PROCARE HEALTH, INC..
ACCOUNTANT'S COMPILATION REPORT AND
FINANCIAL STATEMENTS
September 30, 2021
PROCARE HEALTH, INC.
TABLE OF CONTENTS
| ACCOUNTANT'S COMPILATION REPORT | 3 |
| FINANCIAL STATEMENTS FOR THE NINE MONTH ENDED SEPTEMBER 30, 2021, | 4 |
| Balance Sheet | 5 |
| Statement of Income and Retained Earnings | 6 |
| Statement of Changes in Stockholders' equity | 7 |
| Statement of Cash Flows | 8 |
| NOTES TO FINANCIAL STATEMENTS | 9 |
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
ACCOUNTANT'S COMPILATION REPORT
To the Board of Directors ProCare Health, Inc Garden Grove, California
Management is responsible for the accompanying financial statements of ProCare Health, Inc., which comprise the balance sheet as of September 30, 2021, and the related statement of income and retained earnings for nine months ended September 30, 2021, in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting Review Services promulgated by the Accounting Review Services Committee of the AICPA. We did not audit or review the financial statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any form of assurance on these financial statements.
/s/ Buu D. Nguyen
BUU D NGUYEN CPA INC
BUU D NGUYEN, CPA
Garden Grove, California November 11, 2021
FINANCIAL STATEMENTS
BALANCE SHEET
September 30, 2021
| ASSETS | | |
| CURRENT ASSETS | | | | |
| Cash | | $ | 81,316 | |
| Accounts receivable | | | 284,847 | |
| Total Current Assets | | | 366,163 | |
| PROPERTY AND EQUIPMENT, at cost | | | | |
| Computers | | | 11,933 | |
| | | | 11,933 | |
| Less accumulated depreciation | | | (4,741 | ) |
| Net Property and Equipment | | | 7,192 | |
| OTHER ASSETS | | | | |
| Investments | | | 925,000 | |
| Total Other Assets | | | 925,000 | |
| TOTAL ASSETS | | $ | 1,298,355 | |
| | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
| CURRENT LIABILITIES | | | | |
| Accounts payable | | $ | 95,236 | |
| Income taxes payable | | | 220,640 | |
| Total Current Liabilities | | | 315,876 | |
| STOCKHOLDERS' EQUITY | | | | |
| Common stock | | | 25,000 | |
| Retained earnings | | | 957,479 | |
| Total Stockholders' equity | | | 982,479 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 1,298,355 | |
See accompanying notes and accountant's compilation report.
PROCARE HEALTH, INC.
Statement of Income and Retained Earnings
For Nine Months Ended September 30, 2021
| REVENUE | | |
| Management services | | $ | 1,681,048 | |
| Stop loss insurance income | | | 162,532 | |
| Other income | | | 214,000 | |
| Total Revenue | | | 2,057,580 | |
| DIRECT EXPENSES | | | | |
| Claim expenses | | | 7,398 | |
| Contractors | | | 197,735 | |
| Software subscriptions | | | 201,632 | |
| Stop loss insurance | | | 42,534 | |
| Total Direct Expenses | | | 449,299 | |
| GROSS MARGIN | | | 1,608,281 | |
| GENERAL AND ADMINISTRATIVE EXPENSES | | | | |
| Answering service | | | 11,098 | |
| Credentialing | | | 4,675 | |
| Consulting fees | | | 221,970 | |
| Depreciation | | | 1,378 | |
| Insurance | | | 36,115 | |
| Internet expense | | | 10,791 | |
| Legal and accounting | | | 143,232 | |
| Office supplies | | | 250,219 | |
| Payroll expenses | | | 496,296 | |
| Payroll taxes | | | 56,260 | |
| Repairs and maintenance | | | 2,105 | |
| Total G&A Expenses | | | 1,234,139 | |
| INCOME(LOSS) BEFORE PROVISION FOR INCOME TAXES | | | 374,142 | |
| PROVISION FOR INCOME TAXES | | | (104,698 | ) |
| NET INCOME | | | 269,444 | |
| RETAINED EARNINGS, BEGINNING OF YEAR | | | 825,035 | |
| Distribution | | | (137,000 | ) |
| RETAINED EARNINGS, END OF PERIOD | | $ | 957,479 | |
See accompanying notes and accountant's compilation report. Page4
PROCARE HEALTH, INC.
Statement of Changes in Stockholders' Equity
For the Nine Months Ended September 30, 2021
| | | | Common Stock | | | | | | | | | | | | |
| | | | Shares | | | | Amount | | | | Additional Paid-in Capital | | | | Retained Earnings | | | Total Stockholders' Equity | |
| Balance at December 31, 2020 | | | 25000 | | | $ | 25,000 | | | $ | — | | | $ | 825,035 | | $ | 850,035 | |
| Distribution | | | | | | | | | | | | | | | (137,000 | | | (137,000 | ) |
| Net income | | | | | | | — | | | | — | | | | 269 444 | | | 269.444 | |
| Balance at September 30, 2021 | | | 25000 | | | $ | 25,000 | | | | | | | $ | 957,479 | | $ | 982,479 | |
See accompanying notes and accountant's compilation report.
PROCARE HEALTH, INC.
Statement of Cash Flows
For the Nine months Ended September 30, 2021
| CASH FLOW FROM OPERATING ACTIVITIES | | | | |
| Net income | | | 269,444 | |
| Adjustment to reconcile net income to net cash provided by(used by) operating activities | | | | |
| (Increase)/ Decrease in operating assets | | | | |
| Depreciation | | | 1,378 | |
| Accounts Receivable | | | (227,938 | ) |
| Investments | | | (155,000 | ) |
| Increase /(Decrease) in operating liabilities | | | | |
| Accounts payable | | | 89,625 | |
| Loan payable PPP | | | (51,872 | ) |
| Income taxes payable | | | 46,792 | |
| Net cash used by Operating Activities | | | (27,571 | ) |
| CASH FLOW FROM INVESTING ACTIVITIES | | | | |
| Acquisition of equipment | | | (489 | ) |
| Net cash provided (used) by investing activities | | | (489 | ) |
| CASH FLOW FROM FINANCING ACTIVITIES | | | | |
| Distribution to stockholder | | | (137,000 | ) |
| Net cash provided (used) by financing activities | | | (137,000 | ) |
| Net increase (decrease) in cash | | | (165,060 | ) |
| | | | | |
| Cash at Beginning of year | | | 246,376 | |
| Cash at End of period | | | 81,316 | |
See accompanying notes and accountant's compilation report.
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2021
1. NATURE OF OPERATIONS
PROCARE HEALTH, INC. (the "Company") is an Independent Physicians Association ("IPA") incorporated in the State of California on September 1,2011. The Company is a risk bearing organization, as defined and registered through the California Department of Managed Health Care (DMHC) and engaged in providing professional services under Health Management Organization ("HMO") health plan contracts through a network of providers that consists of primary care and specialty care physicians. The Company contracts with these providers through a variety of capitation and fee for service arrangements to provide a full scope of services for all health care needs of the HMO members. 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, INC. (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 ACCOUNTANT'S COMPILATION REPORT
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2021
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 September 30, 2021, the cash, and cash equivalents in the amount of $81,316 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 $284,847 on September 30. 2021.
Property and Equipment .
The Company has fixed assets identified as of September 30, 2021, in the amount of $11,933 being depreciated for 5 years.
Revenue recognition and contract provisions
The Company contracts with 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.
SEE ACCOMPANYING ACCOUNTANT'S COMPILATION REPORT
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2021
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 period ended September 30,2021 consist of the following:
| | | 2021 |
| Federal | | $ | 71,624 | |
| State | | | 33,074 | |
| | | $ | 104,698 | |
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, permanent 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 September 30, 2021
4. COMMON STOCKS
On September 30, 2021, 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 November 11, 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 Accountant's Compilation Report
SEE ACCOMPANYING ACCOUNTANT'S COMPILATION REPORT
