Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Apr. 11, 2022 | Jun. 30, 2021 | |
Document Information Line Items | |||
Entity Registrant Name | PACIFIC HEALTH CARE ORGANIZATION, INC. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 12,800,000 | ||
Entity Public Float | $ 5,546,745 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001138476 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-50009 | ||
Entity Incorporation, State or Country Code | UT | ||
Entity Tax Identification Number | 87-0285238 | ||
Entity Address, Address Line One | 1201 Dove Street, Suite 300 | ||
Entity Address, City or Town | Newport Beach | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92660 | ||
City Area Code | 949 | ||
Local Phone Number | 721-8272 | ||
Title of 12(g) Security | $.001 par value, common voting shares | ||
Entity Interactive Data Current | Yes | ||
Auditor Firm ID | 6117 | ||
Auditor Name | Pinnacle Accountancy Group of Utah | ||
Auditor Location | Farmington, Utah |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Current Assets | |||
Cash | $ 10,085,372 | $ 9,498,457 | |
Accounts receivable, net of allowance of $23,083 and $19,404 | 927,990 | 1,063,090 | |
Deferred rent assets | 10,055 | 0 | |
Income tax receivable | 19,779 | 0 | |
Receivable – other | 3,000 | 4,000 | |
Prepaid expenses | 96,977 | 82,499 | |
Total current assets | 11,143,173 | 10,648,046 | |
Property and Equipment, net | |||
Computer equipment | 526,249 | 507,873 | |
Furniture and fixtures | 226,323 | 226,323 | |
Office equipment | 9,556 | 9,556 | |
Total property and equipment | 762,128 | 743,752 | |
Less: accumulated depreciation and amortization | (669,592) | [1] | (620,705) |
Net property and equipment | 92,536 | 123,047 | |
Operating lease right-of-use assets, net | 70,368 | 309,282 | |
Other assets | 26,788 | 26,788 | |
Total Assets | 11,332,865 | 11,107,163 | |
Current Liabilities | |||
Accounts payable | 44,899 | 80,134 | |
Accrued expenses | 315,495 | 275,152 | |
Income tax payable | 0 | 61,828 | |
Deferred rent expense | 0 | 2,725 | |
Dividend payable | 37,000 | 37,000 | |
Operating lease liabilities, current portion | 70,368 | 243,049 | |
Paycheck protection program loans, current portion | 311,118 | ||
Unearned revenue | 33,544 | 31,544 | |
Total current liabilities | 501,306 | 1,042,550 | |
Long Term Liabilities | |||
Operating lease liabilities, long term portion | 0 | 66,233 | |
Paycheck protection program loans, long term portion | 0 | 149,582 | |
Deferred tax liabilities | 7,154 | 19,413 | |
Total Liabilities | 508,460 | 1,277,778 | |
Commitments and Contingencies | 0 | 0 | |
Stockholders’ Equity | |||
Preferred stock; 5,000,000 shares authorized at $0.001 par value of which 40,000 shares designated as Series A preferred and 16,000 shares issued and outstanding | 16 | 16 | |
Common stock, $0.001 par value, 800,000,000 shares authorized, 12,800,000 shares issued and outstanding | 12,800 | 12,800 | |
Additional paid-in capital | 416,057 | 416,057 | |
Retained earnings | 10,395,532 | 9,400,512 | |
Total stockholders’ equity | 10,824,405 | 9,829,385 | |
Total Liabilities and Stockholders’ Equity | $ 11,332,865 | $ 11,107,163 | |
[1] | Depreciation and amortization expense for the years ended December 31, 2021 and 2020, totaled $48,887 and $55,428, respectively. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts receivable, allowance (in Dollars) | $ 23,083 | $ 19,404 |
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 | 16,000 | 16,000 |
Preferred stock, shares outstanding | 16,000 | 16,000 |
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued | 12,800,000 | 12,800,000 |
Common stock, outstanding | 12,800,000 | 12,800,000 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 40,000 | 40,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | ||
Revenues | $ 5,403,110 | $ 6,042,718 |
Expenses | ||
Depreciation and amortization | 48,887 | 55,428 |
Bad debt provision | 15,656 | 20,101 |
Consulting fees | 237,582 | 253,181 |
Salaries and wages | 2,740,806 | 2,916,576 |
Professional fees | 293,936 | 295,358 |
Insurance | 321,690 | 351,122 |
Outsource service fees | 364,951 | 449,836 |
Data maintenance | 204,725 | 184,946 |
General and administrative | 658,402 | 695,899 |
Total expenses | 4,886,635 | 5,222,447 |
Income from operations | 516,475 | 820,271 |
Other income (expense) | ||
Paycheck protection program loan forgiveness income | 684,785 | 0 |
Paycheck protection program loan interest expense | (5,185) | 0 |
Total other income (expense) | 679,600 | 0 |
Income before taxes | 1,196,075 | 820,271 |
Income tax provision | 201,055 | 270,701 |
Net income | $ 995,020 | $ 549,570 |
Basic earnings per share: | ||
Earnings per share amount (in Dollars per share) | $ 0.08 | $ 0.04 |
Basic common shares outstanding (in Shares) | 12,800,000 | 12,800,000 |
Fully diluted earnings per share: | ||
Earnings per share amount (in Dollars per share) | $ 0.08 | $ 0.04 |
Fully diluted common shares outstanding (in Shares) | 12,816,000 | 12,816,000 |
HCO [Member] | ||
Revenues | ||
Revenues | $ 1,449,345 | $ 1,453,365 |
MPN [Member] | ||
Revenues | ||
Revenues | 524,148 | 502,590 |
Utilization review [Member] | ||
Revenues | ||
Revenues | 1,091,792 | 1,142,796 |
Medical bill review [Member] | ||
Revenues | ||
Revenues | 368,721 | 305,510 |
Medical case management [Member] | ||
Revenues | ||
Revenues | 1,771,718 | 2,404,148 |
Other Revenues [Member] | ||
Revenues | ||
Revenues | $ 197,386 | $ 234,309 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balances at Dec. 31, 2019 | $ 16 | $ 12,800 | $ 416,057 | $ 8,850,942 | $ 9,279,815 |
Balances (in Shares) at Dec. 31, 2019 | 16,000 | 12,800,000 | |||
Net Income | 549,570 | 549,570 | |||
Balances at Dec. 31, 2020 | $ 16 | $ 12,800 | 416,057 | 9,400,512 | 9,829,385 |
Balances (in Shares) at Dec. 31, 2020 | 16,000 | 12,800,000 | |||
Net Income | 995,020 | 995,020 | |||
Balances at Dec. 31, 2021 | $ 16 | $ 12,800 | $ 416,057 | $ 10,395,532 | $ 10,824,405 |
Balances (in Shares) at Dec. 31, 2021 | 16,000 | 12,800,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net income | $ 995,020 | $ 549,570 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 48,887 | 55,428 |
Bad debt provision | 15,656 | 20,101 |
Paycheck protection program loan forgiveness | (679,600) | 0 |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 119,444 | 31,534 |
Increase in deferred rent asset | (10,055) | 0 |
Decrease in receivable - other | 1,000 | 10,900 |
(Increase) decrease in prepaid expenses | (14,478) | 45,844 |
(Decrease) increase in accounts payable | (35,235) | 27,859 |
Increase in accrued expenses | 40,343 | 25,248 |
Decrease in deferred rent expense | (2,725) | (27,222) |
Increase (decrease) in unearned revenue | 2,000 | (14,522) |
Increase in taxes receivable | (19,779) | 0 |
Decrease (increase) in prepaid income tax | 0 | 158,641 |
(Decrease) increase in deferred taxes | (12,259) | 42,232 |
(Decrease) increase in income tax payable | (61,828) | 61,828 |
Net cash provided by operating activities | 386,391 | 987,441 |
Cash Flows from Investing Activities | ||
Purchase of furniture and equipment | (18,376) | (53,848) |
Net cash used in investing activities | (18,376) | (53,848) |
Proceeds from paycheck protection program loans | 218,900 | 460,700 |
Net cash provided by financing activities | 218,900 | 460,700 |
Increase in cash | 586,915 | 1,394,293 |
Cash at beginning of period | 9,498,457 | 8,104,164 |
Cash at end of period | 10,085,372 | 9,498,457 |
Cash paid for: | ||
Interest | 0 | 0 |
Income taxes | $ 294,000 | $ 8,000 |
CORPORATE HISTORY
CORPORATE HISTORY | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 CORPORATE HISTORY Pacific Health Care Organization, Inc. (the “Company” or “PHCO”) is a specialty workers’ compensation cost containment company providing a range of services principally to 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. Medex also offers carve-out services and Medicare Set Asides (“MSA”). 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 medical case management services and lien representation services. In March 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. On October 19, 2021, the Company completed short-form mergers between PHCO and each of its wholly owned subsidiaries Industrial Resolutions Coalition (“IRC”), Medex Legal Support, Inc. (“MLS”), and Pacific Medical Holding Company (“PMHC”). As a result of the short-form mergers the separate existence of IRC, MLS and PMHC terminated and the business, assets and liabilities of those entities have been transferred to PHCO and, as appropriate to its other subsidiaries. The Company continues to offer the services of IRC and MLS through its other subsidiaries as described in the preceding paragraph. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
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 in accordance with accounting principles generally accepted in the United States for the periods ended December 31, 2021 and 2020. B. Revenue Recognition Revenue Recognition — The Company recognizes revenue in accordance with ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The core principle underlying Topic 606 is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The core principle underlying Topic 606 is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The ASU requires the use of a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. 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 services offered through its HCOs, MPNs, utilization review, medical bill review, medical case management services, lien defense, carve-outs, Medicare set-aside. These services are billed individually as separate components to our customers. These fees include monthly and/or annual HCO and/or MPN administration fees, claim and network access fees, medical bill review fees, legal support fees, Medicare set-aside fees, lien service fees, workers’ compensation carve-outs, utilization review fees, medical case management flat rate fees or hourly fees depending on the agreement with the customer. The Company enters into arrangements for bundled managed care, standalone services, or add-on ancillary services 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. C. Cash Equivalents The Company considers all short term, highly liquid investments that are readily convertible, within three months of origination, to known amounts as cash equivalents. As of December 31, 2021 and 2020, the Company had 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 these audited consolidated financial statements. The fully diluted earnings per share includes 16,000 shares of Series A preferred stock, as disclosed in Section L of Note 2. For the Years Ended December 31, 2021 2020 Basic Earnings per share: Income (numerator) $ 995,020 $ 549,570 Shares (denominator) 12,800,000 12,800,000 Per share amount $ 0.08 $ 0.04 Fully Diluted Earnings per share: Income (numerator) $ 995,020 $ 549,570 Shares (denominator) 12,816,000 12,816,000 Per share amount $ 0.08 $ 0.04 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 or the estimated lives of the assets. Depreciation is computed on the straight-line method which is five years for computer equipment, office equipment, and furniture and fixtures. 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 these audited 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 audited 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 . • 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 cash and cash equivalents, receivables and current assets and 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 advertising, charity, rent expense for office, shareholders’ expense, auto expenses, bank charges, dues and subscriptions, education, equipment/repairs, IT enhancement and internet expenses, licenses and permits, office supplies, parking, postage and delivery, printing and reproduction, rent expense for equipment, telephone, rent-expense, shareholders’ expense, travel expenses and entertainment costs, and compensated absences. 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 On January 6, 2020, the Company effected a four-shares-for-one-share (4:1) forward stock split (“Forward Split”) of its common stock and its Series A preferred stock. Unless otherwise noted, impacted amounts, share and per share information included in the financial statements and notes thereto have been retroactively adjusted for the Forward Split as if such Forward Split occurred on the first day of the first period presented. The Company has two classes of stock. The Articles of Incorporation of the Company, as amended, authorize 5,000,000 shares of $0.001 par value preferred stock, which may be issued in one or more series, with designation, rights and privileges of such preferred stock to be set by the board of directors of the Company from time to time. On November 21, 2016, the board of directors of the Company approved a Certificate of Designation of Rights, Privileges and Preferences of Series A preferred stock and authorized the Company’s officers to file such with the Utah Division of Corporations and Commercial Code to create the Series A preferred stock. The Series A preferred stock has a par value of $0.001 and consists of 40,000 shares. The holders of Series A preferred stock are entitled to vote with the common stockholders on all matters brought for approval of the common stockholders. In connection with any such matter, each outstanding share of Series A preferred stock is entitled to 20,000 votes of common stock of the Company. In the event of a liquidation, dissolution or winding up of the Company, the Series A preferred stock shall rank in parity with the Company’s common stock. Holders of Series A preferred stock are entitled to receive dividends, when, as and if declared by the board of directors. The Series A preferred stock shall rank in parity with the Company’s common stock as to any dividends. As of December 31, 2021 and 2020, 16,000 shares of the Series A preferred stock were outstanding. The Company also has voting common stock of 800,000,000 shares authorized at December 31, 2021 and 2020, and 12,800,000 and 12,800,000 shares issued and outstanding, respectively. The Company purchased no shares of treasury stock at cost during fiscal 2021 or 2020. As of December 31, 2021 and 2020, the Company had dividends payable of $37,000 and $37,000, respectively, from a dividend declared in September 2015. As of December 31, 2021 and 2020, no shareholder entitled to claim the unpaid September 2015 dividend made a claim to such dividend, accordingly the Company paid $0 and $0, respectively during in connection with the September 2015 dividend during the years ended December 31, 2021 and 2020. M. Share Based Compensation The Company has adopted the fair value method of accounting for stock-based employee and non-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 these audited consolidated statements of operations based on their fair value at grant date. N. Trade Receivables In the normal course of business, the Company 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 collectability 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-end 2021 and 2020, the Company had a bad debt reserve of $23,083 and $19,104, 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, 2021 and 2020, are as follows: 12/31/21 12/31/20 Customer A 24 % 20 % Customer B 11 % 9 % Customer C 11 % 10 % O. Major Customers The Company provides services to insurers, third party administrators, self-administered employers, municipalities and other industries. The Company can provide a full range of services to virtually any size employer in the state of California. The Company is also able to provide utilization review, medical bill review and medical case management services both inside and outside the state of California. During 2021, three major customers accounted for more than 43% of our sales, approximately 24%, 11%, and 8% respectively, of our total sales. By comparison, during 2020 our three largest customers accounted for 42% of sales, approximately 20%, 12%, and 10%, respectively. P. Leases Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of operating lease right-of-use assets of $719,861, lease liabilities for operating leases of $719,861, and a zero cumulative-effect adjustment to accumulated deficit. This lease expires as of April 30, 2022. The Company elected to exclude from its balance sheets recognition of leases having a term of 12 months or less (“short-term leases”). Lease expense is recognized on a straight-line basis over the lease term. If a Company lease does not provide an implicit rate, the Company develops an estimated incremental borrowing rate at the commencement date based on the estimated rate at which it would borrow, in the current economic environment, an amount equal to the lease payments over a similar term on a collateralized basis which is used to determine the present value of lease payments. The Company entered into a new office lease for a 12-month period, which commenced on April 1, 2022. The Company had no finance leases at December 31, 2021 and 2020. Q. Subsequent Events In accordance with ASC 855-10 Company management reviewed all material events through the date of issuance and except as follows, there are no material subsequent events to report. As of the date of issuance of the financial statements, it is difficult to determine the impact the COVID-19 outbreak will continue to have on the Company. The extent of its impact will depend upon future developments that are highly uncertain and cannot currently be predicted with any level of confidence. The Company expects the recovery resulting from the COVID-19 pandemic may continue to have a material adverse effect on its business, results of operations, financial condition, and cash flows in one or more future quarters. During the pandemic, our customers had to reduce their workforces and our revenues are derived from their employee counts and workplace injuries. Some of our customers’ industries workforce moved away from those jobs, which may result in slower increase in their workforce to pre-pandemic levels. As a result of the economic contraction from the COVID-19 pandemic, workers’ compensation claims, and medical reviews received were lower in the years covered because of the decline in prior workplace injuries. Our medical case managers usually work on the difficult claims, which can remain open for several months to years. Without the steady flow of new workers’ compensation claims during that time, we expect that our medical case management revenue may continue to be lower throughout 2022, even as more people return to the workforce. The Company has entered into a new 12-month office lease commencing on April 1, 2022. Our office current lease expires as of April 30, 2022. The Company continues to monitor the COVID-19 situation. No impairments were recorded as of the balance sheet date as no triggering events or changes in circumstances had occurred as of year-end; however, due to significant uncertainty surrounding the situation, management's judgment regarding this could change in the future. In addition, while the Company’s results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be reasonably estimated at this time. |
RECENTLY ISSUED ACCOUNTING STAN
RECENTLY ISSUED ACCOUNTING STANDARDS | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Accounting Standards Update and Change in Accounting Principle [Text Block] | NOTE 3 RECENTLY ISSUED ACCOUNTING STANDARDS Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes”. The pronouncement simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, “Income Taxes”. The pronouncement also improves consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This standard became effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The reported results for the fiscal year ended December 31, 2021 and 2020 reflect the application of the guidance of ASC 740-10. Other than the foregoing, the Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements will be expected to cause a material impact on its financial statements. |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
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 more than $1,000 per item. Capitalized amounts are depreciated over the useful life of the assets using the straight-line method of depreciation which is five years for computer equipment, office equipment, and furniture and fixtures. Scheduled below are the assets, costs and accumulated depreciation at December 31, 2021 and 2020. Cost Accumulated Depreciation and Amortization Assets December 31, 2021 December 31, 2020 December 31, 2021 (1) December 31, 2020 Computer equipment $ 526,249 $ 507,873 $ 441,597 $ 405,849 Furniture and fixtures 226,323 226,323 206,884 206,446 Office equipment 9,556 9,556 21,111 8,410 Totals $ 762,128 $ 743,752 $ 669,592 $ 620,705 (1) |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | NOTE 5 INCOME TAXES The Company accounts for corporate income taxes in accordance with ASC 740-10 “Income Taxes.” ASC 740-10 requires an asset and liability approach for financial accounting and reporting for income tax purposes. The tax provision for the years ended December 31, 2021 and 2020, consisted of the following: 2021 2020 Current Federal $ 101,118 $ 152,702 State 112,196 75,766 Deferred Federal (9,304 ) 31,693 State (2,955 ) 10,540 Total tax provision $ 201,055 $ 270,701 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, 2021 and December 31, 2020, are as follows: 2021 2020 Depreciation Federal $ (19,215 ) $ (25,840 ) State (6,391 ) (8,592 ) Reserve for bad debts Federal 4,793 4,075 State 1,594 1,355 Deferred Rent Federal 2,088 572 State 694 190 Deferred Revenues Federal 6,965 6,624 State 2,317 2,203 State tax deductions - - Net deferred tax asset (liabilities) $ (7,155 ) $ (19,413 ) The reconciliation of income tax computed at statutory rates of income tax benefits is as follows: 2021 2020 Expense at federal statutory rate of 21% $ 251,176 $ 172,257 State income taxes, net of federal benefit 79,789 57,285 Non-deductible expenses 10,063 10,027 Tax exempt income (143,805 ) - Other items 3,832 31,132 Income tax provision $ 201,055 $ 270,701 The Company follows ASC 740, Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and 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. The Company follows the interpretations of the ASC 740, which establishes 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 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 these audited consolidated statements of operations in the provision for income taxes. As of December 31, 2021, the Company had no accrued interest or penalties. The years 2019, 2020, and 2021 are still open for examination by the Internal Revenue Service. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Lessee, Operating Leases [Text Block] | NOTE 6 LEASES In April 2017, the Company entered a 39-month operating lease for an office copy machine with monthly payments at $1,723. This lease terminated in July 2020. In July 2015, the Company entered a 79-month office lease that commenced on September 28, 2015 through April 30, 2022. The lease provided for approximately 9,439 square feet of office space. This office space has served as the principal executive offices of the Company, as well as the principal offices of the Company’s operating subsidiaries. The Company has entered a new 12-month office lease that commenced on April 1, 2022. The lease provides 320 square feet of office space that includes shared space for other business needs and expires March 31, 2023. This office space will serve as the principal executive offices of the Company, as well as the principal offices of the Company’s operating subsidiaries. The Company has reduced its office space as the majority of its workforce will continue working remotely. The new office space will be for the executive team and shared office space for key employees to use as needed. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. The components of lease expense and supplemental cash flow information related to leases for the period are as follows: Year Ended December 31, 2021 Lease Cost Operating lease cost (included in general and administrative in the Company’s consolidated statement of operations) $ 71,359 Other Information Cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2021 $ 279,385 Weighted average remaining lease term – operating leases (in years) 0.33 years Average discount rate – operating leases 5.75 % The supplemental balance sheet information related to leases for the period is as follows: At December 31, 2021 At December 31, 2020 Operating leases Remaining right-of-use assets $ 70,368 $ 309,282 Short-term operating lease liabilities $ 70,368 $ 243,049 Long-term operating lease liabilities - 66,233 Total operating lease liabilities $ 70,368 $ 309,282 Maturities of the Company’s undiscounted lease liabilities are as follows: Year Ending Operating Leases 2022 $ 71,359 Total lease payments 71,359 Less: Imputed interest/present value discount (991 ) Present value of lease liabilities $ 70,368 Lease expenses were $279,385 and $257,024 during the years ended December 31, 2021 and 2020, respectively. |
ACCRUED AND OTHER LIABILITIES
ACCRUED AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block Supplement [Abstract] | |
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | NOTE 7 ACCRUED AND OTHER LIABILITIES As of December 31, 2021 and 2020, accrued liabilities consist of the following: 2021 2020 Salaries and wages $ 115,744 $ 91,693 Compensated absences 154,774 135,530 Legal fees 815 - Accounting fees 26,372 21,577 Sales commissions 12,989 25,699 Other 4,801 653 Total $ 315,495 $ 275,152 |
EQUITY INCENTIVE AWARDS
EQUITY INCENTIVE AWARDS | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block Supplement [Abstract] | |
Shareholders' Equity and Share-Based Payments [Text Block] | NOTE 8 EQUITY INCENTIVE AWARDS 2018 Plan The Pacific Health Care Organization 2018 Equity Incentive Plan (the “2018 Plan”) became effective on April 6, 2018. The 2018 Plan permits the granting of 8,000,000 shares of Common Stock. No awards or grants have been awarded or granted under the Plan. The 2018 Plan provides for grants of equity incentive compensation to employees and consultants of the Company and such other individuals the Company reasonably expects to become employees or consultants of the Company. The 2018 Plan allows for awards of (a) incentive stock options, (b) non-qualified stock options, (c) stock appreciation rights, (d) restricted awards, and (e) other equity-based awards. The 2018 Plan will terminate automatically on the tenth anniversary of the 2018’s Plan Effective Date. The 2018 Plan is currently administered by the full board of directors. The Company did not award any equity incentive compensation during the years ended December 31, 2021 and 2020. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block Supplement [Abstract] | |
Legal Matters and Contingencies [Text Block] | NOTE 9 COMMITMENTS AND CONTINGENCIES 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 owner of record or beneficially of more than five percent of any class of voting securities 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. |
BENEFITS AND OTHER COMPENSATION
BENEFITS AND OTHER COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block Supplement [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | NOTE 10 BENEFITS AND OTHER COMPENSATION The Company offers a 401(k)-profit sharing plan for employees who meet the eligibility requirements. Pursuant to the plan, the Company may make discretionary matching contributions and/or discretionary profit-sharing contributions to the plan. All such contributions must comply with federal pension laws, non-discrimination requirements and the terms of the plan. In determining whether to make a discretionary contribution, the board of directors would evaluate current and prospective costs of such awards to the Company and management’s desire to reward and retain employees and attract new employees. To date, the Company has never made matching contributions and/or discretionary profit-sharing contributions to any plan. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Accounting The Company used the accrual method of accounting in accordance with accounting principles generally accepted in the United States for the periods ended December 31, 2021 and 2020. |
Revenue [Policy Text Block] | Revenue Recognition Revenue Recognition — The Company recognizes revenue in accordance with ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The core principle underlying Topic 606 is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The core principle underlying Topic 606 is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The ASU requires the use of a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. 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 services offered through its HCOs, MPNs, utilization review, medical bill review, medical case management services, lien defense, carve-outs, Medicare set-aside. These services are billed individually as separate components to our customers. These fees include monthly and/or annual HCO and/or MPN administration fees, claim and network access fees, medical bill review fees, legal support fees, Medicare set-aside fees, lien service fees, workers’ compensation carve-outs, utilization review fees, medical case management flat rate fees or hourly fees depending on the agreement with the customer. The Company enters into arrangements for bundled managed care, standalone services, or add-on ancillary services 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. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash Equivalents The Company considers all short term, highly liquid investments that are readily convertible, within three months of origination, to known amounts as cash equivalents. As of December 31, 2021 and 2020, the Company had no cash equivalents. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | 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] | 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 these audited consolidated financial statements. The fully diluted earnings per share includes 16,000 shares of Series A preferred stock, as disclosed in Section L of Note 2. For the Years Ended December 31, 2021 2020 Basic Earnings per share: Income (numerator) $ 995,020 $ 549,570 Shares (denominator) 12,800,000 12,800,000 Per share amount $ 0.08 $ 0.04 Fully Diluted Earnings per share: Income (numerator) $ 995,020 $ 549,570 Shares (denominator) 12,816,000 12,816,000 Per share amount $ 0.08 $ 0.04 |
Depreciation, Depletion, and Amortization [Policy Text Block] | 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 or the estimated lives of the assets. Depreciation is computed on the straight-line method which is five years for computer equipment, office equipment, and furniture and fixtures. |
Use of Estimates, Policy [Policy Text Block] | 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 these audited 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] | Principles of Consolidation The accompanying audited 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] | Fair Value of Financial Instruments The Company applies ASC 820, “Fair Value Measurements . • 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 cash and cash equivalents, receivables and current assets and 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] | General and Administrative Expenses General and administrative expenses include fees for advertising, charity, rent expense for office, shareholders’ expense, auto expenses, bank charges, dues and subscriptions, education, equipment/repairs, IT enhancement and internet expenses, licenses and permits, office supplies, parking, postage and delivery, printing and reproduction, rent expense for equipment, telephone, rent-expense, shareholders’ expense, travel expenses and entertainment costs, and compensated absences. |
Income Tax, Policy [Policy Text Block] | 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] | Capital Structure On January 6, 2020, the Company effected a four-shares-for-one-share (4:1) forward stock split (“Forward Split”) of its common stock and its Series A preferred stock. Unless otherwise noted, impacted amounts, share and per share information included in the financial statements and notes thereto have been retroactively adjusted for the Forward Split as if such Forward Split occurred on the first day of the first period presented. The Company has two classes of stock. The Articles of Incorporation of the Company, as amended, authorize 5,000,000 shares of $0.001 par value preferred stock, which may be issued in one or more series, with designation, rights and privileges of such preferred stock to be set by the board of directors of the Company from time to time. On November 21, 2016, the board of directors of the Company approved a Certificate of Designation of Rights, Privileges and Preferences of Series A preferred stock and authorized the Company’s officers to file such with the Utah Division of Corporations and Commercial Code to create the Series A preferred stock. The Series A preferred stock has a par value of $0.001 and consists of 40,000 shares. The holders of Series A preferred stock are entitled to vote with the common stockholders on all matters brought for approval of the common stockholders. In connection with any such matter, each outstanding share of Series A preferred stock is entitled to 20,000 votes of common stock of the Company. In the event of a liquidation, dissolution or winding up of the Company, the Series A preferred stock shall rank in parity with the Company’s common stock. Holders of Series A preferred stock are entitled to receive dividends, when, as and if declared by the board of directors. The Series A preferred stock shall rank in parity with the Company’s common stock as to any dividends. As of December 31, 2021 and 2020, 16,000 shares of the Series A preferred stock were outstanding. The Company also has voting common stock of 800,000,000 shares authorized at December 31, 2021 and 2020, and 12,800,000 and 12,800,000 shares issued and outstanding, respectively. The Company purchased no shares of treasury stock at cost during fiscal 2021 or 2020. As of December 31, 2021 and 2020, the Company had dividends payable of $37,000 and $37,000, respectively, from a dividend declared in September 2015. As of December 31, 2021 and 2020, no shareholder entitled to claim the unpaid September 2015 dividend made a claim to such dividend, accordingly the Company paid $0 and $0, respectively during in connection with the September 2015 dividend during the years ended December 31, 2021 and 2020. |
Share-Based Payment Arrangement [Policy Text Block] | Share Based Compensation The Company has adopted the fair value method of accounting for stock-based employee and non-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 these audited consolidated statements of operations based on their fair value at grant date. |
Receivable [Policy Text Block] | Trade Receivables In the normal course of business, the Company 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 collectability 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-end 2021 and 2020, the Company had a bad debt reserve of $23,083 and $19,104, 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, 2021 and 2020, are as follows: 12/31/21 12/31/20 Customer A 24 % 20 % Customer B 11 % 9 % Customer C 11 % 10 % |
Concentration Risk, Customer Risk, Policy [Policy Text Block] | Major Customers The Company provides services to insurers, third party administrators, self-administered employers, municipalities and other industries. The Company can provide a full range of services to virtually any size employer in the state of California. The Company is also able to provide utilization review, medical bill review and medical case management services both inside and outside the state of California. During 2021, three major customers accounted for more than 43% of our sales, approximately 24%, 11%, and 8% respectively, of our total sales. By comparison, during 2020 our three largest customers accounted for 42% of sales, approximately 20%, 12%, and 10%, respectively. |
Lessee, Leases [Policy Text Block] | Leases Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of operating lease right-of-use assets of $719,861, lease liabilities for operating leases of $719,861, and a zero cumulative-effect adjustment to accumulated deficit. This lease expires as of April 30, 2022. The Company elected to exclude from its balance sheets recognition of leases having a term of 12 months or less (“short-term leases”). Lease expense is recognized on a straight-line basis over the lease term. If a Company lease does not provide an implicit rate, the Company develops an estimated incremental borrowing rate at the commencement date based on the estimated rate at which it would borrow, in the current economic environment, an amount equal to the lease payments over a similar term on a collateralized basis which is used to determine the present value of lease payments. The Company entered into a new office lease for a 12-month period, which commenced on April 1, 2022. The Company had no finance leases at December 31, 2021 and 2020. |
Subsequent Events, Policy [Policy Text Block] | Subsequent Events In accordance with ASC 855-10 Company management reviewed all material events through the date of issuance and except as follows, there are no material subsequent events to report. As of the date of issuance of the financial statements, it is difficult to determine the impact the COVID-19 outbreak will continue to have on the Company. The extent of its impact will depend upon future developments that are highly uncertain and cannot currently be predicted with any level of confidence. The Company expects the recovery resulting from the COVID-19 pandemic may continue to have a material adverse effect on its business, results of operations, financial condition, and cash flows in one or more future quarters. During the pandemic, our customers had to reduce their workforces and our revenues are derived from their employee counts and workplace injuries. Some of our customers’ industries workforce moved away from those jobs, which may result in slower increase in their workforce to pre-pandemic levels. As a result of the economic contraction from the COVID-19 pandemic, workers’ compensation claims, and medical reviews received were lower in the years covered because of the decline in prior workplace injuries. Our medical case managers usually work on the difficult claims, which can remain open for several months to years. Without the steady flow of new workers’ compensation claims during that time, we expect that our medical case management revenue may continue to be lower throughout 2022, even as more people return to the workforce. The Company has entered into a new 12-month office lease commencing on April 1, 2022. Our office current lease expires as of April 30, 2022. The Company continues to monitor the COVID-19 situation. No impairments were recorded as of the balance sheet date as no triggering events or changes in circumstances had occurred as of year-end; however, due to significant uncertainty surrounding the situation, management's judgment regarding this could change in the future. In addition, while the Company’s results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be reasonably estimated at this time. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
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 these audited consolidated financial statements. The fully diluted earnings per share includes 16,000 shares of Series A preferred stock, as disclosed in Section L of Note 2. For the Years Ended December 31, 2021 2020 Basic Earnings per share: Income (numerator) $ 995,020 $ 549,570 Shares (denominator) 12,800,000 12,800,000 Per share amount $ 0.08 $ 0.04 Fully Diluted Earnings per share: Income (numerator) $ 995,020 $ 549,570 Shares (denominator) 12,816,000 12,816,000 Per share amount $ 0.08 $ 0.04 |
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, 2021 and 2020, are as follows: 12/31/21 12/31/20 Customer A 24 % 20 % Customer B 11 % 9 % Customer C 11 % 10 % |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | The Company capitalizes the purchase of equipment and fixtures for major purchases more than $1,000 per item. Capitalized amounts are depreciated over the useful life of the assets using the straight-line method of depreciation which is five years for computer equipment, office equipment, and furniture and fixtures. Scheduled below are the assets, costs and accumulated depreciation at December 31, 2021 and 2020. Cost Accumulated Depreciation and Amortization Assets December 31, 2021 December 31, 2020 December 31, 2021 (1) December 31, 2020 Computer equipment $ 526,249 $ 507,873 $ 441,597 $ 405,849 Furniture and fixtures 226,323 226,323 206,884 206,446 Office equipment 9,556 9,556 21,111 8,410 Totals $ 762,128 $ 743,752 $ 669,592 $ 620,705 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The tax provision for the years ended December 31, 2021 and 2020, consisted of the following: 2021 2020 Current Federal $ 101,118 $ 152,702 State 112,196 75,766 Deferred Federal (9,304 ) 31,693 State (2,955 ) 10,540 Total tax provision $ 201,055 $ 270,701 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 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, 2021 and December 31, 2020, are as follows: 2021 2020 Depreciation Federal $ (19,215 ) $ (25,840 ) State (6,391 ) (8,592 ) Reserve for bad debts Federal 4,793 4,075 State 1,594 1,355 Deferred Rent Federal 2,088 572 State 694 190 Deferred Revenues Federal 6,965 6,624 State 2,317 2,203 State tax deductions - - Net deferred tax asset (liabilities) $ (7,155 ) $ (19,413 ) |
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: 2021 2020 Expense at federal statutory rate of 21% $ 251,176 $ 172,257 State income taxes, net of federal benefit 79,789 57,285 Non-deductible expenses 10,063 10,027 Tax exempt income (143,805 ) - Other items 3,832 31,132 Income tax provision $ 201,055 $ 270,701 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Lease, Cost [Table Text Block] | The components of lease expense and supplemental cash flow information related to leases for the period are as follows: Year Ended December 31, 2021 Lease Cost Operating lease cost (included in general and administrative in the Company’s consolidated statement of operations) $ 71,359 Other Information Cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2021 $ 279,385 Weighted average remaining lease term – operating leases (in years) 0.33 years Average discount rate – operating leases 5.75 % |
Lessee, Operating Lease, Disclosure [Table Text Block] | The supplemental balance sheet information related to leases for the period is as follows: At December 31, 2021 At December 31, 2020 Operating leases Remaining right-of-use assets $ 70,368 $ 309,282 Short-term operating lease liabilities $ 70,368 $ 243,049 Long-term operating lease liabilities - 66,233 Total operating lease liabilities $ 70,368 $ 309,282 |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Maturities of the Company’s undiscounted lease liabilities are as follows: Year Ending Operating Leases 2022 $ 71,359 Total lease payments 71,359 Less: Imputed interest/present value discount (991 ) Present value of lease liabilities $ 70,368 |
ACCRUED AND OTHER LIABILITIES (
ACCRUED AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Accrued Liabilities [Table Text Block] | As of December 31, 2021 and 2020, accrued liabilities consist of the following: 2021 2020 Salaries and wages $ 115,744 $ 91,693 Compensated absences 154,774 135,530 Legal fees 815 - Accounting fees 26,372 21,577 Sales commissions 12,989 25,699 Other 4,801 653 Total $ 315,495 $ 275,152 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details) | Jan. 06, 2020 | Apr. 05, 2018$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Jan. 01, 2019USD ($) |
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||||
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Preferred Stock (in Shares) | shares | 16,000 | ||||
Property, Plant and Equipment, Depreciation Methods | five | ||||
Stockholders' Equity Note, Stock Split | four-shares-for-one-share | ||||
Preferred Stock, Shares Authorized (in Shares) | shares | 40,000 | 5,000,000 | 5,000,000 | ||
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred Stock, Voting Rights | 20,000 | ||||
Preferred Stock, Shares Outstanding (in Shares) | shares | 16,000 | 16,000 | |||
Common Stock, Shares Authorized (in Shares) | shares | 800,000,000 | 800,000,000 | 800,000,000 | ||
Common Stock, Shares, Issued (in Shares) | shares | 12,800,000 | 12,800,000 | |||
Common Stock, Shares, Outstanding (in Shares) | shares | 12,800,000 | 12,800,000 | |||
Dividends Payable (in Dollars) | $ | $ 37,000 | $ 37,000 | |||
Dividends Payable, Current (in Dollars) | $ | 0 | 0 | |||
Accounts Receivable, Allowance for Credit Loss (in Dollars) | $ | 23,083 | 19,104 | |||
Operating Lease, Right-of-Use Assets (in Dollars) | $ | 70,368 | 309,282 | $ 719,861 | ||
Operating Lease, Liabilities (in Dollars) | $ | 70,368 | 309,282 | 719,861 | ||
Retained Earnings (Accumulated Deficit) (in Dollars) | $ | $ 10,395,532 | $ 9,400,512 | $ 0 | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |||||
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||||
Number of Customers | 3 | 3 | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||||
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||||
Concentration Risk, Percentage | 43.00% | 42.00% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||||
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||||
Concentration Risk, Percentage | 24.00% | 20.00% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||||
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||||
Concentration Risk, Percentage | 11.00% | 12.00% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||||
Concentration Risk, Percentage | 8.00% | 10.00% |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Basic Earnings per share: | ||
Income (numerator) | $ 995,020 | $ 549,570 |
Shares (denominator) | 12,800,000 | 12,800,000 |
Per share amount | $ 0.08 | $ 0.04 |
Fully Diluted Earnings per share: | ||
Income (numerator) | $ 995,020 | $ 549,570 |
Shares (denominator) | 12,816,000 | 12,816,000 |
Per share amount | $ 0.08 | $ 0.04 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedules of Concentration of Risk, by Risk Factor - Accounts Receivable [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk | 24.00% | 20.00% |
Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk | 11.00% | 9.00% |
Customer C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk | 11.00% | 10.00% |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Property, Plant and Equipment, Cost Capitalization | $1,000 | |
Property, Plant and Equipment, Useful Life | 5 years | |
Depreciation, Depletion and Amortization | $ 48,887 | $ 55,428 |
FIXED ASSETS (Details) - Proper
FIXED ASSETS (Details) - Property, Plant and Equipment - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Cost | $ 762,128 | $ 743,752 | |
Accumulated Depreciation and Amortization | 669,592 | [1] | 620,705 |
Computer Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 526,249 | 507,873 | |
Accumulated Depreciation and Amortization | 441,597 | [1] | 405,849 |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 226,323 | 226,323 | |
Accumulated Depreciation and Amortization | 206,884 | [1] | 206,446 |
Office Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 9,556 | 9,556 | |
Accumulated Depreciation and Amortization | $ 21,111 | [1] | $ 8,410 |
[1] | Depreciation and amortization expense for the years ended December 31, 2021 and 2020, totaled $48,887 and $55,428, respectively. |
INCOME TAXES (Details)
INCOME TAXES (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Tax Examination, Description | The years 2019, 2020, and 2021 are still open for examination by the Internal Revenue Service |
INCOME TAXES (Details) - Schedu
INCOME TAXES (Details) - Schedule of Components of Income Tax Expense (Benefit) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current | ||
Federal | $ 101,118 | $ 152,702 |
State | 112,196 | 75,766 |
Deferred | ||
Federal | (9,304) | 31,693 |
State | (2,955) | 10,540 |
Total tax provision | $ 201,055 | $ 270,701 |
INCOME TAXES (Details) - Sche_2
INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Revenues | ||
State tax deductions | $ 0 | $ 0 |
Net deferred tax asset | (7,155) | (19,413) |
Domestic Tax Authority [Member] | ||
Depreciation | ||
Depreciation | (19,215) | (25,840) |
Reserve for bad debts | ||
Reserve for bad debts | 4,793 | 4,075 |
Deferred Rent | ||
Deferred Rent | 2,088 | 572 |
Deferred Revenues | ||
Deferred Revenues | 6,965 | 6,624 |
State and Local Jurisdiction [Member] | ||
Depreciation | ||
Depreciation | (6,391) | (8,592) |
Reserve for bad debts | ||
Reserve for bad debts | 1,594 | 1,355 |
Deferred Rent | ||
Deferred Rent | 694 | 190 |
Deferred Revenues | ||
Deferred Revenues | $ 2,317 | $ 2,203 |
INCOME TAXES (Details) - Sche_3
INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Expense at federal statutory rate of 21% | $ 251,176 | $ 172,257 |
State income taxes, net of federal benefit | 79,789 | 57,285 |
Non-deductible expenses | 10,063 | 10,027 |
Effects of rate change | (143,805) | 0 |
Other items | 3,832 | 31,132 |
Income tax provision | $ 201,055 | $ 270,701 |
INCOME TAXES (Details) - Sche_4
INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (Parentheticals) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Federal statutory rate | 21.00% | 21.00% |
LEASES (Details)
LEASES (Details) | Apr. 01, 2017USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Apr. 01, 2022ft² | Sep. 28, 2015ft² |
LEASES (Details) [Line Items] | |||||
Lessee, Operating Lease, Term of Contract | 39 months | 12 months | 79 months | ||
Operating Lease, Expense | $ 279,385 | $ 257,024 | |||
Area of Real Estate Property | ft² | 320 | 9,439 | |||
Minimum [Member] | |||||
LEASES (Details) [Line Items] | |||||
Operating Lease, Expense | $ 1,723 |
LEASES (Details) - Lease, Cost
LEASES (Details) - Lease, Cost | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Lease, Cost [Abstract] | |
Operating lease cost (included in general and administrative in the Company’s consolidated statement of operations) | $ 71,359 |
Cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2021 | $ 279,385 |
Weighted average remaining lease term – operating leases (in years) | 3 months 29 days |
Average discount rate – operating leases | 5.75% |
LEASES (Details) - Lessee, Oper
LEASES (Details) - Lessee, Operating Lease, Disclosure - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2019 |
Lessee, Operating Lease, Disclosure [Abstract] | |||
Long-term right-of-use assets | $ 70,368 | $ 309,282 | $ 719,861 |
Short-term operating lease liabilities | 70,368 | 243,049 | |
Long-term operating lease liabilities | 0 | 66,233 | |
Total operating lease liabilities | $ 70,368 | $ 309,282 | $ 719,861 |
LEASES (Details) - Lessee, Op_2
LEASES (Details) - Lessee, Operating Lease, Liability, Maturity - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2019 |
Lessee, Operating Lease, Liability, Maturity [Abstract] | |||
2022 | $ 71,359 | ||
Total lease payments | 71,359 | ||
Less: Imputed interest/present value discount | (991) | ||
Present value of lease liabilities | $ 70,368 | $ 309,282 | $ 719,861 |
ACCRUED AND OTHER LIABILITIES_2
ACCRUED AND OTHER LIABILITIES (Details) - Schedule of Accrued Liabilities - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of Accrued Liabilities [Abstract] | ||
Salaries and wages | $ 115,744 | $ 91,693 |
Compensated absences | 154,774 | 135,530 |
Legal fees | 815 | 0 |
Accounting fees | 26,372 | 21,577 |
Sales commissions | 12,989 | 25,699 |
Other | 4,801 | 653 |
Total | $ 315,495 | $ 275,152 |
EQUITY INCENTIVE AWARDS (Detail
EQUITY INCENTIVE AWARDS (Details) | Apr. 06, 2018shares |
Disclosure Text Block Supplement [Abstract] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 8,000,000 |