Form 10QSB for AMERICAN CARESOURCE HOLDINGS, INC.
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13-Nov-2007
Quarterly Report
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
This Management's Discussion and Analysis provides a review of the Company's operating results for the three and nine months ended September 30, 2007 and its financial condition at September 30, 2007. The focus of this review is on the underlying business reasons for significant changes and trends affecting the revenues, net losses and financial condition of the Company. This review should be read in conjunction with the accompanying consolidated financial statements and the consolidated financial statements and the notes thereto included in our annual report on Form 10-KSB for the year ended December 31, 2006.
Overview
The Company was incorporated in November 2003 as a wholly-owned subsidiary of Patient InfoSystems, Inc. ("Patient Infosystems") to facilitate Patient Infosystems' acquisition of the assets of American CareSource Corporation. American CareSource Corporation was incorporated as Physician's Referral Network in 1995 and merged into Health Data Solutions, Inc. in October 1997. At the time of such merger, Health Data Solutions changed its name to American CareSource Corporation. American CareSource Corporation was acquired by Patient Infosystems on December 31, 2003. The business of the Company includes the previous business of American CareSource Corporation. The Company became an independent company when Patient Infosystems distributed the shares of the Company to its shareholders on December 23, 2005.
The Company is in the business of delivering ancillary healthcare services through its national network of ancillary care providers. The Company operates from one leased facility in Dallas, Texas, which also contains its executive offices. The Company currently has 40 full-time employees and no part-time employees. The Company markets its products to insurance companies, third party administrators and preferred provider organizations.
The Company recognizes revenues for ancillary healthcare services when services by providers have been authorized and performed and collections from payors are reasonably assured. Cost of revenues for ancillary healthcare services consist of amounts due to providers for providing patient services, client administration fees paid to our client payors to reimburse them for the cost of implementing and managing claims submissions, and the Company's related direct labor and overhead of processing invoices, collections and payments. The Company is not liable for costs incurred by independent contract service
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providers until payment is received by the Company from the payors. The Company recognizes actual or estimated liabilities to independent contract service providers as the related revenues are recognized.
The Company has never operated at a profit, and will require significant growth in either claims volume from existing contracts, new contracts, or both, in order to generate sufficient operational margin to become profitable. No assurances can be given that sufficient sources of new revenue will be identified and other sources of capital may have to be secured by the Company to support its operations. If the Company is unable to generate enough working capital either from its own operations or through the sale of its equity securities, it may be required to curtail or cease operations.
On July 12, 2007, Wayne A. Schellhammer resigned as a member of the Board of Directors and Chief Executive Officer of the Company. On September 23, 2007, David S. Boone was promoted to President and Chief Executive Officer of the Company. More recently, on October 25, 2007, Steven J. Armond joined the Company as Chief Financial Officer.