UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
AMENDMENT NO. 1
TO
FORM 10
GENERAL FORM FOR REGISTRATION OF
SECURITIES Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
IAC Holdings, Inc.
(Name of Small Business Issuer in its Charter)
Florida 621111 22-3917571
(State of Incorporation) (Primary Standard (IRS Employer ID No.)
Classification Code)
136 E. Colonial Dr.
Orlando, FL. 32801
(407) 649-3899
(Address and Telephone Number of Principal Executive Offices)
Copies to:
Michael Paige
Michael Paige PLLC, Counsel
c/o Jackson & Campbell, P.C.
One Lafayette Centre,
300 South Tower
1120 20th Street, N.W.
Washington, D.C. 20036-3437
Telephone: 202-457-1600
Telecopier: 202-457-1678
Securities to be Registered Under Section 12(b) of the Act: None
Securities to be Registered Under Section 12(g) of the Act:
Common Stock, $.0001 Par Value
(Title of Class)
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a smaller reporting company. See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting company" in Rule
12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
TABLE OF CONTENTS
ITEM 1. Business...............................................................3
ITEM 1A. Risk Factors...........................................................5
ITEM 2. Financial Information..................................................9
ITEM 3. Properties............................................................12
ITEM 4. Security Ownership of Certain Beneficial Owners and Management........12
ITEM 6. Executive Compensation................................................13
ITEM 7. Certain Relationships and Related Transactions, and Director
Independence..........................................................14
ITEM 8. Legal Proceedings.....................................................14
ITEM 9. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters...........................................14
ITEM 10. Recent Sales of Unregistered Securities...............................14
ITEM 11. Description of Registrant's Securities to be Registered...............14
ITEM 12. Indemnification of Directors and Officers.............................15
ITEM 13. Financial Statements and Supplementary Data...........................18
SIGNATURES......................................................................32
EXHIBITS........................................................................
PART I
ITEM 1. Business.
Background
IAC Holdings, Inc. ("IAC", the "Company", "we" or "us"), was incorporated under
the laws of Florida in October, 2005, under the name Emerging Markets Holdings,
Inc. Since we were incorporated, we have directed our efforts at identifying a
business to acquire. We changed our name to our present name on January 29,
2008, following the acquisition, pursuant to a Share Exchange Agreement, dated
October 31, 2007 ("Agreement"), of all of the outstanding shares of Injury &
Accident Clinic, Inc., a corporation operating injury and accident clinics
incorporated under the laws of Florida in 1998 (this subsidiary is herein is
referred to as "IAC Clinics").
As provided for in the Agreement, the stockholder of IAC Clinics received
3,800,000 shares of IAC common stock, of which 1,800,000 shares were transferred
by existing stockholders and 2,000,000 shares were issued by the Company, or in
the aggregate 54.28% of the outstanding stock after the acquisition, in exchange
for all of the outstanding shares of IAC Clinics common stock they held.
Immediately following the share exchange, IAC had a total of 7,000,000 shares of
common stock issued and outstanding. Pursuant to the Agreement, IAC Clinics
became a wholly-owned subsidiary of the Company, and the Company changed its
name to IAC Holdings, Inc. For accounting purposes, the Agreement has been
treated as a recapitalization of the Company as the acquirer. The financial
statements show a retroactive restatement of IAC's historical stockholders
equity to reflect the equivalent number of shares of common stock issued in the
acquisition.
Our Business
We operate three injury and accident clinics in Florida providing chiropractic
treatment and services. We were founded by Christine Nguyen, our President and
CEO and commenced operations in Tampa, Florida in 1998, to provide services to
persons who have been injured in automobile accidents, as well as for other
personal injuries and physical problems, including muscle injuries and related
spinal problems. In July of 2000, we opened our second office in Orlando. The
Orlando office is now our headquarters and primary clinic. In July of 2002,
another office was opened in Pinellas Park, and the fourth office was opened in
Tampa in July 2007. We closed our first Tampa office in November, 1999.
Our principal executive offices are located at 136 E. Colonial Dr. Orlando, FL.
32801. Our corporate website address is www.injuryaccidentclinic.com.
Information contained on our website is not part of this registration statement
Services Provided by Our Clinics
Our clinics provide a full range of chiropractic services commonly available in
injury and accident clinics, including in particular, treatment for personal
injuries, auto accidents, herniated discs, mid-back and rib pain, sports
3
injuries, subluxation, arch and foot pain, carpal tunnel syndrome, rotator cuff
injuries, shoulder tendonitis, bursitis (hip, knee, elbow, shoulder), tennis
elbow, pinched nerves, lower back problems, neck pain, arm pain. We also provide
the following services: dietary counseling, soft tissue technique, pain relief
physiologic therapeutics, musculoskeletal manipulation and rehabilitation. Our
employee chiropractors are licensed by the State of Florida. Our revenues are
largely dependent on payments from insurance companies for reimbursement for
clients' personal injuries.
Our goals are to provide our customers with the highest quality chiropractic
information and to educate customers about their medical condition and then
accommodate their needs by providing a positive and satisfying experience. All
of the Company's facilities, doctors and their teams are committed to bringing
better health and a better way of life by providing scientifically sound, safe
and effective chiropractic care.
Our offices are conveniently located throughout central Florida and our
qualified personnel are friendly and ready to ensure a pleasant visit. We take
pride in providing the best possible care and building a long term
patient/doctor relationship. We invite our patients to call our office with any
questions or email us via the contact us or request an appointment page of our
Web site.
Payments for Services at our Clinics
Our revenues largely depend on payments from insurance companies for their
policy holders' personal injuries. Insurance companies are usually billed
immediately but it typically takes 30 - 45 days to get a reply regarding
patients' benefits. Deductibles, usually 20%, are billed but rarely collected
because patient is generally experiencing hardship and our management believes
it to be a beneficial and sound marketing activity to help the injured.
Historically, collection efforts with a separate billing department have not
been economically beneficial. Our clinics accept cash payments. If the patient
does not have insurance and can not pay cash, the clinic can still perform
services if the patient has a Letter of Protection from their attorney where a
legal claim is being made. Florida is a no fault state, so any person involved
in an automobile accident and has insurance is protected financially from
liability resulting from that injury. If patient does not have an attorney
making a claim, then he or she will need to pay cash to continue treatment.
Competition
We experience competition from other chiropractic clinics and individual
chiropractic practitioners, as well as generally from medical practices and
hospitals. While there is significant competition, we have concentrated on
providing better services to our patients and on optimizing the locations of our
clinics. Our marketing niche strategy was developed when we realized that there
are social and cultural differences within a single community that require
changes to be made to a product or service. We have specialized products and
services for several cultural groups. Our clinics treat a large number of
Vietnamese-American and Latino customers in the Central Florida area.
4
Our Market Strategy
We plan to open more offices throughout Florida in 2008 and are using
demographic and strategic marketing analysis to identify new niche markets. We
are finalizing our turn-key methodologies for chiropractic treatment facilities
and plan to expand into other medical fields, including sports medicine, medical
diagnostics and boutique-spa style treatment facilities. We intend to expand our
diversified marketing and advertising campaigns in the identified niche markets
and increase market share by opening offices in these key locations, where we
have already established our company brand and reputation
Employees
We currently have 10 employees, consisting of two chiropractic doctors, one
medical doctor, one assistant, three massage therapists, one manager, one
receptionist and our Chief Executive Officer and President.
ITEM 1A. Risk Factors
Our business is subject to numerous risk factors, including the following:
WE HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE
LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES,
DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL
COMPANY.
We were incorporated in Florida in 1998. We have a limited amount of assets or
financial resources. The likelihood of our success must be considered in light
of the expenses and difficulties in marketing our services to our clients. Since
we have a limited operating history of marketing our services to the public, we
may not be able to grow and generate sufficient revenues to meet our expenses
and support our anticipated activities.
WE DEPEND ON THE SERVICES OF OUR CHIEF EXECUTIVE OFICER, AND IMPLEMENTATION OF
OUR BUSINESS PLAN COULD BE SERIOUSLY HARMED IF WE LOSE THE SERVICES OF OUR CEO.
We depend heavily on the services of Mrs. Christine Nguyen, our Chief Executive
Officer and President. We do not have an employment agreement with Mrs.
Christine Nguyen, nor do we have a "key person" life insurance policy on Mrs.
Christine Nguyen to cover our losses in the event of her death. There can be no
assurance that our CEO will remain in her management positions with us, and the
loss of her services would disrupt our business operations which could reduce
our revenues and profits.
INTEGRATION OF THE BUSINESS AND PRODUCT OFFERINGS OF ACQUIRED COMPANIES COULD
DISRUPT OUR BUSINESS OPERATIONS.
We anticipate that we may, from time to time, acquire additional businesses,
assets or securities of companies that we believe would provide a strategic fit
with our business. Any business we acquire will need to be integrated with our
existing operations. There can be no assurance that we will not have
difficulties doing so in the future. In addition, we could incur unknown or
5
contingent liabilities of acquired companies. Difficulties in integrating the
operations and personnel of the acquired companies could disrupt our business
operations, divert management's time and attention and impair relationships with
and risk the possible loss of key employees and customers of the acquired
business. Our failure to adequately manage the integration of any acquisition
could disrupt our business operations and lower our revenues and profits.
WE DEPEND UPON REIMBURSEMENT BY INSURANCE COMPANIES.
The health care insurance industry reimbursement process is complex and can
involve lengthy delays between the time that revenue is recognized and the time
that reimbursement amounts are settled. As a result, the reimbursement process
may affect our financial condition and results of operations
IF WE FAIL TO COMPLY WITH EXTENSIVE LAWS AND GOVERNMENT REGULATIONS, WE COULD
SUFFER PENALTIES OR BE REQUIRED TO MAKE SIGNIFICANT CHANGES TO OUR OPERATIONS.
The health care industry, including our company, is required to comply with
extensive and complex laws and regulations at the federal, state and local
government levels relating to, among other things,
o licensure and certification;
o adequacy and quality of health care services;
o qualifications of health care and support personnel;
o quality of equipment;
o confidentiality, maintenance and security issues associated with medical
records and claims processing;
o relationships with physicians and other referral sources;
o operating policies and procedures;
o addition of facilities and services; and
o billing for services.
Many of these laws and regulations are expansive, and we do not always have the
benefit of significant regulatory or judicial interpretation of these laws and
regulations. In the future, different interpretations or enforcement of these
laws and regulations could subject our current or past practices to allegations
of impropriety or illegality or could require us to make changes in our
facilities, equipment, personnel, services, capital expenditure programs and
operating expenses.
If we fail to comply with applicable laws and regulations, we could be subjected
to liabilities, including criminal penalties, civil penalties (including the
loss of our licenses to operate one or more of our facilities.
WE ARE REQUIRED TO COMPLY WITH LAWS GOVERNING THE TRANSMISSION AND PRIVACY OF
HEALTH INFORMATION.
6
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires
us to comply with standards for the exchange of health information within our
company and with third parties, such as payors, business associates and
patients. These include standards for common health care transactions, such as:
o claims information, plan eligibility, payment information and the use of
electronic signatures;
o unique identifiers for providers, employers, health plans and individuals;
and
o security, privacy and enforcement.
The Department of Health and Human Services has released final rules to
implement a number of these requirements, and several HIPAA initiatives have
become effective, including privacy protections, transaction standards, and
security standards. If we fail to comply with these standards, we could be
subject to criminal penalties and civil sanctions
WE FACE REGIONAL AND LOCAL COMPETITION.
Our clinics compete primarily on a local and regional basis with many medical
and chiropractic practices. Our ability to compete successfully varies from
location to location depending on a number of factors, including the number of
competing providers in the local market, the types of services available,
quality of care, reputation, age and appearance of each center and the cost of
care in each locality. Patients' treatment facility decisions are in addition
influenced by, among other things, the perceived absolute or relative overall
value of our facilities, including its quality or pricing, compared to
competitive companies. We could also experience higher than expected selling,
general and administrative expenses if we find it necessary to increase
advertising or promotional expenditures, or the number of our personnel to
maintain our competitive position, or for other reasons.
OUR LABOR COSTS MAY INCREASE WITH A POTENTIAL SHORTAGE OF QUALIFIED PERSONNEL.
Labor costs accounted for 51% of the operating expenses in the year ended
December 31, 2006. Our long-term wage rate increases during the same period were
17%. We compete with other health care providers to attract and retain qualified
or skilled personnel. We also compete with various industries for lower-wage
employees. If a shortage of health care workers occurred in the region in which
we operate, it could adversely affect our ability to attract and retain
qualified personnel and could further increase our operating costs.
OUR OPERATIONS ARE SUBJECT TO OCCUPATIONAL HEALTH AND SAFETY REGULATIONS.
We are subject to a wide variety of federal, state and local
occupational health and safety laws and regulations. The types of regulatory
requirements faced by health care providers such as us include:
o air and water quality control requirements;
o occupational health and safety requirements (such as standards regarding
blood-borne pathogens and ergonomics) and waste management requirements;
7
o specific regulatory requirements applicable to asbestos, polychlorinated
biphenyls and radioactive substances;
o requirements for providing notice to employees and members of the public
about hazardous materials and wastes; and
o certain other requirements.
If we fail to comply with these standards, we may be subject to sanctions and
penalties.
THE COST OF GENERAL AND PROFESSIONAL LIABILITY CLAIMS MAY INCREASE.
Patient care liability remains a serious industry-wide issue. We have not
experienced a large number of claims, or any significant liability for claims to
date. General and professional liability claims for the healthcare industry have
become increasingly expensive. If patient care claims increase in number and
size, our future financial condition and operating results may be adversely
affected.
WE HAVE NEVER PAID CASH DIVIDENDS AND WE MAY NOT PAY DIVIDENDS IN THE FUTURE.
Holders of our common stock are entitled to cash dividends when, as and if
declared by the board of directors out of funds legally available for the
payment of dividends. Our management does not and may not in the future
anticipate the declaration or payments of any dividends. We intend to retain
earnings, if any, to finance the development and expansion of our business. Our
future dividend policy will be subject to the discretion of our board of
directors and will be contingent upon future earnings, if any, our financial
condition, capital requirements, general business conditions and other factors.
8
ITEM 2. Financial Information.
IAC HOLDINGS, INC.--SELECTED FINANCIAL DATA
- ------------------------------------------------------------------------------
Years Ended December 31
- ------------------------------------------------------------------------------
2007 2006
- ------------------------------------------------------------------------------
Statement of operations data:
- ------------------------------------------------------------------------------
Net Sales $ 1,106,040 $ 1,260,332
- ------------------------------------------------------------------------------
Net Earnings (Loss) $ 91,967 $ (125,211)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Balance sheet data:
- ------------------------------------------------------------------------------
Total assets $ 388,878 $ 212,688
- ------------------------------------------------------------------------------
Current Liabilities $ 156,041 $ 60,772
- ------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS
The following discussion and analysis of our results of operations should be
read in conjunction with our financial statements and related notes appearing
elsewhere in this prospectus. This discussion and analysis contain
forward-looking statements that involve risks, uncertainties and assumptions.
Actual results may differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including, but not
limited to, those presented under the heading of "Risk Factors" and elsewhere in
this prospectus.
Overview
- --------
We were incorporated in Florida in 2005 under the name Emerging Markets
Holdings, Inc. Since we were incorporated, we have directed our efforts at
identifying a business to acquire and more recently, until our acquisition, to
consulting activities. We changed our name to our present name on January 29,
2008, following the acquisition, pursuant to a Share Exchange Agreement, dated
October 31, 2007, of all of the outstanding shares of Injury & Accident Clinic
Inc., a corporation operating injury and accident clinics incorporated under the
laws of Florida in 1998.
Through our subsidiary, Injury & Accident Clinic, Inc., we now operate three
injury and accident clinics in Florida providing chiropractic treatment and
services. The clinics provide services to persons who have been injured in
automobile accidents, as well as for other personal injuries and physical
problems, including muscle injuries and related spinal problems.
9
Results of Operations
- ---------------------
FISCAL YEAR ENDED DECEMBER 31, 2007 COMPARED TO FISCAL YEAR ENDED DECEMBER 31,
2006.
Revenues
Revenues decreased $154,292 to $1,106,040 for the fiscal year ended December 31,
2007 from $1,260,332 for the fiscal year ended December 31, 2006. This decrease
was primarily due to a decrease in the number of new patients.
Cost of Sales
Selling, general and administrative expense decreased by $427,011 to $950,405
for the fiscal year ended December 31, 2006, from $1,377,416 for the fiscal year
ended December 31, 2006. This decrease was primarily due to lower executive
compensation costs.
Income from Operations.
Our net earnings before income taxes were $151,467 for the fiscal year ended
December 31, 2007, as compared with a loss of $125,211 for the fiscal year ended
December 31, 2006.
Liquidity and Capital Resources
- -------------------------------
As of December 31, 2007, the Company's current assets exceeded its current
liabilities by $154,545. Over the next 12 months, we do not anticipate that we
will need to seek equity or debt financing, in that our anticipated cash flow
from operations will be sufficient for our capital expenditure and operational
requirements.
Off-Balance Sheet Arrangements
- ------------------------------
We have not entered into any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources and would be considered
material to investors.
Inflation
- ---------
It is the opinion of the Company that inflation has not had a material effect on
its operations.
Critical Accounting Policies and Estimates
- ------------------------------------------
The discussion and analysis of our plan of operations is based upon our
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of our consolidated financial statements requires us to make
estimates and assumptions that affect our reported results of operations and the
amount of reported assets and liabilities.
10
Some accounting policies involve judgments and uncertainties to such an extent
that there is reasonable likelihood that materially different amounts could have
been reported under different conditions, or if different assumptions had been
used. Actual results may differ from the estimates and assumptions used in the
preparation of our consolidated financial statements. Described below are the
most significant policies we apply, or intend to apply , in preparing our
consolidated financial statements, some of which are subject to alternative
treatments under accounting principles generally accepted in the United States
of America. We also describe the most significant estimates and assumptions we
make in applying these policies.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Credit Risk - Our accounts receivables are subject, in the normal course of
business, to collection risks; however, we largely depend on payments from
insurance companies for their policy holders' personal injuries. Insurance
companies are usually billed immediately but it typically takes 30 - 45 days to
get a reply regarding patients' benefits. Deductibles, usually 20%, are billed
but rarely collected because patient is generally experiencing hardship and our
management believes it to be a beneficial and sound marketing activity to help
the injured. Historically, collection efforts with a separate billing department
have not been economically beneficial. Our clinics accept cash payments. If the
patient does not have insurance and can not pay cash, the clinic can still
perform services if the patient has a Letter of Protection from their attorney
where a legal claim is being made. Florida is a no fault state, so any person
involved in an automobile accident and has insurance is protected financially
from liability resulting from that injury. If patient does not have an attorney
making a claim, then he or she will need to pay cash to continue treatment.
11
ITEM 3. Properties.
The Company does not own any real estate. We lease our three clinic facilities.
Our Orlando, Florida, clinic and principal offices, consisting of approximately
2,140 square feet of office space and space designed for use as a clinic, are
leased under a lease expiring July 31, 2008, at a monthly rental of $2,848, with
a three-year renewal period at our option [at the same monthly rental]. We lease
our Pinellas Park, Florida, clinic consists of approximately 1,200 square feet
of space designed for clinic use, under a lease expiring July 31, 2008, at a
monthly rental of $900, with a one year renewal period at our option. Our Tampa,
Florida, clinic consisting of approximately 800 square feet of clinic space, is
leased under a lease expiring May 31, 2008, at a monthly rental of $755, and is
renewable for a three period at our option.
ITEM 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of April 1, 2008, each person known by us to
be the beneficial owner of five percent or more of the Company's voting Stock,
all directors individually and all directors and officers of the Company as a
group. Except as noted, each person has sole voting and investment power with
respect to the shares shown.
Name and Address of Beneficial Owner Number of Shares Percentage of Class
Owned Beneficially
Christine Nguyen, CEO and Director
c/o Injury & Accident Clinic, Inc. 3,800,000 Common 54.28%
136 E. Colonial Dr. Shares
Orlando, FL. 32801
Ramon Rosales 575,000 Common 8.21%
Shirys N39-48 Ed. Shares
San Luis, planta baja
Quito, Ecuador
Wolf Blitz Corporation (1) 500,000 Common 7.14%
309 Celtic Ct. Shares
Oviedo, Florida 32765
(1) The owner of Wolf Blitz Corporation is Serguei Melnick, 309 Celtic Ct.,
Oviedo, FL 32765.
12
ITEM 5. Directors and Executive Officers.
We have one Director and Officer as follows:
Name Age Positions and Offices Held
Christine Nguyen 39 President, CEO and Director
Christine Nguyen, 39, founded Injury & Accident Clinic, Inc. in 1998 and serves
as our President and Chief Executive Officer. Prior to founding Injury &
Accident Clinic, Inc., from 1996 to 1998 she was Marketing Director of Dr. Kalaf
Chiropractic Clinics in Tampa, Florida. In 1998 she founded CN Professional
Consulting and Marketing Services in the United States and served as CEO. In
1998, she was CEO and President of Injury & Accident Clinic, Inc. Between 2003
and 2004 she acquired Saigon News Communications, Inc. and Van Nghe Thoi Bao
publishing company. She also became the sole owner of Florida DEP Magazine, LLC.
In 2004 she co-founded Loan Trust Mortgage Corporation in Orlando, Florida and
was CFO and Director of Marketing for Turtle Bay Real Estate, Inc. Since 2007
she has been the President and Owner of LoanTrust Investment, Inc. and The
Marketing Group, Inc., both located in the United States. In January of 2007 she
was appointed CEO of Orlando Wholesale Printing, located in Orlando, Florida.
Mrs. Nguyen's education includes the University of Southern Mississippi and Gulf
Coast University of Florida. Her major areas of study were medical
administration and business management. She is fluent in English, Vietnamese,
and has working knowledge of Spanish.
ITEM 6. Executive Compensation.
SUMMARY COMPENSATION TABLE
- ----------------------------------------------------------------------------------------------------------------
Name Year Salary Bonus Stock Option Non-Equity Change in All Other Total
and ($) ($) Awards Awards Incentive Pension Compen- ($)
Principal ($) ($) Plan Value and Sation
Position Compensation Nonquali-
($) fied Deferred
Compensation
Earnings
($)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
- ----------------------------------------------------------------------------------------------------------------
Christine
- ----------------------------------------------------------------------------------------------------------------
Nguyen,
- ----------------------------------------------------------------------------------------------------------------
President
- ----------------------------------------------------------------------------------------------------------------
& CEO 2007 $83,296 $83,296
- ----------------------------------------------------------------------------------------------------------------
2006 $529,235 $529,235
- ----------------------------------------------------------------------------------------------------------------
EMPLOYMENT AGREEMENT
At this time, there is no employment agreement with Ms. Nguyen.
13
ITEM 7. Certain Relationships and Related Transactions, and Director
Independence.
In connection with the acquisition of all of the outstanding shares of Injury &
Accident Clinic, Inc. by the Company pursuant to the October 31, 2007 Share
Exchange Agreement, the Company issued an aggregate of_2,000,000 shares of its
common stock to Christine Nguyen, our Chief Executive Officer and major
shareholder.
ITEM 8. Legal Proceedings.
None.
ITEM 9. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.
Not applicable.
ITEM 10. Recent Sales of Unregistered Securities.
In connection with the acquisition of all of the outstanding shares of Injury &
Accident Clinic, Inc. by the Company pursuant to the October 31, 2007 Share
Exchange Agreement, the Company issued an aggregate of 2,000,000 shares of its
common stock to Christine Nguyen, our Chief Executive Officer and major
shareholder.
ITEM 11. Description of Registrant's Securities to be Registered.
Our authorized capital stock consists of 105,000,000 shares of which 100,000,000
are Common Stock, par value $.0001 per share and 5,000,000 are Preferred Stock,
par value $.0001 per share.
The following statements relating to the capital stock set forth the material
terms of our securities; however, reference is made to the more detailed
provisions of, and such statements are qualified in their entirety by reference
to, the Articles of Incorporation, as amended.
Common Stock
Holders of shares of common stock are entitled to one vote for each share on all
matters to be voted on by the stockholders. Holders of common stock do not have
cumulative voting rights. Holders of common stock are entitled to share ratably
in dividends, if any, as may be declared from time to time by the Board of
Directors in its discretion from funds legally available therefore. In the event
14
of a liquidation, dissolution or winding up of the Company, the holders of
common stock are entitled to share pro rata all assets remaining after payment
in full of all liabilities. All of the outstanding shares of common stock are
fully paid and non-assessable. Holders of common stock have no preemptive rights
to purchase our common stock. There are no conversion or redemption rights or
sinking fund provisions with respect to the common stock.
The Board of Directors does not at present intend to seek stockholder approval
prior to any issuance of currently authorized stock, unless otherwise required
by law or stock exchange rules.
As of April 1, 2008, we have 7,000,000 shares of common stock issued and
outstanding.
Preferred Stock
The Board of Directors has the authority to issue up to 5,000,000 shares of
preferred stock and to fix the price, rights, preferences, privileges and
restrictions, including voting rights, of those shares without any further vote
or action by the stockholders. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future.
Transfer Agent
Pacific Stock Transfer Company - 500 E. Warm Springs Road, Suite 240, Las Vegas,
NV 89119, is the transfer agent for our common stock.
ITEM 12. Indemnification of Directors and Officers.
As provided by Chapter 607(Corporations), Section 850, of the Florida Statutes,
we have power to indemnify any person who was or is a party to any proceeding
(other than an action by, or in the right of, the corporation), by reason of the
fact that he or she is or was a director, officer, employee, or agent of the
Company or is or was serving at the request of the Company as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise against liability incurred in connection with such
proceeding, including any appeal thereof, if he or she acted in good faith and
in a manner he or she reasonably believed to be in, or not opposed to, the best
interests of the Company and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his or her conduct was unlawful. The
termination of any proceeding by judgment, order, settlement, or conviction or
upon a plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
or she reasonably believed to be in, or not opposed to, the best interests of
the Company or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
The Company has the power to indemnify any person, who was or is a party to any
proceeding by or in the right of the Company to procure a judgment in its favor
by reason of the fact that the person is or was a director, officer, employee,
or agent of the Company or is or was serving at the request of the Company as a
15
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses and amounts paid in
settlement not exceeding, in the judgment of the board of directors, the
estimated expense of litigating the proceeding to conclusion, actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof. Such indemnification shall be
authorized if such person acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
Company, except that no indemnification shall be made under this subsection in
respect of any claim, issue, or matter as to which such person shall have been
adjudged to be liable unless, and only to the extent that, the court in which
such proceeding was brought, or any other court of competent jurisdiction, shall
determine upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
To the extent that a director, officer, employee, or agent of a Company has been
successful on the merits or otherwise in defense of any proceeding referred to
in the two preceding paragraphs, or in defense of any claim, issue, or matter
therein, the Florida corporations law provides that he or she shall be
indemnified against expenses actually and reasonably incurred by him or her in
connection therewith.
The Company has the power to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee, or agent of the Company or
is or was serving at the request of the Company as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise against any liability asserted against the person and incurred
by him or her in any such capacity or arising out of his or her status as such,
whether or not the Company would have the power to indemnify the person against
such liability under the provisions discussed above.
Our Articles of Incorporation provide in Article SIXTH that no director of the
Company shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director except (a) for any
breach of the director's duty of loyalty to the Company or its stockholders, (b)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (c) under Section 607.0834 of the Florida
Business Corporation Act ("FBCA"), or (d) for any transaction from which the
director derived an improper personal benefit. If the FCBA is hereafter amended
to permit a corporation to further eliminate or limit the liability of a
director of a corporation, then the liability of a director of the Company, in
addition to the circumstances in which a director is not personally liable as
set forth in the preceding sentence, shall, without further action of the
directors or stockholders, be further eliminated or limited to the fullest
extent permitted by the FBCA as so amended.
Our Articles of Incorporation further provide in Article SEVENTH that our
directors, officers, employees or agents shall be indemnified and held harmless
by the Company against all judgments, penalties and fines incurred or paid, and
against all expenses (including attorneys' fees) and settlement amounts incurred
or paid, in connection with any specified proceedings, except in relation to
matters as to which the person did not act in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
16
reasonable cause to believe the person's conduct was unlawful. The right to
indemnification conferred in this Article Seventh shall include the right with
certain conditions to require the Company to pay the expenses (including
attorneys' fees) incurred in defending any such proceeding in advance of its
final disposition.
17
ITEM 13. Financial Statements and Supplementary Data.
IAC HOLDINGS, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 2007
INDEX
Paqe
----
Report of Independent Registered Public Accounting Firm 19
Balance Sheet as of December 31, 2007 and 2006 20
Consolidated Statement of Operations for the years ended December 31,
2007 and 2006 21
Consolidated Statement of Stockholders' Equity for the years ended
December 31, 2007 and 2006 22
Consolidated Statement of Cash Flows, for the years ended December 31,
2007 and 2006 23
Notes to Consolidated Financial Statements 24
18
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
IAC Holdings, Inc. and Subsidiary
Orlando, FL
We have audited the accompanying consolidated balance sheets of IAC Holdings,
Inc. and Subsidiary (the "Company") as of December 31, 2007 and 2006, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of IAC Holdings, Inc. and Subsidiary
as of December 31, 2007 and 2006, and the results of their operations and their
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
WIENER, GOODMAN & COMPANY, P.C.
Eatontown, New Jersey
April 15, 2008
19
IAC HOLDINGS INC. & SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31,
------------
2007 2006
---- ----
ASSETS
Current Assets:
Cash $186,959 $ 72,930
Accounts receivable-net 108,755 86,133
Prepaid expenses 14,872 -
-------- --------
Total Current Assets 310,586 159,063
Property and equipment-net 78,292 53,625
-------- --------
Total Assets $388,878 $212,688
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 34,713 $ 23,192
Accrued expenses 40,534 19,701
Loan payable-related party 8,415 7,065
Current portion of long-term debt 12,879 10,814
Income taxes payable 59,500 -
-------- --------
Total Current Liabilities 156,041 60,772
-------- --------
Long-term Liabilities
Long-term debt - less current
portion above 18,779 29,825
-------- --------
Total Liabilities 174,820 90,597
-------- --------
Commitments and Contingencies - -
Stockholders' Equity:
Common stock, $.0001 par
value - authorized
15,000,000 shares, outstanding
7,000,000 shares 700 700
Additional paid in capital 10,400 10,400
Retained earnings 202,958 110,991
-------- --------
Total Stockholders' Equity 214,058 122,091
-------- --------
Total Liabilities and
Stockholders' Equity $388,878 $212,688
======== ========
See Notes to Consolidated Financial Statements
20
IAC HOLDINGS INC. & SUBSIDIARY
STATEMENTS OF OPERATIONS
Years Ended December 31,
------------------------
2007 2006
---- ----
Net sales:
Sales $ 1,106,040 $ 1,260,332
----------- -----------
Cost and expenses:
Selling, general and
administrative 950,405 1,377,416
----------- -----------
Income (loss) from operations 155,635 (117,084)
Other income (expense):
Interest income 19 645
Interest expense (4,187) (8,772)
----------- -----------
(4,168) (8,127)
----------- -----------
Earnings (loss) before income taxes 151,467 (125,211)
Income tax provision 59,500 -
----------- -----------
Net earnings (loss) $ 91,967 $ (125,211)
=========== ===========
Earnings (loss) per common share-
basic and diluted $ 0.01 $ (0.02)
=========== ===========
Weighted average number of
common shares outstanding-
basic and diluted 7,000,000 7,000,000
=========== ===========
See Notes to Consolidated Financial Statements
21
IAC HOLDINGS INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2007 and 2006
Common Stock Additional
Paid in Retained
Total No. of shares Amount capital Earnings
----- ------------- ------ ------- --------
Balance, January 1, 2006 $ 247,302 7,000,000 $ 700 $ 10,400 $ 236,202
Net loss (125,211) - - - (125,211)
--------- --------- --------- --------- ---------
Balance, December 31, 2006 122,091 7,000,000 700 10,400 110,991
Net income 91,967 - - - 91,967
--------- --------- --------- --------- ---------
Balance, December 31, 2007 $ 214,058 7,000,000 $ 700 $ 10,400 $ 202,958
========= ========= ========= ========= =========
See Notes to Consolidated Financial Statements
22
IAC HOLDINGS INC. & SUBSIDIARY
STATEMENTS OF CASH FLOWS
Years Ended December 31,
2007 2006
---- ----
Cash flows from operating activities:
Net earnings (loss) $ 91,967 $(125,211)
Adjustments to reconcile net cash
provided by operating activities:
Depreciation and amortization 38,349 37,096
Changes in operating assets and
liabilities:
(Increase) decrease in accounts receivable (22,622) 54,921
Increase in prepaid expenses (14,872) -
Increase in accounts payable and accrued expenses 37,777 4,409
Increase in income taxes payable 59,500 -
--------- ---------
Net cash provided by (used in) operating
activities 190,099 (28,785)
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment (63,016) (11,200)
--------- ---------
Cash flows from financing activities:
Proceeds from borrowings - 6,532
Repayments of debt (13,054) (23,415)
--------- ---------
Net cash used in financing activities (13,054) (16,883)
--------- ---------
Net increase (decrease) in cash 114,029 (56,868)
Cash-beginning of year 72,930 129,798
--------- ---------
Cash-end of year $ 186,959 $ 72,930
========= =========
See Notes to Consolidated Financial Statements
23
IAC Holdings, Inc. & Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2007 AND 2006
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
------------
IAC Holdings, Inc. ("IAC", the "Company", "we" or "us"), was
incorporated under the laws of Florida in October, 2005, under the name Emerging
Markets Holdings, Inc. Since we were incorporated, we have directed our efforts
at identifying a business to acquire. We changed our name to our present name on
January 29, 2008, following the acquisition, pursuant to a Share Exchange
Agreement, dated October 31, 2007 ("Agreement"), of all of the outstanding
shares of Injury & Accident Clinic, Inc., a corporation operating injury and
accident clinics incorporated under the laws of Florida in 1998 (this subsidiary
herein is referred to as "IAC Clinics").
IAC Clinics, is a recognized leader in helping individuals who have
been injured in automobile accidents or have experienced muscle injuries or
spinal related problems. IAC Clinics originated in Tampa, Florida in 1998. In
July of 2000, we opened our second office in Orlando, Florida. The Orlando
office is now our headquarters and primary clinic. In July 2002, another office
was opened in Pinellas Park, Florida. Our fourth office opened in Tampa in July
2007. We have turn-key methodologies for chiropractic treatment facilities and
are expanding into other medical fields including; sports medicine, medical
diagnostics and boutique-spa style treatment centers. IAC Clinics has maintained
a competitive advantage through niche marketing strategies within several
cultural groups, and the operation of these clinics has been particularly
successful due to strong leadership and management, enterprise resource
planning, strategic marketing and the wonderful results of Chiropractic.
Basis of Presentation
---------------------
As provided for in the Agreement, the stockholder of IAC Clinics
received 3,800,000 shares of IAC common stock, of which 1,800,000 shares were
transferred by existing stockholders and 2,000,000 shares were issued by the
Company, or in the aggregate 54.28% of the outstanding stock after the
acquisition, in exchange for all of the outstanding shares of IAC Clinics common
stock they held. Immediately following the share exchange, IAC had a total of
7,000,000 shares of common stock issued and outstanding. Pursuant to the
Agreement, IAC Clinics became a wholly-owned subsidiary of the Company, and the
Company changed its name to IAC Holdings, Inc. For accounting purposes, the
Agreement has been treated as a recapitalization of the Company as the acquirer.
The financial statements show a retroactive restatement of IAC's historical
stockholders' equity to reflect the equivalent number of shares of common stock
issued in the acquisition.
SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
---------------------------
The Company's financial statements include the accounts of the Company
and its wholly-owned subsidiary. All intercompany transactions and balances have
been eliminated.
Use of Estimates
----------------
The preparation of the financial statements in conformity with accepted
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the 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. Examples include estimates of
costs to complete performance contracts, income tax exposures and valuation
allowances. Actual results could differ from those estimates.
24
IAC Holdings, Inc. & Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2007 AND 2006
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Revenue Recognition
-------------------
The Company recognizes revenue in accordance with the guidance
contained in SEC Staff Bulletin No. 104, "Revenue Recognition in Financial
Statements" ("SAB No. 104"). Revenue is recognized when services are performed.
The Company records revenue from third party insurance companies on a net basis,
which are agreed upon amounts of reimbursements.
Amounts billed to patients that remain unpaid for one year are written
off as bad debt. Collection activities are more expensive and usually not
productive due to patient's hardships, injuries, loss of job and or income etc.
There was no bad debt expense for the years ended December 31, 2007 and 2006.
Amounts billed to insurance companies that remain uncollected are
pursued through legal action and only amounts not recovered after litigation are
written off as bad debts. There was no bad debt expenses for the years ended
December 31, 2007 and 2006.
Concentration of Credit Risk
----------------------------
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash and accounts
receivable.
The Company's cash and cash equivalents are concentrated primarily in
one bank in the United States. At times, such deposits could be in excess of
insured limits. Management believes that the financial institution that holds
the Company financial instrument is financially sound and, accordingly, minimal
credit risk is believed to exist with respect t these financial instruments.
The Company grants credit to customers based on an evaluation of the
customer's financial condition, without requiring collateral. Exposure to losses
on receivables is principally dependent on each customer's financial condition.
The Company controls its exposure to credit risk through credit approvals and
monitoring procedures.
Depreciation
------------
Property and equipment is carried at cost. Depreciation is computed
using the straight-line method at rates calculated to extinguish the assets cost
over their estimated useful lives. For income tax purposes, depreciation is
recorded using accelerated methods of cost recovery over statutory recovery
periods.
Income Taxes
------------
Prior to January 1, 2008, the Company was an "S" Corporation and,
accordingly, any income or losses would flow directly to the stockholders. The
Company has recorded income taxes or a proforma basis as if the Company was a
"C" Corporation as of January 1, 2006.
Evaluation of Long-Lived Assets
-------------------------------
The Company reviews property and equipment for impairment whenever
events or changes in circumstances indicate the carrying value may not be
recoverable in accordance with guidance in SFAS No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets." If the carrying value of the
long-lived asset exceeds the present value of the related estimated future cash
flows, the asset would be adjusted to its fair value and an impairment loss
would be charged to operations in the period identified.
25
IAC Holdings, Inc. & Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2007 AND 2006
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Earnings Per Share
------------------
Basic earnings per common share is computed by dividing net earnings by
the weighted average number of common shares outstanding during the specified
period. Diluted earnings per common shares is computed by dividing net income by
the weighted average number of common shares and potential common shares during
the specified period. As for the years ended December 31, 2007 and 2006, there
were no potentially diluted securities.
Fair Value of Financial Instruments
-----------------------------------
For financial instruments including cash, accounts payable, and accrued
expenses, it was assumed that the carrying amount approximated fair value
because of the short maturities of such instruments.
New Financial Accounting Standards
----------------------------------
In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements", which enhances existing guidance for measuring assets and
liabilities using fair value. This Standard provides a single definition of fair
value, together with a framework for measuring it, and requires additional
disclosure about the use of fair value to measure assets and liabilities. SFAS
No. 157 as amended by FASB Staff Position 157-2, is effective for financial
statements issued for fiscal years beginning after November 15, 2008, and
interim periods within those fiscal years. The Company does not believe that
SFAS No. 157 will have a material impact on its financial statements.
In February 2007, the FASB issued SFAS No. 159 ("SFAS 159") "The Fair
Value Option for Financial Assets and Financial Liabilities", providing
companies with an option to report selected financial assets and liabilities at
fair value. The Standard's objective is to reduce both complexity in accounting
for financial instruments and the volatility in earnings caused by measuring
related assets and liabilities differently. It also requires entities to display
the fair value of those assets and liabilities for which the Company has chosen
to use fair value on the face of the balance sheet. SFAS 159 is effective for
fiscal years beginning after November 15, 2007. The Company does not expect that
the adoption will have a material impact on the financial statements.
In December 2007, the FASB issued SFAS No. 141 (revised 2007) ("SFAS
141 (R)") "Business Combinations", which replaces SFAS 141 "Business
Combinations". This Statement improves the relevance, completeness and
representational faithfulness of the information provided in financial reports
about the assets acquired and the liabilities assumed in a business combination.
This Statement requires an acquirer to recognize the assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquiree at the
acquisition date, measured at their fair values as of that date, with limited
exceptions specified in the Statement. Under SFAS 141(R), acquisition-related
costs, including restructuring costs, must be recognized separately for the
acquisition and will generally be expensed as incurred. That replaces SFAS 141's
cost- allocation process, which required the cost of an acquisition to be
allocated to the individual assets acquired and liabilities assumed based on
their estimated fair values. SFAS 141 (R) shall be applied prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual report period beginning on or after December 15,
2008. The Company will implement this Statement in 2009.
26
IAC Holdings, Inc. & Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2007 AND 2006
In December 2007, the FASB issued SFAS No. 160 "Non-Controlling
Interests in Consolidated Financial Statements - An Amendment of ARB NO. 51"
("SFAS 160"). SFAS 160 establishes new accounting and reporting standards for
the non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. Specifically, this statement requires the recognition of
non-controlling interests (minority interest) as equity in the consolidated
financial statements and separate for parent's equity. The amount of net income
attributable to the non-controlling interest will be included in consolidated
net income on the face of the income statement. SFAS 160 clarifies that changes
in a parent's ownership in a subsidiary that does not result in deconsolidation
are equity transactions if the parent retains its controlling financial
interest. In addition, this statement requires that a parent recognize a gain or
loss in net income when a subsidiary is deconsolidated. Such gain or loss will
be measured using the fair value of the non-controlling equity investment of the
deconsolidation date. SFAS 160 also includes expanded disclosure requirements
regarding the interest of the parent and its non-controlling interest. SFAS 160
is effective for fiscal years, and interim periods other than fiscal years-,
beginning on or after December 15,2008. The Company is currently evaluating the
impact of the adoption of this Statement on it financial statements.
In January 2008, Staff Accounting Bulletin ("SAB") 110 "Share-Based
Payment" ("SAB 110"), was issued. Registrants may continue, under certain
circumstances, to use the simplified method in developing estimates of the
expected term of share options as initially allowed by SAB 107, "Share-Based
Payments". The adoption of SAB 110 should have no effect on the financial
position and results of operations of the Company.
2. PROPERTY, OFFICE and EQUIPMENT
December 31,
2007 2006
---- ----
Machinery and equipment $261,077 $209,998
Furniture and fixtures 51,995 40,058
-------- --------
313,072 250,056
Less: accumulated depreciation 234,780 196,431
-------- --------
$ 78,292 $ 53,625
======== ========
Depreciation expense for the year ended December 31, 2007 and 2006 was
$38,349 and $37,096, respectively.
27
IAC Holdings, Inc. & Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2007 AND 2006
3. DEBT
At December 31, 2007 and 2006, long-term debt consisted of the
following:
December 31,
2007 2006
---- ----
Line of credit, interest at 19.08%, due on demand $ 829 $ 1,416
Automobile loan, interest at 7.58% per anum,
due September 29, 2010, monthly payment
of $1,004.13 30,829 39,223
------- -------
31,658 40,639
Less: current portion 12,879 10,814
------- -------
$18,779 $29,825
======= =======
Future minimum payments:
Year Ending December 31,
------------------------
2008 $ 12,879
2009 12,050
2010 6,729
--------
$ 31,658
========
Interest expense for the years ended December 31, 2007 and 2006
amounted to $3,588 and $8,573, respectively.
4. CAPITAL STOCK
The Company is authorized to issue 105,000,000 shares of $.0001 par
value common stock, of which 7,000,000 shares are outstanding. All the
outstanding common stock is fully paid and non-assessable.
5. RELATED PARY TRANSACTIONS
During 2007 and 2006, the Company borrowed $8,415 and $7,065 from a
related party, Wolf Blitz Corporation, a stockholder of the Company. The note is
due upon demand with interest at six percent (6%) per annum. Interest expense
for the years ended December 31, 2007 and 2006 amounted to $220 and $199,
respectively and is included in accrued expenses on the balance sheet.
28
IAC Holdings, Inc. & Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2007 AND 2006
6. INCOME TAXES
The Company adopted the provisions of Financial Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes", ("FIN 48") on January 1, 2007. As
a result of the implementation of FIN 48, the Company recognized no adjustment
in the net liability for unrecognized income tax benefits.
The provision for income taxes consists of the following:
December 31,
2007 2006
---- ----
Federal $47,400 $ -
State 12,100 -
------- -------
Total $59,500 $ -
======= =======
The reconciliation of the effective income tax rate to the federal statutory
rate is as follows:
For the Year Ended
December 31,
2007 2006
---- ----
Tax provision (benefits) computed $ 51,500 $(42,572)
at the statutory rate
State and local income taxes, net 12,120 -
of federal benefit
Effect of unused operating losses - 42,572
Other (4,120) -
-------- --------
$ 59,500 $ -
======== ========
The effect of unused net operating losses for 2006 has been presented on a
proforma basis when the Company was an "S" Corporation and is not available for
use.
7. COMMITMENTS AND CONTINGENCIES
Leases
------
The Company conducts its operations from leased properties in Florida.
Some of the leases require the Company to pay certain executive costs (such as
insurance and maintenance).
Future minimum lease payments for operating leases are approximately as
follows:
Years Ending
December 31, Amount
------------ ------
2007 $ 50,180
2008 30,020
--------
$ 80,200
========
Total rent expense was approximately $48,735 and $48,561 for the years
ended December 31, 2007 and 2006, respectively.
29
IAC Holdings, Inc. & Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2007 AND 2006
7. COMMITMENTS AND CONTINGENCIES (Continued)
Consultant
----------
In August 2007, Injury & Accident Clinic entered into a one year
consulting agreement with Alfa Investment Fund LLC ("Alfa Investment") which
expires in July 2008. Alfa Investment will be compensated $50,000 in accordance
with the signed consulting agreement. For the year ending December 31, 2007, the
Company recorded consulting expenses of $25,000.
8. LEGAL PROCEEDINGS
On November 2, 2007, the Company entered into an agreement with State
Farm Insurance Agency ("State Farm") to settle a claim for services rendered in
2001, 2002 and 2003. The original claim was for $559,979. State Farm agreed to
pay the Company $125,000 and pay legal fees incurred by the Company in the
amount of $225,000. The Company received the settlement in 2007 and reflected
the settlement in its consolidated financial statements for the year ending
December 31, 2007.
30
(a) Financial Statements.
Financial Statements of IAC Holdings, Inc. at December 31, 2007 and
2006 (Audited):
Report of Independent Registered Public Accounting Firm
Balance Sheets as of December 31, 2007 and 2006
Statements of Operations for the years ended December 31, 2007
and 2006
Statement of Stockholders' Equity for the years ended
December 31, 2007 and 2006
Statement of Cash Flows, for the years ended December 31, 2007
and 2006
Notes to Financial Statements
(b) Exhibits.
- --------------------------------------------------------------------------------
Exhibit Description
No.
- --------------------------------------------------------------------------------
3.1 Articles of Incorporation (incorporated by reference to
Exhibit 3.1 to Amendment No. 2 to the Company's Registration
Statement on Form SB-2, filed with the Securities and
Exchange Commission on December 12, 2006).
- --------------------------------------------------------------------------------
3.1a Articles of Amendment, filed January 28, 2008, filed
herewith.
- --------------------------------------------------------------------------------
3.1b Articles of Amendment, filed February, 2008, filed herewith.
- --------------------------------------------------------------------------------
3.2 By-Laws (incorporated by reference to Exhibit 3.2 to
Amendment No. 2 to the Company's Registration Statement on
Form SB-2, filed with the Securities and Exchange Commission
on December 12, 2006).
- --------------------------------------------------------------------------------
4.1 Specimen Stock Certificate (incorporated by reference to
Exhibit 4.1 to Amendment No. 2 to the Company's Registration
Statement on Form SB-2, filed with the Securities and
Exchange Commission on December 12, 2006).
- --------------------------------------------------------------------------------
10.1 Form of Subscription Agreement (incorporated by reference to
Exhibit 10.1 to Amendment No. 2 to the Company's
Registration Statement on Form SB-2, filed with the
Securities and Exchange Commission on December 12, 2006).
- --------------------------------------------------------------------------------
31
- --------------------------------------------------------------------------------
10.2 Agreement of Advance Funds (incorporated by reference to
Exhibit 10.2 to Amendment No. 2 to the Company's
Registration Statement on Form SB-2, filed with the
Securities and Exchange Commission on December 12, 2006).
- --------------------------------------------------------------------------------
10.3 Share Exchange Agreement, dated October 31, 2007, by and
between the Company and Injury & Accident Clinic Inc.
(incorporated by reference to Exhibit 10.3 to the Company's
Registration Statement on Form 10, filed with the Securities
and Exchange Commission on February 22, 2008).
- --------------------------------------------------------------------------------
21 Subsidiaries of the Registrant (incorporated by reference to
Exhibit 21 to the Company's Registration Statement on Form
10, filed with the Securities and Exchange Commission on
February 22, 2008).
- --------------------------------------------------------------------------------
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
By: /s/ Christine Nguyen
--------------------
Christine Nguyen
Title: President/CEO
Dated: April 22, 2008
32