UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) May 12, 2006
Commission File Number 000-28638
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PACIFIC HEALTH CARE ORGANIZATION, INC.
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(Exact Name of Registrant as Specified in its Charter)
UTAH 30-0233726
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
5150 Pacific Coast Highway, Suite 510, Long Beach, California
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(Address of principal executive offices)
90804
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(Zip Code)
949-721-8272
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(Registrant's Executive Office Telephone Number)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a
Related Audit Report or Completed Interim Review.
In connection with the preparation of its federal and state income
tax returns, the Company commenced a review of its accounting related to
its income tax obligations. Based on the Company's internal review, and
after consultation with the Board of Directors and its independent
registered public accounting firm, on May 12, 2006, the Company concluded
that its audited financial statements for the years ended December 31,
2005 and 2004 are required to be restated to correct accounting errors in
the calculation of the Company's income tax expense, liability and
deferred tax asset.
Because of the restatement, the Company's previously issued
consolidated financial statements which are included in its Annual Report
on Form 10-KSB for the year ended December 31, 2005 should no longer be
relied on. The Company intends to effect the restatement through the
filing of an amended Annual Report for the year ended December 31, 2005,
concurrently with the filing of this Current Report on Form 8-K.
The primary effects of the corrections discussed above have resulted
in the Company recognizing an increase in Total current assets and Total
assets in the amount of $19,620, an increase in Total liabilities of
$40,812 and an increase in Accumulated (deficit) and Total liabilities &
stockholders' equity of $19,620 on the Consolidated Balance Sheets as of
the year ended December 31, 2005. On the Consolidated Statements of
Operations the corrections resulted in an increase in Total expenses of
$23,457, and a change from income from operations of $13,163 and Income
before taxes of $15,619 to a Loss from operations of $10,294 and a Loss
before taxes of $7,838. The correction also resulted in an increase in Net
loss from $8,131 to $29,323.
Following is a summary of the effects of these adjustments on the
Company's Balance Sheets as of December 31, 2005, its Statements of
Operations for the year ended December 31, 2005 and its Statements of Cash
Flows for the years ended December 31, 2005 and 2004:
CONSOLIDATED BALANCE SHEETS
<Table>
<Caption>
AS
PREVIOUSLY AS
REPORTED ADJUSTMENTS RESTATED
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DECEMBER 31, 2005
Total current assets $ 739,273 $ 19,620 $ 758,893
Total assets $ 759,184 $ 19,620 $ 778,804
Total liabilities $ 312,611 $ 40,812 $ 353,423
Total liabilities &
stockholders' equity $ 759,184 $ 19,620 $ 778,804
</Table>
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<Table>
<Caption>
CONSOLIDATED STATEMENTS OF OPERATIONS
AS
PREVIOUSLY AS
REPORTED ADJUSTMENTS RESTATED
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DECEMBER 31, 2005
Total revenue, net $ 2,076,391 $ - $ 2,076,391
Total expenses 2,063,228 23,457 2,086,685
Income (loss) from operations 13,163 (23,457) (10,294)
Income (loss) before taxes 15,619 (23,457) (7,838)
Income tax expense 23,750 (2,265) 21,485
Net income (loss) $ (8,131) $ (21,192) $ (29,323)
<Caption>
CONSOLIDATED STATEMENT OF CASH FLOWS
AS
PREVIOUSLY AS
REPORTED ADJUSTMENTS RESTATED
------------ ------------ ------------
DECEMBER 31, 2005
Net cash provided by operations $161,584 - $161,584
</Table>
The restatements will have no effect on net loss or net loss per
common share in any of the respective periods.
After reviewing the circumstances leading up to the restatement,
management believes that the errors were inadvertent and unintentional.
For the year ended December 31, 2005, the Company's Statements of
Operations reflected a "NET LOSS" of $8,131. In the past the Company has
typically realized a loss from operations or had net operating loss carry
forwards which resulted in the Company realizing no income tax obligation.
In connection with the preparation of its federal and state tax returns,
the Company discovered that for income tax accounting purposes, the Company
realized taxable income during the year ended December 31, 2005. Following
discovery of this error, the Company has implemented new policies requiring
our internal accounting staff on a quarterly basis to calculate both book
income or loss and taxable income or loss to prevent recurrence of future
errors of this nature and to strengthen our internal control process.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be signed
on its behalf by the undersigned hereunto duly authorized.
PACIFIC HEALTH CARE ORGANIZATION, INC.
Date: May 15, 2006 By: /S/ Tom Kubota
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Tom Kubota, President
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