Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 10, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PACIFIC HEALTH CARE ORGANIZATION INC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 800,000 | |
Amendment Flag | false | |
Entity Central Index Key | 1,138,476 | |
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 | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash | $ 4,848,995 | $ 3,834,924 |
Accounts receivable, net of allowance of $64,150 and $55,000 | 725,046 | 1,040,357 |
Deferred tax asset | 35,296 | 35,296 |
Prepaid income taxes | 6,614 | 245,419 |
Prepaid expenses | 124,730 | 66,200 |
Total current assets | 5,740,681 | 5,222,196 |
Property and Equipment, net | ||
Computer equipment | 341,027 | 308,266 |
Furniture and fixtures | 206,784 | 206,784 |
Office equipment | 15,595 | 14,800 |
Total property and equipment | 563,406 | 529,850 |
Less: accumulated depreciation and amortization | (324,841) | (261,594) |
Net property and equipment | 238,565 | 268,256 |
Other Assets | 26,788 | 26,788 |
Total assets | 6,006,034 | 5,517,240 |
Current Liabilities | ||
Accounts payable | 40,651 | 63,565 |
Accrued expenses | 323,487 | 212,144 |
Income tax payable | 10,424 | 0 |
Deferred rent expense | 17,022 | 6,891 |
Dividend payable | 56,922 | 58,985 |
Unearned revenue | 38,637 | 43,329 |
Total current liabilities | 487,143 | 384,914 |
Commitments and Contingencies | 0 | 0 |
Shareholders’ 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 September 30, 2016 and December 31, 2015; 800,000 shares issued, (800,000 outstanding net of treasury shares) and 802,424 shares issued, (800,000 outstanding net of treasury shares), respectively | 800 | 800 |
Additional paid-in capital | 419,073 | 673,130 |
Treasury stock at cost (zero shares and 8,269 shares at September 30, 2016 and December 31, 2015, respectively) | 0 | (254,057) |
Deferred stock compensation | (12,375) | (49,499) |
Retained earnings | 5,111,393 | 4,761,952 |
Total stockholders’ equity | 5,518,891 | 5,132,326 |
Total liabilities and stockholders’ equity | $ 6,006,034 | $ 5,517,240 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts receivable, allowance (in Dollars) | $ 64,150 | $ 55,000 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
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) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 800,000 | 802,424 |
Common stock, shares outstanding | 800,000 | 800,000 |
Treasury stock | 0 | 8,269 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
UR fees | $ 221,176 | $ 1,027,893 | $ 596,205 | $ 3,004,023 |
MBR fees | 187,829 | 201,903 | 517,893 | 855,089 |
HCO fees | 276,951 | 273,089 | 965,768 | 920,789 |
MPN fees | 146,836 | 224,128 | 436,893 | 779,941 |
NCM fees | 499,118 | 216,216 | 1,176,447 | 695,755 |
Other | 111,686 | 126,352 | 309,260 | 444,187 |
Total revenues | 1,443,596 | 2,069,581 | 4,002,466 | 6,699,784 |
Expenses: | ||||
Depreciation and amortization | 20,925 | 16,011 | 63,247 | 44,686 |
Bad debt provision | 4,500 | 9,750 | 13,500 | 26,677 |
Consulting fees | 75,228 | 90,063 | 265,296 | 268,588 |
Salaries and wages | 574,100 | 555,666 | 1,717,148 | 1,874,572 |
Professional fees | 82,105 | 99,418 | 224,368 | 315,357 |
Insurance | 81,452 | 83,283 | 243,307 | 256,265 |
Outsource service fees | 113,017 | 295,507 | 288,225 | 963,059 |
Data maintenance | 30,160 | 11,819 | 113,175 | 120,413 |
General and administrative | 157,894 | 139,035 | 475,230 | 436,644 |
Total expenses | 1,139,381 | 1,300,552 | 3,403,496 | 4,306,261 |
Income from operations | 304,215 | 769,029 | 598,970 | 2,393,523 |
Other expense | ||||
Interest expense | 0 | (6) | 0 | (201) |
Total other expense | 0 | (6) | 0 | (201) |
Income before taxes | 304,215 | 769,023 | 598,970 | 2,393,322 |
Income tax provision | 126,882 | 319,992 | 249,529 | 996,949 |
Net income | $ 177,333 | $ 449,031 | $ 349,441 | $ 1,396,373 |
Basic and fully diluted earnings per share: | ||||
Earnings per share amount (in Dollars per share) | $ 0.22 | $ 0.57 | $ 0.44 | $ 1.76 |
Weighted average common shares outstanding (in Shares) | 800,000 | 794,072 | 800,000 | 794,072 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 349,441 | $ 1,396,373 |
Adjustments to reconcile net income to net cash: | ||
Depreciation and amortization | 63,247 | 44,686 |
Changes in operating assets and liabilities | ||
Increase in bad debt provision | 12,260 | 26,750 |
Decrease in accounts receivable | 303,051 | 333,263 |
(Increase) in other assets | 0 | (18,630) |
Decrease (increase) in prepaid income tax | 238,805 | (237,656) |
(Increase) in prepaid expenses | (58,530) | (10,900) |
(Decrease) in accounts payable | (22,914) | (106,289) |
Increase in accrued expenses | 111,343 | 20,967 |
Increase (decrease) in income tax payable | 10,424 | (4,481) |
Increase (decrease) in deferred rent expense | 10,131 | (14,074) |
(Decrease) increase in unearned revenue | (4,692) | 40,904 |
Decrease in deferred compensation | 37,124 | 0 |
Net cash provided by operating activities | 1,049,690 | 1,470,913 |
Cash flows used in investing activities | ||
Purchases of computers, furniture and equipment | (33,556) | (91,135) |
Net cash used by investing activities | (33,556) | (91,135) |
Cash flows used in financing activities | ||
Purchase of treasury stock | 0 | (177,342) |
Issuance of cash dividend | (2,063) | (859,170) |
Payment of obligation under capital lease | 0 | (8,151) |
Net cash used in financing activities | (2,063) | (1,044,663) |
Increase in cash | 1,014,071 | 335,115 |
Cash at beginning of period | 3,834,924 | 2,946,025 |
Cash at end of period | 4,848,995 | 3,281,140 |
Cash paid for: | ||
Interest | 0 | 205 |
Income taxes paid | $ 300 | $ 1,239,086 |
NOTE 1 - BASIS OF FINANCIAL STA
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | NOTE 1 – BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”) and in accordance with accounting standards generally accepted in the United States (“GAAP”). Certain information and footnote disclosures normally included in condensed consolidated financial statements have been condensed or omitted in accordance with GAAP rules and regulations. The information furnished in these interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect both the recorded values of assets and liabilities at the date of the condensed consolidated financial statements and the revenues recognized and expenses incurred during the reporting period. These estimates and assumptions affect the Company’s recognition of deferred expenses, bad debts, income taxes, the carrying value of its long-lived assets and its provision for certain contingencies. The reasonableness of these estimates and assumptions is evaluated continually based on a combination of historical information and other information that comes to the Company’s attention that may vary its outlook for the future. While management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed consolidated financial statements be read in conjunction with the Company’s audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2015. Operating results for the nine months ended September 30, 2016, are not necessarily indicative of the results to be expected for the year ending December 31, 2016. Principles of Consolidation Basis of Accounting — Revenue Recognition These fees include monthly administration fees, claim network fees, legal support fees, medicare set aside fees, lien service fees, workers’ compensation carve-outs, 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 provisions of revenue recognition topic ASC 605. Arrangements entered into in such agreements consist of bundled managed care which includes various units of accounting such as network solutions and patient management, including managed care. Such elements are considered separate units of accounting due to each element having value to the customer on a stand-alone basis and are billed separately. 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. Accounts Receivables and Bad Debt Allowance The percentages of the amounts due from major customers to total accounts receivable as of September 30, 2016 and December 31, 2015 are as follows: 9/30/16 12/31/15 Customer A 18 % 13 % Customer B 10 % 11 % Customer C 12 % 8 % Customer D 10 % 19 % Customer E 11 % - % Reclassifications |
NOTE 2 - SUBSEQUENT EVENTS
NOTE 2 - SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 2 – 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 -EQUITY INCENTIVE AWARDS
NOTE 3 -EQUITY INCENTIVE AWARDS | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Text Block Supplement [Abstract] | |
Shareholders' Equity and Share-based Payments [Text Block] | NOTE 3 –EQUITY INCENTIVE AWARDS On December 31, 2015, the Company awarded restricted stock grants of 5,928 shares of its common stock to employees and a Company consultant pursuant to the Company’s 2005 Stock Option Plan. The grants vest one year from the date of grant and are subject to forfeiture should the recipient terminate his employment or consulting agreement with the Company prior to vesting. The restricted stock grants were valued at $8.35 per share, the closing price of the Company’s common stock on the December 31, 2015 grant date. At December 31, 2015, the Company recorded deferred compensation totaling $49,499 to be written off over the twelve month period in 2016. During the nine month period ended September 30, 2016, the Company wrote off $37,124 in deferred compensation expense resulting in a balance of $12,375 remaining as of September 30, 2016. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation |
Basis of Accounting, Policy [Policy Text Block] | Basis of Accounting — |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition These fees include monthly administration fees, claim network fees, legal support fees, medicare set aside fees, lien service fees, workers’ compensation carve-outs, 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 provisions of revenue recognition topic ASC 605. Arrangements entered into in such agreements consist of bundled managed care which includes various units of accounting such as network solutions and patient management, including managed care. Such elements are considered separate units of accounting due to each element having value to the customer on a stand-alone basis and are billed separately. 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. |
Receivables, Policy [Policy Text Block] | Accounts Receivables and Bad Debt Allowance The percentages of the amounts due from major customers to total accounts receivable as of September 30, 2016 and December 31, 2015 are as follows: 9/30/16 12/31/15 Customer A 18 % 13 % Customer B 10 % 11 % Customer C 12 % 8 % Customer D 10 % 19 % Customer E 11 % - % |
Reclassification, Policy [Policy Text Block] | Reclassifications |
NOTE 1 - BASIS OF FINANCIAL S10
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Credit Concentration Risk [Member] | |
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION (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 September 30, 2016 and December 31, 2015 are as follows: 9/30/16 12/31/15 Customer A 18 % 13 % Customer B 10 % 11 % Customer C 12 % 8 % Customer D 10 % 19 % Customer E 11 % - % |
NOTE 1 - BASIS OF FINANCIAL S11
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Allowance for Doubtful Accounts Receivable | $ 64,150 | $ 55,000 |
NOTE 1 - BASIS OF FINANCIAL S12
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION (Details) - Schedules of Credit Concentration Risk - Accounts Receivable [Member] - Credit Concentration Risk [Member] | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Credit Concentration Risk, Percentage | 18.00% | 13.00% |
Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Credit Concentration Risk, Percentage | 10.00% | 11.00% |
Customer C [Member] | ||
Concentration Risk [Line Items] | ||
Credit Concentration Risk, Percentage | 12.00% | 8.00% |
Customer D [Member] | ||
Concentration Risk [Line Items] | ||
Credit Concentration Risk, Percentage | 10.00% | 19.00% |
Customer E [Member] | ||
Concentration Risk [Line Items] | ||
Credit Concentration Risk, Percentage | 11.00% | 0.00% |
NOTE 3 -EQUITY INCENTIVE AWAR13
NOTE 3 -EQUITY INCENTIVE AWARDS (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Disclosure Text Block Supplement [Abstract] | ||
Deferred Compensation Arrangement with Individual, Shares Issued (in Shares) | 5,928 | |
Deferred Compensation Arrangement with Individual, Requisite Service Period | 1 year | |
Shares Issued, Price Per Share (in Dollars per share) | $ 8.35 | |
Deferred Compensation Equity | $ 12,375 | $ 49,499 |
Deferred Compensation Arrangement with Individual, Compensation Expense | $ 37,124 |