AMEH.. $0.2288 earnings..
Revenue Recognition
The Company provides hospitalist services to numerous hospitals and other health care providers and recognizes revenue as the services are provided. The Company generates, and segregates, its revenue into three categories: Case Rate, Capitation and Fee for Service. Case Rate and Capitation revenues in each period are recorded upon completion of the services under each contract.
Patient Fee for Service revenues in each period is recorded at amounts reasonably assured to be collected. The percentage of Fee for Service billings that are assumed reasonably collectible are based on experience and are adjusted to reflect actual collections in subsequent periods.
The estimation and the reporting of patient responsibility revenues is highly subjective and depends on the payer mix, contractual reimbursement rates, collection experiences, and other factors.
Direct Costs of Services
Direct Costs include the direct salaries and contract payments to physicians employed by the Company that serve as hospitalists, all employment related taxes, medical and disability insurance costs, premiums for malpractice insurance provided to these physicians, and costs associated with establishing physician privileges.
Management Fees
AMH is charged, and pays, a monthly management fee to AMM. The fee is calculated on a percentage of AMH’s gross revenue that AMH receives for the performance of medical services by AMH. The monthly percentage is established based upon the requirements of AMM. The Management Services Agreement was modified on March 20, 2009 to allow for an adjustment in monthly management fees as needed to cover costs incurred by AMM. These fees are eliminated in consolidation.
FISCAL YEAR ENDED JANUARY 31, 2011 COMPARED TO FISCAL YEAR ENDED JANUARY 31, 2010
Net revenue was $3,896,584 for the twelve months ended January 2011, compared to revenues of $2,441,452 for the comparable twelve months ended January 2010. The Company increased the number of hospitals and independent physician associations contracts to 31 at the end of January 2011.
Physician practice salaries, benefits and other expenses totaled $3,314,722 for the twelve months ended January 2011, compared to $1,813,994 for the corresponding twelve months ended January 2010. Cost of Services were 85% of net revenues for the twelve months ended January 2011, up from 74% of revenues for the comparable twelve month period ended January 2010. Cost of Services includes the payroll and consulting costs of the physicians, all payroll related costs, costs for all medical malpractice insurance and physician privileges. The increase in cost of services is due to start-up losses associated with new contracts, higher stock compensation expense incurred due to stock option grants during the fourth quarter of 2011 and lower bad debt expense. The reduction in bad debt is a result of improved collections efforts to identify and track payments due to the company for physician services.
General and administrative expenses decreased $127,670, or 18%, to $566,649 or 15% of net revenue, for the twelve months ended January 2011, as compared to of $694,319, at 28% of net revenue, for the twelve months ended January 2010. The decrease in General and Administrative costs was due to absence of transaction expenses related to the 10% Senior Subordinated Callable Convertible Notes 2010 and reduction is certain other expenses. This reduction in expenses was partially offset by expenses and costs related to the continuing growth of our operations. In addition, the Company recorded stock compensation expense of $11,810 for the twelve months ended January 2011 compared with $0 in the year ended January 2010.
Depreciation and amortization expense was $11,198 and $35,704 for the twelve months ended January 31, 2011 and 2010, respectively.
The Company reported a profit from Operations of $4,015 for the twelve months ended January 31, 2011, compared to a Loss from Operations of $102,515 in the fiscal year ended January 31, 2010. The decrease in the Loss from Operations was due to the increased contribution from the growth in revenues, coupled with the decrease in General and Administrative expenses,
Interest expense and financing costs were $163,931 for the twelve months ended January 31, 2011, compared to interest and financing expenses of $93,066 for the twelve months ended January 31, 2010. Interest expense in 2011 included $125,000 of interest expense related to our 10% Senior Subordinated Callable Convertible Notes. Financing fees included the amortization of pre-paid commissions of $37,500 that were paid to the placement agent.
The Company reported a net loss of $156,331 for the twelve months ended January 31, 2011, favorable by $39,750 to the net loss of $196,080 reported for the twelve months ended January 31, 2010. The reduction in net loss was primarily due to the higher revenues and the decrease in General and Administrative costs in 2011 from 2010.
Liquidity and Capital Resources
At January 31, 2011, the Company had cash and cash equivalents of $397,101, compared to cash and cash equivalents of $665,737 at the beginning of the fiscal year at January 31, 2010. The cash balance at January 31, 2011 included $389,198 in a money market brokerage account. Long-term borrowings totaled $1,248,588 as of January 31, 2011, compared to long-term borrowings of $1,247,582 on January 31, 2010.
Net cash used in operating activities totaled $245,031in the twelve months ended January 31, 2011, compared to net cash used in operations of $338,141 in the comparable twelve months ended January 31, 2010. The reduction in net cash used in operating activities was primarily due to the higher revenues and the decrease in General and Administrative costs in 2011 from 2010.
Net cash used in operating activities for the twelve months of 2011 of $245,031 was comprised of a net loss of $156,331 for the twelve month period. Adjustments for non-cash charges which include depreciation, bad debt expense, the value of shares issued for services, option expense, and the amortization of warrant discount, totaled $18,310. In addition, net changes in operating assets and liabilities, primarily an increase in outstanding receivables, used cash of $290,363.
Net cash used for investing activities totaled $21,165 in the twelve months ended January 31, 2011, compared to net cash used in operations of $0 in the comparable twelvemonths ended January 31, 2010. The increase in net cash used in operating activities was primarily due to cash associated with improvements to ApolloWeb and purchase of new computers and office equipment.
For the twelve months ended January 31, 2011, net cash used in financing activities totaled $2,440, compared to $919,717 provided by financing activities for the same period in 2010. The Company did not complete any financing transactions during the twelve months ended January 31, 2011. During fiscal 2010, the Company completed the private placement with Syndicated Capital which provided proceeds of $1,250,000. Concurrent with the receipt of these proceeds, the Company retired the business loan with Wells Fargo Bank of $ 198,000 on October 27, 2009, and the related party convertible note in the amount of $75,000 on October 22, 2009. Three convertible notes, two of which were payable to related parties aggregating to $33,000, were fully paid off in late December 2009.
The Company had no off-balance sheet arrangements during the period ended January 31, 2011.
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
FOR THE YEARS ENDED JANUARY 31, 2011 AND 2010
January 31,
2011 2010
CURRENT ASSETS
Cash and cash equivalents $ 397,101 $ 665,737
Accounts receivable, net 704,971 457,517
Receivable from officers 24,873 23,483
Due from affiliate 3,900 2,850
Prepaid expenses 29,138 30,165
Prepaid financing cost, current 37,500 37,500
Total current assets 1,197,483 1,217,251
Prepaid financing cost, long term 39,500 76,563
Property and equipment – net 21,593 11,627
TOTAL ASSETS $ 1,258,139 $ 1,305,441
LIABILITIES AND STOCKHOLDERS' DEFICIT:
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 92,745 $ 104,252
Total current liabilities 92,745 104,252
Convertible notes 1,248,588 1,247,582
Total liabilities 1,341,333 1,351,834
STOCKHOLDERS' DEFICIT:
Preferred stock, par value $0.001 ; 5,000,000 shares authorized; none issued - -
Common Stock, par value $0.001; 100,000,000 shares authorized, 27,635,774 and 27,041,328 shares issued and outstanding as on January 31, 2011 and 2010, respectively 27,636 27,041
Additional paid-in-capital 1,058,418 939,483
Accumulated deficit (1,397,363 ) (1,241,031 )
Total (311,309 ) (274,507 )
Non-controlling interest 228,115 228,115
Total stockholders' deficit (83,194 ) (46,393 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,258,139 $ 1,305,441
The accompanying notes are an integral part of these consolidated financial statements
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JANUARY 31, 2011 AND 2010
For the years ended
January 31,
2011 2010
REVENUES $ 3,896,584 $ 2,441,452
COST OF SERVICES 3,314,722 1,813,944
GROSS REVENUE 581,862 627,508
Operating expenses:
General and administrative 566,649 694,319
Depreciation 11,198 35,704
Total operating expenses 577,847 730,023
INCOME (LOSS) FROM OPERATIONS 4,015 (102,515 )
OTHER EXPENSES:
Interest expense (126,431 ) (53,128 )
Financing cost (37,500 ) (39,938 )
Other income 5,185 300
Total other expenses 158,746 92,766
LOSS BEFORE INCOME TAXES (154,731 ) (195,280 )
Provision for income tax 1,600 800
NET LOSS $ (156,331 ) $ (196,280 )
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED 27,490,476 26,491,052
*BASIC AND DILUTED NET LOSS PER SHARE $ (0.00 ) $ (0.01 )
*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.
The accompanying notes are an integral part of these consolidated financial statements
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED JANUARY 31, 2011 AND 2010
Common Stock Non-
controlling Accumulated Stockholder's
Shares Amount APIC Interest Deficit Deficit
Balance at January 31, 2009 25,870,220 $ 25,870 $ 550,058 $ 228,115 $ (1,044,951 ) $ (240,909 )
Shares issued for service 804,443 804 183,139 - - 183,943
Shares issued for financing cost 100,000 100 3,900 - - 4,000
Shares issued for convertible notes payable 266,665 267 199,733 - - 200,000
Unamortized warrant discount - - 2,653 - - 2,653
Net Loss - - - - (196,080 ) (196,080 )
Balance at January 31, 2010 27,041,328 27,041 939,483 228,115 (1,241,031 ) (46,393 )
Shares issued for service 594,446 595 46,783 - - 47,378
Non-cash stock-based compensation charges - - 72,152 - - 72,152
Net Loss - - - - (156,331 ) (156,331 )
Balance at January 31, 2011 27,635,794 $ 27,636 $ 1,058,418 $ 228,115 $ (1,397,362 ) $ (83,194 )
The accompanying notes are an integral part of these consolidated financial statements
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JANUARY 31, 2011 AND 2010
Years ended January 31,
2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (156,331 ) $ (196,080 )
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation 11,198 35,703
Bad debt expense 42,908 114,358
Issuance of shares for services 47,378 183,944
Shares issued as finance charge - 4,000
Stock option expense 72,152 -
Amortization of debt discount 1,006 235
Changes in assets and liabilities:
Accounts receivable (290,363 ) (316,208 )
Prepaid financing cost 37,500 (114,063 )
Prepaid expenses 1,027 (5,140 )
Accounts payable and accrued liabilities (11,507 ) (44,889
Net cash used in operating activities (245,031 ) (338,141 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for purchase of property and equipment (21,165 ) -
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of line of credit - (198,000 )
Due from related parties (2,440 ) (24,283 )
Proceeds from/(payment to) related parties - (98,000 )
Proceeds from/(payment to) convertible notes - 1,240,000
Net cash (used) provided by financing activities (2,440 ) 919,717
NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS (268,636 ) 581,576
CASH & CASH EQUIVALENTS, BEGINNING BALANCE 665,737 84,161
CASH & CASH EQUIVALENTS, ENDING BALANCE $ 397,101 $ 665,737
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
Interest paid during the year $ 125,425 $ 53,128
Taxes paid during the year $ 1,600 $ 1,600
NON-CASH SUPPLEMENTAL DISCLOSURE
Conversion of convertible notes payable to equity $ - $ 200,000
Convertible note payable due and classified in accrued liabilities $ - $ 200,000
