Document and Entity Information
Document and Entity Information - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Nov. 15, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | CANFIELD MEDICAL SUPPLY, INC. | |
Entity Central Index Key | 1,553,788 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 0 | |
Entity Common Stock, Shares Outstanding | 10,527,200 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED BALANCE SHEETS (Unaud
CONDENSED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash | $ 37,177 | $ 7,343 |
Accounts receivable | 142,624 | 167,063 |
Inventory | 26,918 | 21,589 |
Total Current Assets | 206,719 | 195,995 |
Equipment, net of accumulated depreciation of $47,234 and $40,771 | 47,446 | 43,753 |
Total Assets | 254,165 | 239,748 |
Current Liabilities | ||
Accounts payable | 127,817 | 135,211 |
Line of credit | 74,000 | 77,250 |
Current portion of long-term debt | 7,726 | 7,603 |
Total Current Liabilities | 209,543 | 220,064 |
Long-term debt | 17,276 | 21,169 |
Total Liabilities | 226,819 | 241,233 |
Stockholders' Deficit | ||
Preferred stock, no par value; 5,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, no par value; 100,000,000 shares authorized; 10,527,200 (Jun. 30, 2016) and 10,027,200 (Dec. 31, 2015) shares issued and outstanding | 168,515 | 118,515 |
Accumulated deficit | (141,169) | (120,000) |
Total Stockholders' Deficit | 27,346 | (1,485) |
Total Liabilities and Stockholders' Deficit | $ 254,165 | $ 239,748 |
CONDENSED BALANCE SHEETS (Unau3
CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0 | $ 0 |
Preferred stock, authorized shares | 5,000,000 | 5,000,000 |
Preferred stock, issued shares | ||
Preferred stock, outstanding shares | ||
Common stock, par value | $ 0 | $ 0 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 10,527,200 | 10,027,200 |
Common stock, outstanding shares | 10,527,200 | 10,027,200 |
Net of depreciation on equipment | $ 56,128 | $ 40,771 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Sales (net of returns) | $ 199,985 | $ 189,076 | $ 459,638 | $ 400,955 |
Cost of goods sold | 108,804 | 103,014 | 235,114 | 194,979 |
Gross profit | 91,181 | 86,062 | 224,524 | 205,976 |
Operating expenses: | ||||
Salaries and wages | 70,144 | 59,157 | 139,138 | 123,924 |
Professional fees | 10,759 | 6,660 | 19,459 | 16,445 |
Depreciation | 12,783 | 7,004 | 23,156 | 14,300 |
Other selling, general and administrative | 30,986 | 29,165 | 64,469 | 66,977 |
Total operating expenses | 124,672 | 101,986 | 246,222 | 221,646 |
Income (loss) from operations | (33,491) | (15,924) | (21,698) | (15,670) |
Other income (expense): | ||||
Interest expense | (863) | (1,307) | (1,898) | (2,997) |
Gain on disposal of fixed assets | 1,106 | 1,682 | 2,427 | 2,235 |
Total other income (expense) | 243 | 375 | 529 | (762) |
Income (loss) before provision for income taxes | (33,248) | (15,549) | (21,169) | (16,432) |
Provision for income tax | ||||
Net income (loss) | $ (33,248) | $ (15,549) | $ (21,169) | $ (16,432) |
Net income (loss) per share (basic and fully diluted) | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average number of common shares outstanding | 10,527,200 | 10,027,200 | 10,312,914 | 10,027,200 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ (21,169) | $ (16,432) |
Adjustments to reconcile net loss to net cash provided by (used for) operating activities: | ||
Gain on disposal of fixed assets | (2,427) | (2,235) |
Depreciation | 23,156 | 14,300 |
Changes in current assets and liabilities: | ||
(Increase) decrease in accounts receivable | 24,439 | (40,540) |
(Increase) decrease in inventory | (5,329) | 1,586 |
Increase (decrease) in accounts payable | (7,394) | 37,198 |
Net cash used for operating activities | 11,276 | (6,123) |
Cash Flows From Investing Activities: | ||
Proceeds from sale of property and equipment | (27,468) | (5,275) |
Purchase of property and equipment | 3,046 | |
Net cash used for investing activities | (24,422) | (5,275) |
Cash Flows From Financing Activities: | ||
Payments on line of credit | (3,250) | (1,252) |
Payments on long-term debt | (3,770) | (3,344) |
Proceeds from sales of common stock, net | 50,000 | |
Net cash provided by (used for) financing activities | 42,980 | (4,596) |
Net Increase (Decrease) in Cash | 29,834 | (15,994) |
Cash At The Beginning Of The Period | 7,343 | 24,908 |
Cash At The End Of The Period | 37,177 | 8,914 |
Supplemental Disclosure | ||
Cash paid for interest | 1,898 | 2,997 |
Cash paid for income taxes |
ORGANIZATION, OPERATIONS AND SU
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Canfield Medical Supply, Inc. (the "Company"), was incorporated in the State of Ohio on September 3, 1992, and changed domicile to Colorado on April 18, 2012. The Company is in the business of home health services, primarily the selling of durable medical equipment and medical supplies to the public, nursing homes, hospitals, and other end users. The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the three and six months ended June 30, 2016 and 2015 have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2015 audited financial statements. The results of operations for the periods ended June 30, 2016 and 2015 are not necessarily indicative of the operating results for the full year. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. Accounts receivable The majority of the Company's revenues are received from Medicare, Medicaid, and private insurance companies. As such, the Company records revenues at allowable amounts, net of estimated allowances and discounts based on contracted prices and historical collection rates. The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At June 30, 2016 and December 31, 2015, the Company has determined that no allowance for doubtful accounts is necessary. Property and equipment Property and equipment are recorded at cost and depreciated under straight line methods over each item's estimated useful life. Inventory The Company carries inventory of durable medical equipment and medical supplies for resale. Inventory is accounted for on a first–in first-out basis. Revenue recognition The Company's primary source of revenue is reimbursement from Medicare, Medicaid and private insurance companies for the sale of medical equipment and supplies to patients. Revenue from product sales is recognized subsequent to a patient (customer) ordering a product at an agreed-upon price, and when delivery has occurred and collectability is reasonably assured. A purchase arrangement is evidenced by a written order, with delivery considered as made after physical customer acceptance. Although rare, defective products may be returned, with other return issues considered on a case-by-case basis. Services, such as periodic scheduled deliveries, are contracted in writing, and generally billed monthly. Any service revenue earned by the Company for services, such as safety and set-up consulting or claims processing, is recorded after the service is performed. Rental of durable home medical equipment is evidenced by written contract, with revenue recognized when rent is earned. Advertising costs Advertising costs are expensed as incurred. The Company had advertising costs during the six months ended June 30, 2016 and 2015 of $2,520 and $1,781, respectively. Income tax The Company accounts for income taxes pursuant to ASC 740. Under ASC 740, deferred taxes are provided for using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Net income (loss) per share The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share. There were no potentially dilutive debt or equity instruments issued or outstanding during the six months ended June 30, 2016 or 2015. Financial instruments The carrying value of the Company's financial instruments, as reported in the accompanying balance sheets, approximates fair value. Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents. The Company places its cash and cash equivalents at well-known financial institutions, where at times, such balances may exceed FDIC insurance limits. The Company receives a significant amount of its revenues in reimbursements from Medicare and Medicaid through competitive bidding processes. There is no guarantee that the Company will continue to be selected as a winning contract supplier under future bidding rounds. Long-lived assets In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value. Products and services, geographic areas and major customers The Company's business of medical supply sales constitutes one operating segment. All revenues each year were domestic and to external customers. |
EQUIPMENT
EQUIPMENT | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
EQUIPMENT | NOTE 2. EQUIPMENT Fixed assets are comprised of office equipment, vehicles, and the wheelchair rental pool, which consists of wheelchairs rented to customers over the shorter of the 13-month rental period mandated by Medicaid and Medicare, or the period over which the customer requires use of the wheelchair. At the end of the use period, the wheelchair is either returned to the pool to be rented to another customer, or title of the chair is transferred to the customer. Depreciation is computed over the estimated useful life of the assets, ranging from 13 months to 7 years, on the straight-line basis. Depreciation expense for the six months ended June 30, 2016 and 2015 was $23,156 and $14,300, respectively. Accumulated depreciation totaled $56,128 and $40,771 at June 30, 2016 and December 31, 2015, respectively. |
LINE OF CREDIT
LINE OF CREDIT | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT | NOTE 3. LINE OF CREDIT At June 30, 2016 and December 31, 2015, the Company owed a bank $74,000 and $77,250, respectively, under a revolving line of credit. The line of credit is capped at $100,000, is secured by all Company assets, is due on demand, and bears interest at variable rates approximating 4% on average. Interest expense under the note approximated $1,500 during each of the six months ended June 30, 2016 and 2015. During the six months ended June 30, 2016 and 2015, the Company made net principal payments of $3,250 and $1,252, respectively. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 4. LONG-TERM DEBT Long-term debt consists of the following: June 30, December 31, 3.53% installment note payable $352 monthly, including interest, through July 2019, collateralized by vehicle with carrying value of $9,776 $ 12,336 $ 14,214 2.99% installment note payable $350 monthly, including interest, through August 2019, collateralized by vehicle with carrying value of $11,668 12,666 14,558 25,002 28,772 Less principal due within one year (7,726 ) (7,603 ) TOTAL LONG-TERM DEBT $ 17,276 $ 21,169 |
COMMON STOCK
COMMON STOCK | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
COMMON STOCK | NOTE 5. COMMON STOCK During the period of January through March 2016, the Company underwent a stock offering of 500,000 shares at $.10 per share for total proceeds of $50,000 to primarily unaffiliated individuals and entities. |
LEASE COMMITMENTS
LEASE COMMITMENTS | 6 Months Ended |
Jun. 30, 2016 | |
Leases [Abstract] | |
LEASE COMMITMENTS | NOTE 6. LEASE COMMITMENTS The Company rents office space under a non-cancellable lease through May 2017 with monthly payments of approximately $2,700 plus costs. Lease expense incurred for each of the six months ended June 30, 2016 and 2015 was approximately $16,200. Subsequent to June 30, 2016, future minimum payments under the leases total approximately $30,300 including: 2016 (balance) $16,800, and 2017 - $13,500 |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 7. GOING CONCERN The Company has suffered losses from operations and has working capital and stockholders' equity deficits. In all likelihood, the Company will be required to make significant future expenditures in connection with marketing efforts along with general administrative expenses. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan of selling medical supplies on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 8. SUBSEQUENT EVENTS On July 11, 2016, the Company purchased a delivery vehicle for $17,913 pursuant to a 3.79% simple finance charge agreement. The loan term is five years with a monthly payment of $299. The Company has evaluated subsequent events through the date these financial statements were available to be issued and determined that there are no other reportable subsequent events. |
ORGANIZATION, OPERATIONS AND 14
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. |
Accounts receivable | Accounts receivable The majority of the Company's revenues are received from Medicare, Medicaid, and private insurance companies. As such, the Company records revenues at allowable amounts, net of estimated allowances and discounts based on contracted prices and historical collection rates. The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At June 30, 2016 and December 31, 2015, the Company has determined that no allowance for doubtful accounts is necessary. |
Property and equipment | Property and equipment Property and equipment are recorded at cost and depreciated under straight line methods over each item's estimated useful life. |
Inventory | Inventory The Company carries inventory of durable medical equipment and medical supplies for resale. Inventory is accounted for on a first–in first-out basis. |
Revenue recognition | Revenue recognition The Company's primary source of revenue is reimbursement from Medicare, Medicaid and private insurance companies for the sale of medical equipment and supplies to patients. Revenue from product sales is recognized subsequent to a patient (customer) ordering a product at an agreed-upon price, and when delivery has occurred and collectability is reasonably assured. A purchase arrangement is evidenced by a written order, with delivery considered as made after physical customer acceptance. Although rare, defective products may be returned, with other return issues considered on a case-by-case basis. Services, such as periodic scheduled deliveries, are contracted in writing, and generally billed monthly. Any service revenue earned by the Company for services, such as safety and set-up consulting or claims processing, is recorded after the service is performed. Rental of durable home medical equipment is evidenced by written contract, with revenue recognized when rent is earned. |
Advertising costs | Advertising costs Advertising costs are expensed as incurred. The Company had advertising costs during the six months ended June 30, 2016 and 2015 of $2,520 and $1,781, respectively. |
Income tax | Income tax The Company accounts for income taxes pursuant to ASC 740. Under ASC 740, deferred taxes are provided for using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
Net income (loss) per share | Net income (loss) per share The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share. There were no potentially dilutive debt or equity instruments issued or outstanding during the six months ended June 30, 2016 or 2015. |
Financial Instruments | Financial instruments The carrying value of the Company's financial instruments, as reported in the accompanying balance sheets, approximates fair value. |
Concentrations | Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents. The Company places its cash and cash equivalents at well-known financial institutions, where at times, such balances may exceed FDIC insurance limits. The Company receives a significant amount of its revenues in reimbursements from Medicare and Medicaid through competitive bidding processes. There is no guarantee that the Company will continue to be selected as a winning contract supplier under future bidding rounds. |
Long-Lived Assets | Long-lived assets In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value. |
Products and services, geographic areas and major customers | Products and services, geographic areas and major customers The Company's business of medical supply sales constitutes one operating segment. All revenues each year were domestic and to external customers. |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | June 30, December 31, 3.53% installment note payable $352 monthly, including interest, through July 2019, collateralized by vehicle with carrying value of $9,776 $ 12,336 $ 14,214 2.99% installment note payable $350 monthly, including interest, through August 2019, collateralized by vehicle with carrying value of $11,668 12,666 14,558 25,002 28,772 Less principal due within one year (7,726 ) (7,603 ) TOTAL LONG-TERM DEBT $ 17,276 $ 21,169 |
ORGANIZATION, OPERATIONS AND 16
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Accounting Policies [Abstract] | ||
Advertising cost | $ 2,520 | $ 1,781 |
EQUIPMENT (Details Narrative)
EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||||
Depreciation | $ 12,783 | $ 7,004 | $ 23,156 | $ 14,300 | |
Accumulated depreciation | $ 56,128 | $ 56,128 | $ 40,771 |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |||
Line of credit | $ 74,000 | $ 77,250 | |
Interest expense | 1,500 | $ 1,500 | |
Principal payments made | $ 3,250 | $ 1,252 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Long Term Gross | $ 25,002 | $ 28,772 |
Less principal due within one year | (7,726) | (7,603) |
Total Long Term debt | 17,276 | 21,169 |
Long-term Debt One [Member] | ||
Note Payable, monthly installment | 352 | |
Carrying Value | 9,776 | |
Long Term Gross | 12,336 | 14,214 |
Long-term Debt Two [Member] | ||
Note Payable, monthly installment | 350 | |
Carrying Value | 11,668 | |
Long Term Gross | $ 12,666 | $ 14,558 |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Accounting Policies [Abstract] | ||
Proceeds from sales of common stock | $ 50,000 |
LEASE COMMITMENTS (Details Narr
LEASE COMMITMENTS (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Leases [Abstract] | |||
Office space approximate monthly payment | $ 2,700 | ||
Lease expense on all leases | $ 16,200 | $ 16,200 | |
2,016 | $ 16,800 | ||
2,017 | 13,500 | ||
Total future minimum payments | $ 30,300 |