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    UPDC   US90321C1062


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UPD HOLDING CORP. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

11/22/2021 | 04:29pm EST
The following management discussion and analysis of our financial condition and
results of operations should be read in conjunction with our unaudited interim
consolidated financial statements and related notes which are included in Item 1
of this Quarterly Report on Form 10-Q, and with our audited financial statements
included in our Form 10-K for the fiscal year ended June 30, 2021, filed with
the Securities and Exchange Commission on October 13, 2021.

This discussion and analysis provide information that management believes is
relevant to an assessment and understanding of our results of operations and
financial condition for the periods presented. The following selected financial
information is derived from our historical consolidated financial statements and
should be read in conjunction with such consolidated financial statements and
notes thereto set forth elsewhere herein and the "Forward- Looking Statements"
explanation included herein.


Results of Operations for the Three Months Ended September 30, 2021, and 2020.

Below is a summary of the results of operations for the three months ended
September 30, 2021, and 2020.

                                                              For the Three Months Ended September 30,
                                                          2021          2020         $ Change        Change
Net revenue                                            $        -     $       -     $        -           0.00 %

Operating expenses
Professional fees                                          57,817        45,616         12,201          26.75 %
General and administrative                                240,161         2,480        237,681        9583.91 %
Total operating costs and expenses                        297,978        48,096        249,882        9610.66 %
 Operating loss                                           297,978        48,096        249,882        9610.66 %

Interest expense, net                                     (27,659 )      (5,859 )      (21,800 )       372.08 %

Loss on change in fair value of derivative liability (38,943 )

  -        (38,943 )        -0.00 %

Net loss                                               $ (364,580 )   $ (53,955 )   $ (310,625 )     -9238.58 %

Revenue and Cost of Revenue

We generated no revenue for the three months ended September 30, 2021, and September 30, 2020.

Professional Fees

We incurred professional fees of $57,817 and $45,616 for the three months ended
September 30, 2021, and September 30, 2020, respectively. Our professional fees
increased by $12,201 for the three months ended September 30, 2021, compared to
the same period in 2020. The increase is primarily attributable to accounting
and legal fees.

As funding permits, we expect to incur higher professional fees associated with on-going development of our brand, customers, and other relationship development.


   Table of Contents

General and Administrative Expenses

For the three months ended September 30, 2021, and September 30, 2020, we
incurred general and administrative expenses of $240,161 and $2,480,
respectively, representing an increase of $237,681 for the three months ended
September 30, 2021, compared to the same period in 2020. The $237,681 increase
in general and administrative expenses is primarily attributable to incurring
rent expense and related facilities costs totaling approximately $69,584;
approximately $51,786 in payroll expenses; approximately $11,388 in insurance
expense and approximately $86,590 in consulting fees, none of which were
incurred during the three months ended September 30, 2020.

We expect our expenses to increase over the next several periods should we be
successful in our new business plan, which will primarily consist of facilities
costs, management and other salaries, travel, and other corporate overhead.

Interest Expense

Interest expense was $27,659 and $5,859 for the three months ended September 30,
2021, and September 30, 2020, respectively, representing an increase of $21,800.
The increase is primarily the result of the incurrence of new debt obligations
totaling $544,000.

Change in Fair Value of Derivative Liabilities

As of September 30, 2021, the Company did not have enough authorized and
unissued shares of common stock to settle all its convertible debt obligations.
As a result, the Company recognized obligations to issue a total of 4,367,807
shares of common stock upon convertible debt conversion to derivative
liabilities in the accompanying consolidated balance sheets. For the three
months ended September 30, 2021, the Company recognized a loss on the change in
the fair value of derivative liabilities of $38,943. The Company had derivative
liability obligations of $276,906 as of September 30, 2021.

Liquidity and Capital Resources

As of September 30, 2021, we had a working capital deficit of approximately
$1,244,902. Over the next twelve months, we have estimated that in order to
maintain reporting company status as defined under the Securities Exchange Act
of 1934, we will require cash for general and administrative expenses primarily
consisting of facilities costs payroll expenses and professional fees, which
include accounting, legal and other professional fees, as well as filing fees.

We believe we will be able to meet these costs by raising additional funds
through various financing sources, including the sale of our common or preferred
stock and the procurement of commercial debt financing, and through our
operations which are expected to commence during the second quarter of fiscal
2022. However, no assurance can be given that we will be able to raise
additional capital, when needed or at all, or that such capital, if available,
will be on acceptable terms. Further, we have recently entered the
rehabilitation services industry and may not be able to operate our facilities
at levels sufficient to meet our on-going obligations.

For the three months ended September 30, 2021, our operational cash flows
primarily consisted of incurring expenses in the normal course of business at
levels commensurate with its funding levels and resulting inabilities to
commence commercially viable operations. Net cash used in operating activities
was $335,677 during the three months ended September 30, 2021 and consisted of a
net loss of $364,580 and net change in operating assets and liabilities of
$35,624, which was offset by non-cash items of $64,527. The primary non-cash
items for the three months ended September 30, 2021, consisted of amortization
of debt discount of $11,067 and non-cash warrant amortization of $5,500 and
change in derivative liabilities of $38,943. The significant change in operating
assets and liabilities was an increase in accounts payable and accrued
liabilities. We expect these operational cash uses to increase as we begin our
operations in the first half of fiscal 2022.


   Table of Contents

Our investing activities consisted of acquiring property and equipment totaling
approximately $56,807. We expect to make additional capital expenditures as its
rehabilitation facilities increase operations.

During the three months ended September 30, 2021, we generated $544,000 of net cash from financing activities through the issuance of convertible debt and notes payable which was offset by a $5,000 payment of accrued interest. We expect to continue our financing efforts throughout fiscal 2022.

Off-Balance Sheet Arrangements

During the three months ended September 30, 2021, and the year ended June 30,
2020, we did not engage in any off-balance sheet arrangements as set forth in
Item 303(a)(4) of the Regulation S-K.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations
is based upon our consolidated financial statements, which have been prepared in
accordance with US GAAP. The preparation of these financial statements requires
our management to make significant estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. These items are monitored and
analyzed by our management for changes in facts and circumstances, and material
changes in these estimates could occur in the future.

Business Combinations

Business combinations are accounted for at fair value. Acquisition costs are
expensed as incurred and recorded in general and administrative expenses;
previously held equity interests are valued at fair value upon the acquisition
of a controlling interest; restructuring costs associated with a business
combination are expensed subsequent to the acquisition date; and changes in
deferred tax asset valuation allowances and income tax uncertainties after the
acquisition date affect income tax expense. Measurement period adjustments are
made in the period in which the amounts are determined, and the current period
income effect of such adjustments will be calculated as if the adjustments had
been completed as of the acquisition date. All changes that do not qualify as
measurement period adjustments are also included in current period earnings. The
accounting for business combinations requires estimates and judgment as to
expectations for future cash flows of the acquired business, and the allocation
of those cash flows to identifiable intangible assets, in determining the
estimated fair value for assets acquired and liabilities assumed. The fair
values assigned to tangible and intangible assets acquired and liabilities
assumed, including contingent consideration, are based on management's estimates
and assumptions, as well as other information compiled by management, including
valuations that utilize customary valuation procedures and techniques. If the
actual results differ from the estimates and judgments used in these estimates,
the amounts recorded in the financial statements could result in a possible
impairment of goodwill or the recognition of additional consideration which
would be expensed. The fair value of contingent consideration is re-measured
each period based on relevant information and changes to the fair value are
included in the operating results for the period.


Goodwill represents the excess of fair value over identifiable tangible and
intangible net assets acquired in business combinations. Goodwill is not
amortized, instead goodwill is reviewed for impairment at least annually, or on
an interim basis between annual tests when events or circumstances indicate that
it is more likely than not that the fair value of a reporting unit is less
its carrying value.


   Table of Contents

Embedded Conversion Features and Other Equity-linked Instruments (Derivative Liabilities)

The Company classifies all of its embedded debt conversion features, and other
derivative financial instruments as equity if the contracts (1) require physical
settlement or net-share settlement or (2) give the Company a choice of net-cash
settlement or settlement in its own shares (physical settlement or net-share
settlement). The Company classifies as assets or liabilities any contracts that
(1) require net-cash settlement (including a requirement to net cash settle the
contract if an event occurs and if that event is outside the control of the
Company), (2) give the counterparty a choice of net-cash settlement or
settlement in shares (physical settlement or net-share settlement), or (3)
contracts that contain reset provisions. The Company assesses classification of
its equity-linked instruments at each reporting date to determine whether a
change in classification between equity and liabilities (assets) is required. As
of September 30, 2021, the Company did not have enough authorized and unissued
shares to settle all outstanding equity-linked instruments resulting in the
reclassification of certain instruments to liability. The Company reclassifies
outstanding instruments based on allocating the unissued shares to contracts
with the earliest inception date resulting in the contracts with the latest
inception date being recognized as liabilities first.

The Company accounts for contracts convertible into common stock in excess of
its authorized capital as derivative as liabilities. The derivative liabilities
are re-measured at fair value with the changes in the value reported as a
component of other income (expense) in the accompanying consolidated results of
operations. The derivative liabilities are measured at fair value using a Black
Scholes option pricing model. The model is based on assumptions including quoted
market prices and estimated volatility factors based on historical quoted market
prices for the Company's common stock and are classified within Level 3 of the
fair value hierarchy as established by US GAAP. As of September 30, 2021, all
derivative liability contracts are convertible into a fixed number of shares of
common stock.


VBH Garden Grove

VBH Garden Grove intends to identify substance use disorder treatment facilities
located in California to provide patient solutions that are able to economically
accept select insurance payors to facilitate a broader patient base for Vital.
VBH Garden Grove has identified various potential license holders and facilities
located in Southern California and is in the due diligence phase for transaction
consideration; however, there are no binding transactions for any licenses or
facilities in California as of October 13, 2021.

Business of Vital Behavioral Health, Inc.

Vital's operational plans are contingent upon whether we are able to:

· Obtain sufficient debt or equity financing to operate U.S. substance abuse


· Secure leases for the substance abuse facilities.

· Secure and have approved the required state licenses to operate the substance

abuse facilities.

· Meet applicable zoning requirements.

Upon our acquisition of Vital we became a health and wellness company with a
focus in the drug and alcohol rehabilitation services industry. Vital intends to
operate U.S. facilities focusing on substance abuse treatment and offer various
programs that help provide a continuum of care to its patients. We intend to
become a national operator of clinical and transitional housing services for
clients affected by substance use disorders and co-occurring disorders. Our
treatment plans will be based on an individualized approach and will be
customized to meet each client's specific needs.

The facilities we intend to operate have access to Medically Monitored
Withdrawal Management Services (MMWM), a Partial Hospitalization Program (PHP),
an Intensive Outpatient Program (IOP), and an Outpatient Program (OP). Clients
who participate in the PHP, IOP, and OP treatment programs will be eligible for
housing through sober living accommodations that will be designed to give a
client the ability to participate in his or her daily affairs and work and to
have access to daily on-campus treatment at convenient times and locations.

We intend that most of our treatment facilities will be enrolled in Medicare or
Medicaid and will bill and accept payments from those governmental programs. In
most cases, it takes between 45 and 90 days for a Medicaid application to be
processed and either accepted or denied by the state Medicaid office. However,
depending on the circumstances and the state in which one resides, the
application process could be shorter or longer. Most facilities that accept
Medicaid generally provide programs with some degree of medical care and
substance rehabilitation, including group and individual therapy, 12-step
meetings, and other recovery activities, on a 24 hours per day basis in a highly
structured setting. Short-term programs may last between 3 and 6 weeks and be
followed by outpatient therapy. Long-term programs often last between 6 and 12
months and focus on re-socializing patients as they prepare to re-enter their
communities. Intensive outpatient services (IOPs) typically offer at least 9
hours of therapy per week in sets of three 3-hour sessions, and some studies
have found them to be similar to residential and inpatient programs in both
services and effectiveness.


   Table of Contents

Partial hospitalization programs (PHPs) provide care for people who need a more
comprehensive level of treatment than standard or intensive outpatient. These
programs typically consist of approximately 20 hours a week of treatment and may
include vocational and educational counseling, family therapy, medically
supervised use of medications, and treatment of co-occurring disorders. IOPs may
also offer these services, but the time commitment of a PHP typically is

We will offer both IOP and PHP services at our facilities and accept Medicare and Medicaid payor-qualified patients and clients.

VSL Frankfort intends to offer sober-designated living quarters for individuals
who are in recovery. Operations for VSL Frankfort are intended to commence once
VBH Kentucky obtains the operating entitlements for its outpatient substance use
treatment facility in Frankfort, Kentucky. Until such time, VSL Frankfort's
operations will be limited to planning and preparation.

All of our plans reflected above and below are contingent upon receiving adequate debt and/or equity financing of which there are no assurances we will be successful in obtaining.

Our Future Services and Solutions

We intend to provide quality, comprehensive, and compassionate care to adults
struggling with alcohol and/or drug abuse and dependence as well as co-occurring
mental health issues. We will maintain a research-based, disciplined treatment
plan for all patients with schedules designed to engage the patient in an
enriched recovery experience. Our purpose and passion are to empower the
individual, their families, and the broader community through the promotion of
optimal wellness of the mind, body, and spirit.

We plan to offer the following types of therapy: motivational interviewing,
cognitive behavioral therapy, rational emotive behavior therapy, dialectical
behavioral therapy, solution-focused therapy, eye movement desensitization and
reprocessing, and systematic family intervention. Our variety of therapy
settings includes individual, group, and family therapies, recovery-oriented
challenge therapies, expressive therapies (with a focus on music and art),
trauma therapies.

We also intend to provide Medicated-Assisted Treatment ("MAT"), which is the use
of FDA-approved medications, in combination with counseling and behavioral
therapies, to provide a "whole-patient" approach to the treatment of substance
use disorders. We believe that it is particularly effective for treating certain
conditions such as opioid use disorder, alcohol use disorder, and tobacco use
disorder. The use of MAT has been shown to significantly reduce overdoses from
opioids and to improve long-term abstinence.

Considering the high level of co-occurring substance abuse, mental health, and
medical conditions, we will offer patients a spectrum of psychiatric, medical,
and wellness-focused services based upon individual needs as assessed through
comprehensive evaluations at admission and throughout participation in the
program. To maximize the likelihood of long-term recovery, all program levels
will provide patients access to the following services: assessment of individual
substance abuse, mental health, medical history, and physical condition promptly
upon admission; psychiatric evaluations; psychological evaluations, and services
based on patient needs; follow-up appointments with physicians and
psychiatrists; medication monitoring; educational classes regarding health
risks, nutrition, smoking cessation, HIV awareness, life skills, healthy
nutritional programs, and dietary plans; access to fitness facilities;
interactive wellness activities; and structured daily schedules designed for
restorative sleep patterns.


   Table of Contents

We plan to emphasize clinical treatment, as well as the therapeutic value of
overall physical and nutritional wellness. We are committed to providing fresh
and nutritious meals throughout a patient's stay in order to promote healthy
routines, beginning with diet and exercise. Our facilities will offer
comprehensive work-out facilities either on-site or within walking distance, as
well as various exercise classes and other amenities. We will support long-term
recovery for patients through research-based methodologies and individualized
treatment planning while utilizing 12-step programs, which are a set of guiding
principles outlining a course of action for recovery.

We plan to have a differentiated ability to manage dual diagnosis cases and
coordinate treatment of individuals suffering from the common combination of
mental illness and substance abuse simultaneously. These patients participate in
education and discussion-oriented groups designed to provide information
regarding the psychiatric disorders that co-occur with chemical dependency.

We plan to have a strong emphasis on tracking patient satisfaction scores in
order to measure our patient and staff interaction and overall outcome and
reputation. In addition to patient satisfaction surveys that we will receive
after a patient's discharge, we also will solicit feedback during a patient's
stay at our inpatient facilities. This allows us to further tailor an
individual's treatment plan to emphasize the programs that have been more
impactful to a particular patient.

We believe in tracking clinical outcomes. We intend to track and measure patient outcomes in order to drive continual improvement in our programs.

We plan offer a full spectrum of treatment services to patients based upon
individual needs that are assessed through comprehensive evaluations at
admission and throughout their participation in the program. The assignment and
frequency of services will correspond to individualized treatment plans within
the context of the level of care and treatment intensity level.

· Detoxification ("detox"). Detoxification is usually conducted at an inpatient

facility for patients with physical or psychological dependence. Detoxification

services are designed to clear toxins out of the body so that the body can

safely adjust and heal itself after being dependent upon a substance. Patients

are medically monitored 24 hours per day, seven days per week, by experienced

medical professionals who work to alleviate withdrawal symptoms through

medication, as appropriate. We plan to provide detoxification services for

   several substances including alcohol, sedatives, and opiates.

· Residential Treatment. Residential care is a structured treatment approach

designed to prepare patients to return to the general community with a sober

lifestyle, increased functionality, and improved overall wellness. Treatment is

provided on a 24 hours per day, seven days per week basis, and services

generally include a minimum of two individual therapy sessions per week,

regular group therapy, family therapy, didactic and psycho-educational groups,

exercise (if cleared by medical staff), case management, and recreational

activities. Medical and psychiatric care will be available to all patients, as

   needed, through our planned contracted professional physician groups.

· Partial Hospitalization. Partial hospitalization is a structured program

providing care a minimum of 20 hours per week. This program is designed for

patients who are stable enough physically and psychologically to participate in

everyday activities but who still require a degree of medical monitoring.

Services include a minimum of weekly individual therapy, regular group therapy,

family education and family therapy, didactic and psycho-educational groups,

exercise (if cleared by medical staff), case management, and off-site recovery

meetings and activities. Medical and psychiatric care will be available to all

patients, as needed, through our planned contracted professional physician


· Intensive Outpatient Services. Less intensive than the aforementioned levels of

care, intensive outpatient services are comprised of a structured program

providing care three days per week for three hours per day at a minimum.

Designed as a "step down" from partial hospitalization, this program reinforces

progress and assists in the attainment of sobriety, reduction of detrimental

behaviors, and improved overall wellness of patients while they integrate and

interact in the community. Services include weekly individual therapy, group

therapy, family education and family therapy, didactic and psycho-educational

groups, case management, off-site recovery meetings and activities, and

intensive transitional and aftercare planning.


   Table of Contents

· Outpatient Services. Traditional outpatient services are delivered in regularly

scheduled sessions, usually less the nine hours per week. Outpatient services

include professionally directed screening, assessment, therapy, and other

services designed to support successful transition to the community and

long-term recovery. These services are tailored to a person's specific needs

and stage of recovery and may involve many modalities, including motivational

enhancement, family therapy, educational groups, occupational and recreational

   therapy, psychotherapy, and pharmacotherapy.

· Ancillary Services. In addition to our inpatient and outpatient treatment

services, we intend to provide medical monitoring for adherence to addiction

treatment, clinical diagnostic laboratory services, and physician services to

our patients through our contracted laboratories and professional physician

groups. We believe toxicological monitoring of patients is an important

component of substance abuse treatment. Patients are evaluated for illicit

substances upon admission and thereafter on a random basis and as otherwise

   determined to be medically necessary by the treating physician.

· Sober Living Facilities. We plan to provide sober living arrangements that

serve as an interim environment for patients transitioning from inpatient

treatment centers to lower levels of care and eventually back to their former

living arrangements. Sober living facilities enable us to utilize existing beds

for patients requiring higher levels of care, while still providing housing for

patients completing outpatient treatment programs. We provide sober living

arrangements to patients through our owned and leased properties in Texas,

   Nevada, Mississippi, and Florida. We plan to continue using sober living
   facilities as a complement to our outpatient services.

Business Strategies

Vital plans to hire highly trained and experienced clinical staff to deploy
research-based treatment programs with structured curricula for detoxification,
inpatient treatment, partial hospitalization, and intensive outpatient care. By
keeping the majority of its treatment facilities and housing on campuses that
are conveniently located within walking distance to traditional community
services, we are striving to create so-called 'sober cities' in the United
States that will nurture its clients' development at all stages from detox to
long-term self-sufficiency. By applying a tailored treatment program based on
the individual needs of each patient, many of whom require treatment for a
co-occurring mental health disorder such as depression, bipolar disorder, or
schizophrenia, we believe we will offer the level of quality care and service
necessary for our patients to achieve and maintain sobriety. Development of our
business and the Vital Behavioral Health and Vital Sober Livingnational brands
is contingent upon our ability to raise sufficient funds to fund hiring clinical
experts, leasing facilities, and hiring professional staff, and national sales
and marketing programs. We will engage the following strategies:

· Clinical excellence and outcomes-driven treatment. Our operations require us to

comply with the national standard for quality and sustainable outcomes in

addiction treatment and to ongoing measurement and transparency regarding

patient outcomes. In addition to measurement of patient outcomes and

satisfaction with treatment, we plan to advance utilization of modern,

evidence-based interventions that address addiction as a chronic brain disease,

   as supported by the science.

· Improve census over time at existing facilities. We plan to connect with

potential patients through a multi-faceted program that involves education

about the disease of addiction and the development of relationships with

healthcare professionals, digital marketing, as well as such traditional

channels as television, radio and print advertising. We plan to will take a

consultative, empathetic approach in operating our admissions department to

allow our personnel to effectively identify and enroll patients who may benefit

   from our treatment service offerings.

· Target complementary growth opportunities. We plan to pursue growth

opportunities that are complementary to our business, including providing

laboratory services to other substance abuse treatment providers and expanding

   other ancillary services.

· Develop outpatient operations. We plan to selectively pursue opportunities to

add outpatient centers to complement our broader network of inpatient treatment

facilities. We believe expanding our reach by developing or acquiring premium

outpatient facilities of a quality consistent with our inpatient services will

further enhance our brand and our ability to provide a more comprehensive suite

of services across the spectrum of care.


   Table of Contents

· Opportunistically diversify our portfolio of treatment facilities. We intend to

selectively seek acquisition opportunities to expand and diversify our

geographic presence, service offerings, and the portion of the population that

can access our services based on their individual healthcare coverage We

believe that most mental health and substance abuse treatment companies in

operation are small, regional operations and this high level of fragmentation

presents us with the opportunity to acquire facilities or small providers and

create economies of scale and enhanced patient care. All of the above plans are

   contingent upon adequate funding of which there are no assurances.

Sales and Marketing

We intend to use a multi-faceted approach to reach potential patients suffering from the disease of addiction and co-occurring psychiatric disorders. This multi-pronged approach will include:

· National Marketing Force. We intend to deploy and manage a team of

representatives that will focus on developing relationships with hospitals,

other treatment facilities, psychiatrists, therapists, social workers,

employers, unions, alumni, and employee assistance programs. Our sales

representatives will educate these various constituents about the disease of

   addiction and the variety of treatment services that we provide.

· Multi-Media Marketing. Through comprehensive online directories of treatment

providers, treatment provider reviews, user content that discusses the disease

of addiction, treatment and recovery, as well as discussion forums and

professional communities, our future addiction-related websites will serve

families and individuals who are struggling with addiction and seeking

treatment options. Additionally, we plan to pursue advertising opportunities in

television commercials, radio spots, newspaper articles, medical journals, and

other print media that promote our facilities and have the intent to build our

   integrated, national brand.

· Recommendations by Alumni. We anticipate receiving new patients who are

directly referred to our facilities by our satisfied and supportive alumni, as

well as their friends and families. As our national brand continues to grow and

   our business continues to increase, we believe our alumni will become an
   increasingly important source of business for us.

The extent that we are able to implement the foregoing or even able to implement any of the foregoing sales and marketing plans are contingent upon adequate funding, of which there are no assurances.

Admissions Center Operations

We intend to maintain a 24-hours per day, seven days per week, remote admissions
center. Our centralized admissions center initially will be provided by a
third-party provider that will focus on outreach and enrolling patients. As part
of its role, the admissions center team will conduct benefits verification,
handle initial communication with insurance companies, complete patient intake
screenings, consult with our clinicians where necessary regarding a potential
patient's specific medical or psychological condition, begin the
pre-certification process for treatment authorization, help each patient choose
a proper treatment facility for his or her clinical and financial needs, and
assist patients with arrangements and logistics.

Professional Groups

We plan to become affiliated with groups of physicians and mid-level service
providers that may provide certain professional services to our patients through
professional services agreements with certain of our treatment facilities (the
"Professional Groups"). Under the professional services agreements, the
Professional Groups may provide a physician to serve as medical director for the
applicable facility. The Professional Groups may either bill the payor for their
services directly or be compensated by the treatment facility based on fair
market value hourly rates.


   Table of Contents


Our competitors have greater assets, revenues, operational resources and
financial resources than we do. The market for mental health and substance abuse
treatment facilities is highly fragmented with approximately 12,000 different
companies providing services to the adult and adolescent population, of which
only 30% are operated by for-profit organizations (Source: DHHS, 2020 Data on
Substance Abuse Treatment Facilities). Our inpatient treatment facilities will
compete with several national competitors and many regional and local
competitors. Some of our competitors are government entities that are supported
by tax revenue, and others are non-profit entities that are primarily supported
by endowments and charitable contributions. We do not receive financial support
from these sources. Some larger companies in our industry compete with us on a
national scale and offer substance use treatment services among other behavioral
healthcare services. To a lesser extent, we also compete with other providers of
substance use treatment services, including other inpatient behavioral
healthcare facilities and general acute care hospitals.

We believe the primary competitive factors affecting our business include:

· quality of clinical programs and services;

· reputation and brand recognition;

· overall aesthetics of the facilities;

· amenities offered to patients;

· relationships with payors and referral sources;

· sales and marketing capabilities;

· information systems and proprietary data analytics;

· senior management experience; and

· national scope of operations.


We plan to generate revenues through our Vital Behavioral Health operations from
behavioral health treatment services at our inpatient and outpatient treatment
facilities, which will be derived from personally funded patients (i.e., private
payor), insurance companies (e.g., United Healthcare and Blue Cross and Blue
Shield), and government program payors (e.g., Medicaid and Medicare) that act as
the primary payment or reimbursement source of funds for our patient services.
We also plan to generate revenues through our Vital Sober Living operations as a
landlord through the provision of sober living residences that are supported by
our Vital Behavioral Health patient services. Initially, we expect that our
revenue-producing operations will commence in Frankfort, Kentucky.


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Financials (USD)
Sales 2021 - - -
Net income 2021 -0,49 M - -
Net Debt 2021 0,30 M - -
P/E ratio 2021 -37,6x
Yield 2021 -
Capitalization 11,6 M 11,6 M -
EV / Sales 2020 -
EV / Sales 2021 -
Nbr of Employees -
Free-Float 49,1%
Duration : Period :
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Income Statement Evolution
Managers and Directors
Mark W. Conte President, Chief Executive & Financial Officer
Patrick Ogle COO, Director & General Counsel
George D Shoenberger Director
Sector and Competitors