estimate the range of reasonably possible loss. Our assessment is based on an estimate and assumption that has been deemed reasonable by management, but the assessment process relies heavily on an estimate and assumption that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change that estimate and assumption.

  

From time to time the Company may become a party to litigation matters involving claims against the Company. Except as may be contemplated above, management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.

Segment Reporting

v2.4.0.8
Segment Reporting
9 Months Ended
Sep. 30, 2014
Segment Reporting [Abstract]  
Segment Reporting

Note 9. Segment Reporting

 

The Company has one operating segment, which was identified based upon the availability of discrete financial information and the chief operating decision makers’ regular review of financial information.

Subsequent Events

v2.4.0.8
Subsequent Events
9 Months Ended
Sep. 30, 2014
Subsequent Events [Abstract]  
Subsequent Events

Note 10. Subsequent Events

 

In October 2014, the Company signed an advisory services agreement that provides for the issuance of 450,000 shares of the Company’s common stock. These shares were issued in October.

 

In October, 2014, the Company issued 200,000 shares of the Company’s common stock to one of its directors according to terms of his appointment per the Board of Directors meeting held on June 3, 2014.

 

In October, 2014 the Company issued 168,000 shares of the Company’s common stock to a consulting services firm according to terms of a consulting services agreement signed in June, 2014.

Summary of Significant Accounting Policies (Policies)

v2.4.0.8
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2014
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The interim financial information of the Company as of periods ended September 30, 2014 and September 30, 2013 is unaudited. The balance sheet as of December 31, 2013 is derived from audited financial statements of eWellness Corporation. The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense footnotes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. The accounting policies followed for quarterly financial reporting conform to the accounting policies disclosed in ASU 2014-10. In the opinion of management, all adjustments which are necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the nine months ended September 30, 2014 are not necessarily indicative of the results that can be expected for the entire year ending December 31, 2014. The unaudited financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2013 and the Form 8-K filed on August 6, 2014.

Share Exchange Agreement

Share Exchange Agreement

 

On April 11, 2014, Digntye, Inc. (“Dignyte”), a publicly held Nevada corporation and eWellness Corporation (“Private Co”), a privately held company incorporated in Nevada, executed a Share Exchange Agreement (or “Initial Exchange Agreement”). Prior to the execution and delivery of the final Amended and Restated Share Exchange Agreement (the “Agreement”), the Board of Directors of Dignyte approved the Agreement and the transactions contemplated thereby. Similarly, the Board of Directors of the Private Co. approved the exchange. On April 25, 2014, immediately prior to the execution and delivery of the Agreement, Dignyte amended its certificate of incorporation to change its corporate name from “Dignyte, Inc.” to “eWellness Healthcare Corporation.”

 

Pursuant to the Agreement, eWellness Healthcare Corporation issued 9,200,000 shares of unregistered common stock, $.001 par value (the “common stock”) to the shareholders of the Private Co. in exchange for all outstanding shares of the Private Co.’s common stock. In addition, our former chief executive officer agreed: (i) to tender 5,000,000 shares of common stock back to the Company for cancellation; (ii) assign from his holdings, an additional 2,500,000 shares to the shareholders of the Private Co. resulting in a total of 11,700,000 shares owned by those shareholders; and, (iii) to a further assignment of an additional 2,100,000 shares to other parties as stated therein (collectively, the “CEO Stock Actions”).

 

As the parties satisfied all of the closing conditions, on April 30, 2014, we closed the Share Exchange. As a result, the Private Co. shareholders own approximately 76.97% of our issued and outstanding common stock, after giving effect to CEO Stock Actions.

 

Following the Share Exchange, we abandoned our prior business plan and we are now pursuing the Private Co.’s historical businesses and proposed businesses. The Private Co. is the surviving company under the share exchange and became a wholly owned subsidiary of the Company.

 

Prior to the Share Exchange Agreement, Dignyte was considered a shell company, as defined in SEC Rule 12b-2. For financial reporting purposes, the Share Exchange represents a “reverse merger” rather than a business combination. Consequently, the transaction is accounted for as a reverse-merger and recapitalization. eWellness Corporation is the acquirer for financial reporting purposes and Dignyte, Inc. is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the transactions are those of eWellness Corporation and are recorded at the historical cost basis of eWellness Corporation, and the consolidated financial statements after completion of the transaction include the assets, liabilities and operations of eWellness Healthcare Corporation, and eWellness Corporation from the closing date of the transaction. Additionally all historical equity accounts and awards of eWellness Corporation, including par value per share, share and per share numbers, have been adjusted to reflect the number of shares received in the transaction.

 

Private Co. is in the initial phase of developing a unique telemedicine platform that offers Distance Monitored Physical Therapy Programs (“DMpt”) to pre-diabetic, cardiac and health challenged patients, through contracted physician practices and healthcare systems specifically designed to help prevent patients that are pre-diabetic from becoming diabetic. The Company’s activities are subject to significant risks and uncertainties, including failure to secure funding to operationalize the Company’s business plan.

 

The foregoing description of the Share Exchange Agreement does not purport to be complete and is qualified in its entirety by the Share Exchange Agreement, a copy of which is attached to the Company’s Current Report on Form 8-K/A as filed with the Securities and Exchange Commission on August 6, 2014. At the execution of the Share Exchange Agreement, the total number of shares of common stock outstanding was 15,200,000.

Use of Estimates

Use of Estimates

 

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 at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these good faith estimates and judgments.

Going Concern

Going Concern

 

The accompanying financial statements have been presented on the basis that it is a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the period ended September 30, 2014, the Company has no revenues. As of September 30, 2014, the Company had an accumulated deficit of $1,571,199 and current liabilities of $646,132 (including $90,000 contingently reserved and $130,000 payable to investors as more fully described in Note 8).

 

These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company will need to obtain additional financings to meet their current obligations (including amounts owed to investors) and to fund future development activities. As result of a Rule 419 violation (see Note 8), these fund raising activities will be very challenging, and perhaps, not possible. Failure to obtain additional financings will have a material, adverse impact on the Company’s operations and financial condition.

Deferred Offering and Acquisition Costs

Deferred Offering and Acquisition Costs

 

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs will be charged against the capital raised. Should the offering be terminated, the deferred offering costs will be charged to operations during the period in which the offering is terminated. Direct acquisition costs will be expensed as incurred.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The Company complies with the accounting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, Fair Value Measurements, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

 

The guidance also establishes a fair value hierarchy for measurements of fair value as follows:

 

Level 1 – quoted market prices in active markets for identical assets or liabilities.

 

Level 2 – inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

As of September 30, 2014 and 2013, the Company did not have Level 1, 2, or 3 financial assets or liabilities.

Cash and Cash Equivalents

Cash and Cash Equivalents

 

Cash and cash equivalents includes all cash deposits and highly liquid financial instruments with an original maturity to the Company of three months or less.

Property and Equipment

Property and Equipment

 

Property and equipment consists of assets with useful lives longer than one year. Useful lives for assets have been determined to be 5 years for the Company.

Revenue Recognition

Revenue Recognition

 

The Company has yet to realize revenues from operations. Once the Company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

Research and Development

Research and Development

 

Research and development is primarily related to developing and improving methods related to our distance monitored physical therapy program. Research and development expenses are expensed when incurred. During the nine month periods ended September 30, 2014 and 2013, there were $30 and $2,706 of research and development expenses, respectively, incurred that were paid by a related party.

Loss per Common Share

Loss per Common Share

 

The Company follows ASC Topic 260 to account for the loss per share. Basic loss per common share calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per common share calculations are determined by dividing net loss by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. As the Company has no common stock equivalents and has incurred losses for the period ended September 30, 2014, no dilutive shares are added into the loss per share calculations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements presentation.

 

In May 2014, the Financial Accounting Standards Board issued accounting guidance on revenue recognition. The amended guidance will enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Improved disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. This guidance will be effective for fiscal 2017 and will be required to be applied retrospectively. We will evaluate the impact of this pronouncement on our financial statements when we commence operations and begin to generate revenue.

Summary of Significant Accounting Policies (Details Narrative)

v2.4.0.8
Summary of Significant Accounting Policies (Details Narrative) (USD $)
0 Months Ended 3 Months Ended 9 Months Ended
Apr. 30, 2014
Apr. 11, 2014
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Aug. 06, 2014
Subsequent Event [Member]
Unregistered common stock issued   9,200,000            
Number of common stock returned to company by the officer   5,000,000            
Number of shares assigned to shareholders from the holdings of officer   2,500,000            
Number of shares owned by the shareholders, total   11,700,000            
Additional number of common shares assigned to other parties   2,100,000            
Common stock, par value   $ 0.001 $ 0.001   $ 0.001   $ 0.001  
Percentage of issued and outstanding common stock own by shareholders of subsidiary 76.97%              
Common stock, shares outstanding     15,603,000   15,603,000   9,000,000 15,200,000
Accumulated deficit     $ (1,571,199)   $ (1,571,199)   $ (561,694)  
Current liabilities     646,132   646,132       
Contingently reserved     90,000   90,000       
Payable to investors         130,000      
Property and Equipment, useful lives         5 years      
Research and development expenses        $ 902 $ 30 $ 2,706    
Dilutive shares added in loss per share calculations         0      

Property and Equipment (Details Narrative)

v2.4.0.8
Property and Equipment (Details Narrative) (USD $)
9 Months Ended
Sep. 30, 2014
Property, Plant and Equipment [Abstract]  
Property and equipment $ 4,215
Accumulated depreciation 773
Depreciation expense $ 632
Computer equipment, estimated useful life 5 years

Related Party Transactions (Details Narrative)

v2.4.0.8
Related Party Transactions (Details Narrative) (USD $)
1 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Accounts Payable-Related Party $ 52,616 $ 52,616     
Imputed Interest - related party   (1,619)     
License fee 20,000      
Extended license fee 10,000      
Chief Financial Officer [Member]
       
Amount paid by related parties $ 57,930 $ 57,930    

Convertible Notes Payable (Details Narrative)

v2.4.0.8
Convertible Notes Payable (Details Narrative) (USD $)
0 Months Ended
Apr. 22, 2014
Mar. 31, 2014
Debt Disclosure [Abstract]    
Issuance of promissory notes $ 100,000 $ 30,000
Interest rate 12.00% 12.00%

Preferred and Common Stock (Details Narrative)

v2.4.0.8
Preferred and Common Stock (Details Narrative) (USD $)
0 Months Ended 1 Months Ended 9 Months Ended
May 08, 2014
Jun. 30, 2014
Sep. 30, 2014
Sep. 30, 2013
Aug. 15, 2014
Jul. 28, 2014
Jul. 08, 2014
Apr. 11, 2014
Dec. 31, 2013
Equity [Abstract]                  
Preferred stock, shares authorized     10,000,000           10,000,000
Preferred stock, par value     $ 0.001           $ 0.001
Common stock, shares authorized     350,000,000           350,000,000
Common stock, par value     $ 0.001         $ 0.001 $ 0.001
Common stock, shares issued     15,603,000           9,000,000
Common stock, shares outstanding     15,603,000           9,000,000
Stock issued during the period to non-employees for consulting services, shares 403,000 168,000              
Stock issued during the period to non-employees for consulting services $ 41,500   $ (41,500) $ (9,000)          
Amount received from accredited investors         30,000 25,000 3,000    
Convertible secured notes     120,000            
Minimum offering amount     $ 100,000            

Commitments, Contingencies (Details Narrative)

v2.4.0.8
Commitments, Contingencies (Details Narrative) (USD $)
0 Months Ended 1 Months Ended 9 Months Ended
May 08, 2014
Jun. 30, 2014
Sep. 30, 2014
Dec. 31, 2013
Rent expense     $ 500  
Deposit for office space     8,937  
Shares issued under consulting services agreement 403,000 168,000    
Percentage of subscription proceeds     10.00%  
Percentage of returned funds     90.00%  
Percentage of funds proceed     10.00%  
Percentage of required funds     90.00%  
Contingent liability     90,000   
Escrow Trust [Member]
       
Trust account balance     $ 90,000  

Segment Reporting (Details Narrative)

v2.4.0.8
Segment Reporting (Details Narrative)
9 Months Ended
Sep. 30, 2014
Integer
Segment Reporting [Abstract]  
Number of operating segments 1

Subsequent Events (Details Narrative)

v2.4.0.8
Subsequent Events (Details Narrative)
0 Months Ended 1 Months Ended
May 08, 2014
Jun. 30, 2014
Oct. 31, 2014
Subsequent Event [Member]
Oct. 31, 2014
Subsequent Event [Member]
Advisory Services Agreement [Member]
Oct. 31, 2014
Subsequent Event [Member]
Consulting Services Agreement [Member]
Stock issued to directors     200,000    
Stock issued to consulting services 403,000 168,000   450,000 168,000