Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 16, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | PACIFIC HEALTH CARE ORGANIZATION INC | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 800,136 | ||
Entity Public Float | $17,592,400 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1138476 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets | ||
Cash | $2,946,025 | $1,265,535 |
Accounts receivable, net of allowance of $40,510 and $15,860 | 1,868,181 | 1,518,813 |
Prepaid income tax | 2,703 | 6,568 |
Deferred tax assets | 77,059 | 41,513 |
Prepaid expenses | 77,278 | 68,613 |
Total current assets | 4,971,246 | 2,901,042 |
Property and Equipment, net | ||
Computer equipment | 222,240 | 130,717 |
Furniture and fixtures | 92,191 | 83,708 |
Office equipment | 27,160 | 26,560 |
Office equipment under capital lease | 63,923 | 63,923 |
Total property and equipment | 405,514 | 304,908 |
Less: accumulated depreciation and amortization | -226,329 | -177,158 |
Net property and equipment | 179,185 | 127,750 |
Other assets | 8,158 | 8,158 |
Total assets | 5,158,589 | 3,036,950 |
Current Liabilities | ||
Accounts payable | 240,214 | 108,496 |
Accrued expenses | 261,510 | 142,983 |
Income tax payable | 9,348 | 2,618 |
Current obligations under capital lease | 8,151 | 13,173 |
Deferred rent expense | 14,332 | 21,698 |
Total current liabilities | 533,555 | 288,968 |
Long term liabilities | ||
Noncurrent obligation under capital lease | 0 | 8,151 |
Total liabilities | 533,555 | 297,119 |
Commitments and Contingencies | ||
Shareholder's Equity | ||
Preferred stock; 5,000,000 shares authorized at $0.001 par value; zero shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value, 50,000,000 shares authorized at December 31, 2014 and 2013; 802,424 shares issued (800,396 outstanding net of treasury shares) and 802,424 issued and outstanding, respectively | 800 | 802 |
Additional paid-in capital | 623,631 | 623,629 |
Treasury stock at cost (2,028 shares and zero shares at December 31, 2014 and 2013, respectively) | -76,715 | 0 |
Retained earnings | 4,077,318 | 2,115,400 |
Total stockholders’ equity | 4,625,034 | 2,739,831 |
Total liabilities and stockholders' equity | $5,158,589 | $3,036,950 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts receivable, allowance (in Dollars) | $40,510 | $15,860 |
Preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 802,424 | 802,424 |
Common stock, shares outstanding | 800,396 | 802,424 |
Treasury stock, shares | 2,028 | 0 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | ||
HCO fees | $1,050,028 | $906,974 |
MPN fees | 1,095,988 | 875,218 |
UR fees | 4,160,388 | 2,059,234 |
MBR fees | 1,821,593 | 1,424,617 |
NCM fees | 987,945 | 1,107,125 |
Other | 347,053 | 199,938 |
Total revenues | 9,462,995 | 6,573,106 |
Expenses | ||
Depreciation | 49,171 | 43,585 |
Bad debt provision | 58,856 | 17,500 |
Consulting fees | 324,250 | 344,181 |
Salaries and wages | 2,526,848 | 2,083,853 |
Professional fees | 442,064 | 449,736 |
Insurance | 308,308 | 255,859 |
Outsource service fees | 1,791,296 | 759,243 |
Data maintenance | 87,184 | 88,475 |
General and administrative | 577,413 | 474,869 |
Total expenses | 6,165,390 | 4,517,301 |
Income from operations | 3,297,605 | 2,055,805 |
Other expense | ||
Interest expense | 1,149 | 1,909 |
Total other expense | 1,149 | 1,909 |
Income before income tax provision | 3,296,456 | 2,053,896 |
Income tax provision | 1,334,538 | 821,319 |
Net income | $1,961,918 | $1,232,577 |
Basic and fully diluted earnings per share: | ||
Earnings per share amount (in Dollars per share) | $2.45 | $1.54 |
Weighted average common shares outstanding (in Shares) | 800,396 | 802,424 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2012 | $0 | $802 | $623,629 | $0 | $882,823 | $1,507,254 |
Balance (in Shares) at Dec. 31, 2012 | 0 | 802,424 | 0 | |||
Net income | 1,232,577 | 1,232,577 | ||||
Balance at Dec. 31, 2013 | 0 | 802 | 623,629 | 0 | 2,115,400 | 2,739,831 |
Balance (in Shares) at Dec. 31, 2013 | 0 | 802,424 | 0 | |||
Purchase of treasury stock | -2 | 2 | -76,715 | -76,715 | ||
Purchase of treasury stock (in Shares) | -2,028 | 2,028 | ||||
Net income | 1,961,918 | 1,961,918 | ||||
Balance at Dec. 31, 2014 | $0 | $800 | $623,631 | ($76,715) | $4,077,318 | $4,625,034 |
Balance (in Shares) at Dec. 31, 2014 | 0 | 800,396 | 2,028 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities | ||
Net income | $1,961,918 | $1,232,577 |
Adjustments to reconcile net income to net cash: | ||
Depreciation | 49,171 | 43,585 |
Changes in operating assets and liabilities: | ||
Increase in bad debt provision | 24,650 | 0 |
(Increase) in accounts receivable | -374,018 | -186,314 |
Increase in prepaid income tax | 3,865 | 0 |
Decrease in receivable – other | 0 | 7,344 |
(Increase) in income tax receivable | 0 | -6,568 |
(Increase) in deferred tax assets | -35,546 | -41,513 |
(Increase) in prepaid expenses | -8,665 | -15,625 |
Increase (decrease) in accounts payable | 131,718 | -12,291 |
Increase in accrued expenses | 118,527 | 44,909 |
Increase (decrease) in income tax payable | 6,730 | -246,544 |
(Decrease) in deferred rent expense | -7,366 | -3,253 |
(Decrease) in deferred tax liabilities | 0 | -5,659 |
(Decrease) in unearned revenue | 0 | -2,443 |
Net cash provided by operating activities | 1,870,984 | 808,205 |
Cash Flows from Investing Activities | ||
Purchase of furniture and equipment | -100,606 | -3,050 |
Net cash used by investing activities | -100,606 | -3,050 |
Cash Flows from Financing Activities | ||
Purchase of treasury stock | -76,715 | 0 |
Payment of obligations under capital lease | -13,173 | -19,294 |
Net cash used in financing activities | -89,888 | -19,294 |
Increase in cash | 1,680,490 | 785,861 |
Cash at beginning of period | 1,265,535 | 479,674 |
Cash at end of period | 2,946,025 | 1,265,535 |
Cash paid for: | ||
Interest | 1,154 | 2,997 |
Income taxes paid | $1,364,134 | $1,121,502 |
NOTE_1_CORPORATE_HISTORY
NOTE 1 - CORPORATE HISTORY | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 – CORPORATE HISTORY |
Pacific Health Care Organization, Inc. (the “Company”) is a specialty workers’ compensation managed care company providing a range of services for California employers and claims administrators. The Company was incorporated under the laws of the state of Utah in April 1970 under the name Clear Air, Inc. The Company changed its name to Pacific Health Care Organization, Inc., in January 2001. In February 2001 the Company acquired Medex Healthcare, Inc. (“Medex”), a California corporation organized in March 1994 in a share for share exchange. Medex is a wholly-owned subsidiary of the Company. Medex is in the business of managing and administering both Health Care Organizations (“HCOs”) and Managed Provider Networks (”MPNs”) in the state of California. In August 2001 we formed Industrial Resolutions Coalition, Inc. (“IRC”) (f/k/a Workers Compensation Assistance, Inc.), a California corporation, as a wholly-owned subsidiary of PHCO. IRC oversees and manages the Company’s Workers’ Compensation Carve-Outs services. In June 2010, the Company acquired Medex Legal Support, Inc. (“MLS”) (f/k/a Arissa Managed Care, Inc.), a Nevada corporation incorporated in September 2009. MLS offers lien representation services. In February 2012 we incorporated Medex Medical Management, Inc., (“MMM”) in the state of Nevada, as a wholly owned subsidiary of the Company. MMM is responsible for overseeing and managing nurse case management services. In March 16, 2011 we incorporated Medex Managed Care, Inc. (“MMC”) in the state of Nevada, as a wholly owned subsidiary of the Company. MMC oversees and manages the Company’s utilization review and managed bill review services. | |
NOTE_2_SIGNIFICANT_ACCOUNTING_
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Significant Accounting Policies [Text Block] | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES | ||||||||
A. Basis of Accounting | |||||||||
The Company used the accrual method of accounting for the periods ended December 31, 2014 and 2013. | |||||||||
B. Revenue Recognition | |||||||||
In general, the Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the fee is fixed or determinable and (iv) collectability is reasonably assured. Revenues are generated as services are provided to the customer based on the sales price agreed and collected. The Company recognizes revenue as the time is worked or as units of production are completed, which is when the revenue is earned and realized. Labor costs are recognized as the costs are incurred. The Company derives its revenue from the sale of Managed Care Services, Review Services and Case Management Services. These services may be sold individually or in combination. When a sale combines multiple elements, the Company accounts for multiple-deliverable revenue arrangements in accordance with the guidance included in Financial Accounting Standards Board (“FASB”) ASC 605-25, the services, however, are typically billed as separate components in accordance with the customer’s service agreement. | |||||||||
These fees include monthly administration fees, claim network fees, flat rate fees or hourly fees depending on the agreement with the client. Such revenue is recognized at the end of each month for which services are performed. | |||||||||
Management reviews each agreement in accordance with the provision of the revenue recognition topic ASC 605 that addresses multiple-deliverable revenue arrangements. The multiple-deliverable arrangements entered into consist of bundled managed care which included various units of accounting such as network solutions and patient management which includes managed care. Such elements are considered separate units of accounting due to each element having value to the customer on a stand-alone basis. The selling price for each unit of accounting is determined using the contract price. When the Company’s customers purchase several products the pricing of the products sold is generally the same as if the products were sold on an individual basis. Revenue is recognized as the work is performed in accordance with the Company’s customer contracts. Based upon the nature of the Company’s products, bundled managed care elements are generally delivered in the same accounting period. The Company recognizes revenue for patient management services ratably over the life of the customer contract. Based upon prior experience in managed care, the Company estimates the deferral amount from when the customer’s claim is received to when the customer contract expires. Advance payments from subscribers and billings made in advance are recorded on the balance sheet as deferred revenue. | |||||||||
C. Cash Equivalents | |||||||||
The Company considers all short term, highly liquid investments that are readily convertible, within three months, to known amounts as cash equivalents. The Company currently has no cash equivalents. | |||||||||
D. Concentrations of Credit Risk | |||||||||
Financial instruments that potentially subject the Company to concentrations of credit risks consist of cash and cash equivalents. The Company places its cash and cash equivalents at well-known, quality financial institutions. At times, such cash and investments may be in excess of the FDIC insurance limit. | |||||||||
E. Earnings (Per Share of Common Stock) | |||||||||
The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the consolidated financial statements. | |||||||||
For the Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Basic Earnings per share: | |||||||||
Income (numerator) | $ | 1,961,918 | $ | 1,232,577 | |||||
Shares (denominator) | 800,396 | 802,424 | |||||||
Per share amount | $ | 2.45 | $ | 1.54 | |||||
Fully Diluted Earnings per share: | |||||||||
Income (numerator) | $ | 1,961,918 | $ | 1,232,577 | |||||
Shares (denominator) | 800,396 | 802,424 | |||||||
Per share amount | $ | 2.45 | $ | 1.54 | |||||
F. Depreciation | |||||||||
The cost of property and equipment is depreciated over the estimated useful lives of the related assets. The cost of leasehold improvements is depreciated over the lesser of the length of the lease of the related assets for the estimated lives of the assets. Depreciation is computed on the straight line method. | |||||||||
G. Use of Estimates | |||||||||
The preparation of the 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 amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimates include the values assigned to the allowance for doubtful accounts and accruals for income taxes. | |||||||||
H. Principles of Consolidation | |||||||||
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. | |||||||||
I. Fair Value of Financial Instruments | |||||||||
The Company applies ASC 820, “Fair Value Measurements.” This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows: | |||||||||
• | 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. | ||||||||
The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. | |||||||||
J. General and Administrative Expenses | |||||||||
General and administrative expenses include fees for office space and supplies, dues and subscriptions, IT and internet expenses, postage and delivery expenses, rent equipment, telephone, compensated absences, miscellaneous expense, travel expenses and entertainment costs. | |||||||||
K. Income Taxes | |||||||||
The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are provided based on the difference between the financial statements and tax basis of assets and liabilities measured by the currently enacted tax rates in effect for the years in which these differences are expected to reverse. Deferred tax expense or benefit is the result of changes in deferred tax assets and liabilities. | |||||||||
L. Capital Structure | |||||||||
The Company has two classes of stock. Preferred stock, 5,000,000 shares authorized, zero issued and outstanding. Voting rights and liquidation preferences have not been determined. The Company also has voting common stock of 50,000,000 shares authorized at December 31, 2014 and 2013, with 802,424 shares issued and 800,396 outstanding net of treasury shares and 802,424 issued and outstanding, respectively. The Company recorded 2,028 shares treasury stock at cost in December 2014 and had no treasury shares at December 31, 2013. No dividends were paid in either 2014 or 2013, or in any prior years. | |||||||||
Treasury stock is accounted for by the cost method, whereby shares of common stock reacquired are recorded at their purchase price. When treasury stock is re-issued at a higher price than its cost, the difference is recorded as a component of additional paid-in capital to the extent that there are gains to offset the losses. If there are no treasury stock gains in additional paid-in capital, the losses are recorded as a component of accumulated deficit. | |||||||||
M. Stock Based Compensation | |||||||||
The Company has adopted the fair value method of accounting for stock-based employee compensation in accordance with statement of ASC Topic 718, “Compensation – Stock Compensation” which requires that equity-based payments (to the extent they are compensatory) be recognized in our consolidated statements of operations based on their fair value. | |||||||||
N. Trade Receivables | |||||||||
The Company in the normal course of business extends credit to its customers on a short-term basis. Although the credit risk associated with these customers is minimal, the Company routinely reviews its accounts receivable balances and makes provisions for doubtful accounts. The Company ages its receivables by date of invoice. Management reviews bad debt reserves quarterly and reserves specific accounts as warranted or sets up a general reserve based on amounts over 90 days past due. When an account is deemed uncollectible, the Company charges off the receivable against the bad debt reserve. A considerable amount of judgment is required in assessing the realization of these receivables including the current creditworthiness of each customer and related aging of the past-due balances, including any billing disputes. In order to assess the collectibility of these receivables, the Company performs ongoing credit evaluations of its customers’ financial condition. Through these evaluations, the Company may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The allowance for doubtful accounts is based on the best information available to the Company and is reevaluated and adjusted as additional information is received. The Company evaluates the allowance based on historical write-off experience, the size of the individual customer balances, past-due amounts and the overall national economy. At fiscal year ended 2014 and 2013, the Company’s bad debt reserve of $40,510 and $15,860, respectively as a general reserve for certain balances over 90 days past due and for accounts that are potentially uncollectible. | |||||||||
The percentages of the amounts due from major customers to total accounts receivable as of December 31, 2014 and 2013 are as follows: | |||||||||
12/31/14 | 12/31/13 | ||||||||
Customer A | 25 | % | 27% | ||||||
Customer B | 8 | % | 12% | ||||||
Customer C | 22 | % | 19% | ||||||
Customer D | 11 | % | -% | ||||||
O. Significant Customers | |||||||||
We provide services to insurers, third party administrators, self-administered employers, municipalities and other industries. We are able to provide our full range of services to virtually any size employer in the state of California. We are also able to provide UR, MBR and NCM services outside the state of California. During 2014, AmTrust North America, Companion Property & Casualty Insurance Co and Prime Health Services, Inc. accounted for approximately 19%, 13% and 13%, respectively, of our total sales. During 2013, AmTrust North America and Companion Property & Casualty Insurance Co. accounted for approximately 14% and 13%, respectively, of our total sales. | |||||||||
P. Reclassifications | |||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications have had no effect on the financial position, operations or cash flows for the period ended December 31, 2014. | |||||||||
Q. Subsequent Events | |||||||||
In accordance with ASC 855-10 Company management reviewed all material events through the date of issuance and there are no material subsequent events to report. | |||||||||
NOTE_3_RECENTLY_ISSUED_ACCOUNT
NOTE 3 - RECENTLY ISSUED ACCOUNTING STANDARDS | 12 Months Ended |
Dec. 31, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | NOTE 3 – RECENTLY ISSUED ACCOUNTING STANDARDS |
In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers. The amendments in ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605 Revenue Recognition and most industry-specific guidance, and creates a Topic 606 Revenue from Contracts with Customers. | |
The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: | |
Step 1: Identify the contract(s) 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. | |
ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. We have not yet determined how our financial statements will be affected by the adoption of ASU 2014-09. | |
NOTE_4_FIXED_ASSETS
NOTE 4 - FIXED ASSETS | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] | NOTE 4 – FIXED ASSETS | ||||||||||||||||||||||||
The Company capitalizes the purchase of equipment and fixtures for major purchases in excess of $1,000 per item. Capitalized amounts are depreciated over the useful life of the assets using the straight line method of depreciation which is 3 and 7 years for the office equipment, and furniture and fixtures, respectively. Scheduled below are the assets, costs and accumulated depreciation at December 31, 2014 and 2013. | |||||||||||||||||||||||||
Cost | Depreciation Expense | Accumulated Depreciation | |||||||||||||||||||||||
and Amortization | and Amortization | ||||||||||||||||||||||||
Assets | 31-Dec-14 | 31-Dec-13 | 31-Dec-14 | 31-Dec-13 | 31-Dec-14 | 31-Dec-13 | |||||||||||||||||||
Computer equipment | $ | 222,240 | $ | 130,717 | $ | 18,506 | $ | 13,581 | $ | 102,635 | $ | 84,129 | |||||||||||||
Furniture and fixtures | 96,264 | 87,781 | 12,638 | 11,979 | 66,518 | 53,880 | |||||||||||||||||||
Disposal of furniture | (4,073 | ) | (4,073 | ) | - | - | (1,309 | ) | (1,309 | ) | |||||||||||||||
Office equipment | 27,160 | 26,560 | 5,242 | 5,242 | 16,311 | 11,069 | |||||||||||||||||||
Office equipment under capital lease | 63,923 | 63,923 | 12,785 | 12,783 | 42,174 | 29,389 | |||||||||||||||||||
Totals | $ | 405,514 | $ | 304,908 | $ | 49,171 | $ | 43,585 | $ | 226,329 | $ | 177,158 | |||||||||||||
NOTE_5_INCOME_TAXES
NOTE 5 - INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income Tax Disclosure [Text Block] | NOTE 5 – INCOME TAXES | ||||||||
The Company accounts for corporate income taxes in accordance with FASB ASC 740-10 “Income Taxes.” FASB ASC 740-10 requires an asset and liability approach for financial accounting and reporting for income tax purposes. | |||||||||
The tax provision for the year-ended December 31, 2014 and the year ended December 31, 2013 consisted of the following: | |||||||||
2014 | 2013 | ||||||||
Current | |||||||||
Federal | $ | 1,070,120 | $ | 682,752 | |||||
State | 299,964 | 185,739 | |||||||
Deferred | |||||||||
Federal | (35,505 | ) | (42,896 | ) | |||||
State | (41 | ) | (4,276 | ) | |||||
Total tax provision | $ | 1,334,538 | $ | 821,319 | |||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s total deferred tax liabilities, deferred tax assets, and deferred tax asset valuation allowances at December 31, 2014 and December 31, 2013 are as follows: | |||||||||
2014 | 2013 | ||||||||
Depreciation | |||||||||
Federal | $ | (43,845 | ) | $ | (38,918 | ) | |||
State | (12,545 | ) | (11,136 | ) | |||||
Reserve for bad debts | |||||||||
Federal | 12,248 | 4,917 | |||||||
State | 3,531 | 1,433 | |||||||
State tax deductions | 92,989 | 57,629 | |||||||
Compensated absences accrual | |||||||||
Federal | 19,191 | 21,450 | |||||||
State | 5,490 | 6,138 | |||||||
Deferred tax asset | $ | 77,059 | $ | 41,513 | |||||
The reconciliation of income tax computed at statutory rates of income tax benefits is as follows: | |||||||||
2014 | 2013 | ||||||||
Expense at federal statutory rate of 34% | $ | 1,120,795 | $ | 697,917 | |||||
State tax effects | 197,949 | 119,872 | |||||||
Non-deductible expenses | 13,175 | 12,397 | |||||||
Effects of rate change | - | (491 | ) | ||||||
Other differences | 2,619 | (8,376 | ) | ||||||
Income tax provision | $ | 1,334,538 | $ | 821,319 | |||||
The FASB has issued ASC 740-10 (Prior authoritative literature: Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48)).” ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740-10. | |||||||||
The Company follows the interpretations of the FASB, which establish a single model to address accounting for uncertain tax positions. The interpretations clarify the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements and also provide guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. | |||||||||
The Company takes a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon effective settlement. The Company re-evaluates its income tax positions on a quarterly basis to consider factors such as changes in facts or circumstances, changes in or interpretations of tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in recognition of a tax benefit or an additional charge to the tax provision. Interest and penalties on unrecognized tax benefits are classified as income tax expense. | |||||||||
The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of December 31, 2014, the Company had no accrued interest or penalties. The years 2011, 2012 and 2013 are still open for examination by the Internal Revenue Service. | |||||||||
NOTE_6_CONTRACTUAL_COMMITMENTS
NOTE 6 - CONTRACTUAL COMMITMENTS | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] | NOTE 6 – CONTRACTUAL COMMITMENTS | ||||||||||||||||||||
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 a capital interest rate of 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 a capital interest rate of 7.5%. | |||||||||||||||||||||
In October 2013 we entered into a 36 month lease for an office copy machine with monthly payments at $160.93. In December 2013 we leased two document scanners with monthly lease payments of $206.93 each for 36 months. | |||||||||||||||||||||
The Company’s principal executive offices are located at 1201 Dove Street, Suites 300 and 375, in Newport Beach, California, where it leases approximately 6,740 square feet of office space. The Company’s lease runs through February 29, 2016. This space also serves as the principal offices of our operating subsidiaries, Medex, IRC, MLS, MMM and MMC. Following is our base annual rent payment schedule for the office space. | |||||||||||||||||||||
Rent Period | Annual Rent Payments | ||||||||||||||||||||
Jan. 1 to Dec. 31, 2015 | $ | 148,851 | |||||||||||||||||||
Jan. 1 to Feb. 29, 2016 | $ | 24,914 | |||||||||||||||||||
Total | $ | 173,765 | |||||||||||||||||||
Rent expense for office space for the years ended December 31, 2014 and December 31, 2013 was $144,508 and $143,406, respectively. | |||||||||||||||||||||
Summary of Material Contractual Commitments as of December 31, 2014 | |||||||||||||||||||||
Payments Due By Period | |||||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||||
Operating Leases: | |||||||||||||||||||||
Operating Leases – Equipment | $ | 35,934 | $ | 18,415 | $ | 17,519 | $ | - | $ | - | |||||||||||
Office Leases | 173,765 | 148,851 | 24,914 | - | - | ||||||||||||||||
Total Operating Leases | $ | 209,699 | $ | 167,266 | $ | 42,433 | $ | - | $ | - | |||||||||||
Capitalized Leases: | |||||||||||||||||||||
Capitalized Equipment Leases | $ | 8,356 | $ | 8,356 | $ | - | $ | - | $ | - | |||||||||||
Total Capitalized Equipment Leases | 8,356 | 8,356 | - | - | - | ||||||||||||||||
Less Amounts Representing Interest | (205 | ) | (205 | ) | - | - | - | ||||||||||||||
Total Principal | $ | 8,151 | $ | 8,151 | $ | - | $ | - | $ | - | |||||||||||
NOTE_7_ACCRUED_AND_OTHER_LIABI
NOTE 7 - ACCRUED AND OTHER LIABILITIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Text Block Supplement [Abstract] | |||||||||
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | NOTE 7 – ACCRUED AND OTHER LIABILITIES | ||||||||
Accrued liabilities consist of the following: | |||||||||
2014 | 2013 | ||||||||
Customer overpayment of accounts receivables | $ | 73 | $ | 1,109 | |||||
Compensated absences | 145,576 | 69,195 | |||||||
Legal fees | 14,805 | 31,700 | |||||||
Accounting fees | 27,627 | 18,862 | |||||||
Sales commissions | 33,866 | 15,658 | |||||||
Bonus | 40,000 | 5,000 | |||||||
Other | (437 | ) | 1,459 | ||||||
Total | $ | 261,510 | $ | 142,983 | |||||
NOTE_8_OPTIONS_FOR_PURCHASE_OF
NOTE 8 - OPTIONS FOR PURCHASE OF COMMON STOCK | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Text Block Supplement [Abstract] | |
Shareholders' Equity and Share-based Payments [Text Block] | NOTE 8 – OPTIONS FOR PURCHASE OF COMMON STOCK |
2002 Stock Option Plan | |
In August 2002, the Company adopted the PHCO 2002 Stock Option Plan (the “2002 Plan”). The 2002 Plan provides for the grant of options to officers, consultants and employees to acquire shares of the Company’s common stock at a purchase price equal to or greater than fair market value as of the date of the grant. Options are exercisable six months after the grant date and expire five years from the grant date. The 2002 Plan calls for a total of 50,000 shares to be held for grant. Options to purchase 4,250 common shares were granted in August 2002. Options to purchase 938 common shares were exercised; the balance of the outstanding options expired unexercised in August 2007. No securities were awarded under the 2002 Plan in 2014 or 2013. | |
2005 Stock Option Plan | |
In November 2005, at the annual meeting of stockholders of the Company, the Company and its shareholders adopted the Pacific Health Care Organization, Inc., 2005 Stock Option Plan (the “2005 Plan”). The 2005 Plan provides for the grant of Company securities, including options, warrants and restricted stock to officers, directors, consultants and employees to acquire shares of the Company’s common stock at a purchase price equal to or greater than fair market value as of the date of the grant. Options are exercisable six months after the grant date and expire five years from the grant date. The 2005 Plan permits the granting of up to 50,000 common shares of the Company. To date, no securities have been granted under the 2005 Plan. | |
NOTE_9_LITIGATION
NOTE 9 - LITIGATION | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Text Block Supplement [Abstract] | |
Legal Matters and Contingencies [Text Block] | NOTE 9 – LITIGATION |
From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in such matters may arise from time to time that may harm the Company’s business. To the knowledge of management, there is no material litigation or governmental agency proceeding pending or threatened against the Company or any of its subsidiaries. Further, the Company is not aware of any material proceeding to which any director, member of senior management or affiliate of the Company, or any associate of any of them is a party adverse to or has a material interest adverse to the Company or any of its subsidiaries. | |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of Accounting, Policy [Policy Text Block] | A. Basis of Accounting | ||||||||
The Company used the accrual method of accounting for the periods ended December 31, 2014 and 2013. | |||||||||
Revenue Recognition, Policy [Policy Text Block] | B. Revenue Recognition | ||||||||
In general, the Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the fee is fixed or determinable and (iv) collectability is reasonably assured. Revenues are generated as services are provided to the customer based on the sales price agreed and collected. The Company recognizes revenue as the time is worked or as units of production are completed, which is when the revenue is earned and realized. Labor costs are recognized as the costs are incurred. The Company derives its revenue from the sale of Managed Care Services, Review Services and Case Management Services. These services may be sold individually or in combination. When a sale combines multiple elements, the Company accounts for multiple-deliverable revenue arrangements in accordance with the guidance included in Financial Accounting Standards Board (“FASB”) ASC 605-25, the services, however, are typically billed as separate components in accordance with the customer’s service agreement. | |||||||||
These fees include monthly administration fees, claim network fees, flat rate fees or hourly fees depending on the agreement with the client. Such revenue is recognized at the end of each month for which services are performed. | |||||||||
Management reviews each agreement in accordance with the provision of the revenue recognition topic ASC 605 that addresses multiple-deliverable revenue arrangements. The multiple-deliverable arrangements entered into consist of bundled managed care which included various units of accounting such as network solutions and patient management which includes managed care. Such elements are considered separate units of accounting due to each element having value to the customer on a stand-alone basis. The selling price for each unit of accounting is determined using the contract price. When the Company’s customers purchase several products the pricing of the products sold is generally the same as if the products were sold on an individual basis. Revenue is recognized as the work is performed in accordance with the Company’s customer contracts. Based upon the nature of the Company’s products, bundled managed care elements are generally delivered in the same accounting period. The Company recognizes revenue for patient management services ratably over the life of the customer contract. Based upon prior experience in managed care, the Company estimates the deferral amount from when the customer’s claim is received to when the customer contract expires. Advance payments from subscribers and billings made in advance are recorded on the balance sheet as deferred revenue. | |||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | C. Cash Equivalents | ||||||||
The Company considers all short term, highly liquid investments that are readily convertible, within three months, to known amounts as cash equivalents. The Company currently has no cash equivalents. | |||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | D. Concentrations of Credit Risk | ||||||||
Financial instruments that potentially subject the Company to concentrations of credit risks consist of cash and cash equivalents. The Company places its cash and cash equivalents at well-known, quality financial institutions. At times, such cash and investments may be in excess of the FDIC insurance limit. | |||||||||
Earnings Per Share, Policy [Policy Text Block] | E. Earnings (Per Share of Common Stock) | ||||||||
The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the consolidated financial statements. | |||||||||
For the Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Basic Earnings per share: | |||||||||
Income (numerator) | $ | 1,961,918 | $ | 1,232,577 | |||||
Shares (denominator) | 800,396 | 802,424 | |||||||
Per share amount | $ | 2.45 | $ | 1.54 | |||||
Fully Diluted Earnings per share: | |||||||||
Income (numerator) | $ | 1,961,918 | $ | 1,232,577 | |||||
Shares (denominator) | 800,396 | 802,424 | |||||||
Per share amount | $ | 2.45 | $ | 1.54 | |||||
Depreciation, Depletion, and Amortization [Policy Text Block] | F. Depreciation | ||||||||
The cost of property and equipment is depreciated over the estimated useful lives of the related assets. The cost of leasehold improvements is depreciated over the lesser of the length of the lease of the related assets for the estimated lives of the assets. Depreciation is computed on the straight line method. | |||||||||
Use of Estimates, Policy [Policy Text Block] | G. Use of Estimates | ||||||||
The preparation of the 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 amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimates include the values assigned to the allowance for doubtful accounts and accruals for income taxes. | |||||||||
Consolidation, Policy [Policy Text Block] | H. Principles of Consolidation | ||||||||
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. | |||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | I. Fair Value of Financial Instruments | ||||||||
The Company applies ASC 820, “Fair Value Measurements.” This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows: | |||||||||
• | 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. | ||||||||
The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. | |||||||||
Selling, General and Administrative Expenses, Policy [Policy Text Block] | J. General and Administrative Expenses | ||||||||
General and administrative expenses include fees for office space and supplies, dues and subscriptions, IT and internet expenses, postage and delivery expenses, rent equipment, telephone, compensated absences, miscellaneous expense, travel expenses and entertainment costs. | |||||||||
Income Tax, Policy [Policy Text Block] | K. Income Taxes | ||||||||
The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are provided based on the difference between the financial statements and tax basis of assets and liabilities measured by the currently enacted tax rates in effect for the years in which these differences are expected to reverse. Deferred tax expense or benefit is the result of changes in deferred tax assets and liabilities. | |||||||||
Stockholders' Equity, Policy [Policy Text Block] | L. Capital Structure | ||||||||
The Company has two classes of stock. Preferred stock, 5,000,000 shares authorized, zero issued and outstanding. Voting rights and liquidation preferences have not been determined. The Company also has voting common stock of 50,000,000 shares authorized at December 31, 2014 and 2013, with 802,424 shares issued and 800,396 outstanding net of treasury shares and 802,424 issued and outstanding, respectively. The Company recorded 2,028 shares treasury stock at cost in December 2014 and had no treasury shares at December 31, 2013. No dividends were paid in either 2014 or 2013, or in any prior years. | |||||||||
Treasury stock is accounted for by the cost method, whereby shares of common stock reacquired are recorded at their purchase price. When treasury stock is re-issued at a higher price than its cost, the difference is recorded as a component of additional paid-in capital to the extent that there are gains to offset the losses. If there are no treasury stock gains in additional paid-in capital, the losses are recorded as a component of accumulated deficit. | |||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | M. Stock Based Compensation | ||||||||
The Company has adopted the fair value method of accounting for stock-based employee compensation in accordance with statement of ASC Topic 718, “Compensation – Stock Compensation” which requires that equity-based payments (to the extent they are compensatory) be recognized in our consolidated statements of operations based on their fair value. | |||||||||
Receivables, Policy [Policy Text Block] | N. Trade Receivables | ||||||||
The Company in the normal course of business extends credit to its customers on a short-term basis. Although the credit risk associated with these customers is minimal, the Company routinely reviews its accounts receivable balances and makes provisions for doubtful accounts. The Company ages its receivables by date of invoice. Management reviews bad debt reserves quarterly and reserves specific accounts as warranted or sets up a general reserve based on amounts over 90 days past due. When an account is deemed uncollectible, the Company charges off the receivable against the bad debt reserve. A considerable amount of judgment is required in assessing the realization of these receivables including the current creditworthiness of each customer and related aging of the past-due balances, including any billing disputes. In order to assess the collectibility of these receivables, the Company performs ongoing credit evaluations of its customers’ financial condition. Through these evaluations, the Company may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The allowance for doubtful accounts is based on the best information available to the Company and is reevaluated and adjusted as additional information is received. The Company evaluates the allowance based on historical write-off experience, the size of the individual customer balances, past-due amounts and the overall national economy. At fiscal year ended 2014 and 2013, the Company’s bad debt reserve of $40,510 and $15,860, respectively as a general reserve for certain balances over 90 days past due and for accounts that are potentially uncollectible. | |||||||||
The percentages of the amounts due from major customers to total accounts receivable as of December 31, 2014 and 2013 are as follows: | |||||||||
12/31/14 | 12/31/13 | ||||||||
Customer A | 25 | % | 27% | ||||||
Customer B | 8 | % | 12% | ||||||
Customer C | 22 | % | 19% | ||||||
Customer D | 11 | % | -% | ||||||
Concentration Risk, Customer Risk, Policy [Policy Text Block] | O. Significant Customers | ||||||||
We provide services to insurers, third party administrators, self-administered employers, municipalities and other industries. We are able to provide our full range of services to virtually any size employer in the state of California. We are also able to provide UR, MBR and NCM services outside the state of California. During 2014, AmTrust North America, Companion Property & Casualty Insurance Co and Prime Health Services, Inc. accounted for approximately 19%, 13% and 13%, respectively, of our total sales. During 2013, AmTrust North America and Companion Property & Casualty Insurance Co. accounted for approximately 14% and 13%, respectively, of our total sales. | |||||||||
Reclassification, Policy [Policy Text Block] | P. Reclassifications | ||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications have had no effect on the financial position, operations or cash flows for the period ended December 31, 2014. | |||||||||
Subsequent Events, Policy [Policy Text Block] | Q. Subsequent Events | ||||||||
In accordance with ASC 855-10 Company management reviewed all material events through the date of issuance and there are no material subsequent events to report. |
NOTE_2_SIGNIFICANT_ACCOUNTING_1
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Tables) [Line Items] | |||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the consolidated financial statements. | ||||||||
For the Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Basic Earnings per share: | |||||||||
Income (numerator) | $ | 1,961,918 | $ | 1,232,577 | |||||
Shares (denominator) | 800,396 | 802,424 | |||||||
Per share amount | $ | 2.45 | $ | 1.54 | |||||
Fully Diluted Earnings per share: | |||||||||
Income (numerator) | $ | 1,961,918 | $ | 1,232,577 | |||||
Shares (denominator) | 800,396 | 802,424 | |||||||
Per share amount | $ | 2.45 | $ | 1.54 | |||||
Credit Concentration Risk [Member] | |||||||||
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Tables) [Line Items] | |||||||||
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | The percentages of the amounts due from major customers to total accounts receivable as of December 31, 2014 and 2013 are as follows: | ||||||||
12/31/14 | 12/31/13 | ||||||||
Customer A | 25 | % | 27% | ||||||
Customer B | 8 | % | 12% | ||||||
Customer C | 22 | % | 19% | ||||||
Customer D | 11 | % | -% |
NOTE_4_FIXED_ASSETS_Tables
NOTE 4 - FIXED ASSETS (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] | Scheduled below are the assets, costs and accumulated depreciation at December 31, 2014 and 2013. | ||||||||||||||||||||||||
Cost | Depreciation Expense | Accumulated Depreciation | |||||||||||||||||||||||
and Amortization | and Amortization | ||||||||||||||||||||||||
Assets | 31-Dec-14 | 31-Dec-13 | 31-Dec-14 | 31-Dec-13 | 31-Dec-14 | 31-Dec-13 | |||||||||||||||||||
Computer equipment | $ | 222,240 | $ | 130,717 | $ | 18,506 | $ | 13,581 | $ | 102,635 | $ | 84,129 | |||||||||||||
Furniture and fixtures | 96,264 | 87,781 | 12,638 | 11,979 | 66,518 | 53,880 | |||||||||||||||||||
Disposal of furniture | (4,073 | ) | (4,073 | ) | - | - | (1,309 | ) | (1,309 | ) | |||||||||||||||
Office equipment | 27,160 | 26,560 | 5,242 | 5,242 | 16,311 | 11,069 | |||||||||||||||||||
Office equipment under capital lease | 63,923 | 63,923 | 12,785 | 12,783 | 42,174 | 29,389 | |||||||||||||||||||
Totals | $ | 405,514 | $ | 304,908 | $ | 49,171 | $ | 43,585 | $ | 226,329 | $ | 177,158 |
NOTE_5_INCOME_TAXES_Tables
NOTE 5 - INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The tax provision for the year-ended December 31, 2014 and the year ended December 31, 2013 consisted of the following: | ||||||||
2014 | 2013 | ||||||||
Current | |||||||||
Federal | $ | 1,070,120 | $ | 682,752 | |||||
State | 299,964 | 185,739 | |||||||
Deferred | |||||||||
Federal | (35,505 | ) | (42,896 | ) | |||||
State | (41 | ) | (4,276 | ) | |||||
Total tax provision | $ | 1,334,538 | $ | 821,319 | |||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The Company’s total deferred tax liabilities, deferred tax assets, and deferred tax asset valuation allowances at December 31, 2014 and December 31, 2013 are as follows: | ||||||||
2014 | 2013 | ||||||||
Depreciation | |||||||||
Federal | $ | (43,845 | ) | $ | (38,918 | ) | |||
State | (12,545 | ) | (11,136 | ) | |||||
Reserve for bad debts | |||||||||
Federal | 12,248 | 4,917 | |||||||
State | 3,531 | 1,433 | |||||||
State tax deductions | 92,989 | 57,629 | |||||||
Compensated absences accrual | |||||||||
Federal | 19,191 | 21,450 | |||||||
State | 5,490 | 6,138 | |||||||
Deferred tax asset | $ | 77,059 | $ | 41,513 | |||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The reconciliation of income tax computed at statutory rates of income tax benefits is as follows: | ||||||||
2014 | 2013 | ||||||||
Expense at federal statutory rate of 34% | $ | 1,120,795 | $ | 697,917 | |||||
State tax effects | 197,949 | 119,872 | |||||||
Non-deductible expenses | 13,175 | 12,397 | |||||||
Effects of rate change | - | (491 | ) | ||||||
Other differences | 2,619 | (8,376 | ) | ||||||
Income tax provision | $ | 1,334,538 | $ | 821,319 |
NOTE_6_CONTRACTUAL_COMMITMENTS1
NOTE 6 - CONTRACTUAL COMMITMENTS (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
NOTE 6 - CONTRACTUAL COMMITMENTS (Tables) [Line Items] | |||||||||||||||||||||
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | Capitalized Leases: | ||||||||||||||||||||
Capitalized Equipment Leases | $ | 8,356 | $ | 8,356 | $ | - | $ | - | $ | - | |||||||||||
Total Capitalized Equipment Leases | 8,356 | 8,356 | - | - | - | ||||||||||||||||
Less Amounts Representing Interest | (205 | ) | (205 | ) | - | - | - | ||||||||||||||
Total Principal | $ | 8,151 | $ | 8,151 | $ | - | $ | - | $ | - | |||||||||||
Building [Member] | |||||||||||||||||||||
NOTE 6 - CONTRACTUAL COMMITMENTS (Tables) [Line Items] | |||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Following is our base annual rent payment schedule for the office space. | ||||||||||||||||||||
Rent Period | Annual Rent Payments | ||||||||||||||||||||
Jan. 1 to Dec. 31, 2015 | $ | 148,851 | |||||||||||||||||||
Jan. 1 to Feb. 29, 2016 | $ | 24,914 | |||||||||||||||||||
Total | $ | 173,765 | |||||||||||||||||||
Building and Equipment [Member] | |||||||||||||||||||||
NOTE 6 - CONTRACTUAL COMMITMENTS (Tables) [Line Items] | |||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Summary of Material Contractual Commitments as of December 31, 2014 | ||||||||||||||||||||
Payments Due By Period | |||||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||||
Operating Leases: | |||||||||||||||||||||
Operating Leases – Equipment | $ | 35,934 | $ | 18,415 | $ | 17,519 | $ | - | $ | - | |||||||||||
Office Leases | 173,765 | 148,851 | 24,914 | - | - | ||||||||||||||||
Total Operating Leases | $ | 209,699 | $ | 167,266 | $ | 42,433 | $ | - | $ | - |
NOTE_7_ACCRUED_AND_OTHER_LIABI1
NOTE 7 - ACCRUED AND OTHER LIABILITIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Text Block Supplement [Abstract] | |||||||||
Schedule of Accrued Liabilities [Table Text Block] | Accrued liabilities consist of the following: | ||||||||
2014 | 2013 | ||||||||
Customer overpayment of accounts receivables | $ | 73 | $ | 1,109 | |||||
Compensated absences | 145,576 | 69,195 | |||||||
Legal fees | 14,805 | 31,700 | |||||||
Accounting fees | 27,627 | 18,862 | |||||||
Sales commissions | 33,866 | 15,658 | |||||||
Bonus | 40,000 | 5,000 | |||||||
Other | (437 | ) | 1,459 | ||||||
Total | $ | 261,510 | $ | 142,983 |
NOTE_2_SIGNIFICANT_ACCOUNTING_2
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Cash Equivalents, at Carrying Value (in Dollars) | $0 | |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares, Issued | 802,424 | 802,424 |
Common Stock, Shares, Outstanding | 800,396 | 802,424 |
Treasury Stock, Shares | 2,028 | 0 |
Payments of Dividends (in Dollars) | 0 | 0 |
Allowance for Doubtful Accounts Receivable (in Dollars) | $40,510 | $15,860 |
AmTrust North America [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 19.00% | 14.00% |
Companion Property & Casualty Insurance Co. [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 13.00% | 13.00% |
Prime Health Services [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 13.00% |
NOTE_2_SIGNIFICANT_ACCOUNTING_3
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Earnings Per Share Reconciliation (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Basic Earnings per share: | ||
Income (numerator) | $1,961,918 | $1,232,577 |
Shares (denominator) | 800,396 | 802,424 |
Per share amount | $2.45 | $1.54 |
Fully Diluted Earnings per share: | ||
Income (numerator) | $1,961,918 | $1,232,577 |
Shares (denominator) | 800,396 | 802,424 |
Per share amount | $2.45 | $1.54 |
NOTE_2_SIGNIFICANT_ACCOUNTING_4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedules of Credit Concentration Risk (Accounts Receivable [Member], Credit Concentration Risk [Member]) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Credit Concentration Risk, Percentage | 25.00% | 27.00% |
Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Credit Concentration Risk, Percentage | 8.00% | 12.00% |
Customer C [Member] | ||
Concentration Risk [Line Items] | ||
Credit Concentration Risk, Percentage | 22.00% | 19.00% |
Customer D [Member] | ||
Concentration Risk [Line Items] | ||
Credit Concentration Risk, Percentage | 11.00% |
NOTE_4_FIXED_ASSETS_Details
NOTE 4 - FIXED ASSETS (Details) | 12 Months Ended |
Dec. 31, 2014 | |
NOTE 4 - FIXED ASSETS (Details) [Line Items] | |
Property, Plant and Equipment, Cost Capitalization | The Company capitalizes the purchase of equipment and fixtures for major purchases in excess of $1,000 per item. |
Office Equipment [Member] | |
NOTE 4 - FIXED ASSETS (Details) [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture and Fixtures [Member] | |
NOTE 4 - FIXED ASSETS (Details) [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
NOTE_4_FIXED_ASSETS_Details_Sc
NOTE 4 - FIXED ASSETS (Details) - Schedule of Property, Plant and Equipment (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ||
Cost | $405,514 | $304,908 |
Depreciation expense and amortization | 49,171 | 43,585 |
Accumulated depreciation and amortization | 226,329 | 177,158 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 222,240 | 130,717 |
Depreciation expense and amortization | 18,506 | 13,581 |
Accumulated depreciation and amortization | 102,635 | 84,129 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 96,264 | 87,781 |
Depreciation expense and amortization | 12,638 | 11,979 |
Accumulated depreciation and amortization | 66,518 | 53,880 |
Disposal of furniture | -4,073 | -4,073 |
Disposal of furniture | -1,309 | -1,309 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 27,160 | 26,560 |
Depreciation expense and amortization | 5,242 | 5,242 |
Accumulated depreciation and amortization | 16,311 | 11,069 |
Other Capitalized Property Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 63,923 | 63,923 |
Depreciation expense and amortization | 12,785 | 12,783 |
Accumulated depreciation and amortization | $42,174 | $29,389 |
NOTE_5_INCOME_TAXES_Details
NOTE 5 - INCOME TAXES (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Income Tax Examination, Penalties and Interest Accrued | $0 |
Income Tax Examination, Description | The years 2011, 2012 and 2013 are still open for examination by the Internal Revenue Service. |
NOTE_5_INCOME_TAXES_Details_Sc
NOTE 5 - INCOME TAXES (Details) - Schedule of Components of Income Tax Expense (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Current | ||
Federal | $1,070,120 | $682,752 |
State | 299,964 | 185,739 |
Deferred | ||
Federal | -35,505 | -42,896 |
State | -41 | -4,276 |
Total tax provision | $1,334,538 | $821,319 |
NOTE_5_INCOME_TAXES_Details_Sc1
NOTE 5 - INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
NOTE 5 - INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities [Line Items] | ||
Deferred tax asset | $77,059 | $41,513 |
Domestic Tax Authority [Member] | ||
NOTE 5 - INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities [Line Items] | ||
Depreciation | -43,845 | -38,918 |
Reserve for Bad Debts | 12,248 | 4,917 |
Vacation Accrual | 19,191 | 21,450 |
State and Local Jurisdiction [Member] | ||
NOTE 5 - INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities [Line Items] | ||
Depreciation | -12,545 | -11,136 |
Reserve for Bad Debts | 3,531 | 1,433 |
State tax deductions | 92,989 | 57,629 |
Vacation Accrual | $5,490 | $6,138 |
NOTE_5_INCOME_TAXES_Details_Sc2
NOTE 5 - INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Expense at federal statutory rate of 34% | $1,120,795 | $697,917 |
State tax effects | 197,949 | 119,872 |
Non-deductible expenses | 13,175 | 12,397 |
Effects of rate change | 0 | -491 |
Other differences | 2,619 | -8,376 |
Income tax provision | $1,334,538 | $821,319 |
NOTE_5_INCOME_TAXES_Details_Sc3
NOTE 5 - INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (Parentheticals) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Federal statutory rate | 34.00% | 34.00% |
NOTE_6_CONTRACTUAL_COMMITMENTS2
NOTE 6 - CONTRACTUAL COMMITMENTS (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2013 | Jan. 31, 2010 | Aug. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
sqft | ||||||
Capital Lease, Copy Machine [Member] | ||||||
NOTE 6 - CONTRACTUAL COMMITMENTS (Details) [Line Items] | ||||||
Capital Lease Obligations | $160.93 | $25,543 | ||||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 36 months | 48 months | ||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | |||||
Capital Lease, Office Server [Member] | ||||||
NOTE 6 - CONTRACTUAL COMMITMENTS (Details) [Line Items] | ||||||
Capital Lease Obligations | 38,380 | |||||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 36 months | |||||
Debt Instrument, Interest Rate, Stated Percentage | 7.50% | |||||
Capital Lease, Document Scanners [Member] | ||||||
NOTE 6 - CONTRACTUAL COMMITMENTS (Details) [Line Items] | ||||||
Capital Lease Obligations | 206.93 | 206.93 | ||||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 36 months | |||||
Building [Member] | ||||||
NOTE 6 - CONTRACTUAL COMMITMENTS (Details) [Line Items] | ||||||
Area of Real Estate Property (in Square Feet) | 6,740 | |||||
Lease Expiration Date | 29-Feb-16 | |||||
Operating Leases, Rent Expense | $144,508 | $143,406 |
NOTE_6_CONTRACTUAL_COMMITMENTS3
NOTE 6 - CONTRACTUAL COMMITMENTS (Details) - Schedule of Future Minimum Rent Payment (Building [Member], USD $) | Dec. 31, 2014 |
Building [Member] | |
NOTE 6 - CONTRACTUAL COMMITMENTS (Details) - Schedule of Future Minimum Rent Payment [Line Items] | |
Jan. 1 to Dec. 31, 2015 | $148,851 |
Jan. 1 to Feb. 29, 2016 | 24,914 |
Total | $173,765 |
NOTE_6_CONTRACTUAL_COMMITMENTS4
NOTE 6 - CONTRACTUAL COMMITMENTS (Details) - Schedule of Future Minimum Lease Payments (USD $) | Dec. 31, 2014 |
Equipment [Member] | |
Operating Leases: | |
Operating Lease, Payments Due Total | $35,934 |
Operating Lease, Payments Due Less than 1 year | 18,415 |
Operating Lease, Payments Due 1-3 years | 17,519 |
Operating Lease, Payments Due 3-5 years | 0 |
Operating Lease, Payments Due More than 5 years | 0 |
Building [Member] | |
Operating Leases: | |
Operating Lease, Payments Due Total | 173,765 |
Operating Lease, Payments Due Less than 1 year | 148,851 |
Operating Lease, Payments Due 1-3 years | 24,914 |
Operating Lease, Payments Due 3-5 years | 0 |
Operating Lease, Payments Due More than 5 years | 0 |
Building and Equipment [Member] | |
Operating Leases: | |
Operating Lease, Payments Due Total | 209,699 |
Operating Lease, Payments Due Less than 1 year | 167,266 |
Operating Lease, Payments Due 1-3 years | 42,433 |
Operating Lease, Payments Due 3-5 years | 0 |
Operating Lease, Payments Due More than 5 years | $0 |
NOTE_6_CONTRACTUAL_COMMITMENTS5
NOTE 6 - CONTRACTUAL COMMITMENTS (Details) - Schedule of Future Minimum Lease Payments for Capital Leases (USD $) | Dec. 31, 2014 |
Schedule of Future Minimum Lease Payments for Capital Leases [Abstract] | |
Capital Leases, Payments Due Total | $8,356 |
Capital Leases, Payments Due Less than Year | 8,356 |
Capital Leases, Payments Due 1-3 Years | 0 |
Capital Leases, Payments Due 3-5 Years | 0 |
Capital Leases, Payments Due More than 5 Years | 0 |
Less Amounts Representing Interest | -205 |
Less Amounts Representing Interest | -205 |
Less Amounts Representing Interest | 0 |
Less Amounts Representing Interest | 0 |
Less Amounts Representing Interest | 0 |
Total Principal | 8,151 |
Total Principal | 8,151 |
Total Principal | 0 |
Total Principal | 0 |
Total Principal | $0 |
NOTE_7_ACCRUED_AND_OTHER_LIABI2
NOTE 7 - ACCRUED AND OTHER LIABILITIES (Details) - Schedule of Accrued Liabilities (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Accrued Liabilities [Abstract] | ||
Customer overpayment of accounts receivables | $73 | $1,109 |
Compensated absences | 145,576 | 69,195 |
Legal fees | 14,805 | 31,700 |
Accounting fees | 27,627 | 18,862 |
Sales commissions | 33,866 | 15,658 |
Bonus | 40,000 | 5,000 |
Other | -437 | 1,459 |
Total | $261,510 | $142,983 |
NOTE_8_OPTIONS_FOR_PURCHASE_OF1
NOTE 8 - OPTIONS FOR PURCHASE OF COMMON STOCK (Details) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |
Aug. 31, 2002 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2005 | |
2002 Stock Option Plan [Member] | ||||
NOTE 8 - OPTIONS FOR PURCHASE OF COMMON STOCK (Details) [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Description | grant of options to officers, consultants and employees to acquire shares of the Company’s common stock at a purchase price equal to or greater than fair market value as of the date of the grant | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 6 months | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 50,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 4,250 | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 938 | |||
2005 Stock Option Plan [Member] | ||||
NOTE 8 - OPTIONS FOR PURCHASE OF COMMON STOCK (Details) [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Description | grant of Company securities, including options, warrants and restricted stock to officers, directors, consultants and employees to acquire shares of the Company’s common stock at a purchase price equal to or greater than fair market value as of the date of the grant | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 6 months | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 50,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 |