Wednesday, October 13, 2010 3:20:24 PM
this is an important read---pt.#2-F-at pinks right now fer information fer all...
http://www.otcmarkets.com/stock/PPJE/quote
for now most important is their last financial reporting.
http://www.otcmarkets.com/stock/PPJE/financials
i'm having problem at pinks.
will continue in a few minutes.
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http://www.otcmarkets.com/otciq/ajax/showFinancialReportById.pdf?id=37378
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The Notes carry an interest rate of 6% and a maturity date of June 27, 2009 which are now extended. The notes are convertible into our common shares at the Applicable Percentage of the average of the lowest three (3) trading prices for our shares of common stock during the twenty (20) trading day period prior to conversion. The "Applicable Percentage" means 50%; provided, however, that the Applicable Percentage shall be increased to (i) 55% in the event that a Registration Statement is filed within thirty days of the closing and (ii) 60% in the event that the Registration Statement becomes effective within one hundred and twenty days from the Closing.
The Company has an option to prepay the Notes in the event that no event of default exists, there are a sufficient number of shares available for conversion of the Notes and the market price is at or below $.05 per share. In addition, in the event that the average daily price of the common stock, as reported by the reporting service, for each day of the month ending on any determination date is below $.05, the Company may prepay a portion of the outstanding principal amount of the Notes equal to 101% of the principal amount hereof divided by thirty-six (36) plus one month's interest. Exercise of this option will stay all conversions for the following month. The full principal amountof the Notes is due upon default under the terms of Notes. In addition, the Company has granted the investors a security interest in substantially all of its assets and intellectual property as well as registration rights.
The Company simultaneously issued to the Investors seven year warrants to purchase 32,500,000 shares of common stock at an exercise price of $0.07.
The Investors have contractually agreed to restrict their ability to convert the Notes and exercise the Warrants and receive shares of the Company's common stock such that the number of shares of the Company's common stock held by them and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of the Company's common stock.
The Company computed the beneficial conversion liability of $1,300,000 and warrant liability of $ 105,762 based on Black Sholes model. These amounts have been reflected on the financials as derivative liability in amount of $65,700.
NOTE 5 LITIGATION
The Company is currently plaintiff to collect company assets from its former subsidiary client and former Board of Directors Narinder Grewal, MD and Santa Clarita Surgery Center for obtaining and holding company assets unlawfully. The Company filed a claim for $15,000,000 (Fifteen Million Dollars) against the above defendants in Los Angeles Superior Court, California Case no. BC427192.
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. Other than the legal proceedings listed below, we are not currently involved in legal proceedings that could be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. However, we may become involved in material legal proceedings in the future.
NOTE 6 RELAED PARTY TRANSACTIONS
As of September 30, 2010, the officer of the company loaned the Company $168,000 to pay operating expenses. This loan accrued interest at 9% per annum, unsecured and the term of the loan is one year, no monthly payment.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 12
This report contains forward looking statements within the meaning of section 27a of the securities act of 1933, as amended and section 21e of the securities exchange act of 1934, as amended. The company's actual results could differ materially from those set forth on the forward looking statements as a result of the risks set forth in the company's filings with the securities and exchange commission, general economic conditions, and changes in the assumptions used in making such forward looking statements.
OVERVIEW
Winfield Financial Group, Inc. (the "Registrant") was incorporated in the State of Nevada on May 2, 2000. Prior to the Acquisition, discussed below, the Registrant was a business broker, primarily representing sellers and offering its clients' businesses for sale. As a result of the Acquisition, the Registrant changed its business focus.
On April 7, 2004, the Registrant filed Articles of Exchange with the State of Nevada to take effect on such date. Under the terms of the Articles of Exchange, the Registrant was to acquire Vanguard Commercial, Inc., a Nevada corporation ("Vanguard") whereby the Registrant was to issue 197,000 of its shares of Common Stock in exchange for all of the issued and outstanding Common Stock of Vanguard. Robert Burley, a former Director of the Registrant and the Registrant's former President, Chief Executive Officer and Treasurer is also an officer and director of Vanguard. Subsequent to the effective date of the exchange with Vanguard, the Registrant and Vanguard mutually agreed to rescind the transaction. The Registrant filed a Certificate of Correction with the State of Nevada rescinding the exchange with Vanguard, which never took place and the Registrant never issued any of its shares with respect thereto.
On April 22, 2004, the Registrant amended its Articles of Incorporation to increase the authorized shares to Fifty Million (50,000,000) shares of Common Stock, to reauthorize the par value of $.001 per share of Common Stock and to reauthorize 5,000,000 shares of preferred stock with a par value of $.001 per share of preferred stock.
On April 23, 2004, the Registrant acquired 100% of the issued and outstanding shares of PPJ Enterprise, a Delaware corporation ("Healthcare"). As part of the same transaction on May 7, 2004, the Registrant acquired 100% of the issued and outstanding shares of AutoMed Software Corp., a Nevada corporation ("AutoMed"), and 100% of the membership interests of Silver Shadow Properties, LLC, a Nevada single member limited liability company ("Silver Shadow"). The transactions are collectively referred to herein as the "Acquisition." The Registrant acquired Healthcare, AutoMed, and Silver Shadow from Chandana Basu, the sole owner, in exchange for 25,150,000 newly issued treasury shares of the Registrant's Common Stock. The term "Company" shall include a reference to Winfield Financial Group, Inc., Healthcare, AutoMed and Silver Shadow merged into unless otherwise stated referred to herein as "HBSGI. Or Company"
On June 21, 2004, the Registrant entered into an agreement with Robert Burley (former Director, President and Chief Executive Officer of the Registrant) and Linda Burley (former Director and Secretary of the Registrant) whereby the Registrant agreed to transfer certain assets owned by the Registrant immediately prior to the change in control in consideration for Mr. and Mrs. Burley's cancellation of an aggregate of 2,640,000 of their shares of the Registrant's Common Stock. The Registrant transferred the following assets to Mr. and Mrs. Burley: i) the right to the name "Winfield Financial Group, Inc." and ii) any contracts, agreements, rights or other intangible property that related to the Registrant's business operations immediately prior to the change in control whether or not such intangible property was accounted for in the Registrant's financial statements. After the issuance of shares to Ms. Basu and the cancellation of 2,640,000 shares of Mr. and Mrs. Burley, there were 28,774,650 shares of the Registrant's 13
Common Stock Outstanding. As a result of these transactions, control of the Registrant shifted to Ms. Basu. Ms. Basu currently owns 2,955,150,000 shares (or over 50%) out of 5,584,175,298 of the Registrant's issued and outstanding Common Stock.
On January 5, 2005, the Registrant changed its name to Healthcare Business Services, Inc. and on Feb 19, 2008 changes its name to PPJ Enterprise. The Registrant is a holding company for PBS The business operations discussed herein is conducted by Professional Billing Service (PBS). The Registrant, through PBS, is engaged in the business of providing medical billing services to healthcare providers in the United States.
The income due to change in fair value of derivative liability decreased by $65,701 for the nine month period ending September 30, 2010 due to change in the market value of the stock prices. The derivative liability originated from the convertible note.
LIQUIDITY AND CAPITAL RESOURCES
On September 27, 2006, the Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with New Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC (collectively, the "Investors"). Under the terms of the Securities Purchase Agreement, the Investors purchased an aggregate of (i) $2,000,000 in callable convertible secured notes (the "Notes") and (ii) warrants to purchase 50,000,000 shares of our common stock (the "Warrants").
Pursuant to the Securities Purchase Agreement, the Investors purchased the Notes and Warrants in three trenches as set forth below:
At closing, on July 1, 2006 ("Closing"), the Investors purchased Notes aggregating $700,000 and warrants to purchase 17,500,000 shares based on the prorate shares of our common stock;
On August 8, 2006 the investors purchased Notes aggregating $600,000 and warrants to purchase 15,000,000 shares based on the prorate shares of our common stock and,
Upon effectiveness of the Registration Statement, the Investors will purchase Notes aggregating $700,000. The Company has withdrawn the prior registration statement and filed a new registration statement on June 11, 2007.
The Notes carry an interest rate of 6% and a maturity date of June 27, 2009. The notes are convertible into our common shares at the Applicable Percentage of the average of the lowest three (3) trading prices for our shares of common stock during the twenty (20) trading day period prior to conversion. The "Applicable Percentage" means 50%; provided, however, that the Applicable Percentage shall be increased to (i) 55% in the event that a Registration Statement is filed within thirty days of the closing and (ii) 60% in the event that the Registration Statement becomes effective within one hundred and twenty days from the Closing.
The Company has an option to prepay the Notes in the event that no event of default exists, there are a sufficient number of shares available for conversion of the Notes and the market price is at or below $.05 per share. In addition, in the event that the average daily price of the common stock, as reported by the reporting service, for each day of the month ending on any determination date is below $.05, the Company may prepay a portion of the outstanding principal amount of the Notes equal to 101% of the principal amount hereof divided by thirty-six (36) plus one month's interest. Exercise of this option will stay all conversions for the following month. The full principal amount of the Notes is due upon default under the terms of Notes. In addition, the Company has granted the investors a security interest in substantially all of its assets and intellectual property as well as registration rights.
The Company simultaneously issued to the Investors seven year warrants to purchase 32,500,000 shares of common stock at an exercise price of $0.07. 14
The Investors have contractually agreed to restrict their ability to convert the Notes and exercise the Warrants and receive shares of the Company's common stock such that the number of shares of the Company's common stock held by them and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of the Company's common stock. The company accrued interest of $146,250 on the note during the nine month period ended September 30, 2007.
The Company is in default of the note as its registration statement has not become effective as stipulated by the agreement. The note is immediately due and payable and has been shown as a current liability in the accompanying financials. The Company has accrued interest on the note at the default interest rate of 15%.
FACTORS THAT MAY AFFECT FUTURE RESULTS
We currently operate a high growth company that is bringing new business every month but that may change due to other facts
We currently have revenues from operations or assets that pay our basic bills, but this situation may change for any reason which may have adverse effects on the value of our common shares.
AUTOMED SOFTWARE
The Roots of AutoMed® started to grow in late 2000 when our founders teamed up with a national medical billing company based in Southern California. AutoMed® was designed on the simple vision of using the technology to streamline Healthcare Practice Management, Billing and Collections. AutoMed® is a subsidiary of the Company.
The innovative software team at AutoMed® spent over 5 years developing this one of a kind, highly flexible suite of practice management applications. This includes automated data entry, billing, follow-ups and collections for Healthcare providers and billing companies. AutoMed®'s first version was online in July 2003. Working exclusively with Southern California based national medical billing agency, we spent another 30 months perfecting the system, working with numerous specialized medical practice fields such as anesthesia, pain management, ambulatory surgery centers, physical therapy, internal, General medicine, Hospital and many others. The results were phenomenal!
AutoMed® version 5.0 is now commercially available. This method is proven to manage in house data entry, coding billing, collection and tracking systems. Managing a practice is a snap with Automed®.
Product name have been changed from ‘AutoMed’ to ‘Automated Biller’ due to conflict of trade mark name.
MARKETING & PUBLIC RELATION AGREEMENTS
The Company entered into an agreement with a consultant to provide Public Relations services including investment banking liaison and acting as public relations consultant. But the deal did not materialize due to lack of funding in 2009.
WE HAVE AN EMPLOYMENT AGREEMENT WITH OUR CEO MS BASU, BUT MS BASU WAS NOT PAID AS AGREED SINCE YR 2004 FOR ALL HER RESPOSIBILITIES PERMORMED AS EXECUTIVE OFFICERS AND TREASURER. SHE HAS ALSO TAKEN ALL RESPONSIBILITIES TO BRING THE COMPANY BACK FROM FINANCIAL DISASTERS. MS BASU IS A CARING, HONEST PERSON WITH FULL INTEREST IN HEART TO PROTECT SHAEHOLDERS INTERESTS.
Chandana Basu, our Chief Executive Officer, President and Treasurer, and many other hats she wears was supposed to receive $50,000 per month (or $600,000 per year) for her services, which includes approximately $5,000 of salary and a minimum bonus of $45,000 each month (accrues if not paid). The amount of salary that Ms. Basu was suppose to receive to the Company's revenue at merger in 2004 was fair but she has never received her full compensation ever as of this date. In addition Ms. Basu has loaned the company Millions of dollars and jeopardize her personal assets to protect the Company interests. 15
WE RELY ON KEY MANAGEMENT.
The success of the Company depends upon the personal efforts and abilities of Chandana Basu. .
BECAUSE MS. CHANDANA BASU OWNS OVER 50% OF OUR OUTSTANDING COMMON STOCK, SHE WILL EXERCISE CONTROL OVER CORPORATE DECISIONS THAT MAY BE ADVERSE TO OTHER MINORITY SHAREHOLDERS.
Chandana Basu, a Director of the Company and the Company's Chief Executive Officer and Treasurer, owns over 50% of the issued and outstanding shares of our common stock. Accordingly, she will exercise control in determining the outcome of all corporate transactions or other matters, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. The interests of Ms. Basu may differ from the interests of the other stockholders and thus result in corporate decisions that are adverse to other shareholders.
Introductory Comment
Throughout this Quarterly Report the terms of the company, “we,” “us” and “our” refers to PPJ and its subsidiaries PBS on a consolidated basis.
Note Regarding Forward- Looking Statements
This Quarterly Reports contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). To the extent that any statements made in this Quarterly Report contain information that is not historical, these statements are essentially forward-looking. Forward-looking statements can be identified by the use of words such as “expect,” “plan”, “will”, “may”, “anticipate”, “believe”, “should”, “intend”, “estimate”, and variations od such words. Forward-looking statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation:
•
Our ability to increase revenue or raise capital to finance our growth and operations, when needed and terms advantageous to us;
•
The ability to manage growth, profitability and the marketability of our services;
•
General economic and business conditions;
•
Other risks and uncertainties detailed in this Quarterly Report and, from time to time, in our other findings with the SEC.
•
There could other impacts due to President Obama’s new Health Care Bill.
IF THERE'S A MARKET FOR OUR COMMON STOCK, OUR STOCK PRICE MAY BE VOLATILE.
If there's a market for our common stock, we anticipate that such market would be subject to wide fluctuations in response to several factors, including, but not limited to:
(1) actual or anticipated variations in our results of operations;
(2) our ability or inability to generate new revenues; 16
(3) increased competition; and
(4) conditions and trends in the medical billing industry.
Further, because our common stock is traded on the NASD Pinksheets, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock.
CRITICAL ACCOUNTING POLICIES
Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principals generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of any contingent assets and liabilities. On an on-going basis, we evaluate our estimates. We base our estimates on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about 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.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:
(A) Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as certain financial statements disclosures. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from those estimates.
(B) Cash and Cash Equivalents
For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.
(C) Revenue Recognition
The Company's revenue recognition policies are in compliance with Staff accounting bulletin SAB 104. All revenue is recognized when persuasive evidence of an arrangement exists, the service or sale is complete, the price is fixed or determinable and collectibility is reasonably assured. Revenue is derived from collections of medical billing services. Revenue is recognized when the collection process is complete which occurs when the money is collected and recognized on a net basis.
License Revenue - The Company recognizes revenue from license contracts when a non-cancelable, non-contingent license agreement has been signed, the software product has been delivered, no uncertainties exist surrounding product acceptance, fees from the agreement are fixed and determinable and collection is probable. Any revenues from software arrangements with multiple elements are allocated to each element of the arrangement based on the relative fair values using specific objective evidence as defined in the SOPs. If no such objective evidence exists, revenues from the arrangements are not recognized until the entire arrangement is completed and accepted by the customer. Once the amount of the revenue for each element is determined, the Company recognizes revenues as each element is completed and accepted by the customer. For arrangements that require significant production, modification or customization of software, the entire arrangement is accounted for by the percentage of completion method, in conformity with Accounting Research Bulletin ("ARB") No. 45 and SOP 81-1. 17
Contract Services Revenue - Revenue from consulting services is recognized as the services are performed for time-and-materials contracts and contract accounting is utilized for fixed-price contracts. Revenue from training and development services is recognized as the services are performed. Revenue from maintenance agreements is recognized ratably over the term of the maintenance agreement, which in most instances is one year.
(D) Property and Equipment
Property and equipment is stated at cost. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful life of the assets from three to seven years. Expenditures for maintenance and repairs are charged to expense as incurred.
(E) Software development Costs
The Company complied with Statement of Position 98-1 ("SOP 98-1") "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use", as accounting policy for internally developed computer software costs. Under SOP 98-1, we capitalized software development costs incurred during the application development stage.
Subsequently, the Company decided to market the software AutoMed. Therefore the Company is following the guideline under SFAS 86. SFAS 86 specifies that costs incurred internally in creating a computer software product shall be charged to expense when incurred as research and development until technological feasibility has been established for the product. Thereafter, all software production costs shall be capitalized and subsequently reported at the lower of unamortized cost or net realizable value.
Capitalized costs is being amortized based on current and future revenue for the product (AutoMed) with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product.
(F) Impairment of Long-Lived Assets
Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," and the accounting and reporting provisions of APB Opinion No. 30, "Reporting the Results of Operations for a Disposal of a Segment of a Business." The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.
(G) Stock-based Compensation
The Company accounts for non-cash stock-based compensation issued to non-employees in accordance with the provisions of SFAS No. 123 and EITF No. 96-18, Accounting for Equity Investments That Are Issued to Non-Employees for Acquiring, or in Conjunction with Selling Goods or Services. Common stock issued to non-employees and consultants is based upon the value of the services received or the quoted market price, whichever value is more readily determinable. The Company accounts for stock options and warrants issued to employees under the intrinsic value method. Under this method, the Company recognizes no compensation expense for stock options or warrants granted when the number of underlying shares is known and the exercise price of the option or warrant is greater than or equal to the fair market value of the stock on the date of grant. As of September 20, 2010, there were no options or warrants outstanding. 18
In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock Based Compensation-Transition and Disclosure". SFAS No. 148 amends SFAS No. 123, "Accounting for Stock Based Compensation", to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of Statement 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used, on reported results. The adoption of SFAS No. 148 did not have a material affect on the net loss of the Company.
(H) Basic and diluted net loss per share
Net loss per share is calculated in accordance with the Statement of financial accounting standards No. 128 (SFAS No. 128), "Earnings per share". Basic net loss per share is based upon the weighted average number of common shares outstanding. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Weighted average number of shares used to compute basic and diluted loss per share is the same since the effect of dilutive securities is anti-dilutive.
(I) Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, "Disclosures About Fair Value of Financial Instruments" requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate that value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts of the Company's accounts and other receivables, accounts payable, accrued liabilities, factor payable, capital lease payable and notes and loans payable approximates fair value due to the relatively short period to maturity for these instruments.
(J) Concentrations of Risk
Financial instruments which potentially subject the Company to concentrations of credit risk are cash and accounts receivable. The Company places its cash with financial institutions deemed by management to be of high credit quality. The amount on deposit in any one institution that exceeds federally insured limits is subject to credit risk. All of the Company's revenue and majority of its assets are derived from operations in Unites States of America.
(K) Reporting Segments
Statement of financial accounting standards No. 131, Disclosures about segments of an enterprise and related information (SFAS No. 131), which superseded statement of financial accounting standards No. 14, Financial reporting for segments of a business enterprise, establishes standards for the way that public enterprises report information about operating segments in annual financial statements.
Healthcare is a medical billing service provider. Healthcare's sister company, AutoMed, has developed a proprietary software system. In addition, Healthcare's other sister company, Silver Shadow, made an investment in real estate where Healthcare plans to construct its first surgical center and corporate office development.
There has been very insignificant activity in Automed and Silver Shadow. Hence the Company has determined it has only one segment.
(L) Comprehensive Income 19
Statement of financial accounting standards No. 130, Reporting comprehensive income (SFAS No. 130), establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity, except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS No. 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in financial statements that are displayed with the same prominence as other financial statements.
(M) Reclassifications
For comparative purposes, prior years' consolidated financial statements have been reclassified to conform to report classifications of the current year.
(N) New Accounting Pronouncements
In February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. FAS159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted subject to specific requirements outlined in the new Statement. Therefore, calendar-year companies may be able to adopt FAS 159 for their first quarter 2007 financial statements.
The new Statement allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods must be recognized in current earnings. FAS 159 also establishes presentation and disclosure requirements designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities. The management is currently evaluating the effect of this pronouncement on financial statements.
In September 2006, FASB issued SFAS 158 `Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans--an amendment of FASB Statements No. 87, 88, 106, and 132(R)' This Statement improves financial reporting by requiring an employer to recognize the over funded or under funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This Statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. An employer with publicly traded equity securities is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. An employer without publicly traded equity securities is required to recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after June 15, 2007. However, an employer without publicly traded equity securities is required Below is to disclose the following information in the notes to financial statements for a fiscal year ending after December 15, 2006, but before June 16, 2007, unless it has applied the recognition provisions of this Statement in preparing those financial statements:
1. A brief description of the provisions of this Statement
2. The date that adoption is required
3. The date the employer plans to adopt the recognition provisions of this Statement, if earlier.
The requirement to measure plan assets and benefit obligations as of the date of the employer's fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. The management is currently evaluating the effect of this pronouncement on the consolidated financial statements. In September 2006, FASB issued SFAS 157 `Fair Value Measurements'. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles ("GAAP"), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having 20
previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The management is currently evaluating the effect of this pronouncement on the consolidated financial statements.
(O) Source of Materials
NA
(P) Regulation and Environmental Matters
Not applicable
(Q) Employees
As of September 30, 2010 we have employed 14 full time 1 part time 2 as trainee we also retained additional consultants of five persons in the marketing and four persons in the software, hardware technology. Of the fourteen full time employees, our CEO MS. Basu is currently on full time consultant who is in the executive management position. We are not subject to any collective bargaining agreement that covers any of our employees, we consider our employee relations to be good.
(R) Seasonality
Not Applicable
(S) Economies Effect on The Company
None
(T) Marketing and Sales Activity
The marketing dept. of the company has been working with potential clients that they have met in various medical conferences throughout the country. We attend in excess of six conferences per year. There can be no assurances that all or any of these potential clients will result in contract commitments, but due to companies good reputation we have closed between 5 to 10 % of our leads we generate from various medical conferences. We also use direct mailer and cold call techniques to generate interest in medical and hospital based physicians.
(U) Competition
There are hundreds of medical billing service throughout the country most of this services are home based and family run operations, technical billing knowledge is poor and they don’t do a very good job in billing and collecting. Especially these home based services handle general physician billing but when it comes to specialty billing like anesthesia pain management, ambulatory surgery centers, number of services who can do this specialized billing are few. The company considers itself a superior, highly knowledgeable and has consistent follow up technique, with its aggressive performances the company has proven itself to be one of the most superior billing service for the above specialty billing area. Considering the above, company and its clients agree that our competitors are few.
NINE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2009 21
Contract and Service Revenue 2010, 2009 revenues are comprised of primarily of medical billing and collection service revenue.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Our chief executive officer and principal financial officer, after evaluating the effectiveness of the Company's "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report (the "Evaluation Date"), has concluded that as of the Evaluation Date, our disclosure controls and procedures were effective and designed to ensure that material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act of 1934 is 1) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms; and 2) accumulated and communicated to her as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in internal control over financial reporting. There were no significant changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
None.
ITEM 1. LEGAL PROCEEDINGS
The Company is currently plaintiff to collect company assets from its former subsidiary client and former Board of Directors Narinder Grewal, MD and Santa Clarita Surgery Center for obtaining and holding company assets unlawfully. The Company filed a claim for $15,000,000 (Fifteen Million Dollars) against the above defendants in Los Angeles Superior Court, California Case no. BC427192.
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. Other than the legal proceedings listed below, we are not currently involved in legal proceedings that could be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. However, we may become involved in material legal proceedings in the future.
ITEM 2. CHANGES IN SECURITIES
The Company is presently authorized to issue 7,500,000,000 shares of $0.0001 par value Common Stock. The Com
pany currently has 5,584,175,298 common shares issued and outstanding. The holders of common stock, and of shares issuable upon exercise of any Warrants or Options, are entitled to equal dividends and distributions, per share, with respect to the common stock when, as and if declared by the Board of Directors from funds legally available therefore. No holder of any shares of common stock has a pre-emptive right to subscribe for any securities of the Company nor is any common shares subject to redemption or convertible into other securities of the Company. Upon liquidation, dissolution or winding up of the Company, and after payment of creditors and preferred stockholders, if any, the assets will be divided pro-rata on a share-for-share basis among the holders of the shares of common stock. All shares of common stock now outstanding are fully paid, validly issued and non-assessable. Each share of common stock is entitled to one vote with respect to the election of any director or any other matter upon which shareholders are required or permitted to vote. Holders of the Company's common stock do not have cumulative voting rights, so that the holders of more than 50% of the combined shares voting for the election of directors may elect all of the directors, if they choose to do so and, in that event, the holders of the remaining shares will not be able to elect any members to the Board of Directors. 22
ITEM 3. RELATED PARTY TRANSACTIONS
During the year of 2010, the officer of the company loaned the Company $168,000 to pay operating expenses. This loan accrued interest at 9% per annum, unsecured and the term of the loan is one year no monthly payment.
ITEM 4. MANAGEMENT - DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information about our executive officers and directors.
Name
Age
Position
Chandana Basu
56
Chief Executive Officer, Treasurer and Director
Arjinderpal Singh Sekhon, M.D.
61
Director
Daljit Kaur, DDS
59
Director
The above listed officers and directors will serve until the next annual meeting of the shareholders or until their death, resignation, retirement, removal, or disqualification, or until their successors have been duly elected and qualified. Vacancies in the existing Board of Directors are filled by majority vote of the remaining Directors. Officers of the Company serve at the will of the Board of Directors .To the Company's knowledge, there are no agreements or understandings for any officer or director to resign at the request of another person nor is any officer or director acting on behalf of or is to act at the direction of any other person other than in his fiduciary capacity of and for the benefit of the Company and at its direction.
Set forth below is certain biographical information regarding our executive officers and directors:
Chandana Basu - Chief Executive Officer, Treasurer and Director
Chandana Basu has served as our Chief Executive Officer and Treasurer since May 2004, after we acquired PPJ Enterprise ("HBSGI"), a full-service medical billing agency and our wholly-owned subsidiary. She has served as our director since April 23, 2004. Ms. Basu incorporated HBSGI in December 1994. Ms. Basu has operated HBSGI for the past 21 years. Ms. Basu has been grown HBSGI from a core client base of doctors and hospitals in California, Florida, Washington State and Texas without the use of consistent marketing or advertising. Ms. Basu has over 21 years of experience in medical bill collecting from insurance companies. Ms. Basu also has over 14 years of experience in computer design and programming. Ms. Basu is the CEO and President of AutoMed Software Corp. our wholly-owned subsidiary. She also received specialized education in medical billing, anesthesia billing and attended various pain management conferences. Ms. Basu is a Technical Exhibitor for the American Association of Anesthesiology, American pain Academy and few other Medical organizations. During the Quarter ending September 30, 2010 the Company has not issue any shares to Ms. Basu.
Arjinder Paul Singh Sekhon, M.D. - Director
Dr. Singh Sekhon is self-employed doctor with a specialty in pulmonary medicine and pain management services. He has been a member of the United States Army Reserve for over 20 years. He has served in the Persian Gulf War and in the current military operation enduring freedom. He received Army's highest honor upon graduation from the United States Army College recently. During the past congressional election cycles, he was a candidate for the U.S. House of Representatives and won the Primary in California District 2. Lastly, he has served as an Owner/Director
23
24
of local medical clinic for over twenty five years. The company has not issue any shares to Dr. Sekhon for his services during the Quarter ending September 30, 2010.
Daljit Kaur, DDS – Director
Dr. Kaur has been operating multiple large dental practices over 20 years as Owner/Director. She is a seasoned business woman. The Company has not issued any shares to Dr. Kaur as of September 30, 2010 for her services.
ITEM 5. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 6. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 7. OTHER INFORMATION
Employee - The Company has 15 employees and six consultants as of September 30, 2010
ITEM 8. EXHIBITS
(a) Exhibits
1. Articles *
2. Bylaws *
* Filed Herein.
The Company filed no Reports on Form 8-K during the fiscal quarter ended September 30, 2010.
SIGNATURES
In accordance with the requirements of the U.S. Security & Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PPJ Enterprise
Dated: October 4, 2010
By: /s/ Chandana Basu
Chandana Basu, Chief Executive Officer and Principal Financial Officer
http://www.otcmarkets.com/stock/PPJE/quote
for now most important is their last financial reporting.
http://www.otcmarkets.com/stock/PPJE/financials
i'm having problem at pinks.
will continue in a few minutes.
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http://www.otcmarkets.com/otciq/ajax/showFinancialReportById.pdf?id=37378
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The Notes carry an interest rate of 6% and a maturity date of June 27, 2009 which are now extended. The notes are convertible into our common shares at the Applicable Percentage of the average of the lowest three (3) trading prices for our shares of common stock during the twenty (20) trading day period prior to conversion. The "Applicable Percentage" means 50%; provided, however, that the Applicable Percentage shall be increased to (i) 55% in the event that a Registration Statement is filed within thirty days of the closing and (ii) 60% in the event that the Registration Statement becomes effective within one hundred and twenty days from the Closing.
The Company has an option to prepay the Notes in the event that no event of default exists, there are a sufficient number of shares available for conversion of the Notes and the market price is at or below $.05 per share. In addition, in the event that the average daily price of the common stock, as reported by the reporting service, for each day of the month ending on any determination date is below $.05, the Company may prepay a portion of the outstanding principal amount of the Notes equal to 101% of the principal amount hereof divided by thirty-six (36) plus one month's interest. Exercise of this option will stay all conversions for the following month. The full principal amountof the Notes is due upon default under the terms of Notes. In addition, the Company has granted the investors a security interest in substantially all of its assets and intellectual property as well as registration rights.
The Company simultaneously issued to the Investors seven year warrants to purchase 32,500,000 shares of common stock at an exercise price of $0.07.
The Investors have contractually agreed to restrict their ability to convert the Notes and exercise the Warrants and receive shares of the Company's common stock such that the number of shares of the Company's common stock held by them and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of the Company's common stock.
The Company computed the beneficial conversion liability of $1,300,000 and warrant liability of $ 105,762 based on Black Sholes model. These amounts have been reflected on the financials as derivative liability in amount of $65,700.
NOTE 5 LITIGATION
The Company is currently plaintiff to collect company assets from its former subsidiary client and former Board of Directors Narinder Grewal, MD and Santa Clarita Surgery Center for obtaining and holding company assets unlawfully. The Company filed a claim for $15,000,000 (Fifteen Million Dollars) against the above defendants in Los Angeles Superior Court, California Case no. BC427192.
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. Other than the legal proceedings listed below, we are not currently involved in legal proceedings that could be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. However, we may become involved in material legal proceedings in the future.
NOTE 6 RELAED PARTY TRANSACTIONS
As of September 30, 2010, the officer of the company loaned the Company $168,000 to pay operating expenses. This loan accrued interest at 9% per annum, unsecured and the term of the loan is one year, no monthly payment.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 12
This report contains forward looking statements within the meaning of section 27a of the securities act of 1933, as amended and section 21e of the securities exchange act of 1934, as amended. The company's actual results could differ materially from those set forth on the forward looking statements as a result of the risks set forth in the company's filings with the securities and exchange commission, general economic conditions, and changes in the assumptions used in making such forward looking statements.
OVERVIEW
Winfield Financial Group, Inc. (the "Registrant") was incorporated in the State of Nevada on May 2, 2000. Prior to the Acquisition, discussed below, the Registrant was a business broker, primarily representing sellers and offering its clients' businesses for sale. As a result of the Acquisition, the Registrant changed its business focus.
On April 7, 2004, the Registrant filed Articles of Exchange with the State of Nevada to take effect on such date. Under the terms of the Articles of Exchange, the Registrant was to acquire Vanguard Commercial, Inc., a Nevada corporation ("Vanguard") whereby the Registrant was to issue 197,000 of its shares of Common Stock in exchange for all of the issued and outstanding Common Stock of Vanguard. Robert Burley, a former Director of the Registrant and the Registrant's former President, Chief Executive Officer and Treasurer is also an officer and director of Vanguard. Subsequent to the effective date of the exchange with Vanguard, the Registrant and Vanguard mutually agreed to rescind the transaction. The Registrant filed a Certificate of Correction with the State of Nevada rescinding the exchange with Vanguard, which never took place and the Registrant never issued any of its shares with respect thereto.
On April 22, 2004, the Registrant amended its Articles of Incorporation to increase the authorized shares to Fifty Million (50,000,000) shares of Common Stock, to reauthorize the par value of $.001 per share of Common Stock and to reauthorize 5,000,000 shares of preferred stock with a par value of $.001 per share of preferred stock.
On April 23, 2004, the Registrant acquired 100% of the issued and outstanding shares of PPJ Enterprise, a Delaware corporation ("Healthcare"). As part of the same transaction on May 7, 2004, the Registrant acquired 100% of the issued and outstanding shares of AutoMed Software Corp., a Nevada corporation ("AutoMed"), and 100% of the membership interests of Silver Shadow Properties, LLC, a Nevada single member limited liability company ("Silver Shadow"). The transactions are collectively referred to herein as the "Acquisition." The Registrant acquired Healthcare, AutoMed, and Silver Shadow from Chandana Basu, the sole owner, in exchange for 25,150,000 newly issued treasury shares of the Registrant's Common Stock. The term "Company" shall include a reference to Winfield Financial Group, Inc., Healthcare, AutoMed and Silver Shadow merged into unless otherwise stated referred to herein as "HBSGI. Or Company"
On June 21, 2004, the Registrant entered into an agreement with Robert Burley (former Director, President and Chief Executive Officer of the Registrant) and Linda Burley (former Director and Secretary of the Registrant) whereby the Registrant agreed to transfer certain assets owned by the Registrant immediately prior to the change in control in consideration for Mr. and Mrs. Burley's cancellation of an aggregate of 2,640,000 of their shares of the Registrant's Common Stock. The Registrant transferred the following assets to Mr. and Mrs. Burley: i) the right to the name "Winfield Financial Group, Inc." and ii) any contracts, agreements, rights or other intangible property that related to the Registrant's business operations immediately prior to the change in control whether or not such intangible property was accounted for in the Registrant's financial statements. After the issuance of shares to Ms. Basu and the cancellation of 2,640,000 shares of Mr. and Mrs. Burley, there were 28,774,650 shares of the Registrant's 13
Common Stock Outstanding. As a result of these transactions, control of the Registrant shifted to Ms. Basu. Ms. Basu currently owns 2,955,150,000 shares (or over 50%) out of 5,584,175,298 of the Registrant's issued and outstanding Common Stock.
On January 5, 2005, the Registrant changed its name to Healthcare Business Services, Inc. and on Feb 19, 2008 changes its name to PPJ Enterprise. The Registrant is a holding company for PBS The business operations discussed herein is conducted by Professional Billing Service (PBS). The Registrant, through PBS, is engaged in the business of providing medical billing services to healthcare providers in the United States.
The income due to change in fair value of derivative liability decreased by $65,701 for the nine month period ending September 30, 2010 due to change in the market value of the stock prices. The derivative liability originated from the convertible note.
LIQUIDITY AND CAPITAL RESOURCES
On September 27, 2006, the Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with New Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC (collectively, the "Investors"). Under the terms of the Securities Purchase Agreement, the Investors purchased an aggregate of (i) $2,000,000 in callable convertible secured notes (the "Notes") and (ii) warrants to purchase 50,000,000 shares of our common stock (the "Warrants").
Pursuant to the Securities Purchase Agreement, the Investors purchased the Notes and Warrants in three trenches as set forth below:
At closing, on July 1, 2006 ("Closing"), the Investors purchased Notes aggregating $700,000 and warrants to purchase 17,500,000 shares based on the prorate shares of our common stock;
On August 8, 2006 the investors purchased Notes aggregating $600,000 and warrants to purchase 15,000,000 shares based on the prorate shares of our common stock and,
Upon effectiveness of the Registration Statement, the Investors will purchase Notes aggregating $700,000. The Company has withdrawn the prior registration statement and filed a new registration statement on June 11, 2007.
The Notes carry an interest rate of 6% and a maturity date of June 27, 2009. The notes are convertible into our common shares at the Applicable Percentage of the average of the lowest three (3) trading prices for our shares of common stock during the twenty (20) trading day period prior to conversion. The "Applicable Percentage" means 50%; provided, however, that the Applicable Percentage shall be increased to (i) 55% in the event that a Registration Statement is filed within thirty days of the closing and (ii) 60% in the event that the Registration Statement becomes effective within one hundred and twenty days from the Closing.
The Company has an option to prepay the Notes in the event that no event of default exists, there are a sufficient number of shares available for conversion of the Notes and the market price is at or below $.05 per share. In addition, in the event that the average daily price of the common stock, as reported by the reporting service, for each day of the month ending on any determination date is below $.05, the Company may prepay a portion of the outstanding principal amount of the Notes equal to 101% of the principal amount hereof divided by thirty-six (36) plus one month's interest. Exercise of this option will stay all conversions for the following month. The full principal amount of the Notes is due upon default under the terms of Notes. In addition, the Company has granted the investors a security interest in substantially all of its assets and intellectual property as well as registration rights.
The Company simultaneously issued to the Investors seven year warrants to purchase 32,500,000 shares of common stock at an exercise price of $0.07. 14
The Investors have contractually agreed to restrict their ability to convert the Notes and exercise the Warrants and receive shares of the Company's common stock such that the number of shares of the Company's common stock held by them and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of the Company's common stock. The company accrued interest of $146,250 on the note during the nine month period ended September 30, 2007.
The Company is in default of the note as its registration statement has not become effective as stipulated by the agreement. The note is immediately due and payable and has been shown as a current liability in the accompanying financials. The Company has accrued interest on the note at the default interest rate of 15%.
FACTORS THAT MAY AFFECT FUTURE RESULTS
We currently operate a high growth company that is bringing new business every month but that may change due to other facts
We currently have revenues from operations or assets that pay our basic bills, but this situation may change for any reason which may have adverse effects on the value of our common shares.
AUTOMED SOFTWARE
The Roots of AutoMed® started to grow in late 2000 when our founders teamed up with a national medical billing company based in Southern California. AutoMed® was designed on the simple vision of using the technology to streamline Healthcare Practice Management, Billing and Collections. AutoMed® is a subsidiary of the Company.
The innovative software team at AutoMed® spent over 5 years developing this one of a kind, highly flexible suite of practice management applications. This includes automated data entry, billing, follow-ups and collections for Healthcare providers and billing companies. AutoMed®'s first version was online in July 2003. Working exclusively with Southern California based national medical billing agency, we spent another 30 months perfecting the system, working with numerous specialized medical practice fields such as anesthesia, pain management, ambulatory surgery centers, physical therapy, internal, General medicine, Hospital and many others. The results were phenomenal!
AutoMed® version 5.0 is now commercially available. This method is proven to manage in house data entry, coding billing, collection and tracking systems. Managing a practice is a snap with Automed®.
Product name have been changed from ‘AutoMed’ to ‘Automated Biller’ due to conflict of trade mark name.
MARKETING & PUBLIC RELATION AGREEMENTS
The Company entered into an agreement with a consultant to provide Public Relations services including investment banking liaison and acting as public relations consultant. But the deal did not materialize due to lack of funding in 2009.
WE HAVE AN EMPLOYMENT AGREEMENT WITH OUR CEO MS BASU, BUT MS BASU WAS NOT PAID AS AGREED SINCE YR 2004 FOR ALL HER RESPOSIBILITIES PERMORMED AS EXECUTIVE OFFICERS AND TREASURER. SHE HAS ALSO TAKEN ALL RESPONSIBILITIES TO BRING THE COMPANY BACK FROM FINANCIAL DISASTERS. MS BASU IS A CARING, HONEST PERSON WITH FULL INTEREST IN HEART TO PROTECT SHAEHOLDERS INTERESTS.
Chandana Basu, our Chief Executive Officer, President and Treasurer, and many other hats she wears was supposed to receive $50,000 per month (or $600,000 per year) for her services, which includes approximately $5,000 of salary and a minimum bonus of $45,000 each month (accrues if not paid). The amount of salary that Ms. Basu was suppose to receive to the Company's revenue at merger in 2004 was fair but she has never received her full compensation ever as of this date. In addition Ms. Basu has loaned the company Millions of dollars and jeopardize her personal assets to protect the Company interests. 15
WE RELY ON KEY MANAGEMENT.
The success of the Company depends upon the personal efforts and abilities of Chandana Basu. .
BECAUSE MS. CHANDANA BASU OWNS OVER 50% OF OUR OUTSTANDING COMMON STOCK, SHE WILL EXERCISE CONTROL OVER CORPORATE DECISIONS THAT MAY BE ADVERSE TO OTHER MINORITY SHAREHOLDERS.
Chandana Basu, a Director of the Company and the Company's Chief Executive Officer and Treasurer, owns over 50% of the issued and outstanding shares of our common stock. Accordingly, she will exercise control in determining the outcome of all corporate transactions or other matters, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. The interests of Ms. Basu may differ from the interests of the other stockholders and thus result in corporate decisions that are adverse to other shareholders.
Introductory Comment
Throughout this Quarterly Report the terms of the company, “we,” “us” and “our” refers to PPJ and its subsidiaries PBS on a consolidated basis.
Note Regarding Forward- Looking Statements
This Quarterly Reports contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). To the extent that any statements made in this Quarterly Report contain information that is not historical, these statements are essentially forward-looking. Forward-looking statements can be identified by the use of words such as “expect,” “plan”, “will”, “may”, “anticipate”, “believe”, “should”, “intend”, “estimate”, and variations od such words. Forward-looking statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation:
•
Our ability to increase revenue or raise capital to finance our growth and operations, when needed and terms advantageous to us;
•
The ability to manage growth, profitability and the marketability of our services;
•
General economic and business conditions;
•
Other risks and uncertainties detailed in this Quarterly Report and, from time to time, in our other findings with the SEC.
•
There could other impacts due to President Obama’s new Health Care Bill.
IF THERE'S A MARKET FOR OUR COMMON STOCK, OUR STOCK PRICE MAY BE VOLATILE.
If there's a market for our common stock, we anticipate that such market would be subject to wide fluctuations in response to several factors, including, but not limited to:
(1) actual or anticipated variations in our results of operations;
(2) our ability or inability to generate new revenues; 16
(3) increased competition; and
(4) conditions and trends in the medical billing industry.
Further, because our common stock is traded on the NASD Pinksheets, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock.
CRITICAL ACCOUNTING POLICIES
Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principals generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of any contingent assets and liabilities. On an on-going basis, we evaluate our estimates. We base our estimates on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about 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.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:
(A) Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as certain financial statements disclosures. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from those estimates.
(B) Cash and Cash Equivalents
For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.
(C) Revenue Recognition
The Company's revenue recognition policies are in compliance with Staff accounting bulletin SAB 104. All revenue is recognized when persuasive evidence of an arrangement exists, the service or sale is complete, the price is fixed or determinable and collectibility is reasonably assured. Revenue is derived from collections of medical billing services. Revenue is recognized when the collection process is complete which occurs when the money is collected and recognized on a net basis.
License Revenue - The Company recognizes revenue from license contracts when a non-cancelable, non-contingent license agreement has been signed, the software product has been delivered, no uncertainties exist surrounding product acceptance, fees from the agreement are fixed and determinable and collection is probable. Any revenues from software arrangements with multiple elements are allocated to each element of the arrangement based on the relative fair values using specific objective evidence as defined in the SOPs. If no such objective evidence exists, revenues from the arrangements are not recognized until the entire arrangement is completed and accepted by the customer. Once the amount of the revenue for each element is determined, the Company recognizes revenues as each element is completed and accepted by the customer. For arrangements that require significant production, modification or customization of software, the entire arrangement is accounted for by the percentage of completion method, in conformity with Accounting Research Bulletin ("ARB") No. 45 and SOP 81-1. 17
Contract Services Revenue - Revenue from consulting services is recognized as the services are performed for time-and-materials contracts and contract accounting is utilized for fixed-price contracts. Revenue from training and development services is recognized as the services are performed. Revenue from maintenance agreements is recognized ratably over the term of the maintenance agreement, which in most instances is one year.
(D) Property and Equipment
Property and equipment is stated at cost. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful life of the assets from three to seven years. Expenditures for maintenance and repairs are charged to expense as incurred.
(E) Software development Costs
The Company complied with Statement of Position 98-1 ("SOP 98-1") "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use", as accounting policy for internally developed computer software costs. Under SOP 98-1, we capitalized software development costs incurred during the application development stage.
Subsequently, the Company decided to market the software AutoMed. Therefore the Company is following the guideline under SFAS 86. SFAS 86 specifies that costs incurred internally in creating a computer software product shall be charged to expense when incurred as research and development until technological feasibility has been established for the product. Thereafter, all software production costs shall be capitalized and subsequently reported at the lower of unamortized cost or net realizable value.
Capitalized costs is being amortized based on current and future revenue for the product (AutoMed) with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product.
(F) Impairment of Long-Lived Assets
Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," and the accounting and reporting provisions of APB Opinion No. 30, "Reporting the Results of Operations for a Disposal of a Segment of a Business." The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.
(G) Stock-based Compensation
The Company accounts for non-cash stock-based compensation issued to non-employees in accordance with the provisions of SFAS No. 123 and EITF No. 96-18, Accounting for Equity Investments That Are Issued to Non-Employees for Acquiring, or in Conjunction with Selling Goods or Services. Common stock issued to non-employees and consultants is based upon the value of the services received or the quoted market price, whichever value is more readily determinable. The Company accounts for stock options and warrants issued to employees under the intrinsic value method. Under this method, the Company recognizes no compensation expense for stock options or warrants granted when the number of underlying shares is known and the exercise price of the option or warrant is greater than or equal to the fair market value of the stock on the date of grant. As of September 20, 2010, there were no options or warrants outstanding. 18
In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock Based Compensation-Transition and Disclosure". SFAS No. 148 amends SFAS No. 123, "Accounting for Stock Based Compensation", to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of Statement 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used, on reported results. The adoption of SFAS No. 148 did not have a material affect on the net loss of the Company.
(H) Basic and diluted net loss per share
Net loss per share is calculated in accordance with the Statement of financial accounting standards No. 128 (SFAS No. 128), "Earnings per share". Basic net loss per share is based upon the weighted average number of common shares outstanding. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Weighted average number of shares used to compute basic and diluted loss per share is the same since the effect of dilutive securities is anti-dilutive.
(I) Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, "Disclosures About Fair Value of Financial Instruments" requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate that value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts of the Company's accounts and other receivables, accounts payable, accrued liabilities, factor payable, capital lease payable and notes and loans payable approximates fair value due to the relatively short period to maturity for these instruments.
(J) Concentrations of Risk
Financial instruments which potentially subject the Company to concentrations of credit risk are cash and accounts receivable. The Company places its cash with financial institutions deemed by management to be of high credit quality. The amount on deposit in any one institution that exceeds federally insured limits is subject to credit risk. All of the Company's revenue and majority of its assets are derived from operations in Unites States of America.
(K) Reporting Segments
Statement of financial accounting standards No. 131, Disclosures about segments of an enterprise and related information (SFAS No. 131), which superseded statement of financial accounting standards No. 14, Financial reporting for segments of a business enterprise, establishes standards for the way that public enterprises report information about operating segments in annual financial statements.
Healthcare is a medical billing service provider. Healthcare's sister company, AutoMed, has developed a proprietary software system. In addition, Healthcare's other sister company, Silver Shadow, made an investment in real estate where Healthcare plans to construct its first surgical center and corporate office development.
There has been very insignificant activity in Automed and Silver Shadow. Hence the Company has determined it has only one segment.
(L) Comprehensive Income 19
Statement of financial accounting standards No. 130, Reporting comprehensive income (SFAS No. 130), establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity, except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS No. 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in financial statements that are displayed with the same prominence as other financial statements.
(M) Reclassifications
For comparative purposes, prior years' consolidated financial statements have been reclassified to conform to report classifications of the current year.
(N) New Accounting Pronouncements
In February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. FAS159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted subject to specific requirements outlined in the new Statement. Therefore, calendar-year companies may be able to adopt FAS 159 for their first quarter 2007 financial statements.
The new Statement allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods must be recognized in current earnings. FAS 159 also establishes presentation and disclosure requirements designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities. The management is currently evaluating the effect of this pronouncement on financial statements.
In September 2006, FASB issued SFAS 158 `Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans--an amendment of FASB Statements No. 87, 88, 106, and 132(R)' This Statement improves financial reporting by requiring an employer to recognize the over funded or under funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This Statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. An employer with publicly traded equity securities is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. An employer without publicly traded equity securities is required to recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after June 15, 2007. However, an employer without publicly traded equity securities is required Below is to disclose the following information in the notes to financial statements for a fiscal year ending after December 15, 2006, but before June 16, 2007, unless it has applied the recognition provisions of this Statement in preparing those financial statements:
1. A brief description of the provisions of this Statement
2. The date that adoption is required
3. The date the employer plans to adopt the recognition provisions of this Statement, if earlier.
The requirement to measure plan assets and benefit obligations as of the date of the employer's fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. The management is currently evaluating the effect of this pronouncement on the consolidated financial statements. In September 2006, FASB issued SFAS 157 `Fair Value Measurements'. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles ("GAAP"), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having 20
previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The management is currently evaluating the effect of this pronouncement on the consolidated financial statements.
(O) Source of Materials
NA
(P) Regulation and Environmental Matters
Not applicable
(Q) Employees
As of September 30, 2010 we have employed 14 full time 1 part time 2 as trainee we also retained additional consultants of five persons in the marketing and four persons in the software, hardware technology. Of the fourteen full time employees, our CEO MS. Basu is currently on full time consultant who is in the executive management position. We are not subject to any collective bargaining agreement that covers any of our employees, we consider our employee relations to be good.
(R) Seasonality
Not Applicable
(S) Economies Effect on The Company
None
(T) Marketing and Sales Activity
The marketing dept. of the company has been working with potential clients that they have met in various medical conferences throughout the country. We attend in excess of six conferences per year. There can be no assurances that all or any of these potential clients will result in contract commitments, but due to companies good reputation we have closed between 5 to 10 % of our leads we generate from various medical conferences. We also use direct mailer and cold call techniques to generate interest in medical and hospital based physicians.
(U) Competition
There are hundreds of medical billing service throughout the country most of this services are home based and family run operations, technical billing knowledge is poor and they don’t do a very good job in billing and collecting. Especially these home based services handle general physician billing but when it comes to specialty billing like anesthesia pain management, ambulatory surgery centers, number of services who can do this specialized billing are few. The company considers itself a superior, highly knowledgeable and has consistent follow up technique, with its aggressive performances the company has proven itself to be one of the most superior billing service for the above specialty billing area. Considering the above, company and its clients agree that our competitors are few.
NINE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2009 21
Contract and Service Revenue 2010, 2009 revenues are comprised of primarily of medical billing and collection service revenue.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Our chief executive officer and principal financial officer, after evaluating the effectiveness of the Company's "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report (the "Evaluation Date"), has concluded that as of the Evaluation Date, our disclosure controls and procedures were effective and designed to ensure that material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act of 1934 is 1) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms; and 2) accumulated and communicated to her as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in internal control over financial reporting. There were no significant changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
None.
ITEM 1. LEGAL PROCEEDINGS
The Company is currently plaintiff to collect company assets from its former subsidiary client and former Board of Directors Narinder Grewal, MD and Santa Clarita Surgery Center for obtaining and holding company assets unlawfully. The Company filed a claim for $15,000,000 (Fifteen Million Dollars) against the above defendants in Los Angeles Superior Court, California Case no. BC427192.
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. Other than the legal proceedings listed below, we are not currently involved in legal proceedings that could be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. However, we may become involved in material legal proceedings in the future.
ITEM 2. CHANGES IN SECURITIES
The Company is presently authorized to issue 7,500,000,000 shares of $0.0001 par value Common Stock. The Com
pany currently has 5,584,175,298 common shares issued and outstanding. The holders of common stock, and of shares issuable upon exercise of any Warrants or Options, are entitled to equal dividends and distributions, per share, with respect to the common stock when, as and if declared by the Board of Directors from funds legally available therefore. No holder of any shares of common stock has a pre-emptive right to subscribe for any securities of the Company nor is any common shares subject to redemption or convertible into other securities of the Company. Upon liquidation, dissolution or winding up of the Company, and after payment of creditors and preferred stockholders, if any, the assets will be divided pro-rata on a share-for-share basis among the holders of the shares of common stock. All shares of common stock now outstanding are fully paid, validly issued and non-assessable. Each share of common stock is entitled to one vote with respect to the election of any director or any other matter upon which shareholders are required or permitted to vote. Holders of the Company's common stock do not have cumulative voting rights, so that the holders of more than 50% of the combined shares voting for the election of directors may elect all of the directors, if they choose to do so and, in that event, the holders of the remaining shares will not be able to elect any members to the Board of Directors. 22
ITEM 3. RELATED PARTY TRANSACTIONS
During the year of 2010, the officer of the company loaned the Company $168,000 to pay operating expenses. This loan accrued interest at 9% per annum, unsecured and the term of the loan is one year no monthly payment.
ITEM 4. MANAGEMENT - DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information about our executive officers and directors.
Name
Age
Position
Chandana Basu
56
Chief Executive Officer, Treasurer and Director
Arjinderpal Singh Sekhon, M.D.
61
Director
Daljit Kaur, DDS
59
Director
The above listed officers and directors will serve until the next annual meeting of the shareholders or until their death, resignation, retirement, removal, or disqualification, or until their successors have been duly elected and qualified. Vacancies in the existing Board of Directors are filled by majority vote of the remaining Directors. Officers of the Company serve at the will of the Board of Directors .To the Company's knowledge, there are no agreements or understandings for any officer or director to resign at the request of another person nor is any officer or director acting on behalf of or is to act at the direction of any other person other than in his fiduciary capacity of and for the benefit of the Company and at its direction.
Set forth below is certain biographical information regarding our executive officers and directors:
Chandana Basu - Chief Executive Officer, Treasurer and Director
Chandana Basu has served as our Chief Executive Officer and Treasurer since May 2004, after we acquired PPJ Enterprise ("HBSGI"), a full-service medical billing agency and our wholly-owned subsidiary. She has served as our director since April 23, 2004. Ms. Basu incorporated HBSGI in December 1994. Ms. Basu has operated HBSGI for the past 21 years. Ms. Basu has been grown HBSGI from a core client base of doctors and hospitals in California, Florida, Washington State and Texas without the use of consistent marketing or advertising. Ms. Basu has over 21 years of experience in medical bill collecting from insurance companies. Ms. Basu also has over 14 years of experience in computer design and programming. Ms. Basu is the CEO and President of AutoMed Software Corp. our wholly-owned subsidiary. She also received specialized education in medical billing, anesthesia billing and attended various pain management conferences. Ms. Basu is a Technical Exhibitor for the American Association of Anesthesiology, American pain Academy and few other Medical organizations. During the Quarter ending September 30, 2010 the Company has not issue any shares to Ms. Basu.
Arjinder Paul Singh Sekhon, M.D. - Director
Dr. Singh Sekhon is self-employed doctor with a specialty in pulmonary medicine and pain management services. He has been a member of the United States Army Reserve for over 20 years. He has served in the Persian Gulf War and in the current military operation enduring freedom. He received Army's highest honor upon graduation from the United States Army College recently. During the past congressional election cycles, he was a candidate for the U.S. House of Representatives and won the Primary in California District 2. Lastly, he has served as an Owner/Director
23
24
of local medical clinic for over twenty five years. The company has not issue any shares to Dr. Sekhon for his services during the Quarter ending September 30, 2010.
Daljit Kaur, DDS – Director
Dr. Kaur has been operating multiple large dental practices over 20 years as Owner/Director. She is a seasoned business woman. The Company has not issued any shares to Dr. Kaur as of September 30, 2010 for her services.
ITEM 5. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 6. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 7. OTHER INFORMATION
Employee - The Company has 15 employees and six consultants as of September 30, 2010
ITEM 8. EXHIBITS
(a) Exhibits
1. Articles *
2. Bylaws *
* Filed Herein.
The Company filed no Reports on Form 8-K during the fiscal quarter ended September 30, 2010.
SIGNATURES
In accordance with the requirements of the U.S. Security & Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PPJ Enterprise
Dated: October 4, 2010
By: /s/ Chandana Basu
Chandana Basu, Chief Executive Officer and Principal Financial Officer
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