PROCARE HEALTH, INC.
INDEPENDENT AUDITOR'S REPORT AND
FINANCIAL STATEMENTS
December 31, 2020
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PROCARE HEALTH, INC.
TABLE OF CONTENTS
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INDEPENDENT AUDITOR'S REPORT | 3 |
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020 | 4 |
Balance Sheet | 5 |
State of Income Retained Earnings | 6 |
Statement of Changes in Stockholders' equity | 7 |
Statement of Cash Flows | 8 |
NOTES TO FINANCIAL STATEMENTS | 9 |
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BUU D NGUYEN CPA INC
CERTIFIED PUBLIC ACCOUNTING 14180 BROOKHURST ST
GARDEN GROVE CA 92846 TEL (714) 530-3602
e-mail: buunguyen cpa@yahoo.com
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors ProCare Health, Inc Garden Grove, California
Report on the Financial Statements
We have audited the accompanying financial statements of ProCare Health, Inc. (A California Corporation) which comprise the balance sheet as of December 31, 2020, and the related statements of income and retained earnings, changes in stockholders' equity, and cash flows for the year then ended and the related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.
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continuation
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence is sufficient and appropriate to provide a basis for our audit opm10n.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ProCare Health, Inc. as of December 31, 2020, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
/s/ Buu D Nguyen
BUU D NGUYEN CPA INC
Garden Grove, California August 18, 2021
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FINANCIAL STATEMENTS
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PROCARE HEALTH, INC.
BALANCE SHEET
December 31, 2020
ASSETS | ||||
CURRENT ASSETS | ||||
Cash | $ | 246,376 | ||
Accounts receivable | 56,909 | |||
Total Current Assets | 303,285 | |||
PROPERTY AND EQUIPMENT, at cost | ||||
Computers | 11,444 | |||
11,444 | ||||
Less accumulated depreciation Net Property and Equipment | (3,363 | ) | ||
8,081 | ||||
OTHER ASSETS | ||||
Investments | 770,000 | |||
Total Other Assets | 770,000 | |||
TOTAL ASSETS | $ | 1,081,366 | ||
LIABILITIES AND STOCKHOLDER'S EQUITY | ||||
CURRENT LIABILITIES | ||||
Account payable | $ | 5,611 | ||
Loan payable - PPP | 51,872 | |||
Income tax payable | 173,848 | |||
Total Current Liabilities | 231,331 | |||
STOCKHOLDERS' EQUITY | ||||
Common stock | 25,000 | |||
Retained earnings | 825,035 | |||
Total Stockholder's equity | 850,035 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,081,366 |
See accompanying notes and auditor’s report.
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PROCARE HEALTH, INC.
Statement of Income and Retained Earnings
For the Year Ended December 31, 2020
REVENUE | ||||
Management service | $ | 1,769,262 | ||
Stop loss insurance income | 157,080 | |||
Other income | 240,302 | |||
Total Revenue | 2,166,644 | |||
DIRECT EXPENSES | ||||
Claim expenses | 7,716 | |||
Contractors | 351,797 | |||
Software subscriptions | 155,448 | |||
Stop loss insurance | 30,862 | |||
Total Direct Expenses | 545,823 | |||
GROSS MARGIN | 1,620,821 | |||
GENERAL AND ADMINISTRATIVE EXPENSES | ||||
Answering service | 11,863 | |||
Credentialing | 5,450 | |||
Consulting fees | 116,620 | |||
Depreciation | 2,102 | |||
Donation | 70,000 | |||
Insurance | 22,680 | |||
Internet expense | 21,508 | |||
Legal and accounting | 46,624 | |||
Office supplies | 244,738 | |||
Payroll expenses | 575,369 | |||
Payroll taxes | 37,738 | |||
Repairs and maintenance | 15,794 | |||
Total G&A Expenses | 1,170,486 | |||
INCOME(LOSS) BEFORE PROVISION FOR INCOME TAXES | 450,335 | |||
PROVISION FOR INCOME TAXES | (126,020 | ) | ||
NET INCOME | 324,315 | |||
RETAINED EARNINGS, BEGINNING OF YEAR | 675,720 | |||
Distribution | (175,000 | } | ||
RETAINED EARNINGS, END OF YEAR | $ | 825,035 |
See accompanying notes and auditor’s report
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PROCARE HEALTH, INC.
Statement of Changes in Stockholders' Equity
For the Year Ended December 31, 2020
Common Stock | ||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Retained Earnings | Total Stockholders' Equity | ||||||||||||||||
Balance on December 31, 2019 25000 | 25,000 | 25000 | 675,720 | 700,720 | ||||||||||||||||
Distribution | (175,000 | ) | (175,000 | ) | ||||||||||||||||
Net income | — | — | — | 324,315 | 324,315 | |||||||||||||||
Balance on December 31, 2020, | 25000 | 25000 | 825,035 | 850,035 |
See accompanying notes and auditor’s report
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PROCARE HEALTH, INC.
Statement of Cash Flows
For the Year Ended December 31, 2020
CASH FLOW FROM OPERATING ACTIVITIES | |||
Net income | $ | 324,315 | |
Adjustment to reconcile net income to net cash | |||
provided by (used by) operating activities | |||
(Increase)/ Decrease in operating assets | |||
Depreciation | 2,102 | ||
Accounts receivable | 3,067 | ||
Investment | |||
Increase/ (Decrease) in operating liabilities | |||
Accounts payable | 5,611 | ||
Loan payable PPP | 51,872 | ||
Income taxes payable | 30,690 | ||
Net cash provided by operating activities | 417,657 | ||
CASH FLOW FROM INVESTING ACTIVITIES | |||
Acquisition of equipment | (2,751 | ) | |
Net cash provided (used) by investing activities | (2,751 | ) | |
CASH FLOW FROM FINANCING ACTIVITIES | |||
Distribution to stockholder | (175,000 | ) | |
Net cash provided (used) by financing activities | (175,000 | ) | |
Net increase (decrease) in cash | 239,906 | ||
Cash at Beginning of year | 6,470 | ||
Cash at End of year | $ | 246,376 |
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PROCARE HEALTH, INC.
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020
1. NATURE OF OPERATIONS
PROCARE HEALTH, INC (the "Company") is a management service organization (MSO)that provides administrative infrastructure and technology for risk bearing Independent Physicians Association ("IPA") operated in Southern California and Northern California. The company was incorporated in the State of California on September 1, 2011. The Company enable the physician organizations to succeed in the assumption of financial and population risk, to improve the organization's performance in health care delivery and to provide actionable health care data analytics. ProCare Health, Inc provides claims administration, compliance, credentialing, quality management, utilization management, contracting, healthcare provider relations, member services, care management, coding optimization and financial reporting services to the California Department of Managed Health Care (DMHC). The Company markets and sells the services of its member physicians to HMO' s and then administers the financial, informational and risk management aspects associated with each contract.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The summary of significant accounting policies of PROCARE HEALTH (the Company) is presented to assist in the understanding of the Company's financial statements. The financial statements and notes are representations of the Company's management, who are responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk are primary cash and cash equivalents.
The Company deposits its cash in accounts with a major financial institution, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to legal limits. At times, cash and cash equivalents may be more than FDIC-insured limits. The Company places its cash deposits with high-credit, quality financial institutions and, by policy, limits its credit exposure. The Company has not experienced any losses in such amounts and believes it is not exposed to significant credit risk
SEE ACCOMPANYING AUDITOR 'S REPORT
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PROCARE HEALTH, INC.
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Cash and cash equivalents
The Company has highly liquid instruments with a demand account as cash equivalents. As of December 31, 2020, the cash, and cash equivalents in the amount of $246,376 included in the balance sheet were held in a financial institution the form of a checking account.
Use of estimates
The Company prepares financial statements in conformity with generally accepted accounting principles that require management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the accounting period. Actual results could differ from such estimates.
Trade accounts receivable
Trade accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Changes in the valuation allowance have not been material to the financial statements. Account receivable was $56,909 on December 31, 2020.
Property and Equipment
The Company has fixed assets identified as of December 31, 2020, in the amount of $11,444 being depreciated for 5 years.
Revenue recognition and contract provisions
The Company contracts with the Independent Physicians Association ("IPA") for a negotiated fixed fee based on the IPA monthly collected revenues from the health plans to provide business services for administrative assistance and operational support for billing, payroll, and marketing.
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PROCARE HEALTH, INC.
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income tax
The Company has no uncertain tax positions that qualify for recognition or disclosure in the financial statements. The income tax returns of the company for 2018, 2019, 2020 are subject to examination by Internal Revenue Service and Franchise Tax Board, generally for three (3) years after they have been filed
The income tax provision for the year ended December 31, 2020, consist of the following:
2020 | ||||
Federal | $ | 86,210 | ||
State | 39,810 | |||
$ | 126,020 |
The income tax provision amounts shown on the statement of income and retained earnings differ from the amounts that would result from applying statutory tax rates to income before income taxes primarily because of the marginal tax rates used to compute deferred taxes, pennanent differences between determining income for financial statement purposes and computing taxable income, and the effect of state and local taxes.
3. RESTRICTED ACCOUNT
There is no Restricted Account identified as of December 31, 2020
4. COMMON STOCKS
On December 31, 2020, the Company has authorized 25,000 shares, at $1.00 par value.
5. SUBSEQUENT EVENTS
Date of Management Review- The company has evaluated subsequent events through August 18, 2021, the date of which the Company's audited financial statements were available to be issued. Through that date, management has determined that the Company did not have any material recognizable or non-recognizable subsequent events.
End of Independent Auditor's Report
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