REVENUE RECOGNITION We recognize revenue from product sales or services rendered under ASC 606, which directs that revenue should be recognized when the promised goods or services are transferred to the customer. The amount of revenue recognized should equal the total consideration expected to be received in return for the goods or services. ASC 606 creates a five-step approach that should be applied when determining the amount and timing of revenue recognition.  Step 1: Identify the contract with a customer  Step 2: Identify the performance obligations in the contract  Step 3: Determine the transaction price  Step 4: Allocate the transaction price to the performance obligations in the contract  Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation The Company and its subsidiaries currently maintain three separate lines of revenue; revenue from sales of product by Clinical and Herbal Innovations; revenues from use of the recently acquired CareClix software by third parties (Software as a Service or SaaS); and revenues from patient consultations through the CareClix telemedicine system. The revenues from these three lines of business are recognized as follows: Product Sales : Clinical and Herbal Innovations sells its Panoxol branded products through third party outlets such as Amazon and through on-line sales through TSYS. Orders are received and payment is collected through the third-party systems and product is shipped on notice to Clinical from the third-party operators. Sales proceeds are transmitted to Clinical from the third-party marketing groups after their fees and charges are collected. Revenue is recognized by Clinical on shipment of the product to the customers. The full sales price is recognized as income and the fees and charges of the third-party selling groups are charged as a cost of sales. Product sales represent revenue from the sale of products and related shipping fees where the Company is the seller of record. Product sales and shipping revenues are recorded when the products are shipped and title passes to customers. Since all of the sales are on-line sales, collected through third parties, the Company does not invoice customers; rather, product is shipped and matched with the revenue payments received from the third parties. Product sales for the three and six months ended June 30, 2019 totaled $2,969 and $7,320. SaaS : The CareClix software system is used by certain third-party customers to service their telemedicine clients under written service agreements with CareClix, Inc. Those clients generally pay a co-pay at the time of service, in most cases by credit card, and those co-pay fees are transmitted to CareClix, Inc. through STRIPE, a card processing service, as part of the third-party service agreement. That revenue is recognized as received. On a monthly basis, the balance of the client fees are billed and the invoice is charged to service revenue immediately. The identity of the client, the related performance obligations, the various transaction prices for different levels and frequency of use are all determined by the individual service agreements with each client, and the CareClix software maintains all of the details of the price, performance, frequency and billing under each contract. The co-pay fees are received after the completion of the service provided to the telemedicine client by the CareClix customer and the balance due for those services is billed monthly in arrears by CareClix. SaaS revenues for the three and six months ended June 30, 2019 totaled approximately $132,000 and $132,000. Telemedicine Revenues : Other customers of CareClix use the CareClix telemedicine platform directly to service their clients or members and the CareClix software maintains the record of the number of consultations and other work performed for the customers clients, using the CareClix contracted medical doctors, and CareClix bills the customer monthly for all services provided during the month, in accordance with the written agreement between CareClix and the customer. That revenue is recognized as income at the time it is invoiced since it is for services already rendered during the month of billing. Telemedicine revenues for the three and six months ended June 30, 2019 totaled approximately $308,000 and $308,000. Approximately 40 percent of the Company revenues for the three and six months ended June 30, 2019 were derived from one customer. Since the CareClix, Inc. telemedicine operation commenced in mid-April, 2019, the accounts receivable of the subsidiary are less than 75 days old and there do not appear to be any uncollectible accounts as of June 30, 2019, or to the date of this report. Accordingly, no allowance for bad debts has been established and will not be established until the subsidiary has more experience with its receivables collections.