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EX-31.1 - EXHIBIT 31.1 - First Choice Healthcare Solutions, Inc. | medicalbill10ka3231x31_21910.htm |
EX-32.1 - EXHIBIT 32.1 - First Choice Healthcare Solutions, Inc. | medicalbill10ka3231x32_21910.htm |
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K/A
Amendment No. 3
[x]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the
fiscal year ended December 31,
2008
[]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Commission
File No. 000-53012
MEDICAL
BILLING ASSISTANCE, INC.
(Exact
Name of Small Business Issuer as specified in its charter)
Colorado
|
59-2851601
|
(State
or other jurisdiction
|
(IRS
Employer File Number)
|
of
incorporation)
|
16325
East Dorado Ave.
|
|
Centennial , Colorado
|
80111
|
(Address
of principal executive offices)
|
(zip
code)
|
(303)
667-6411
(Registrant's
telephone number, including area code)
Securities
Registered Pursuant to Section 12(b) of the Act: None
Securities
Registered Pursuant to Section 12(g) of the Act:
Common Stock, $.0.001 per
share par value
Indicate
by check mark if registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act.
Yes
[] No [X].
Indicate
by check mark if registrant is not required to file reports pursuant to Section
13 or 15(d) of the Exchange Act.
Yes
[] No [X].
Indicate
by check mark whether the registrant (1) has filed all Reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes:
[X] No: [ ]
Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form and no disclosure will be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K.
[X]
Indicate
by check mark whether the registrant is a large accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of “large
accelerated filer,” “accelerated filer,” and “small reporting company” in Rule
12b-2 of the Exchange Act.
Large
accelerated filer []
|
Accelerated
filer []
|
Non-accelerated
filer [] (Do not check if a smaller reporting
company)
|
Smaller
reporting company [X]
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act):
Yes [] No
[X].
The
aggregate market value of the voting stock held by nonaffiliates cannot be
computed because the Company’s securities do not trade in any market. The number
of shares outstanding of the Registrant's common stock, as of the latest
practicable date, November
30, 2009 was 9,596,000.
FORM
10-K/A
Medical
Billing Assistance, Inc.
INDEX
\
PART
I
|
|
Item
1. Business
|
3
|
Item
1A. Risk Factors
|
6
|
Item
2. Property
|
10
|
Item
3. Legal Proceedings
|
10
|
Item
4. Submission of Matters to a Vote of Security Holders
|
10
|
PART
II
|
|
Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
|
10
|
Item
6. Selected Financial Data
|
12
|
Item
7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
|
12
|
Item
7A. Quantitative and Qualitative Disclosures About Market
Risk
|
15
|
Item
8. Financial Statements and Supplementary Data
|
15
|
Item
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
|
26
|
Item
9A(T). Controls and Procedures
|
26
|
Item
9B. Other Information
|
27
|
|
|
PART
III
|
|
Item
10. Directors, Executive Officers and Corporate Governance
|
27
|
Item
11. Executive Compensation
|
28
|
Item
12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
|
28
|
Item
13. Certain Relationships and Related Transactions, and Director
Independence
|
29
|
Item
14. Principal Accountant Fees and Services
|
29
|
Item
15. Exhibits Financial Statement Schedules
|
30
|
Financial
Statements pages
|
15
- 25
|
Signatures
|
31
|
-
2 -
For
purposes of this document, unless otherwise indicated or the context otherwise
requires, all references herein to “Medical Billing Assistance” “we,” “us,” and
“our,” refer to Medical Billing Assistance, Inc., a Colorado corporation and our
wholly-owned subsidiary, I.V. Services Ltd., Inc.
Forward-Looking
Statements
The
following discussion contains forward-looking statements regarding us, our
business, prospects and results of operations that are subject to certain risks
and uncertainties posed by many factors and events that could cause our actual
business, prospects and results of operations to differ materially from those
that may be anticipated by such forward-looking statements. Factors that may
affect such forward-looking statements include, without limitation: our ability
to successfully develop new products and services for new markets; the impact of
competition on our revenues, changes in law or regulatory requirements that
adversely affect or preclude clients from using us for certain applications;
delays our introduction of new products or services; and our failure to keep
pace with our competitors.
When used
in this discussion, words such as "believes", "anticipates", "expects",
"intends" and similar expressions are intended to identify forward-looking
statements, but are not the exclusive means of identifying forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report. We
undertake no obligation to revise any forward-looking statements in order to
reflect events or circumstances that may subsequently arise. Readers are urged
to carefully review and consider the various disclosures made by us in this
report and other reports filed with the Securities and Exchange Commission that
attempt to advise interested parties of the risks and factors that may affect
our business.
PART
I
Item
1. DESCRIPTION OF BUSINESS.
General
Our
parent company was incorporated in the State of Colorado on May 30, 2007 to act
as a holding corporation for I.V. Services Ltd., Inc., a Florida corporation
engaged in providing billing services to the medical community. I.V. Services
Ltd., Inc. was incorporated in the State of Florida on September 28,
1987.
On June
30, 2007, we issued the 8,000,000 common shares to Mr. Michael West in exchange
for 100% of the capital stock of IVS. Also on June 30, 2007, we issued
1,500,000 restricted common shares.
In
September 2007, we completed a private placement offering of our common shares
under the provisions of Rule 504 and analogous state securities laws. We raised
a total of $24,000 in this private placement offering and sold a total of 96,000
shares.
We have
not been subject to any bankruptcy, receivership or similar
proceeding.
Our
address is 16325 East Dorado Ave., Centennial, CO 80111. Our
telephone number is (303) 667-6411.
Organization
As of
December 31, 2008, we are comprised of one corporation with one wholly-owned
subsidiary. Medical Billing Assistance, Inc., a Colorado corporation is the
parent, and our wholly-owned subsidiary is I.V. Services Ltd., Inc., a Florida
corporation, which was established September 28, 1987. All of our operations are
conducted out of our wholly-owned subsidiary.
-
3 -
Operations
Our
primary business goal is to provide medical billing assistance to durable
medical equipment companies (“DME”). A DME is a company, which sells or rents
durable medical equipment to patients for use in their homes. Our plan is to
help DME companies comply with constantly changing billing and documentation
requirements thrust upon them by Medicare, Medicaid and Private Health Insurance
Companies. With our assistance, we believe that DME companies will
have the opportunity to improve accuracy, completeness, and efficiency in record
keeping resulting in a more rapid turn around for insurance claims they submit
for services provided, with the result of fewer claim denials and, potentially,
a significant improvement in their cash flow.
Our
primary focus will be DME companies throughout the United States. We do not
currently have any plans for expansion into other areas of business. At the
present time, we do have active operations but continue to develop business
plan. We plan to sell our services to small and medium-sized business clients.
At the present time, we have no plans to raise any additional funds within the
next twelve months, other than those raised in our recent private offering. Any
working capital will be generated from internal operations or from funds, which
may be loaned to us by Mr. West, our President. In the event that we need
additional capital, Mr. West has agreed to loan such funds as may be necessary
through December 31, 2010 for working capital purposes. However, we reserve the
right to examine possible additional sources of funds, including, but not
limited to, equity or debt offerings, borrowings, or joint ventures. No market
surveys have ever been conducted to determine demand for our services.
Therefore, there can be no assurance that any of our objectives will be
achieved.
We
operate out of the office of our President. This office is also shared with
another company owned by our President and largest shareholder.
We are
presently marketing our services. We utilize the expertise and existing business
relationships of our principal officer, Mr. Michael West to develop our
opportunities. All operational decisions are made solely by Mr.
West.
It should
be noted, however, that we do not have any extensive history of successful
operations. We have never been profitable. To the extent that management is
unsuccessful in keeping expenses in line with income, failure to affect the
events and goals listed herein would result in a general failure of the
business. This would cause management to consider liquidation or
merger.
Markets
Our
sales strategy is to approach DME companies who wish to simplify and be more
efficient in their health insurance billing practices. We believe that the
primary reason that clients would buy from us rather than competitors would be
the existing relationships developed by Mr. West over the 25 years he has been
in the healthcare business and others that we can develop. We believe that
client loyalty and satisfaction can be the basis for success in this business.
Therefore, we plan to develop and expand on already existing relationships to
develop and strengthen our competitive edge. We plan to utilize the expertise of
our principal officer to develop our business.
Raw
Materials
The use
of raw materials is not a material factor in our operations at the present time.
The use of raw materials may become a material factor in the future as we
develop operations.
Customers
and Competition
We
consider our principal competitors to be ACCUBILL Medical Billing Services, A –
Perfect Medical Billing Service, Medical Billing Solutions Nationwide, Inc.,
MedTech Solutions, Resource One Medical Billing, LLC, and STAT Medical
Consulting, Inc.
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4 -
At this
time, all of these companies have greater resources and manpower than we do.
But, the success of any company in this business is based primarily on the
accumulated knowledge and business relationships that have been developed over
the years by their key personnel. Most of our competitors have
focused all of their efforts where their business relationships are
strongest. Any one of these companies could choose to compete with
Medical Billing Assistance at any time. Intrusion into our market by these
companies would make it difficult, but not impossible for us to
compete. This could adversely affect the results of our operations.
Competition from these larger and more established companies is a significant
threat and is expected to remain so in the immediate future. Significant
competition could result in our failure to gain as many clients or we might even
lose clients in the long run. This could result in reduced or
non-existent revenue. Thus, significant competitive pressures may impact our
revenues and our growth.
Our
principal effort at this time will be to begin developing a client base.
Initially, we expect to rely heavily on the experience and business
relationships of our principal officer. Mr. West has developed
numerous business relationships with other medical equipment companies over the
years and we expect those relationships will result in our initial business
clients. We believe that we will be able to develop significant customer loyalty
based on the overall improvement our clients will see in their accounts
receivables and turn around time in their claims
processing. Satisfied clients will also result in referrals of other
new clients.
Backlog
At
December 31, 2008, we had no backlogs.
Employees
We
have one full-time employee: Mr. Michael West, our President. Mr. West does not
draw a salary or receive any other kind of compensation. However, we reimburse
our employee for all necessary and customary business related
expenses. We have no plans or agreements, which provide health care,
insurance or compensation on the event of termination of employment or change in
our control. We do not pay our Directors separately for any Board
meeting they attend.
Proprietary
Information
We
own no proprietary information.
Government
Regulation
We do not
expect to be subject to material governmental regulation. However, it is our
policy to fully comply with all governmental regulation and regulatory
authorities, including HIPPA.
Research
and Development
We have
never spent any amount in research and development activities.
Environmental
Compliance
We
believe that we are not subject to any material costs for compliance with any
environmental laws.
How
to Obtain Our SEC Filings
We file
annual, quarterly, and special reports, proxy statements, and other information
with the Securities Exchange Commission (SEC). Reports, proxy statements and
other information filed with the SEC can be inspected and copied at the public
reference facilities of the SEC at 100 F Street N.E., Washington, DC 20549. Such
material may also be accessed electronically by means of the SEC's website at
www.sec.gov.
-
5 -
Our investor relations department can
be contacted at our principal executive office located at our principal office,
16325 East Dorado Ave., Centennial, CO 80111. Our telephone number is
(303) 667-6411.
Item
1A. RISK FACTORS.
You
should carefully consider the risks and uncertainties described below and the
other information in this document before deciding to invest in shares of our
common stock.
The
occurrence of any of the following risks could materially and adversely affect
our business, financial condition and operating result. In this case, the
trading price of our common stock could decline and you might lose all or part
of your investment.
RISKS
ASSOCIATED WITH OUR COMPANY:
We
have a limited history in our present format, and have never been
profitable. We have negative stockholders equity.
Our
parent company formed as a Colorado business entity in May 2007. We have a
limited history of operations in our present format. Our subsidiary has had
operations since 1994 but has never been profitable. We cannot say that we have
a successful operating history. There can be no guarantee that we will ever
be profitable. For the fiscal year ended 2007, we generated no revenues.
For the fiscal year ended December 31, 2008, we generated $24,632 in revenues.
We had net losses during these periods. On December 31, 2008 we had a negative
stockholders equity of $61,583. On December 31, 2007 we had a negative
stockholders equity of $51,725.
Because
we had incurred operating losses from our inception, our accountants have
expressed doubts about our ability to continue as a going concern.
For the
fiscal years ended December 31, 2008 and 2007, our accountants have expressed
doubt about our ability to continue as a going concern as a result of our
continued net losses. Our ability to achieve and maintain profitability and
positive cash flow is dependent upon:
·
|
our ability to develop substantial
operations;
|
·
|
our ability to locate clients who will purchase our services;
and
|
·
|
our ability to generate substantial
revenues.
|
Based
upon current plans, we may incur operating losses in future periods because we
may, from time to time, be incurring expenses but not generating sufficient
revenues. We expect approximately $35,000 in operating costs over the next
twelve months. We cannot guarantee that we will be successful in generating
sufficient revenues or other funds in the future to cover these operating costs.
Failure to generate sufficient revenues will cause us to go out of
business.
Our
limited operating history in our present format makes it difficult for us to
evaluate our future business prospects and make decisions based on those
estimates of our future performance.
The
concept for our business model was developed in 1994. However, we only created
our holding company in 2007. We have operated as a corporation in this present
format for short amount of time. We have never developed substantial revenue. We
believe that we have a limited operating history, based upon no revenues and a
lack of profitability. These factors make it difficult to evaluate our business
on the basis of historical operations. As a consequence, our past results may
not be indicative of future results. Although this is true for any business, it
is particularly true for us because of our limited operating history. Reliance
on historical results may hinder our ability to anticipate and timely adapt to
increases or decreases in sales, revenues or expenses. For example, if we
overestimate our future sales for a particular period or periods based on our
historical growth rate, we may increase our overhead and other operating
expenses to a greater degree than we would have if we correctly anticipated the
lower sales level for that period and reduced our controllable expenses
accordingly. If we make poor budgetary decisions as a result of unreliable
historical data, we could be continue to incur losses, which may result in a
decline in our stock price.
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6 -
We
have no experience as a public company.
We have
never operated as a public company. We have no experience in complying with the
various rules and regulations, which are required of a public company. As a
result, we may not be able to operate successfully as a public company, even if
our operations are successful. We plan to comply with all of the various rules
and regulations, which are required of a public company. However, if we cannot
operate successfully as a public company, your investment may be materially
adversely affected. Our inability to operate as a public company could be the
basis of your losing your entire investment in us.
We
are implementing a strategy to grow our business, which is expensive and may not
generate increases in our revenues.
We intend
to grow our business, and we plan to incur expenses associated with our growth
and expansion. Although we recently raised funds through offerings to implement
our growth strategy, these funds may not be adequate to offset all of the
expenses we incur in expanding our business. We will need to generate revenues
to offset expenses associated with our growth, and we may be unsuccessful in
achieving revenues, despite our attempts to grow our business. If our growth
strategies do not result in significant revenues, we may have to abandon our
plans for further growth or may even cease our proposed operations.
We
must effectively manage the growth of our operations, or we may outgrow our
current infrastructure.
As of
December 31, 2008, we had one employee, our President. If we experience rapid
growth of our operations, we could see a backlog of client projects. We can
resolve these capacity issues by hiring additional personnel and upgrading our
infrastructure. However, we cannot guarantee that sufficient additional
personnel will be available or that we will find suitable technology to aid our
growth. In any case, we will continue pursuing additional sales growth for our
company. Expanding our infrastructure will be expensive, and will require us to
train our workforce, and improve our financial and managerial controls to keep
pace with the growth of our operations.
We
have a lack of liquidity and will need additional financing in the future.
Additional financing may not be available when needed, which could delay our
development or indefinitely postponed.
We are
only minimally capitalized. Because we are only minimally capitalized, we expect
to experience a lack of liquidity for the foreseeable future in our proposed
operations. We will adjust our expenses as necessary to prevent cash flow or
liquidity problems. However, we expect we will need additional financing of some
type, which we do not now possess, to fully develop our operations. We expect to
rely principally upon our ability to raise additional financing, the success of
which cannot be guaranteed. We will look at both equity and debt financing,
including loans from our principal shareholder. However, at the present time, we
have no definitive plans for financing in place, other than the funds, which may
be loaned to us by Mr. West, our President. In the event that we need additional
capital, Mr. West has agreed to loan such funds as may be necessary through
December 31, 2010 for working capital purposes. To the extent that we experience
a substantial lack of liquidity, our development in accordance with our proposed
plan may be delayed or indefinitely postponed, our operations could be impaired,
we may never become profitable, fail as an organization, and our investors could
lose some or all of their investment.
As
a company with limited operating history in this format, we are inherently a
risky investment.
We have
limited operating history in this format. Because we are a company with limited
operating history, the operations in which we engage in should be seen as an
extremely risky business. An investor could lose his entire
investment.
There
are factors beyond our control, which may adversely affect us.
Our
operations may also be affected by factors, which are beyond our control,
principally general market conditions and changing client
preferences. Any of these problems, or a combination thereof, could
have affect on our viability as an entity. We may never become profitable, fail
as an organization, and our investors could lose some or all of their
investment.
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Our
ability to grow our business depends on relationships with others. We have no
established relationships at this time. We may never develop such
relationships. Further, if we were to lose those relationships, we could lose
our ability to sell our services.
Most of
our revenue and a majority of our gross profit are expected to come from selling
our billing services to DME companies. While our relationships will change from
time to time, we must rely upon DME companies for the services we plan to sell.
At the present time, we do not have any DME companies as clients and cannot
guarantee we will ever develop any such clients. If we do develop such clients,
we risk that a given client will change its marketing strategy and de-emphasize
its use of our services. Our ability to generate revenue from selling our
services would diminish and our operations and results of operations would be
materially and adversely affected.
We
are a relatively small company with limited resources compared to some of our
current and potential competitors, which may hinder our ability to compete
effectively.
All of
our current and potential competitors have longer operating histories,
significantly greater resources, broader name recognition, and a larger
installed base of clients than we have. As a result, these competitors may have
greater credibility with our existing and potential clients. They also may be
able to adopt more aggressive pricing policies and devote greater resources to
the development, promotion and sale of their services than we can to ours, which
would allow them to respond more quickly than us to new or emerging technologies
or changes in client requirements. In addition, some of our current and
potential competitors have already established relationships with decision
makers at our potential clients.
We
may be unable to hire and retain key personnel.
Our
future success depends on our ability to attract qualified personnel. We may be
unable to attract these necessary personnel. If we fail to attract or retain
skilled employees, or if a key employee fails to perform in his or her current
position, we may be unable to generate sufficient revenue to offset our
operating costs.
We
may need to substantially invest in marketing efforts in order to grow our
business, which will be expensive.
In order
to grow our business, we will need to develop and maintain widespread
recognition and acceptance of our company, our business model, and our services.
We have not presented our service offering to the potential market. We plan to
rely primarily on word of mouth from our existing contacts we develop personally
through industry events to promote and market ourselves. In order to
successfully grow our company, we may need to significantly increase our
financial commitment to creating awareness and acceptance of our company, which
would be expensive. To date, marketing and advertising expenses have been
negligible. If we fail to successfully market and promote our business, we could
lose potential clients to our competitors, or our growth efforts may be
ineffective. If we incur significant expenses promoting and marketing ourselves,
it could delay or completely forestall our profitability.
Our
business is not diversified, which could result in significant fluctuations in
our operating results.
All of
our business is involved in the marketing of selling our billing services to DME
companies, and, accordingly, is dependent upon trends in the sector. Downturns
in the integrated data storage solutions sector could have a material adverse
effect on our business. A downturn in selling our billing services sector may
reduce our stock price, even if our business is successful.
Our
success will be dependent upon our management’s efforts. We cannot sustain
profitability without the efforts of our management.
Our
success will be dependent upon the decision making of our directors and
executive officers. These individuals intend to commit as much time as necessary
to our business, but this commitment is no assurance of success. The loss of any
or all of these individuals, particularly Mr. Michael J. West, our President,
could have a material, adverse impact on our operations. We have no written
employment agreements with any officers and directors, including Mr. West. We
have not obtained key man life insurance on the lives of any of our officers or
directors.
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8 -
Our
stock has no public trading market and there is no guarantee a trading market
will ever develop for our securities.
There has
been, and continues to be, no public market for our common stock. An active
trading market for our shares has not, and may never develop or be
sustained. If you purchase shares of common stock, you may not be able to resell
those shares at or above the initial price you paid. The market price of our
common stock may fluctuate significantly in response to numerous factors, some
of which are beyond our control, including the following:
·
|
actual
or anticipated fluctuations in our operating results;
|
·
|
changes
in financial estimates by securities analysts or our failure to perform in
line with such estimates;
|
·
|
changes
in market valuations of other companies, particularly those that market
services such as ours;
|
·
|
announcements
by us or our competitors of significant
innovations, acquisitions, strategic partnerships, joint
ventures or capital commitments;
|
·
|
introduction
of enhancements that reduce the need for our services;
|
·
|
departures
of key personnel.
|
Of our
total outstanding shares as of December 31, 2008, a total of 8,000,000, or
approximately 83.4%, will be restricted from immediate resale but may be sold
into the market in the near future. This could cause the market price of our
common stock to drop significantly, even if our business is doing
well.
As
restrictions on resale end, the market price of our stock could drop
significantly if the holders of restricted shares sell them or are perceived by
the market as intending to sell them.
Applicable
SEC rules governing the trading of “Penny Stocks” limits the liquidity of our
common stock, which may affect the trading price of our common
stock.
Our
common stock is currently not quoted on in any market. If our common stock
becomes quoted, we anticipate that it will trade well below $5.00 per share. As
a result, our common stock is considered a “penny stock” and is subject to SEC
rules and regulations that impose limitations upon the manner in which our
shares can be publicly traded. These regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock and the associated risks. Under
these regulations, certain brokers who recommend such securities to persons
other than established customers or certain accredited investors must make a
special written suitability determination for the purchaser and receive the
written purchaser’s agreement to a transaction prior to
purchase. These regulations have the effect of limiting the trading
activity of our common stock and reducing the liquidity of an investment in our
common stock
The
over-the-counter market for stock such as ours is subject to extreme price and
volume fluctuations.
The
securities of companies such as ours have historically experienced extreme price
and volume fluctuations during certain periods. These broad market fluctuations
and other factors, such as new developments and trends in the our industry and
in the investment markets generally, as well as economic conditions and
quarterly variations in our operational results, may have a negative effect on
the market price of our common stock.
-
9 -
Buying
low-priced penny stocks is very risky and speculative.
The
shares being offered are defined as a penny stock under the Securities and
Exchange Act of 1934, and rules of the Commission. The Exchange Act and such
penny stock rules generally impose additional sales practice and disclosure
requirements on broker-dealers who sell our securities to persons other than
certain accredited investors who are, generally, institutions with assets in
excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or
annual income exceeding $200,000, or $300,000 jointly with spouse, or in
transactions not recommended by the broker-dealer. For transactions covered by
the penny stock rules, a broker-dealer must make a suitability determination for
each purchaser and receive the purchaser's written agreement prior to the sale.
In addition, the broker-dealer must make certain mandated disclosures in penny
stock transactions, including the actual sale or purchase price and actual bid
and offer quotations, the compensation to be received by the broker-dealer and
certain associated persons, and deliver certain disclosures required by the
Commission. Consequently, the penny stock rules may affect the ability of
broker-dealers to make a market in or trade our common stock and may also affect
your ability to resell any shares you may purchase in the public
markets.
We
do not expect to pay dividends on common stock.
We have
not paid any cash dividends with respect to our common stock, and it is unlikely
that we will pay any dividends on our common stock in the foreseeable future.
Earnings, if any, that we may realize will be retained in the business for
further development and expansion.
ITEM
2. DESCRIPTION OF PROPERTY.
We
currently occupy approximately 500 square feet of office space, which we rent
from our President and largest shareholder on a month-to-month basis, currently
without charge. This space is considered to be sufficient for us at the present
time. We own no property.
ITEM
3. LEGAL PROCEEDINGS.
We are
not a party to any material legal proceedings, nor is our property the subject
of any material legal proceeding.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
We held
no shareholders meeting in the fourth quarter of our fiscal year.
PART
II
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
Holders
As
of December 31, 2008, there were there were 41 record holders of our common
stock, and there were 9,596,000 shares of our common stock outstanding. No
public market currently exists for shares of our common stock. We intend to
apply to have our common stock listed for quotation on the Over-the-Counter
Bulletin Board.
Equity
Compensation Plan Information
We have no outstanding stock options or other equity compensation
plans.
-
10 -
The
Securities Enforcement and Penny Stock Reform Act of 1990
The
Securities and Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
A
purchaser is purchasing penny stock which limits the ability to sell the stock.
The shares offered by this prospectus constitute penny stock under the
Securities and Exchange Act. The shares will remain penny stocks for the
foreseeable future. The classification of penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his/her investment. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from those rules, to deliver a standardized risk disclosure
document prepared by the Commission, which:
·
|
contains
a description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary trading;
|
·
|
contains
a description of the broker's or dealer's duties to the customer and of
the rights and remedies available to the customer with respect to a
violation to such duties or other requirements of the Securities Act of
1934, as amended;
|
·
|
contains
a brief, clear, narrative description of a dealer market, including "bid"
and "ask" prices for penny stocks and the significance of the spread
between the bid and ask price;
|
·
|
contains
a toll-free telephone number for inquiries on disciplinary
actions;
|
·
|
defines
significant terms in the disclosure document or in the conduct of trading
penny stocks; and
|
·
|
contains
such other information and is in such form (including language, type, size
and format) as the Securities and Exchange Commission shall require by
rule or regulation;
|
The
broker-dealer also must provide, prior to effecting any transaction in a penny
stock, to the customer:
·
|
the
bid and offer quotations for the penny stock;
|
·
|
the
compensation of the broker-dealer and its salesperson in the
transaction;
|
·
|
the
number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market
for such stock; and
|
·
|
monthly
account statements showing the market value of each penny stock held in
the customer's account.
|
In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
their securities.
-
11 -
Reports
Since our
registration statement under Form SB-2 was declared effective, we have been
subject to certain reporting requirements and will furnish annual financial
reports to our stockholders, certified by our independent accountants, and will
furnish unaudited quarterly financial reports in our quarterly reports filed
electronically with the SEC. All reports and information filed by us can be
found at the SEC website, www.sec.gov.
Stock
Transfer Agent
The
stock transfer agent for our securities is Corporate Stock Transfer of Denver,
Colorado. Their address is 3200 Cherry Creek Drive South, Suite 430,
Denver, Colorado 80209. Their phone number is (303)282-4800.
Dividend
Policy
We
have not previously declared or paid any dividends on our common stock and do
not anticipate declaring any dividends in the foreseeable future. The payment of
dividends on our common stock is within the discretion of our board of
directors. We intend to retain any earnings for use in our operations and the
expansion of our business. Payment of dividends in the future will depend on our
future earnings, future capital needs and our operating and financial condition,
among other factors that our board of directors may deem relevant. We are not
under any contractual restriction as to our present or future ability to pay
dividends.
ITEM
6. SELECTED FINANCIAL DATA
A smaller
reporting company is not required to provide the information in this
Item.
ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
This
Management’s Discussion and Analysis contains forward-looking statements that
involve future events, our future performance and our expected future operations
and actions. In some cases, you can identify forward-looking statements by the
use of words such as “may”, “will”, “should”, “anticipate”, “believe”, “expect”,
“plan”, “future”, “intend”, “could”, “estimate”, “predict”, “hope”, “potential”,
“continue”, or the negative of these terms or other similar expressions. These
forward-looking statements are only our predictions and involve numerous
assumptions, risks and uncertainties. Our actual results or actions may differ
materially from these forward-looking statements for many reasons, including,
but not limited to, the matters discussed in this report under the caption “Risk
Factors”. We urge you not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus. We undertake no
obligation to publicly update any forward looking-statements, whether as a
result of new information, future events or otherwise.
The
following discussion of our financial condition and results of operations should
be read in conjunction with our financial statements and the related notes
included in this report.
Results
of Operations
We had revenues
of $24,632 for the fiscal year ended December, 2008. During 2008 we sold
various medical equipment and medical supplies to customers. Our business plan remains the same. In
this turbulent time, we have elected to attempt to generate revenues wherever
possible. It happened that for the relevant period, we generated revenues from
the sale of medical equipment and supplies. We do not plan to change our
business model but to act as opportunity presents itself. We
have no ongoing relationships with our customers but are always seeking new
customers. For the fiscal year ended December 2007, we generated no revenue. We
plan to continue to seek new customers and to develop our revenue.
Our cost
of goods sold for the fiscal year ended December 31, 2008 was $17,943, compared
to no cost of goods sold for the fiscal year ended December 31, 2007. These
activities represent the development of active operations during 2008, which we
plan to continue.
Our gross
profit for the fiscal year ended December 31, 2008 was $6,689, compared to no
gross profit for the fiscal year ended December 31, 2007. These activities
represent the development of active operations during 2008, which we plan to
continue.
To date, we have generated
revenues wherever possible. It happened that for the relevant periods, we
generated revenues from the sale of medical equipment and supplies. We do not
plan to change our business model but to act as opportunity presents
itself. In connection with these sales, we do not carry any inventory
or take title to any products. All products are pre-sold because they are
purchased by us as requested by the customer. Further wherever possible, the
products are drop shipped directly by the manufacturer to the customer. Any
returned products are sent by the customer directly to the manufacturer. The
customers who use this arrangement do so because they believe that we can
arrange the purchase of products under better terms than the customer would
receive. We have generated these customers to date from the personal contacts of
our President, Mr. West.
Our
operating expenses, which consisted entirely of general and administrative
expenses, for the fiscal year ended December 31, 2008 was $15,360, compared to
$14,463 in operating expenses for the fiscal year ended December 31,
2007.
-
12 -
We had
net losses of $9,858 and $16,442 for the fiscal years ended
December 2008 and 2007, respectively. We have narrowed our losses and hope to
become profitable in our next fiscal year.
Our
accountants have expressed doubt about our ability to continue as a going
concern as a result of our history of net loss. Our ability to achieve and
maintain profitability and positive cash flow is dependent upon our ability to
successfully develop a consulting practice with regard to providing medical
billing assistance to durable medical equipment companies and our ability to
generate revenues.
Because
we do not pay salaries, and our major professional fees have been paid for the
year, operating expenses are expected to remain fairly constant.
To try to
operate at a break-even level based upon our current level of proposed business
activity, we believe that we must generate approximately $35,000 in revenue per
year. However, if our forecasts are inaccurate, we will need to raise additional
funds. In the event that we need additional capital, Mr. West has agreed to loan
such funds as may be necessary through December 31, 2010 for working capital
purposes.
On the
other hand, we may choose to scale back our operations to operate at break-even
with a smaller level of business activity, while adjusting our overhead to meet
the revenue from current operations. In addition, we expect that we will need to
raise additional funds if we decide to pursue more rapid expansion, the
development of new or enhanced services or products, appropriate responses to
competitive pressures, or the acquisition of complementary businesses or
technologies, or if we must respond to unanticipated events that require us to
make additional investments. We cannot assure that additional financing will be
available when needed on favorable terms, or at all.
We expect
to incur operating losses in future periods because we will be incurring
expenses and not generating sufficient revenues. We expect approximately $35,000
in operating costs over the next twelve months. We cannot guarantee that we will
be successful in generating sufficient revenues or other funds in the future to
cover these operating costs. Failure to generate sufficient revenues or
additional financing when needed could cause us to go out of
business.
Liquidity
and Capital Resources.
As of
December 31, 2008, we had cash or cash equivalents of $2,985, compared to cash
or cash equivalents of $11,451 at December 31, 2007.
Net cash
used for operating activities was $6,592, and $13,338 for the fiscal years ended
December 2008 and December 31, 2007, respectively.
Cash
flows from investing activities were $-0- for the fiscal years ended December
2008 and December 31, 2007, respectively.
Cash
flows used for financing activities were $1,874 for the fiscal year ended
December 31, 2008. This represented a payment on a note payable. Cash flows
provided by financing activities were $24,559 for the fiscal year ended December
31, 2007. These cash flows were all related to sales of stock.
Over the
next twelve months we do not expect any material our capital costs to develop
operations. We plan to buy office equipment to be used in our
operations.
We
believe that we have sufficient capital in the short term for our current level
of operations. This is because we believe that we can attract sufficient sales
within our present organizational structure and resources to become profitable
in our operations. Additional resources would be needed to expand into
additional locations, which we have no plans to do at this time. We do not
anticipate needing to raise additional capital resources in the next twelve
months In the event that we need additional capital, Mr. West has agreed to loan
such funds as may be necessary through December 31, 2010 for working capital
purposes.
Our
principal source of liquidity will be our operations. We expect variation in
revenues to account for the difference between a profit and a loss. Also
business activity is closely tied to the U.S. economy. Our ability to achieve
and maintain profitability and positive cash flow is dependent upon our ability
to successfully develop a management consulting practice with regard to
accounting, computer and general business issues for small and home-office based
companies and our ability to generate revenues.
-
13 -
In any
case, we try to operate with minimal overhead. Our primary activity will be to
seek to develop clients for our services and, consequently, our sales. If we
succeed in developing clients for our services and generating sufficient sales,
we will become profitable. We cannot guarantee that this will ever occur. Our
plan is to build our company in any manner, which will be
successful.
Off-Balance
Sheet Arrangements
We have
no off-balance sheet arrangements with any party.
Critical
Accounting Policies
Our
discussion and analysis of results of operations and financial condition are
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 these consolidated financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. We evaluate our estimates on an ongoing basis, including those
related to provisions for uncollectible accounts receivable, inventories,
valuation of intangible assets and contingencies and litigation. We base our
estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.
The
accounting policies that we follow are set forth in Note 2 to our financial
statements as included in this prospectus. These accounting policies conform to
accounting principles generally accepted in the United States, and have been
consistently applied in the preparation of the financial
statements.
Recently
Issued Accounting Pronouncements
In
December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 123R "Share Based Payment." This
statement is a revision of SFAS No. 123, "Accounting for Stock-Based
Compensation" and supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees, and its related implementation guidance. SFAS No. 123R addresses all
forms of share based payment ("SBP") awards including shares issued under
employee stock purchase plans, stock options, restricted stock and stock
appreciation rights. Under SFAS No. 123R, SBP awards result in a cost that will
be measured at fair value on the awards' grant date, based on the estimated
number of awards that are expected to vest. This statement is effective for
public entities that file as small business issuers, as of the beginning of the
first interim or annual reporting period that begins after December 15, 2005. We
adopted this pronouncement during the first quarter of 2005.
In
December 2004, the FASB issued SFAS No. 153, Exchanges of Non-monetary Assets -
An Amendment of APB Opinion No. 29. The amendments made by SFAS No. 153 are
based on the principle that exchanges of non-monetary assets should be measured
based on the fair value of the assets exchanged. Further, the amendments
eliminate the narrow exception for non-monetary exchanges of similar productive
assets and replace it with a broader exception for exchanges of non-monetary
assets that do not have "commercial substance." SFAS No. 153 is effective for
non-monetary asset exchanges occurring in fiscal periods beginning after June
15, 2005. The adoption of SFAS No. 153 on its effective date did not have a
material effect on our consolidated financial statements.
In March
2005, the FASB issued Financial Interpretation No. 47, "Accounting for
Conditional Asset Retirement Obligations - an Interpretation of FASB Statement
No. 143", which specifies the accounting treatment for obligations associated
with the sale or disposal of an asset when there are legal requirements
attendant to such a disposition. We adopted this pronouncement in 2005, as
required, but there was no impact as there are no legal obligations associated
with the future sale or disposal of any assets.
In May
2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections —
A Replacement of APB Opinion No. 20 and SFAS Statement No. 3". SFAS No. 154
changes the requirements for the accounting and reporting of a change in
accounting principle by requiring retrospective application to prior periods'
financial statements of the change in accounting principle, unless it is
impracticable to do so. SFAS No. 154 is effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15, 2005. We
do not expect the adoption of SFAS No. 154 to have any impact on our
consolidated financial statements.
-
14 -
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
A smaller
reporting company is not required to provide the information in this
Item.
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
MEDICAL
BILLING ASSISTANCE, INC.
CONSOLIDATED
FINANCIAL STATEMENTS
December
31, 2007 and 2008
-
15 -
MEDICAL
BILLING ASSISTANCE, INC.
Consolidated
Financial Statements
TABLE
OF CONTENTS
Page
|
|
REPORT
OF INDEPENDENT REGISTERED
|
|
PUBLIC
ACCOUNTING FIRM
|
17
|
CONSOLIDATED
FINANCIAL STATEMENTS
|
|
Consolidated
balance sheets
|
18
|
Consolidated
statements of operation
|
19
|
Consolidated
statements of stockholders' equity
|
20
|
Consolidated
statements of cash flows
|
21
|
Notes
to consolidated financial statements
|
23
|
-
16 -
RONALD R.
CHADWICK, P.C.
Certified
Public Accountant
2851
South Parker Road, Suite 720
Aurora,
Colorado 80014
Telephone
(303)306-1967
Fax
(303)306-1944
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of
Directors
Medical
Billing Assistance, Inc.
Centennial,
Colorado
I have
audited the accompanying consolidated balance sheet of Medical Billing
Assistance, Inc. as of December 31, 2007 and 2008 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. My responsibility is to express an opinion on these financial
statements based on my audit.
I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I 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 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. I believe that my audit provides a
reasonable basis for my opinion.
In my
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Medical Billing Assistance,
Inc. as of December 31, 2007 and 2008 and the related consolidated statements of
operations, stockholders' equity and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 5 to the financial
statements the Company has suffered recurring losses from operations and has a
working capital deficit that raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 5. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Aurora,
Colorado /s/ Ronald R. Chadwick,
P.C.
March 16,
2009
RONALD R. CHADWICK, P.C.
-
17 -
MEDICAL
BILLING ASSISTANCE, INC.
|
||||||||
CONSOLIDATED
BALANCE SHEETS
|
||||||||
Dec.
31, 2007
|
Dec.
31, 2008
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
|
$ | 11,451 | $ | 2,985 | ||||
Total current
assets
|
11,451 | 2,985 | ||||||
Total
Assets
|
$ | 11,451 | $ | 2,985 | ||||
LIABILITIES
&
|
||||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accrued
payables
|
$ | 149 | $ | 66 | ||||
Related
party payables
|
40,549 | 43,898 | ||||||
Notes
payable
|
22,478 | 20,604 | ||||||
Total current
liabilties
|
63,176 | 64,568 | ||||||
Total
Liabilities
|
63,176 | 64,568 | ||||||
Stockholders'
Equity
|
||||||||
Preferred
stock, $.01 par value;
|
||||||||
1,000,000
shares authorized;
|
||||||||
no
shares issued and outstanding
|
- | - | ||||||
Common
stock, $.001 par value;
|
||||||||
50,000,000
shares authorized;
|
||||||||
9,596,000
shares issued and outstanding
|
9,596 | 9,596 | ||||||
Additional
paid in capital
|
20,956 | 20,956 | ||||||
Accumulated
deficit
|
(82,277 | ) | (92,135 | ) | ||||
Total
Stockholders' Equity
|
(51,725 | ) | (61,583 | ) | ||||
Total
Liabilities and Stockholders' Equity
|
$ | 11,451 | $ | 2,985 |
The
accompanying notes are an integral part of the consolidated financial
statements.
-
18 -
MEDICAL
BILLING ASSISTANCE, INC.
|
||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||
Year
Ended
|
Year
Ended
|
|||||||
Dec.
31, 2007
|
Dec.
31, 2008
|
|||||||
Sales
|
$ | - | $ | 24,632 | ||||
Cost
of goods sold
|
17,943 | |||||||
- | ||||||||
Gross
profit
|
- | 6,689 | ||||||
Operating
expenses:
|
||||||||
General
and administrative
|
14,463 | 15,360 | ||||||
14,463 | 15,360 | |||||||
Gain
(loss) from operations
|
(14,463 | ) | (8,671 | ) | ||||
Other
income (expense):
|
||||||||
Interest
expense
|
(1,979 | ) | (1,187 | ) | ||||
Income
(loss) before
|
||||||||
provision
for income taxes
|
(16,442 | ) | (9,858 | ) | ||||
Provision
for income tax
|
- | - | ||||||
Net
income (loss)
|
$ | (16,442 | ) | $ | (9,858 | ) | ||
Net
income (loss) per share
|
||||||||
(Basic
and fully diluted)
|
$ | (0.00 | ) | $ | (0.00 | ) | ||
Weighted
average number of
|
||||||||
common
shares outstanding
|
8,600,083 | 9,596,000 |
The
accompanying notes are an integral part of the consolidated financial
statements.
-
19 -
MEDICAL
BILLING ASSISTANCE, INC.
|
||||||||||||||||||||
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
Stock-
|
||||||||||||||||||||
Common
Stock (1)
|
Paid
In
|
Accumulated
|
holders'
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||
Balances
at December 31, 2006
|
8,000,000 | $ | 8,000 | $ | (3,000 | ) | $ | (65,835 | ) | $ | (60,835 | ) | ||||||||
Paid
in capital
|
52 | 52 | ||||||||||||||||||
Sales
of common stock
|
1,596,000 | 1,596 | 23,904 | 25,500 | ||||||||||||||||
Gain
(loss) for the year
|
(16,442 | ) | (16,442 | ) | ||||||||||||||||
Balances
at Deccember 31, 2007
|
9,596,000 | $ | 9,596 | $ | 20,956 | $ | (82,277 | ) | $ | (51,725 | ) | |||||||||
Gain
(loss) for the year
|
(9,858 | ) | (9,858 | ) | ||||||||||||||||
Balances
at Deccember 31, 2008
|
9,596,000 | $ | 9,596 | $ | 20,956 | $ | (92,135 | ) | $ | (61,583 | ) | |||||||||
________________
(1)
As restated for a 80,000 for 1 recapitalization on June 30,
2007.
|
The
accompanying notes are an integral part of the consolidated financial
statements.
-
20 -
MEDICAL
BILLING ASSISTANCE, INC.
|
||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
Year
Ended
|
Year
Ended
|
|||||||
Dec.
31, 2007
|
Dec.
31, 2008
|
|||||||
Cash
Flows From Operating Activities:
|
||||||||
Net
income (loss)
|
$ | (16,442 | ) | $ | (9,858 | ) | ||
Adjustments
to reconcile net loss to
|
||||||||
net
cash provided by (used for)
|
||||||||
operating
activities:
|
||||||||
Accrued
payables
|
(28 | ) | (83 | ) | ||||
Related
party payables
|
3,132 | 3,349 | ||||||
Net cash provided by (used
for)
|
||||||||
operating
activities
|
(13,338 | ) | (6,592 | ) | ||||
Cash
Flows From Investing Activities:
|
||||||||
- | - | |||||||
Net
cash provided by (used for)
|
||||||||
investing
activities
|
- | - | ||||||
(Continued
On Following Page)
|
The
accompanying notes are an integral part of the consolidated financial
statements.
-
21 -
MEDICAL
BILLING ASSISTANCE, INC.
|
||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
(Continued
From Previous Page)
|
||||||||
Year
Ended
|
Year
Ended
|
|||||||
Dec.
31, 2007
|
Dec.
31, 2008
|
|||||||
Cash
Flows From Financing Activities:
|
||||||||
Notes
payable - payments
|
(993 | ) | (1,874 | ) | ||||
Sales
of common stock
|
25,500 | - | ||||||
Paid
in capital
|
52 | - | ||||||
Net cash provided by (used
for)
|
||||||||
financing
activities
|
24,559 | (1,874 | ) | |||||
Net
Increase (Decrease) In Cash
|
11,221 | (8,466 | ) | |||||
Cash
At The Beginning Of The Year
|
230 | 11,451 | ||||||
Cash
At The End Of The Year
|
$ | 11,451 | $ | 2,985 | ||||
Schedule Of Non-Cash Investing And Financing
Activities
|
||||||||
None
|
||||||||
Supplemental Disclosure
|
||||||||
Cash
paid for interest
|
$ | 2,007 | $ | 1,270 | ||||
Cash
paid for income taxes
|
$ | - | $ | - |
The
accompanying notes are an integral part of the consolidated financial
statements.
-
22 -
MEDICAL
BILLING ASSISTANCE, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2007 and 2008
NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
Medical
Billing Assistance, Inc. (the “Company”), was incorporated in the State of
Colorado on May 30, 2007. The Company was formed to act as a holding corporation
for I.V. Services Ltd., Inc., a Florida corporation engaged in providing billing
services to the medical community. The Company may also engage in any other
business permitted by law, as designated by the Board of Directors of the
Company. I.V. Services Ltd., Inc. was incorporated in the State of Florida on
September 28, 1987. On June 30, 2007 in an acquisition classified as a
transaction between parties under common control, Medical Billing Assistance,
Inc. acquired all the outstanding common shares of I.V. Services Ltd., Inc.
(8,000,000 Medical Billing Assistance, Inc. common shares were issued for 100
common shares of I.V. Services Ltd., Inc.), making I.V. Services Ltd., Inc. a
wholly owned subsidiary of Medical Billing Assistance, Inc.. Financial activity
of the Company up to June 30, 2007 as represented in the financial statements is
that of I.V. Services Ltd., Inc., as Medical Billing Assistance, Inc. had no
activity. The results of operations of Medical Billing Assistance, Inc. and I.V.
Services Ltd., Inc. have been consolidated from June 30, 2007
forward.
Principles of
consolidation
The
accompanying consolidated financial statements include the accounts of Medical
Billing Assistance, Inc. and its wholly owned subsidiary. All intercompany
accounts and transactions have been eliminated in consolidation.
Cash and cash
equivalents
The
Company considers all highly liquid investments with an original maturity of
three months or less as cash equivalents.
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.
Income
tax
The
Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (“SFAS 109”). Under SFAS 109 deferred taxes are provided on a
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
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23 -
MEDICAL
BILLING ASSISTANCE, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2007 and 2008
NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
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.
Revenue
recognition
Revenue is
recognized on an accrual basis as earned under contract terms. The Company currently does not carry any inventory or
take title to any products. All products are currently pre-sold
because they are purchased by the Company as requested by the customer. The
Company is the primary obligor on purchases as it is ultimately responsible for
payment to the manufacturer. Further wherever possible, the products are drop
shipped directly by the manufacturer to the customer. Any returned products are
currently sent by the customer directly to the manufacturer. The customers who
use this arrangement do so because they believe that the Company can arrange the
purchase of products under better terms than the customer would
receive.
Property and
equipment
Property
and equipment are recorded at cost and depreciated under the straight line
method over each item's estimated useful life.
Financial
Instruments
The
carrying value of the Company’s financial instruments, including cash and cash
equivalents and accrued payables, as reported in the accompanying balance sheet,
approximates fair value.
NOTE
2. RELATED PARTY TRANSACTIONS
The
Company at December 31, 2007 and 2008 owed $40,549 and $43,898 to an officer for
non-interest bearing, due on demand working capital advances.
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24 -
MEDICAL
BILLING ASSISTANCE, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2007 and 2008
NOTE
3. INCOME TAXES
Deferred
income taxes arise from the temporary differences between financial statement
and income tax recognition of net operating losses. These loss carryovers are
limited under the Internal Revenue Code should a significant change in ownership
occur. The Company accounts for income taxes pursuant to SFAS 109. Until 2007,
the Company's subsidiary, I.V. Services Ltd., Inc. operated as an S-Corporation
for tax purposes. At December 31, 2007 and 2008 the Company had approximately
$16,500 and $26,300 in unused federal net operating loss carryforwards, which
begin to expire principally in the year 2027. A deferred tax asset at year end
2007 and 2008 of approximately $3,300 and $5,300 resulting from the loss
carryforward has been offset by a 100% valuation allowance. The change in the
valuation allowance in 2007 and 2008 was approximately $3,300 and
$2,000.
NOTE
4. NOTES PAYABLE
At
December 31, 2007 and 2008 the Company owed a bank $22,478 and $20,604 under a
line of credit note payable. The line of credit is secured by all Company
assets, guaranteed by a Company officer, due on demand, and bears interest at
prime plus 6%. Interest expense under the note in 2007 and 2008 was $1,979 and
$1,187. Accrued interest payable at each date was $149 and $66.
NOTE
5. GOING CONCERN
The
Company has suffered recurring losses from operations and has a working capital
deficit and stockholders' deficit, and in all likelihood 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. By doing so, the Company hopes through marketing efforts to
generate revenues from sales of its medical billing services. Management
believes that actions presently being taken to obtain additional funding provide
the opportunity for the Company to continue as a going concern.
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25 -
ITEM
9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
We did
not have any disagreements on accounting and financial disclosures with our
present accounting firm during the reporting period.
ITEM
9A(T). CONTROLS AND PROCEDURES.
Conclusion
Regarding the Effectiveness of Disclosure Controls and Procedures
Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as
amended (the Exchange Act). Accordingly, our principal executive and
financial officer concluded that our disclosure controls and procedures were
effective as of December 31, 2008.
Management’s Annual Report on Internal Control Over Financial Reporting.
Management
is responsible for establishing and maintaining adequate internal control over
financial reporting (ICFR).
Our
internal control over financial reporting are designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of consolidated financial statements for external purposes in accordance with U.
S. generally accepted accounting principles.
Our
management conducted an evaluation of the effectiveness of our internal control
over financial reporting based on the framework in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on our evaluation, management concluded
that internal control over the financial reporting was effective as of December
31, 2008.
Inherent Limitations Over Internal Controls
Internal
control over financial reporting cannot provide absolute assurance of achieving
financial reporting objectives because of its inherent limitations, including
the possibility of human error and circumvention by collusion or overriding of
controls. Accordingly, even an effective internal control system may not prevent
or detect material misstatements on a timely basis. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions or that the
degree of compliance with the policies or procedures may
deteriorate.
Attestation
Report of the Registered Public Accounting Firm.
This
annual report does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our independent
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only management's report in this annual
report.
Changes
in Internal Control Over Financial Reporting.
We have
made no change in our internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
-
26 -
ITEM
9B. OTHER INFORMATION.
Nothing
to report.
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Set forth
below are the names of the directors and officers of the Company, all positions
and offices with the Company held, the period during which he has served as
such, and the business experience during at least the last five
years:
Name
|
Age
|
Positions and Offices
Held
|
||
Michael
West
|
54
|
President,
Treasurer, Director
|
||
Stephen
West
|
53
|
Secretary
and Director
|
Michael J. West has been our
President, Treasurer and a Director since our inception in 1994. Mr. West has
been involved with electronic billing of medical claims to Medicare since
1988. He has participated successfully in all aspects of the appeal
process with Medicare for denied claims, including telephone hearings,
face-to-face hearings and hearings before an administrative law judge. In 1992
he established Canfield Medical Supply, Inc., which is provider of DME home
products, and continues to operate this company through the present. He
co-founded ElectroMed in October 1998 and has also been involved with this
company through the present. Electromed helps companies identify problems with
their accounts receivable and improve bottom line profits. He has a B.A. Degree
in Biology from Wittenberg University. 1977. He plans to devote approximately 20
hours per month to our affairs.
Stephen West has been our
Secretary and Director since our holding company was founded in May,
2007. He has been involved in the computer data storage market since
1978. He spent twenty-two years at Storage Technology Corporation
where he held positions as Director of Sales for their Telecommunications
Region, Vice President and General Manager of the Western Region and Vice
President of Global Accounts. Mr. West also worked for Qwest Cyber
Solutions as Director of Channel Sales. Since March 2001, he has been
the Executive Vice President of Sales for PeakData Inc., a computer data storage
company. He is also one of its founders. PeakData, Inc. focuses on sales and
integration of enterprise storage solutions for fortune 1000 companies in the
telecommunications, medical, and financial industries. Mr. West
graduated from the University of Cincinnati with a BBA in 1978.
Family
Relationships
Michael
and Stephen West are brothers. Neither can be considered an independent
director. As a result, none of our directors is independent.
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27 -
Committees
of the Board of Directors
There are
no committees of the Board of Directors.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a)
of the Securities Exchange Act of 1934 (the “34 Act”) requires our officers and
directors and persons owning more than ten percent of the Common Stock, to file
initial reports of ownership and changes in ownership with the Securities and
Exchange Commission (“SEC”). Additionally, Item 405 of Regulation S-B
under the 34 Act requires us to identify in its Form 10-K and proxy statement
those individuals for whom one of the above referenced reports was not filed on
a timely basis during the most recent year or prior years. We have nothing to
report in this regard.
Code
of Ethics
Our Board
of directors has not adopted a code of ethics but plans to do so in the
future.
Options/SAR
Grants and Fiscal Year End Option Exercises and Values
We have
not had a stock option plan or other similar incentive compensation plan for
officers, directors and employees, and no stock options, restricted stock or SAR
grants were granted or were outstanding at any time.
Item
11. EXECUTIVE COMPENSATION
No
compensation has been paid and no stock options granted to any of our officers
or directors in the last three years. Further, the officers and directors
are not accruing any compensation pursuant to any agreement with us. We have no
plans to pay any compensation to our officers or directors in the
future.
None
of our officers and directors will receive any finder’s fee, either directly or
indirectly, as a result of their respective efforts to implement our business
plan outlined herein.
No
retirement, pension, profit sharing, stock option or insurance programs or other
similar programs have been adopted by us for the benefit of its
employees.
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
The following sets forth the number of shares of our $.0.001 par value common
stock beneficially owned by (i) each person who, as of December 31, 2008, was
known by us to own beneficially more than five percent (5%) of its common stock;
(ii) our individual Directors and (iii) our Officers and Directors as a group. A
total of 9,596,000 common shares were issued and outstanding as of December 31,
2008.
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28 -
Name
and Address
|
Amount
and Nature of
|
Percent
of
|
of
Beneficial Owner
|
Beneficial Ownership(1)(2)
|
Class
|
Michael
West
|
8,216,500
|
85.6%
|
16325
East Dorado Ave.
|
||
Centennial,
CO 80111
|
||
Stephen
West
|
216,500
|
2.3%
|
16325
East Dorado Ave.
|
||
Centennial,
CO 80111
|
||
All
Officers and Directors as a Group
|
8,433,000
|
87.9%
|
(two
persons)
|
_______________
(1) All ownership is
beneficial and of record, unless indicated otherwise.
(2) The Beneficial owner
has sole voting and investment power with respect to the shares
shown.
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
We
currently occupy approximately 500 square feet of office space, which we rent
from our President and largest shareholder on a month-to-month basis, currently
without charge.
At
December 31, 2008 and 2007, we owed $43,898 and $40,549, respectively,
in loans to Mr. Michael West. The loans are non-interest bearing and due on
demand. The loans were made for working capital advances. Mr. West has agreed to
continue to loan such funds as may be necessary through December 31, 2010 for
working capital purposes.
ITEM
14: PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our
independent auditor, Ronald R. Chadwick, P.C., Certified Public Accountants,
billed an aggregate of $7,500 for the year ended December 31, 2008 and for
professional services rendered for the audit of the Company's annual financial
statements and review of the financial statements included in its quarterly
reports. The firm billed an aggregate of $6,650 for the year ended December 31,
2007 and for professional services rendered for the audit of the Company's
annual financial statements and review of the financial statements included in
its quarterly reports.
We do not
have an audit committee and as a result our entire board of directors performs
the duties of an audit committee. Our board of directors evaluates the scope and
cost of the engagement of an auditor before the auditor renders audit and
non-audit services.
ITEM
15. EXHIBITS FINANCIAL STATEMENT SCHEDULES.
The
following financial information is filed as part of this report:
(a)
(1) FINANCIAL STATEMENTS
(2)
SCHEDULES
-
29 -
(3)
EXHIBITS. The following exhibits required by Item 601 to be filed herewith are
incorporated by reference to previously filed documents:
Exhibit No.
|
Description
|
|
3.1*
|
Articles
of Incorporation of Medical Billing Assistance, Inc.
|
|
3.2*
|
Bylaws
of Medical Billing Assistance, Inc.
|
|
21.1*
|
List
of Subsidiaries
|
|
31.1
|
Certification
of CEO/CFO pursuant to Sec. 302
|
|
32.1
|
Certification
of CEO/CFO pursuant to Sec. 906
|
* Previously filed with Form SB-2 Registration Statement, December 20,
2007.
(b) Reports
on Form 8-K. No reports have ever been filed under cover of Form
8-K.
-
30 -
SIGNATURES
In
accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on February 19, 2010.
MEDICAL
BILLING ASSISTANCE, INC.
|
||
By:
|
/s/
Michael West
|
|
Michael
West
|
||
Chief
Executive Officer and President
(principal
executive officer and principal financial and accounting
officer)
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following person on behalf of the Registrant and in the
capacity and on the date indicated.
Date:
February 19, 2010
|
By:
|
/s/
Michael West
|
Michael
West
|
||
Director
|
Date:
February 19, 2010
|
By:
|
/s/
Stephen West
|
Stephen
West
|
||
Director
|
- 31 -