Property and Equipment

Depreciation expense for the three and nine months ended September 30, 2017 was $12,416 and $33,228, respectively. For the nine months ended September 30, 2017, an additional $302 of depreciation on customer-leased equipment was included in cost of sales. Depreciation expense for the three and nine months ended September 30, 2016 was $7,295 and $29,466, respectively. For the three and nine months ended September 30, 2017 computers and office equipment with an original cost basis of $29,412 was retired resulting in a $1,281 loss on disposition.

As of September 30, 2017 and December 31, 2016 property and equipment consisted of the following:

Earnings (Loss) per Share

Basic earnings or loss per common share is computed by dividing net income or loss applicable to common shareholders by the weighted average number of shares outstanding during each period. As the Company experienced net losses during the three and nine months ending September 30, 2017 and 2016, respectively, no common stock equivalents have been included in the diluted earnings per common share calculations as the effect of such common stock equivalents would be anti-dilutive. As of September 30, 2017 and 2016, there were 1,028,969 and 4,141,667 potentially dilutive shares, respectively.

Management 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 and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Inventories

Inventories consisting of diagnostic tests are stated at the lower of cost or market determined using the first-in, first-out method.

Revenue Recognition

We recognize revenue when evidence exists that there is an arrangement between us and our customers, delivery of products sold or service has occurred, the selling price to our customers is fixed and determinable with required documentation, and collectability is reasonably assured. We recognize as deferred revenue, payments made in advance by customers for products not yet provided.

In instances where we have entered into license agreements with a third parties to use our technology within their product offering, we recognize any base or prepaid revenues over the term of the agreement and any per occurrence or periodic usage revenues in the period they are earned.

Customer Leased Equipment

Customer leased equipment is capitalized and depreciated using the straight-line method over the estimated useful lives of the equipment, generally from three to five years. The expense for depreciation on this equipment is included in cost of sales. The company typically retains ownership of the equipment.