x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Utah |
87-0285238 | ||||
(State or other jurisdiction of incorporation | (I.R.S. Employer I.D. No.) | |||
1201 Dove Street, Suite Newport Beach, California | 92660 | |||
(Address of principal executive offices) | ||||
Registrant’s telephone number, including area code: (949) 721-8272 |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | |||||||||||
Yes | o | No | | ||||||||
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theExchange Act. | |||||||||||
Yes | o | No | | ||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was | |||||||||||
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | |||||||||||
Yes | | No | o | ||||||||
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). | |||||||||||
Yes | x | No | o | ||||||||
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§232.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements | |||||||||||
incorporated by reference in Part III of this Form 10-K or any amendment to this Form | |||||||||||
| |||||||||||
Indicate by check mark whether the registrant is a large accelerated | |||||||||||
Large accelerated filer | o | Accelerated filer | o | ||||||||
o | |||||||||||
Non-accelerated filer | | Smaller reporting company | x | ||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. | |||||||||||
Yes | o | No | |
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity as of June 30, $1,156,122. | |||||||||||
As of March | |||||||||||
Documents incorporated by reference: None |
Page | |||
Item 1. | 5 | ||
Item 1A. | |||
Item 1B. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | ||
Item 6. | |||
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operation | ||
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | ||
Item 8. | Financial Statements and Supplementary Data | ||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | ||
Item 9A. | |||
Item 9B. | |||
Item 10. | Directors, Executive Officers and Corporate Governance | ||
Item 11. | |||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | ||
Item 13. | Certain Relationships and Related Transactions, and Director Independence | ||
Item 14. | Principal Accounting Fees and Services | ||
Item 15. | Exhibits, Financial Statement Schedules | ||
· | Health Care Organizations (“HCOs”) |
· | Medical Provider Networks (“MPNs”) |
· | HCO + MPN |
· | Workers’ Compensation Carve-Outs |
· | Utilization Review (“UR”) |
· | Medical Bill Review (“MBR”) |
· | Nurse Case Management (“NCM”) |
· | improving safety programs and having fewer injury and illness claims; |
· | increasing access to quality medical providers and medical evaluators; |
· | lowering costs of medical care; |
· | reducing disputes; |
· | improving collaboration between unions and employers; |
· | increasing satisfaction of all parties; and |
· | providing the opportunity for continuous improvement by renegotiating the terms of the carve-out on an as-needed basis. |
· | an alternative dispute resolution process in place of most hearings before a workers’ compensation judge; |
· | a mutually agreed upon list of medical providers and medical evaluators; and |
· | a mutually agreed upon list of vocational rehabilitation providers. |
· | that the carve-out process does not diminish compensation to injured workers; and |
· | that the alternative dispute resolution process retain the right to appeal to the reconsideration unit of the Workers’ Compensation Appeals Board (“WCAB”) and, ultimately, to the state courts of appeal. |
Year ended December 31, | ||||||||||||
Customer: | 2009 | 2008 | 2007 | |||||||||
Customer A | 12 | % | 18 | % | 15 | % | ||||||
Customer B | 20 | % | 15 | % | 13 | % | ||||||
Customer C | 0 | % | 12 | % | 11 | % | ||||||
Customer D | 11 | % | 9 | % | 9 | % | ||||||
Customer E | 11 | % | 8 | % | 3 | % |
Year ended December 31, | ||||||||
Customer: | 2012 | 2011 | ||||||
Customer A | 12 | % | 14 | % | ||||
Customer B | 7 | % | 12 | % | ||||
Customer C | 14 | % | 11 | % | ||||
Customer D | 13 | % | 8 | % |
High | Low | High | Low | |||||||||||||
Fiscal year ended December 31, 2009 | ||||||||||||||||
Fiscal year ended December 31, 2012 | ||||||||||||||||
Fourth Quarter | $ | .45 | $ | .45 | $ | 5.05 | $ | 4.37 | ||||||||
Third Quarter | $ | .45 | $ | .30 | $ | 4.75 | $ | 3.00 | ||||||||
Second Quarter | $ | .50 | $ | .30 | $ | 3.58 | $ | 1.55 | ||||||||
First Quarter | $ | .51 | $ | .40 | $ | 1.74 | $ | .86 | ||||||||
Fiscal year ended December 31, 2008 | ||||||||||||||||
Fiscal year ended December 31, 2011 | ||||||||||||||||
Fourth Quarter | $ | .60 | $ | .51 | $ | .87 | $ | .27 | ||||||||
Third Quarter | $ | 1.01 | $ | .60 | $ | .56 | $ | .26 | ||||||||
*Second Quarter | ||||||||||||||||
May 20 through June 30 | $ | 1.01 | $ | .25 | ||||||||||||
April 1 through May 19 | $ | .06 | $ | .04 | ||||||||||||
Second Quarter | $ | .53 | $ | .30 | ||||||||||||
First Quarter | $ | .07 | $ | .055 | $ | .30 | $ | .01 |
December 31, 2009 | December 31, 2008 | |||||||
Net cash provided by (used in) operating activities | $ | (20,379 | ) | $ | 210,063 | |||
Net cash used in investing activities | - | (4,073 | ) | |||||
Net cash provided by (used in) financing activities | - | (1,005 | ) | |||||
Net Change in Cash | $ | (20,379 | ) | $ | 204,985 |
December 31, 2012 | December 31, 2011 | |||||||
Net cash provided by operating activities | $ | 210,602 | $ | 88,139 | ||||
Net cash (used in) investing activities | (126,344 | ) | (63,084 | ) | ||||
Net cash provided by (used in) financing activities | 26,957 | (6,148 | ) | |||||
Net increase in cash | $ | 111,215 | $ | 18,907 |
Payments Due By Period | Payments Due By Period | |||||||||||||||||||||||||||||||||||||||
Contractual obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||||||||||||||||||||||
Operating Leases: | ||||||||||||||||||||||||||||||||||||||||
Equipment Leases | $ | 40,846 | $ | 9,729 | $ | 30,276 | $ | 841 | $ | - | $ | 67,259 | $ | 34,495 | $ | 32,764 | $ | - | $ | - | ||||||||||||||||||||
Office Leases | 134,612 | 115,398 | 19,214 | - | - | 457,550 | 140,343 | 292,457 | 24,750 | - | ||||||||||||||||||||||||||||||
Total | $ | 175,458 | $ | 125,127 | $ | 49,490 | $ | 841 | $ | - | $ | 524,809 | $ | 174,838 | $ | 325,221 | $ | 24,750 | $ | - |
(1) | In January 2010 we entered into a capital lease arrangement whereby we leased an office copy machine for $25,543. The asset was recorded on our balance sheet under office equipment under capital lease and our liability incurred under the lease was recorded as current and noncurrent obligations under capital lease. The lease arrangement is for a term of 48 months at level operating rents with capital interest rate at 7%. In August 2012 we entered into a capital lease arrangement whereby we leased office server equipment for $38,380. The asset was recorded on our balance sheet under office equipment under capital lease and our liability incurred under the lease was recorded as current and noncurrent obligations under capital lease. The lease arrangement is for a term of 36 months at level operating rents with capital interest rate at 7.5%. |
(2) | Following is our annual base rent for our office space throughout the remaining term of the lease: |
Rent Period | Annual Rent Payments | |||
Jan. 1 to Dec. 31, 2013 | $ | 140,343 | ||
Jan. 1 to Dec. 31, 2014 | $ | 144,508 | ||
Jan. 1 to Dec. 31, 2015 | $ | 147,949 | ||
Jan. 1 to Feb. 29, 2016 | $ | 24,750 | ||
Total | $ | 457,550 |
ASSETS | ||||||||
December 31, | December 31, | |||||||
2012 | 2011 | |||||||
Current Assets | ||||||||
Cash | $ | 479,674 | $ | 368,459 | ||||
Accounts receivable, net of allowance of $20,000 | 1,332,499 | 523,864 | ||||||
Income tax receivable | - | 3,998 | ||||||
Commission draw | - | 29,853 | ||||||
Receivable other | 7,344 | - | ||||||
Prepaid expenses | 52,988 | 53,947 | ||||||
Total current assets | 1,872,505 | 980,121 | ||||||
Property & Equipment, net | ||||||||
Computer equipment | 127,667 | 80,963 | ||||||
Furniture & fixtures | 83,708 | 56,471 | ||||||
Office equipment | 26,560 | 12,537 | ||||||
Office equipment under capital lease | 63,923 | 25,543 | ||||||
Total property & equipment | 301,858 | 175,514 | ||||||
Less: accumulated depreciation and amortization | (133,573 | ) | (104,294 | ) | ||||
Net property & equipment | 168,285 | 71,220 | ||||||
Other assets | 8,158 | 8,158 | ||||||
Total assets | $ | 2,048,948 | $ | 1,059,499 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 120,787 | $ | 86,482 | ||||
Accrued expenses | 98,074 | 126,770 | ||||||
Income tax payable | 249,162 | 1,611 | ||||||
Current obligations under capital lease | 19,294 | 6,592 | ||||||
Deferred rent expense | 24,951 | 21,903 | ||||||
Deferred tax liabilities | 5,659 | 5,404 | ||||||
Unearned revenue | 2,443 | 7,803 | ||||||
Total current liabilities | 520,370 | 256,565 | ||||||
Long term liabilities | ||||||||
Noncurrent obligation under capital lease | 21,324 | 7,069 | ||||||
Total liabilities | 541,694 | 263,634 | ||||||
Commitments and Contingencies | - | - | ||||||
Shareholder's Equity | ||||||||
Preferred stock; 5,000,000 shares authorized at $0.001 par value; | - | - | ||||||
Common stock; 50,000,000 shares authorized at $0.001 par value; | 802 | 802 | ||||||
Additional paid-in capital | 623,629 | 623,629 | ||||||
Retained earnings | 882,823 | 171,434 | ||||||
Total stockholders' equity | 1,507,254 | 795,865 | ||||||
Total liabilities and stockholders' equity | $ | 2,048,948 | $ | 1,059,499 |
ASSETS | ||||||||
December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Current Assets | ||||||||
Cash | $ | 604,022 | $ | 624,401 | ||||
Accounts receivable, net of allowance of $20,000 | 155,066 | 177,376 | ||||||
Deferred tax asset | 12,469 | 15,765 | ||||||
Income tax receivable | 11,523 | - | ||||||
Prepaid expenses | 66,400 | 50,119 | ||||||
Total current assets | 849,480 | 867,661 | ||||||
Property & Equipment, net (note 4) | ||||||||
Computer equipment | 60,922 | 60,922 | ||||||
Furniture & fixtures | 28,839 | 28,839 | ||||||
Total property & equipment | 89,761 | 89,761 | ||||||
Less: accumulated depreciation | (86,318 | ) | (85,736 | ) | ||||
Net property & equipment | 3,443 | 4,025 | ||||||
Total assets | $ | 852,923 | $ | 871,686 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 6,672 | $ | 1,630 | ||||
Accrued expenses (note 8) | 169,054 | 178,836 | ||||||
Income tax payable | 100 | 34,823 | ||||||
Unearned revenue | 19,534 | 30,494 | ||||||
Total current liabilities | 195,360 | 245,783 | ||||||
Total liabilities | 195,360 | 245,783 | ||||||
Commitment | - | - | ||||||
Shareholder's Equity | ||||||||
Preferred stock; 5,000,000 shares | ||||||||
authorized at $0.001 par value; | ||||||||
Zero shares issued and outstanding | - | - | ||||||
Common stock; 50,000,000 shares | ||||||||
authorized at $0.001 par value; | ||||||||
802,424 shares issued and outstanding (note 11) | 802 | 802 | ||||||
Additional paid-in capital (note 11) | 623,629 | 623,629 | ||||||
Retained earnings | 33,132 | 1,472 | ||||||
Total stockholders' equity | 657,563 | 625,903 | ||||||
Total liabilities and stockholders' equity | $ | 852,923 | $ | 871,686 |
Pacific Health Care Organization, Inc. | ||||||||
Consolidated Statements of Operations | ||||||||
December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Revenues | ||||||||
HCO fees | $ | 801,571 | $ | 1,175,166 | ||||
MPN fee | 587,455 | 636,599 | ||||||
Other | 369,175 | 545,053 | ||||||
Total revenues | 1,758,201 | 2,356,818 | ||||||
Expenses | ||||||||
Depreciation | 582 | 879 | ||||||
Consulting fees | 225,201 | 260,882 | ||||||
Salaries & wages | 747,514 | 845,716 | ||||||
Professional fees | 158,952 | 235,798 | ||||||
Insurance | 114,471 | 115,022 | ||||||
Employee enrollment | (4,467 | ) | 74,016 | |||||
Data maintenance | 154,552 | 249,246 | ||||||
General & administrative | 318,776 | 320,117 | ||||||
Total expenses | 1,715,581 | 2,101,676 | ||||||
Income from operations | 42,620 | 255,142 | ||||||
Other income | ||||||||
Interest income | 3,290 | 3,851 | ||||||
Total other income | 3,290 | 3,851 | ||||||
Income before income tax provision | 45,910 | 258,993 | ||||||
Income tax provision | 14,250 | 115,771 | ||||||
Net income | $ | 31,660 | $ | 143,222 | ||||
December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Basic and fully diluted earnings per share: | ||||||||
Earnings per share amount | $ | 0.04 | $ | 0.18 | ||||
Weighted average common shares outstanding | 802,424 | 802,424 |
December 31, | December 31, | |||||||
2012 | 2011 | |||||||
Revenues | ||||||||
HCO fees | $ | 945,823 | $ | 770,303 | ||||
MPN fees | 749,250 | 627,341 | ||||||
Other | 3,131,692 | 1,434,149 | ||||||
Total revenues | 4,826,765 | 2,831,793 | ||||||
Expenses | ||||||||
Depreciation | 29,279 | 13,595 | ||||||
Consulting fees | 486,736 | 358,996 | ||||||
Salaries & wages | 1,655,386 | 1,132,351 | ||||||
Professional fees | 267,434 | 212,572 | ||||||
Insurance | 203,251 | 151,227 | ||||||
Outsource service fees | 385,368 | 190,917 | ||||||
Data maintenance | 75,530 | 57,445 | ||||||
General & administrative | 490,663 | 392,407 | ||||||
Total expenses | 3,593,647 | 2,509,510 | ||||||
Income from operations | 1,233,118 | 322,283 | ||||||
Other income (expense) | ||||||||
Loss on disposal of assets | - | (1,564 | ) | |||||
Interest income | 704 | 957 | ||||||
Rental income | 1,500 | 250 | ||||||
Interest (expense) | (1,885 | ) | (1,192 | ) | ||||
Total other income (expense) | 319 | (1,549 | ) | |||||
Income (loss) before income tax provision | 1,233,437 | 320,734 | ||||||
Income tax provision | 522,048 | 122,499 | ||||||
Net income | $ | 711,389 | $ | 198,235 | ||||
Basic and fully diluted earnings per share: | ||||||||
Earnings per share amount | $ | .89 | $ | .25 | ||||
Weighted average common shares outstanding | 802,424 | 802,424 |
Consolidated Statements of Stockholders’ Equity | ||||||||||||||||||||||||
From January 1, 2007 to December 31, 2008 | ||||||||||||||||||||||||
Preferred Shares | Common Stock | Paid in | Retained Earnings | |||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | (Deficit) | |||||||||||||||||||
Balance, January 1, 2008 | - | $ | - | $ | 802,424 | $ | 802 | $ | 624,634 | $ | (141,750 | ) | ||||||||||||
Stock Splits/Cash-out of fractional shares | - | - | - | - | (1,005 | ) | - | |||||||||||||||||
Net Income for the Year Ended December 31, 2008 | - | - | - | - | - | 143,222 | ||||||||||||||||||
Balance, December 31, 2008 | - | $ | - | $ | 802,424 | $ | 802 | $ | 623,629 | $ | 1,472 | |||||||||||||
Net Income for the Year Ended December 31, 2009 | - | - | - | - | - | 31,660 | ||||||||||||||||||
Balance, December 31, 2009 | - | $ | - | $ | 802,424 | $ | 802 | $ | 623,629 | $ | 33,132 |
Preferred Stock | Common Stock | Paid in | Retained Earnings | |||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | (Deficit) | |||||||||||||||||||
Balance, January 1, 2011 | - | $ | - | 802,424 | $ | 802 | $ | 623,629 | $ | (26,801 | ) | |||||||||||||
Net income for the year ended December 31, 2011 | - | - | - | - | - | 198,235 | ||||||||||||||||||
Balance, December 31, 2011 | - | $ | - | 802,424 | $ | 802 | $ | 623,629 | $ | 171,434 | ||||||||||||||
Net income for the year ended December 31, 2012 | - | - | - | - | - | 711,389 | ||||||||||||||||||
Balance, December 31, 2012 | - | $ | - | 802,424 | $ | 802 | $ | 623,629 | $ | 882,823 |
Pacific Health Care Organization, Inc. | ||||||||
Consolidated Statements of Cash Flows | ||||||||
For the Years Ended December 31 | ||||||||
2009 | 2008 | |||||||
Cash Flows from Operating Activities | ||||||||
Net income | $ | 31,660 | $ | 143,222 | ||||
Adjustments to reconcile net income to net cash: | ||||||||
Depreciation | 582 | 879 | ||||||
Changes in operating assets & liabilities: | ||||||||
(Increase) decrease in accounts receivable | 22,310 | 46,670 | ||||||
Increase in income tax receivable | - | |||||||
(Increase) decrease in deferred tax asset | 3,296 | (1,255 | ) | |||||
Increase (decrease) in prepaid income tax | - | 300 | ||||||
(Increase) decrease in income tax receivable | (11,523 | ) | - | |||||
(Increase) decrease in prepaid expenses | (16,281 | ) | 164 | |||||
Increase (decrease) in accounts payable | 5,042 | (12,389 | ) | |||||
Increase (decrease) in accrued expenses | (9,782 | ) | 68,588 | |||||
Increase (decrease) in income tax payable | (34,723 | ) | 24,772 | |||||
Increase (decrease) in unearned revenue | (10,960 | ) | (60,888 | ) | ||||
Net cash provided by operating activities | (20,379 | ) | 210,063 | |||||
Cash Flows from Investing Activities | ||||||||
Purchase of furniture and fixtures | - | (4,073 | ) | |||||
Net cash used by investing activities | - | (4,073 | ) | |||||
Cash Flows from Financing Activities | ||||||||
Cash-out of fractional shares of common stock | - | (1,005 | ) | |||||
Net cash used by financing activities | - | (1,005 | ) | |||||
Increase (decrease) in cash | (20,379 | ) | 204,985 | |||||
Cash at beginning of period | 624,401 | 419,416 | ||||||
Cash at End of Period | $ | 604,022 | $ | 624,401 | ||||
Supplemental Cash Flow Information | ||||||||
Cash paid for: | ||||||||
Interest | $ | - | $ | - | ||||
Taxes | $ | 57,200 | $ | 91,854 |
2012 | 2011 | |||||||
Cash Flows from Operating Activities | ||||||||
Net income | $ | 711,389 | $ | 198,235 | ||||
Adjustments to reconcile net income to net cash: | ||||||||
Depreciation | 29,279 | 13,595 | ||||||
Loss on disposition of assets | - | 1,564 | ||||||
Changes in operating assets & liabilities: | ||||||||
(Increase) in accounts receivable | (808,635 | ) | (284,659 | ) | ||||
Decrease in income tax receivable | 3,998 | 31,102 | ||||||
Decrease (increase) in commission draw | 29,853 | (5,853 | ) | |||||
(Increase) in receivable other | (7,344 | ) | - | |||||
Decrease in deferred tax asset | - | 10,582 | ||||||
Decrease in prepaid expenses | 959 | 16,165 | ||||||
Increase in accounts payable | 34,305 | 56,444 | ||||||
(Decrease) increase in accrued expenses | (28,696 | ) | 26,378 | |||||
Increase in income tax payable | 247,551 | 1,511 | ||||||
Increase in deferred rent expense | 3,048 | 21,903 | ||||||
Increase in deferred tax liabilities | 255 | 5,404 | ||||||
(Decrease) in unearned revenue | (5,360 | ) | (4,232 | ) | ||||
Net cash provided by operating activities | 210,602 | 88,139 | ||||||
Cash Flows from Investing Activities | ||||||||
Purchase of furniture & equipment | (87,964 | ) | (63,084 | ) | ||||
Purchase equipment under capital lease | (38,380 | ) | - | |||||
Net cash used by investing activities | (126,344 | ) | (63,084 | ) | ||||
Cash Flows from Financing Activities | ||||||||
Increase in obligation under capital lease | 38,380 | - | ||||||
Payment of obligations under capital lease | (11,423 | ) | (6,148 | ) | ||||
Net cash provided by (used in) financing activities | 26,957 | (6,148 | ) | |||||
Increase in cash | 111,215 | 18,907 | ||||||
Cash at beginning of period | 368,459 | 349,552 | ||||||
Cash at end of period | $ | 479,674 | $ | 368,459 | ||||
Supplemental Cash Flow Information | ||||||||
Cash paid (refunded) for: | ||||||||
Interest | 703 | 1,191 | ||||||
Income taxes refunded | - | (38,718 | ) | |||||
Income taxes paid | 260,000 | 107,346 |
For the Years Ended December 31, | For the Years Ended December 31, | |||||||||||||||
2009 | 2008 | 2012 | 2011 | |||||||||||||
Basic Earnings Per Share: | ||||||||||||||||
Basic Earnings per share: | ||||||||||||||||
Income (numerator) | $ | 31,660 | $ | 143,222 | $ | 711,389 | $ | 198,235 | ||||||||
Shares (denominator) | 802,424 | 802,424 | 802,424 | 802,424 | ||||||||||||
Per share amount | $ | .04 | $ | .18 | $ | .89 | $ | .25 | ||||||||
Fully Diluted Earnings Per Share: | ||||||||||||||||
Fully Diluted Earnings per share: | ||||||||||||||||
Income (numerator) | $ | 31,660 | 143,222 | $ | 711,389 | $ | 198,235 | |||||||||
Shares (denominator) | 802,424 | 802,424 | 802,424 | 802,424 | ||||||||||||
Per share amount | $ | .04 | $ | .18 | $ | .89 | $ | .25 |
• | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
• | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
• | Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. |
12/31/12 | 12/31/11 | |||||||
Customer A | 12 | % | 12 | % | ||||
Customer B | 22 | % | 15 | % | ||||
Customer C | 8 | % | 12 | % | ||||
Customer D | 4 | % | 13 | % |
Cost | Depreciation Expense | Accumulated Depreciation | Cost | Depreciation Exp. & Amort. | Accum. Depre. & Amort. | |||||||||||||||||||||||||||||||||||||||||||
Assets | December 31, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | December 31, 2012 | December 31, 2011 | December 31, 2012 | December 31, 2011 | December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||||||||
Computer equipment | $ | 60,922 | $ | 60,922 | $ | - | $ | - | $ | 60,922 | $ | 60,922 | $ | 127,667 | $ | 80,963 | $ | 7,284 | $ | 2,342 | $ | 70,548 | $ | 63,264 | ||||||||||||||||||||||||
Furniture & fixtures | 28,839 | 28,839 | 582 | 879 | 25,396 | 24,814 | 87,781 | 60,544 | 11,245 | 4,678 | 41,901 | 30,656 | ||||||||||||||||||||||||||||||||||||
Disposal of furniture | (4,073 | ) | (4,073 | ) | - | - | (1,309 | ) | (1,309 | ) | ||||||||||||||||||||||||||||||||||||||
Office equipment | 26,560 | 12,537 | 4,362 | 1,465 | 5,827 | 1,465 | ||||||||||||||||||||||||||||||||||||||||||
Office equipment under capital lease | 63,923 | 25,543 | 6,388 | 5,109 | 16,606 | 10,218 | ||||||||||||||||||||||||||||||||||||||||||
Totals | $ | 89,761 | $ | 89,761 | $ | 582 | $ | 879 | $ | 86,318 | $ | 85,736 | $ | 301,858 | $ | 175,514 | $ | 29,279 | $ | 13,594 | $ | 133,573 | $ | 104,294 |
2009 | 2008 | ||||||||
Current: | |||||||||
Federal | $ | 5,655 | $ | 81,703 | |||||
State | 5,299 | 35,323 | |||||||
Deferred: | |||||||||
Federal | 2,555 | (996 | ) | ||||||
State | 741 | (259 | ) | ||||||
Total tax provision (benefit) | $ | 14,250 | $ | 115,771 |
2012 | 2011 | |||||||
Current: | ||||||||
Federal | $ | 403,153 | $ | 86,511 | ||||
State | 118,640 | 20,002 | ||||||
Deferred | ||||||||
Federal | (6,370 | ) | 12,389 | |||||
State | 6,625 | 3,597 | ||||||
Total tax provision | $ | 522,048 | $ | 122,499 |
2012 | 2011 | ||||||||||||||||
2009 | 2008 | ||||||||||||||||
Depreciation | Depreciation | ||||||||||||||||
Federal | $ | (65,841 | ) | (20,858 | ) | ||||||||||||
State | (14,601 | ) | (5,858 | ) | |||||||||||||
Reserve for bad debts | |||||||||||||||||
Federal | 8,000 | 6,200 | |||||||||||||||
State | 1,800 | 1,800 | |||||||||||||||
State tax deductions | 37,659 | - | |||||||||||||||
Vacation accrual | |||||||||||||||||
Federal | 22,365 | 9,790 | |||||||||||||||
State | 4,959 | 2,842 | |||||||||||||||
Federal | $ | (945 | ) | $ | (888 | ) | |||||||||||
State | (274 | ) | (330 | ) | |||||||||||||
Reserve for bad debts | |||||||||||||||||
Federal | 6,200 | 6,770 | |||||||||||||||
State | 1,800 | 1,030 | |||||||||||||||
Vacation accrual | |||||||||||||||||
Federal | 4,409 | 7,734 | |||||||||||||||
State | 1,279 | 1,449 | |||||||||||||||
Deferred tax asset | $ | 12,469 | $ | 15,765 | |||||||||||||
Deferred tax asset (liability) | $ | (5,659 | ) | $ | (5,404 | ) |
2009 | 2008 | |||||||
Expense at federal statory rate | $ | 4,786 | $ | 70,085 | ||||
State tax effect | 2,384 | 35,064 | ||||||
Non deductible expenses | 4,525 | 10,622 | ||||||
Taxable temporary differences | 3,125 | 2,764 | ||||||
Deductible termporary differences | (570 | ) | (1,768 | ) | ||||
Deferred tax asset valuation allowance | - | (996 | ) | |||||
Income tax provision (benefit) | $ | 14,250 | $ | 115,771 |
2012 | 2011 | |||||||
Expense at federal statutory rate | $ | 419,369 | $ | 101,905 | ||||
State tax effects | 82,675 | 24,281 | ||||||
Non deductible expenses | 11,572 | 16,270 | ||||||
Effects of rate change | 7,982 | - | ||||||
Taxable temporary differences | 450 | (19,957 | ) | |||||
Income tax provision | $ | 522,048 | $ | 122,499 |
Rent Period | Annual Rent Payments | |||
Jan. 1 to Dec. 31, 2013 | $ | 140,343 | ||
Jan. 1 to Dec. 31, 2014 | $ | 144,508 | ||
Jan. 1 to Dec. 31, 2015 | $ | 147,949 | ||
Jan. 1 to Feb. 29, 2016 | $ | 24,750 | ||
Total | $ | 457,550 |
Year | Office Lease Amount | Equipment Lease Amount | Total Amount | ||||||||||
Total Lease Commitments: | 2010 | $ | 115,398 | $ | 9,729 | $ | 125,127 | ||||||
2011 | 19,214 | 10,092 | 29,306 | ||||||||||
Thereafter | - | 21,025 | 21,025 | ||||||||||
Total | $ | 134,612 | $ | 40,846 | $ | 175,458 |
Payments Due By Period | ||||||||||||||||||||
Contractual obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Equipment Leases | $ | 67,259 | $ | 34,495 | $ | 32,764 | $ | - | $ | - | ||||||||||
Office Leases | 457,550 | 140,343 | 292,457 | 24,750 | - | |||||||||||||||
Total | $ | 524,809 | $ | 174,838 | $ | 325,221 | $ | 24,750 | $ | - |
2009 | 2008 | |||||||
Customer A | 12 | % | 18 | % | ||||
Customer B | 20 | % | 15 | % | ||||
Customer C | 0 | % | 12 | % | ||||
Customer D | 11 | % | 9 | % | ||||
Customer E | 11 | % | 8 | % |
Year ended December 31, | ||||||||
Customer: | 2012 | 2011 | ||||||
Customer A | 12 | % | 14 | % | ||||
Customer B | 7 | % | 12 | % | ||||
Customer C | 14 | % | 11 | % | ||||
Customer D | 13 | % | 8 | % |
Accrued liabilities consist of the the following: | 2009 | 2008 | ||||||
Employee enrollment fees | $ | 750 | $ | 75,000 | ||||
Compensated absences | 14,222 | 22,735 | ||||||
Legal fees | 102,380 | 80,783 | ||||||
Accounting fees | 37,739 | - | ||||||
Sales commissions | 3,645 | - | ||||||
Licenses and permits | 10,000 | - | ||||||
Other | 318 | 318 | ||||||
Total | $ | 169,054 | $ | 178,836 |
2012 | 2011 | |||||||
Customer overpayment of accounts receivables | 1,108 | - | ||||||
Compensated absences | 55,913 | 29,287 | ||||||
Legal fees | 3,200 | 52,000 | ||||||
Accounting fees | 37,108 | 43,812 | ||||||
Sales commissions | 427 | 930 | ||||||
Other | 318 | 741 | ||||||
Total | $ | 98,074 | $ | 126,770 |
· | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; |
· | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and |
· | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. |
Name | Age | Positions with the Company | Director Since | Executive Officer Since | |||||
Tom Kubota | Chief Executive Officer, President and Chairman of the Board of Directors | Sept. 2000 | Sept. 2000 | ||||||
Fred Odaka | Chief Financial Officer and Secretary | Aug. 2008 | |||||||
David Wang | Independent Director | Nov. 2007 | |||||||
Thomas Iwanski | Independent Director | Nov. 2004 | |||||||
(i) Any Federal or State securities or commodities law or regulations; or (ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or | |
Name and Principal Position | Year | Salary ($) | Bonus ($) | All Other Compensation ($) | Total ($) | ||||||||||||||
Tom Kubota | 2009 | 117,600 | 10,000 | -0- | 127,600 | ||||||||||||||
Chief Executive Officer, | 2008 | 101,400 | 9,000 | -0- | 110,400 | ||||||||||||||
President and Director | |||||||||||||||||||
Doug Hikawa | 2009 | 80,794 | -0- | 25,814 | (1) | 106,608 | |||||||||||||
Former President, Medex | 2008 | 143,400 | 22,000 | 15,638 | (2) | 181,038 | |||||||||||||
Geri Plotzke | 2009 | 97,840 | -0- | 13,546 | (3) | 111,386 | |||||||||||||
Vice President, Medex | 2008 | 98,400 | 18,000 | 13,610 | (3) | 130,010 | |||||||||||||
Donald Balzano | 2009 | -0- | -0- | 128,784 | (4) | 128,784 | |||||||||||||
President, IRC | 2008 | -0- | -0- | 121,438 | (4) | 121,438 |
Name and Principal Position | Year | Salary ($) | Bonus ($) | All Other Compensation ($) | Total ($) | |||||||||||||
Tom Kubota | 2012 | 159,600 | 25,000 | 28,747 | (1) | 213,347 | ||||||||||||
Chief Executive Officer, | 2011 | 135,450 | -0- | 4,493 | (2) | 139,943 | ||||||||||||
President and Director, PHCO | ||||||||||||||||||
Fred Odaka | 2012 | 92,160 | 10,000 | 10,827 | (3) | 112,987 | ||||||||||||
Chief Financial Officer, PHCO | 2011 | 86,250 | 10,000 | 5,264 | (2) | 101,514 | ||||||||||||
Donald Balzano | 2012 | -0- | 10,000 | 146,567 | (4) | 156,567 | ||||||||||||
President, IRC and MLS | 2011 | -0- | 6,000 | 151,600 | (4) | 157,600 | ||||||||||||
David Kim | 2012 | 117,333 | 15,000 | 10,242 | (5) | 142,575 | ||||||||||||
Chief Operating Officer, | 2011 | 92,622 | 10,000 | 21,968 | (5) | 124,590 | ||||||||||||
Medex, MMC and MMM |
· | Mr. Kubota from $12,000 per month to $14,400 per month; |
· | Mr. Odaka from $7,200 per month to $8,640 per month; and |
· | Mr. Kim from $8,417 per month to $12,500 per month. This increase was in connection with his promotion to Chief Operating Officer of Medex, MMC and MMM effective September 1, 2012. |
· | Mr. Kubota - $25,000 |
· | Mr. Odaka - $10,000; |
· | Mr. Balzano - $10,000; and |
· | Mr. Kim - $15,000. |
Name | Fees Earned or Paid in Cash ($) | All Other Compensation($) | Total ($) | Fees Earned or Paid in Cash ($) | All Other Compensation($) | Total ($) | ||||||||||||||||||
Thomas Iwanski | 5,250 | (1) | 5,250 | 4,400 | (1) | 1,500 | (2) | 4,450 | ||||||||||||||||
David Wang | 4,400 | (1) | 1,500 | (2) | 4,450 | |||||||||||||||||||
Tom Kubota | 0 | 127,600 | (2) | 127,600 | 4,400 | (1) | 208,947 | (3) | 213,347 | |||||||||||||||
David Wang | 4,300 | (3) | 4,300 |
Type of Security | Name and Address | Amount & Nature of Beneficial Ownership | % of Class | Name and Address | Amount & Nature of Beneficial Ownership | % of Class | ||||||||||||||
Common | Tom Kubota (1) (2) 1201 Dove Street, Suite 585 Newport Beach, CA 92660 | 455,456 | 56.8 | % | Tom Kubota(1)(2) | 474,944 | 59.2 | % | ||||||||||||
1201 Dove Street, Suite 300 | ||||||||||||||||||||
Common | Fred Odaka(1) 1201 Dove Street, Suite 585 Newport Beach, CA 92660 | - | * | |||||||||||||||||
Newport Beach, CA 92660 | ||||||||||||||||||||
Common | David Wang (1) 138 Ocean Way Santa Monica, CA 90402 | - | * | Fred Odaka(1) | -0- | * | ||||||||||||||
1201 Dove Street, Suite 300 | ||||||||||||||||||||
Common | Nanko Investments, Inc. (2) 1280 Bison, Suite B9-596 Newport Beach, CA 92660 | 432,626 | 53.9 | % | ||||||||||||||||
Newport Beach, CA 92660 | ||||||||||||||||||||
Common | Donald P. Balzano (3) 5422 Michelle Drive Torrance, CA 90503 | 54,165 | 6.8 | % | Thomas Iwanksi(1) | -0- | * | |||||||||||||
1551 Bullard Lane | ||||||||||||||||||||
Santa Ana, CA 92705 | ||||||||||||||||||||
Common | Janet Zand 1505 Rockcliff Road Austin, TX 78796 | 54,165 | 6.8 | % | David Wang(1) | -0- | * | |||||||||||||
138 Ocean Way | ||||||||||||||||||||
Santa Monica, CA 90402 | ||||||||||||||||||||
Common | Donald P. Balzano(1) (3) | 54,165 | 6.8 | % | ||||||||||||||||
5422 Michelle Drive | ||||||||||||||||||||
Torrance, CA 90503 | ||||||||||||||||||||
Common | David Kim(1) | -0- | * | |||||||||||||||||
1201 Dove Street, Suite 300 | ||||||||||||||||||||
Newport Beach, CA 92660 | ||||||||||||||||||||
Common | Nanko Investments, Inc.(2) | 432,626 | 53.9 | % | ||||||||||||||||
1280 Bison, Suite B9-596 | ||||||||||||||||||||
Newport Beach, CA 92660 | ||||||||||||||||||||
Common | Janet Zand | 54,165 | 6.8 | % | ||||||||||||||||
1505 Rockcliff Road | ||||||||||||||||||||
Austin, TX 78796 | ||||||||||||||||||||
Common | Ronald A. Zlatniski | 49,843 | 6.2 | % | ||||||||||||||||
4206 Cypress Grove Lane | ||||||||||||||||||||
Greensboro, NC 27455 | ||||||||||||||||||||
All executive officers and directors as a group (4 persons) | All executive officers and directors as a group (4 persons) | 455,456 | 56.8 | % | All executive officers and directors as a group (4 persons) | 529,109 | 65.9 | % | ||||||||||||
TOTAL | 563,786 | 70.3 | % | |||||||||||||||||
TOTAL | 633,117 | 78.9 | % |
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders | 0 | $ | 0.00 | 95,750 | ||||||||
Equity compensation plans not approved by security holders | 0 | $ | 0.00 | -0- | ||||||||
Total | 0 | $ | 0.00 | 95,750 |
2012 | 2011 | |||||||||||||||
2009 | 2008 | |||||||||||||||
Audit | $ | 46,832 | $ | 35,193 | $ | 50,257 | $ | 43,043 | ||||||||
Audit related | -0- | -0- | -0- | -0- | ||||||||||||
Tax | -0- | 4,000 | -0- | -0- | ||||||||||||
All other | 893 | 870 | -0- | -0- | ||||||||||||
Total | $ | 47,725 | $ | 46,184 | $ | 50,257 | $ | 43,043 |
Exhibit No. | Exhibit Description | ||
3.1 | Articles of Incorporation and Amendments | ||
3.2 | Bylaws(1) | ||
3.3 | Bylaws(2) | ||
3.4 | Articles of Amendment to Articles of Incorporation to effect 1 share for 50 shares reverse split(3) | ||
3.5 | Articles of Amendment to Articles of Incorporation to effect 2.5 shares for 1 share forward split(3) | ||
4.1 | Pacific Health Care Organization, Inc., 2002 Stock Option Plan(1)+ | ||
4.2 | Pacific Health Care Organization, Inc., 2005 Stock Option Plan(4)+ | ||
10.1 | |||
10.2 | |||
10.3 | |||
14.1 | Code of Ethics(5) | ||
21.1 | |||
31.1 | |||
31.2 | |||
32.1 | |||
32.2 | |||
101.INS | XBRL Instance Document* | ||
101.SCH | XBRL Taxonomy Extension Schema Document* | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document* | ||
101.DEF | XBRL Taxonomy Definition Linkbase Document* | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document* | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document* |
(1) | Incorporated by reference to Registrant’s Registration Statement on Form 10-SB as filed with the Commission on September 19, 2002. |
(2) | Incorporated by reference to Registrant’s Registration Statement on Form 10-SB/A-2 as filed with the Commission on July 13, 2004. |
(3) | Incorporated by reference to Registrant’s Proxy Statement on Schedule 14A as filed with the Commission on May 15, 2008. |
(4) | Incorporated by reference to Registrant’s Proxy Statement on Schedule 14A as filed with the Commission on October 21, 2005. |
(5) | Incorporated by reference to Registrant’s Annual Report on Form 10-KSB as filed with the Commission on April 17, 2007. |
PACIFIC HEALTH CARE ORGANIZATION, INC. | |||
Signatures | Title | Date | ||
Chief Executive Officer, Presidentand Director | ||||
Tom Kubota | ||||
Chief Financial Officer | ||||
Fred U. Odaka | ||||
Director | ||||
Thomas Iwanski | ||||
Director | ||||
David Wang |