Attached files
file | filename |
---|---|
8-K - FORM 8-K - Swisher Hygiene Inc. | g27950e8vk.htm |
EX-10.7 - EX-10.7 - Swisher Hygiene Inc. | g27950exv10w7.htm |
EX-99.3 - EX-99.3 - Swisher Hygiene Inc. | g27950exv99w3.htm |
EX-23.1 - EX-23.1 - Swisher Hygiene Inc. | g27950exv23w1.htm |
EX-10.3 - EX-10.3 - Swisher Hygiene Inc. | g27950exv10w3.htm |
EX-99.4 - EX-99.4 - Swisher Hygiene Inc. | g27950exv99w4.htm |
EX-99.6 - EX-99.6 - Swisher Hygiene Inc. | g27950exv99w6.htm |
EX-10.1 - EX-10.1 - Swisher Hygiene Inc. | g27950exv10w1.htm |
EX-23.3 - EX-23.3 - Swisher Hygiene Inc. | g27950exv23w3.htm |
EX-10.4 - EX-10.4 - Swisher Hygiene Inc. | g27950exv10w4.htm |
EX-10.2 - EX-10.2 - Swisher Hygiene Inc. | g27950exv10w2.htm |
EX-99.2 - EX-99.2 - Swisher Hygiene Inc. | g27950exv99w2.htm |
EX-10.6 - EX-10.6 - Swisher Hygiene Inc. | g27950exv10w6.htm |
EX-99.5 - EX-99.5 - Swisher Hygiene Inc. | g27950exv99w5.htm |
EX-23.2 - EX-23.2 - Swisher Hygiene Inc. | g27950exv23w2.htm |
EX-10.5 - EX-10.5 - Swisher Hygiene Inc. | g27950exv10w5.htm |
Exhibit 99.1
MT. HOOD SOLUTIONS COMPANY | ||||
Consolidated Financial Statements As of March 31, 2011
and 2010 (Unaudited)
|
||||
FINANCIAL STATEMENTS
|
||||
F-1 | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
MT. HOOD
SOLUTIONS COMPANY
CONSOLIDATED
BALANCE SHEETS
MARCH 31,
2011 AND DECEMBER 31, 2010
(unaudited) |
(audited) |
|||||||
March 31, |
December 31, |
|||||||
2011 | 2010 | |||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 129,041 | $ | 243,032 | ||||
Marketable securities Note 3
|
28,798 | 28,884 | ||||||
Accounts and note receivable, net of allowance
Note 2
|
2,457,314 | 2,223,540 | ||||||
Employee receivables
|
27,084 | 27,353 | ||||||
Due from related party
|
10,000 | 10,000 | ||||||
Inventory
|
1,728,363 | 1,710,449 | ||||||
Prepaid expenses and other current assets
|
180,355 | 213,318 | ||||||
Total current assets
|
4,560,955 | 4,456,576 | ||||||
Property and equipment, net Note 4
|
4,440,051 | 4,474,925 | ||||||
Other assets
|
||||||||
Intangible assets, net Note 5
|
22,387 | 25,072 | ||||||
$ | 9,023,393 | $ | 8,956,573 | |||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Current liabilities
|
||||||||
Line of credit Note 6
|
$ | 625,155 | $ | 738,210 | ||||
Accounts payable
|
1,332,782 | 1,126,875 | ||||||
Deferred compensation Note 10
|
783,896 | 783,896 | ||||||
Accrued expenses and other current liabilities
Note 10
|
798,081 | 1,001,537 | ||||||
Income taxes payable
|
19,559 | 14,640 | ||||||
Total current liabilities
|
3,559,473 | 3,665,158 | ||||||
Commitments and contingencies Note 7
|
| | ||||||
Stockholders equity
|
||||||||
Common stock, no par value, authorized 1,000 shares,
37 shares issued and outstanding at March 31, 2011 and
December 31, 2010
|
95,738 | 95,738 | ||||||
Retained earnings
|
5,348,558 | 5,175,378 | ||||||
Accumulated other comprehensive loss
|
(8,029 | ) | (1,726 | ) | ||||
5,436,267 | 5,269,390 | |||||||
Non-controlling interest
|
27,653 | 22,025 | ||||||
$ | 9,023,393 | $ | 8,956,573 | |||||
See Notes to Consolidated Financial Statements
F-1
MT. HOOD
SOLUTIONS COMPANY
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
THREE
MONTHS ENDED MARCH 31, 2011 AND 2010
Three Months |
Three Months |
|||||||
Ended |
Ended |
|||||||
March 31, |
March 31, |
|||||||
2011 | 2010 | |||||||
Revenue
|
||||||||
Products and services
|
$ | 5,683,679 | $ | 5,322,447 | ||||
Costs and Expenses
|
||||||||
Cost of sales
|
2,639,911 | 2,363,937 | ||||||
Selling, general and administrative
|
2,572,829 | 2,537,362 | ||||||
Depreciation and amortization
|
190,395 | 186,675 | ||||||
Total costs and expenses
|
5,403,135 | 5,087,974 | ||||||
Income from Operations
|
280,544 | 234,473 | ||||||
Other Income (Expense)
|
||||||||
Interest expense
|
(3,318 | ) | (1,577 | ) | ||||
Rental income
|
21,542 | 21,028 | ||||||
(Loss) gain on sale of property and equipment
|
(7,592 | ) | 800 | |||||
Other
|
8,784 | 5,774 | ||||||
Total other income (expense)
|
19,416 | 26,025 | ||||||
Net Income Before Income Taxes
|
299,960 | 260,498 | ||||||
Income Taxes
|
(5,718 | ) | (4,010 | ) | ||||
Net Income
|
294,242 | 256,488 | ||||||
Net Income (Loss) Attributable to Non-Controlling Equity
Interest
|
5,628 | (975 | ) | |||||
Net Income Attributable to Mt. Hood Solutions Company
|
299,870 | 255,513 | ||||||
Other Comprehensive Income
|
||||||||
Unrealized (loss) gain on marketable securities
|
(6,303 | ) | 1,624 | |||||
Comprehensive Income
|
$ | 293,567 | $ | 257,137 | ||||
See Notes to Consolidated Financial Statements
F-2
MT. HOOD
SOLUTIONS COMPANY
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS EQUITY AND COMPREHENSIVE
LOSS
THREE
MONTHS ENDED MARCH 31, 2011 AND 2010
Accumulated |
||||||||||||||||||||||||
Common Stock |
Other |
Retained |
Non-controlling |
|||||||||||||||||||||
Shares | Amount | Comprehensive Loss | Earnings | Interest | Total | |||||||||||||||||||
Balance as of December 31, 2009
|
37 | $ | 95,738 | $ | (11,067 | ) | $ | 5,016,732 | $ | 36,027 | $ | 5,137,430 | ||||||||||||
Distributions
|
(118,936 | ) | (118,936 | ) | ||||||||||||||||||||
Net income
|
255,513 | 975 | 256,488 | |||||||||||||||||||||
Unrealized gain on marketable securities
|
1,624 | 1,624 | ||||||||||||||||||||||
Balance as of March 31, 2010
|
37 | 95,738 | (9,443 | ) | 5,153,309 | 37,002 | 5,276,606 | |||||||||||||||||
Distributions
|
(904,851 | ) | (19,374 | ) | (924,225 | ) | ||||||||||||||||||
Net income
|
926,920 | 4,397 | 931,317 | |||||||||||||||||||||
Unrealized gain on marketable securities
|
7,717 | 7,717 | ||||||||||||||||||||||
Balance as of December 31, 2010
|
37 | 95,738 | (1,726 | ) | 5,175,378 | 22,025 | 5,291,415 | |||||||||||||||||
Distributions
|
(121,062 | ) | (121,062 | ) | ||||||||||||||||||||
Net income
|
294,242 | 5,628 | 299,870 | |||||||||||||||||||||
Unrealized loss on marketable securities
|
(6,303 | ) | (6,303 | ) | ||||||||||||||||||||
Balance as of March 31, 2011
|
37 | $ | 95,738 | $ | (8,029 | ) | $ | 5,348,558 | $ | 27,653 | $ | 5,463,920 | ||||||||||||
See Notes to Consolidated Financial Statements
F-3
MT. HOOD
SOLUTIONS COMPANY
CONSOLIDATED
STATEMENTS OF CASH FLOWS
THREE
MONTHS ENDED MARCH 31, 2011 AND 2010
Three Months |
Three Months |
|||||||
Ended |
Ended |
|||||||
March 31, |
March 31, |
|||||||
2011 | 2010 | |||||||
Cash provided by operating activities
|
||||||||
Net income
|
$ | 299,870 | $ | 256,488 | ||||
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||
Depreciation and amortization
|
190,395 | 178,741 | ||||||
Provision for doubtful accounts
|
12,000 | 12,000 | ||||||
Loss on sale of property and equipment
|
7,592 | | ||||||
Changes in working capital components:
|
||||||||
Accounts receivable
|
(245,774 | ) | (80,248 | ) | ||||
Investments
|
| (81 | ) | |||||
Employee receivable
|
270 | 2,869 | ||||||
Inventory
|
(17,914 | ) | 126,206 | |||||
Prepaid expenses and other assets
|
32,962 | 47,263 | ||||||
Accounts payable and accrued expenses
|
2,451 | (520,204 | ) | |||||
Accrued income taxes
|
4,918 | 4,010 | ||||||
Deferred compensation
|
| 7,839 | ||||||
Cash provided by operating activities
|
286,770 | 34,883 | ||||||
Cash used in investing activities
|
||||||||
Purchases of property and equipment
|
(160,426 | ) | (106,501 | ) | ||||
Purchase of marketable securities
|
(6,217 | ) | | |||||
Cash used in investing activities
|
(166,643 | ) | (106,501 | ) | ||||
Cash (used in) provided by financing activities
|
||||||||
Distributions to stockholder
|
(121,062 | ) | (118,936 | ) | ||||
Net advances from line of credit
|
(113,056 | ) | 212,670 | |||||
Cash (used in) provided by financing activities
|
(234,118 | ) | 93,734 | |||||
Net change in cash and cash equivalents
|
(113,991 | ) | 22,116 | |||||
Cash and cash equivalents at beginning of period
|
243,032 | 57,403 | ||||||
Cash and cash equivalents at end of period
|
$ | 129,041 | $ | 79,519 | ||||
See Notes to Consolidated Financial Statements
F-4
MT. HOOD
SOLUTIONS COMPANY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 | BUSINESS DESCRIPTION |
Mt. Hood Solutions Company (MHS) is a manufacturer
and distributor of over 300 industrial detergents and other
cleaning compounds headquartered in Portland, Oregon. Its
customers primarily consist of institutional and commercial
enterprises in Oregon, Washington, Utah, Colorado, California
and Idaho.
AML2, LLC (AML2) was founded in 2008, to manufacture
a cleaning compound for use in institutional and commercial
enterprises. AML2 is headquartered in Portland, Oregon.
Principles
of Combination and Consolidation
MHS and AML2 (collectively the Company) have common
ownership and management. The financial statements of these two
companies have been consolidated in accordance with Financial
Accounting Standards Board (FASB) Accounting
Standards Codification (ASC) Topic 810
Consolidation.
The non-controlling equity interest amounts shown represent the
third-party ownership interest in AML2. All inter-company
transactions are eliminated in these consolidated financial
statements.
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Use of
Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue
and expenses and disclosure of contingent assets and liabilities
at the date of the financial statements. Actual results could
differ from those estimates and such differences could affect
the results of operations reported in future periods.
Cash and
Cash Equivalents
The Company considers all cash accounts and all highly liquid
short-term investments purchased with an original maturity of
three months or less to be cash or cash equivalents. As a result
of the Companys cash management system, checks issued but
not presented to the banks for payment may create negative book
cash balances. Such negative balances are included in trade
accounts payable and totaled $243,007 and $44,063 at
March 31, 2011 and December 31, 2010, respectively.
Marketable
Securities
At March 31, 2011 and December 31, 2010, the Company
held equity securities classified as available for sale.
Available for sale securities are carried at fair market value
with the unrealized holding gains and losses reported in other
comprehensive income. For determining gross realized gains and
losses, the cost of securities sold is based upon specific
identification. Quoted market prices are used in determining the
fair market value of the Companys investments.
Accounts
and Notes Receivable
Accounts and notes receivable consist of amounts due from
customers for product sales and services. Accounts and notes
receivable are reported net of an allowance for doubtful
accounts. The allowance is managements best estimate of
uncollectible amounts and is based on a number of factors,
including overall credit quality, age of outstanding balances,
historical write-off experience and specific account analysis
that projects the ultimate collectability of the outstanding
balances. As of March 31, 2011and December 31, 2010,
the allowance was $123,394 and $206,460, respectively.
F-5
MT. HOOD
SOLUTIONS COMPANY
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Inventory
Inventory is stated at the lower of cost or market determined
using the last in-first out (LIFO) cost method.
Property
and Equipment
Property and equipment is stated at cost, less accumulated
depreciation and amortization. Depreciation and amortization is
provided using the straight-line method over the estimated
useful lives of individual assets or classes of assets as
follows:
Building Improvements
|
15 years | |||
Dish Machines
|
5 years | |||
Office Equipment and Furniture
|
5 years | |||
Machinery and Equipment
|
5 years | |||
Vehicles
|
5 years |
When an asset is sold or otherwise disposed, the related cost
and accumulated depreciation or amortization are removed from
the respective accounts and the gain or loss is recognized.
Maintenance and repairs are charged to expense when incurred.
Intangible
Assets
Intangible assets include customer relationships and formulas
purchased during acquisitions. Customer relationships are
amortized on a straight-line basis over the expected average
life of the acquired accounts, which is five years.
Long-lived
Assets
In accordance with FASB ASC
360-10-35
Impairment of Disposal of Long-lived Assets, losses
related to the impairment of long-lived assets are recognized
when the carrying amount is not recoverable and exceeds its fair
value. When facts and circumstances indicate that the carrying
values of long-lived assets may be impaired, management of the
Company evaluates recoverability by comparing the carrying value
of the assets to projected future cash flows, in addition to
other qualitative and quantitative analyses.
Compensated
Absences
Employees of the Company are entitled to paid vacation, sick
days and personal days, depending on job classification, length
of service, and other factors. It is impractical to estimate the
amount of compensation for future absences and accordingly no
liability has been recorded in the accompanying financial
statements. The companys policy is to recognize the costs
of compensated absences when actually paid to employees.
Revenue
Recognition
Revenue from product sales and services is recognized when the
services are performed or the products are delivered to the
customer, provided that persuasive evidence of a sales
arrangement exists, both title and risk of loss have passed to
the customer, and collection is reasonably assured.
Advertising
The Company expenses non-direct advertising costs when incurred.
Advertising expense was $18,114 and $18,195 for the three months
ended March 31, 2011 and 2010, respectively.
F-6
MT. HOOD
SOLUTIONS COMPANY
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Income
Taxes
Effective July 1, 2003, the Companys stockholder
elected that the corporation be taxed under the provisions of
Subchapter S of the Internal Revenue Code. Under this provision,
the stockholder is taxed on his proportionate share of the
Companys taxable income. As a Subchapter
S corporation, the Company bears no liability or expense
for federal income taxes. The Company is required to file income
tax returns in several states. Various states do not recognize
Subchapter S of the Internal Revenue Code and as such the
Company may incur income tax expense.
FASB ASC
740-10,
Income Taxes, clarifies the accounting for income
taxes, by prescribing a minimum recognition threshold a tax
position is required to meet before being recognized in the
balance sheet. It also provides guidance on derecognition,
measurement and classification of amounts related to uncertain
tax positions, accounting for and disclosure of interest and
penalties, accounting in interim period disclosures and
transition relating to the adoption of new accounting standards.
Under FASB ASC
740-10, the
recognition for uncertain tax positions should be based on a
more likely than not threshold that the tax position will be
sustained upon audit. The tax position is measured as the
largest amount of benefit that has a greater than fifty percent
probability of being realized upon settlement. Management has
determined that adoption of this topic has had no effect on the
Companys balance sheet.
Fair
Value of Financial Instruments
The Companys financial instruments include cash,
marketable securities, receivables and accrued liabilities. The
Company adopted the provisions of FASB ASC Topic 820 Fair
Value Measurements and Disclosures, effective
January 1, 2008. Under FASB ASC
820-10-30-2,
fair value is defined as the price that would be received to
sell an asset or paid to transfer a liability in an orderly
transaction between market participants.
FASB ASC
820-10-30-2
establishes a fair value hierarchy for inputs used in measuring
fair value that maximizes the use of observable inputs and
minimizes the use of unobservable inputs by requiring the most
observable inputs be used when available. Observable inputs are
from sources independent of the Company, whereas unobservable
inputs reflect the Companys assumptions about the inputs
market participants would use in pricing the asset or liability
developed on the best information available in the
circumstances. The fair value hierarchy is categorized into
three levels based on the inputs as follows:
Level 1 inputs are valuations based on unadjusted quoted
prices in active markets for identical assets or liabilities
that the Company has the ability to access. Since valuations are
based on quoted prices that are readily and regularly available
in an active market, valuation of these securities does not
entail a significant degree of judgment.
Level 2 inputs are valuations based on quoted prices in
markets that are not active or for which all significant inputs
are observable, either directly or indirectly.
Level 3 inputs are valuations that are unobservable and
significant to the overall fair value measurement.
The Company did not have any outstanding financial derivative
instruments.
Segment
Information
FASB ASC 280, Segment Reporting, establishes
standards for reporting information regarding operating segments
in annual financial statements. Operating segments are
identified as components of an enterprise for which separate
discrete financial information is available for evaluation by
the chief operating decision-maker, or decision-making group in
making decisions on how to allocate resources and assess
performance.
F-7
MT. HOOD
SOLUTIONS COMPANY
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The Company manages, allocates resources and reports in one
business segment. The Companys chief operating
decision-maker, as defined under FASB ASC 280, is the
Companys chief executive officer.
Based on the information reviewed by its chief executive
officer, the Company operates in one business segment.
NOTE 3 | FAIR VALUE MEASUREMENTS |
The Companys assets and liabilities recorded at fair value
have been categorized based upon a fair value hierarchy in
accordance with FASB ASC
820-10-30-2,
as described in Note 2. The following table presents
information about the Companys marketable securities
measured at fair value as of March 31, 2011 and at
December 31, 2010.
Quoted Price in |
Significant |
(unaudited) |
||||||||||||||
Active Markets for |
Significant Other |
Unobservable |
Balance as of |
|||||||||||||
Identical Assets |
Observable Inputs |
Inputs |
March 31, |
|||||||||||||
(Level 1) | (Level 2) | (Level 3) | 2011 | |||||||||||||
Marketable securities actively traded
|
$ | 28,798 | $ | | $ | | $ | 28,798 | ||||||||
$ | 28,798 | $ | | $ | | $ | 28,798 | |||||||||
Quoted Price in |
Significant |
(audited) |
||||||||||||||
Active Markets for |
Significant Other |
Unobservable |
Balance as of |
|||||||||||||
Identical Assets |
Observable Inputs |
Inputs |
December 31, |
|||||||||||||
(Level 1) | (Level 2) | (Level 3) | 2010 | |||||||||||||
Marketable securities actively traded
|
$ | 28,884 | $ | | $ | | $ | 28,884 | ||||||||
$ | 28,884 | $ | | $ | | $ | 28,884 | |||||||||
NOTE 4 | PROPERTY AND EQUIPMENT |
Property and equipment as of March 31, 2011 and
December 31, 2010 consists of the following:
(unaudited) |
(audited) |
|||||||
March 31, |
December 31, |
|||||||
2011 | 2010 | |||||||
Building improvements
|
$ | 3,615,615 | $ | 3,615,615 | ||||
Dish machines
|
2,341,156 | 2,233,047 | ||||||
Office equipment and furniture
|
87,955 | 87,955 | ||||||
Machinery and equipment
|
818,283 | 812,966 | ||||||
Vehicles
|
1,205,870 | 1,180,747 | ||||||
8,068,879 | 7,930,330 | |||||||
Less: accumulated depreciation
|
(3,628,828 | ) | (3,455,405 | ) | ||||
$ | 4,440,051 | $ | 4,474,925 | |||||
Depreciation expense for the three months ended March 31,
2011 and 2010 is $187,710 and $183,990, respectively.
F-8
MT. HOOD
SOLUTIONS COMPANY
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
NOTE 5 | INTANGIBLE ASSETS |
Intangible assets as of March 31, 2011 and
December 31, 2010 consists of the following:
(unaudited) |
(audited) |
|||||||
March 31, |
December 31, |
|||||||
2011 | 2010 | |||||||
Customer list
|
$ | 53,726 | $ | 53,726 | ||||
Less: accumulated amortization
|
(31,339 | ) | (28,654 | ) | ||||
$ | 22,387 | $ | 25,072 | |||||
Amortization expense for the three months ended March 31,
2011 and 2010 is $2,685 and $2,685 respectively.
As of March 31, 2011, future amortization of customer
relationships for the next three years is as follows:
Twelve months ending March 31,
|
||||
2012
|
$ | 8,060 | ||
2013
|
10,745 | |||
2014
|
3,582 | |||
$ | 22,387 | |||
NOTE 6 | LINE OF CREDIT |
In July 2010, the Company amended its revolving line of credit
with a financial institution having a maximum borrowing of up to
$3,000,000. The line of credit matures on March 31, 2012.
Borrowings under these lines are used for general working
capital purposes and capital expenditures. The line of credit is
collateralized by accounts receivable and substantially all
assets not otherwise encumbered. Interest is payable monthly at
the banks announced prime rate less 0.50%, which at
March 31, 2011 was 3.25%. The line of credit contains
financial covenants which the Company met at March 31,
2011. At March 31, 2011 and December 31, 2010, the
Company had borrowings totaling $625,155 and $738,210,
respectively.
NOTE 7 | COMMITMENTS AND CONTINGENCIES |
The Company leases its headquarters and other facilities,
equipment and vehicles under operating leases that expire at
varying times through 2023. Future minimum lease payments for
operating leases that had initial or remaining non-cancelable
lease terms in excess of one year as of March 31, 2011 are
as follows:
Twelve months ending March 31,
|
||||
2012
|
$ | 675,984 | ||
2013
|
675,984 | |||
2014
|
675,984 | |||
2015
|
675,984 | |||
2016
|
675,984 | |||
Thereafter
|
4,743,804 | |||
$ | 8,123,724 | |||
The Company leases its headquarters from a limited liability
company related through common ownership. The lease expires
March 2023 and has two five-year renewal options. Under terms of
the lease, the Company is responsible for utilities,
maintenance, taxes and insurance. Future payments under this
lease
F-9
MT. HOOD
SOLUTIONS COMPANY
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
totaling $8,059,200 are included in the above figures. During
the three months ended March 31, 2011 and 2010, the Company
paid this related party $160,810 and $166,950, respectively, as
rent for use of the facility.
Total rent expense for operating leases, including those with
terms of less than one year was approximately $189,734 for the
three months ended March 31, 2011.
The Company has determined that, as a potentially responsible
party, it is likely that it has incurred a liability for
environmental remediation costs resulting from leasing certain
real property in past years. The Company has accrued
approximately $150,000 of estimated environmental remediation
costs in accrued liabilities as of March 31, 2011 and
December 31, 2010.
NOTE 8 | RELATED-PARTY TRANSACTIONS |
As of March 31, 2011, the Company had guaranteed the debt
of its related party lessor totaling approximately $4,655,159,
which is fully collateralized by property and facilities. The
Company is required to perform under the guaranty in the event
the related party fails to make contractual payments. The term
of the loan covered by this guaranty is through March 2018.
There is no recognition of any potential future payment
obligation as the Company believes the potential for making this
payment is remote.
NOTE 9 | EMPLOYEE BENEFIT PLAN |
The Company has a 401(k) profit sharing plan which covers all
eligible employees. Plan participants can make voluntary
contributions of up to $16,500 of compensation, subject to
certain limitations. Under this plan, the Company may contribute
to participants accounts at managements discretion.
Total Company contributions to the plan for the three months
ended March 31, 2011 and 2010 was $60,000 and $60,000,
respectively. Accrued contributions of $59,859 and $230,000 are
included in accrued liabilities at March 31, 2011 and
December 31, 2010, respectively.
NOTE 10 | SUPPLEMENTAL FINANCIAL INFORMATION |
Accrued
Expenses and Other Current Liabilities
Accrued expenses and other current liabilities as of
March 31, 2011 and December 31, 2010 consists of the
following:
(unaudited) |
(audited) |
|||||||
March 31, |
December 31, |
|||||||
2011 | 2010 | |||||||
Sales tax payable
|
$ | 89,546 | $ | 85,806 | ||||
Accrued commissions
|
151,231 | 136,620 | ||||||
Accrued payroll and payroll taxes
|
39,000 | 39,412 | ||||||
Profit sharing
|
59,859 | 230,000 | ||||||
Other accrued expenses
|
458,445 | 509,699 | ||||||
$ | 798,081 | $ | 1,001,537 | |||||
The Company entered into a deferred compensation agreement with
an employee in December 1993. The agreement provides that the
Company pay the employee an incentive bonus based upon the
number of full employment years and average monthly pay of the
employee at termination. The amount is fully vested. The
Companys liability is approximately $783,896 at
March 31, 2011 and December 31, 2010.
F-10
MT. HOOD
SOLUTIONS COMPANY
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Supplemental
Disclosure of Cash Flow Information
Supplemental cash flow information with respect to the three
months ended March 31, 2011 and the year ended
December 31, 2010 is as follows:
(unaudited) |
(audited) |
|||||||
March 31, |
December 31, |
|||||||
2011 | 2010 | |||||||
Cash paid for:
|
||||||||
Interest
|
$ | 3,318 | $ | 7,375 | ||||
Income taxes
|
$ | 5,718 | $ | 25,741 | ||||
Shareholder loan converted to equity
|
$ | | $ | 585,481 | ||||
NOTE 11 | SUBSEQUENT EVENTS |
The Company evaluated all events and transactions through
July 12, 2011, the date these financial statements were
issued. During this period, there were no material recognizable
or non-recognizable subsequent events except for the following:
On May 4, 2011, the Company entered into an agreement under
which it sold certain assets and liabilities of the Company to
Swisher Hygiene, Inc. Assets sold included substantially all
inventory and supplies, accounts receivable, property and
equipment, customer lists, and other assets.
F-11