We have audited the accompanying consolidated balance sheets of Future Healthcare of America and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of operations, stockholders' equity and cash flows for the years ended December 31, 2016 and 2015. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, and audit of its internal controls over financial reporting for the years ended December 31, 2016 and 2015. Our audit included consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the companys internal controls over financial reporting for the years ended December 31, 2016 and 2015. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, based on our audit, the consolidated financial statements audited by us present fairly, in all material respects, the financial position of Future Healthcare of America and subsidiaries as of December 31, 2016 and 2015 and the results of their operations and their cash flows for the years ended December 31, 2016 and 2015, in conformity with generally accepted accounting principles in the United States of America.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred losses, an accumulated deficit and has a short-term note payable in excess of anticipated cash. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
See accompanying notes to these unaudited consolidated financial statements.
See accompanying notes to these unaudited consolidated financial statements.
See accompanying notes to these unaudited consolidated financial statements.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
On June 22, 2012, FAB Universal (FAB) formed Future Healthcare of America (FHA), a wholly owned subsidiary. On October 1, 2012, FHA operations were spun-off in a 1 for 1 dividend to the shareholders of record of FAB on September 5, 2012, the record date. On November 14, 2014, FHA organized Future Healthcare Services Corp. (FHS), and transferred all the shares of Interim to FHS. Interim Healthcare of Wyoming, Inc. (Interim), a Wyoming corporation, a wholly owned subsidiary of FHS, was organized on September 30, 1991. Interim operates primarily in the home healthcare and healthcare staffing services in Wyoming and Montana. On April 3, 2007, Interim purchased the operations of Professional Personnel, Inc., d.b.a., Professional Nursing Personnel Pool.
Consolidation
- The financial statements presented reflect the accounts of FHA, FHS and Interim. All inter-company transactions have been eliminated in consolidation.
Accounting Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Management made assumptions and estimates for determining reserve for accounts receivable, accrued liabilities, contingent liabilities and the fair market value of derivative liabilities. Actual results could differ from those estimated by management.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity date of three months or less when purchased to be cash equivalents. At December 31, 2016, the Company had no cash balances in excess of federally insured limits.
Accounts Receivable
Accounts receivable consist of trade receivables arising in the normal course of business. At December 31, 2016 and 2015, the Company has an allowance for doubtful accounts of $20,200 and $20,200, respectively, which reflects the Companys best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. During the years ended December 31, 2016 and 2015, the Company adjusted the allowance for bad debt by $0.
Depreciation
Depreciation of property and equipment is provided on the straight-line method over the estimated useful lives.
Long-lived intangible assets
FHA evaluates its long-lived assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the asset.
Leases
The Company accounts for leases in accordance with Accounting Standards Codification (ASC) Topic 840, (formerly Statement of Financial Accounting Standards SFAS No. 13 "Accounting for Leases"). Leases that meet one or more of the capital lease criteria of standard are recorded as a capital lease, all other leases are operating leases.
Loss Per Share
The Company computes loss per share in accordance with FASB ASC Topic 260 Earnings Per Share, which requires the Company to present basic earnings per share and diluted earnings per share when the effect is dilutive (see Note 11).
Income Taxes
The Company accounts for income taxes in accordance with FASB ASC Topic 740 Accounting for Income Taxes. This topic requires an asset and liability approach for accounting for income taxes (see Note 9).
Advertising Costs
Advertising costs are expensed as incurred and amounted to $35,454 and $42,550 for the periods ending December 31, 2016 and 2015, respectively.
21
FUTURE HEALTHCARE OF AMERICA AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
Fair Value of Financial Instruments
The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Unless otherwise disclosed, the fair value of the Companys financial instruments including cash, accounts receivable, prepaid expenses, and accounts payable and accrued expenses approximates their recorded values due to their short-term maturities.
Revenue Recognition
Revenue is generated from various payers including Medicare, Medicaid, Insurance Companies, and various other entities and individuals. In accordance with FASB ASC Topic 605, Revenue is recognized when persuasive evidence of an arrangement exists, services have been provided, the price of services is fixed or determinable, and collection is reasonably assured. Payments received prior to services being provided are recorded as a liability (deferred revenue) until such services are performed. Revenue is recorded as net revenue where contractual adjustments and discounts are deducted from Gross Revenue to determine net revenue.
Derivative Financial Instruments
The Company is required to recognize all of its derivative instruments as either assets or liabilities in the Consolidated Balance Sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated, and is effective, as a hedge and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, or cash flow hedge. Gains and losses related to a hedge are either recognized in income immediately to offset the gain or loss on the hedged item or are deferred and reported as a component of Accumulated Other Comprehensive Income in the Stockholders' Equity and subsequently recognized in Net income when the hedged item affects Net income. The change in fair value of the ineffective portion of a financial instrument is recognized in Net income immediately. The gain or loss related to financial instruments that are not designated as hedges are recognized immediately in Net income.
Recently Enacted Accounting Standards -
In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. On July 9, 2015, the FASB agreed to delay the effective date by one year; accordingly, the new standard is effective for us beginning in the first quarter of 2018 and we expect to adopt it at that time. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected a transition method, nor have we determined the impact of the new standard on our consolidated financial statements.
22
FUTURE HEALTHCARE OF AMERICA AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
In 2015, the FASB issued an amended standard requiring that we classify all deferred tax assets and liabilities as non-current on the balance sheet instead of separating deferred taxes into current and non-current. The amended standard is effective for us beginning in the first quarter of 2017; early adoption is permitted and we are evaluating whether we will early adopt. The amended standard may be adopted on either a prospective or retrospective basis. We do not expect that the adoption of this standard will have a significant impact on our financial position or results of operations.
In February 2016, the FASB issued changes to the accounting for leases that primarily affect presentation and disclosure requirements. The new standard will require the recognition of a right to use asset and underlying lease liability for operating leases with an initial life in excess of one year. This standard is effective for us beginning in the first quarter of 2019. We have not yet determined the impact of the new standard on our consolidated financial statements.
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties About an Entitys Ability to Continue as a Going Concern, that will require management to assess an entitys ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. In connection with each annual and interim period, management will assess if there is substantial doubt about an entitys ability to continue as a going concern within one year after the issuance date. Substantial doubt exists if it is probable that the entity will be unable to meet its obligations within one year after the issuance date. The new standard defines substantial doubt and provides example indicators. Disclosures will be required if conditions give rise to substantial doubt. However, management will need to assess if its plans will alleviate substantial doubt to determine the specific disclosures. This standard is effective for public entities for annual periods ending after December 15, 2016. Earlier application of this standard is permitted. This standard is not expected to have a material effect on the Companys financial position, results of operations and cash flows.
In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which changes how companies account for certain aspects of share-based payments to employees. The new guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled, allows an employer to repurchase more of an employees shares than previously allowed for tax withholding purposes without triggering liability accounting, allows a company to make a policy election to account for forfeitures as they occur, and eliminates the requirement that excess tax benefits be realized before companies can recognize them. The new guidance also requires excess tax benefits and tax shortfalls to be presented on the cash flow statement as an operating activity rather than as a financing activity, and clarifies that cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation are to be presented as a financing activity. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company has elected to adopt this standard early and applied it as of January 1, 2016, with no significant impact on its financial statements.
Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Companys present or future financial statements.
NOTE 2 - GOING CONCERN
The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has incurred losses, an accumulated deficit and has a short-term note payable in excess of anticipated cash. These factors raise substantial doubt about the ability of the Company to continue as a going concern. There is no assurance that the Company will be successful in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
23
FUTURE HEALTHCARE OF AMERICA AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - PROPERTY & EQUIPMENT
The following is a summary of property and equipment at:
|
|
|
|
| |
|
Life
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
Furniture, fixtures and equipment
|
2-10 yrs
|
$
|
36,384
|
$
|
36,384
|
|
|
|
36,384
|
|
36,384
|
Less: Accumulated depreciation
|
|
|
(36,384)
|
|
(36,348)
|
Property & equipment, net
|
|
$
|
-
|
$
|
36
|
Depreciation expense for the periods ended December 31, 2016 and 2015 was $36 and $65, respectively.
NOTE 4 VARIABLE RATE SENIOR SECURED CONVERTIBLE DEBENTURE
On September 9, 2013, the Company closed a Subscription Agreement by which one institutional investor purchased a) a Variable Rate Senior Secured Convertible Note payable having a total principal amount of $1,010,000, convertible into common shares of the Company at $0.25 per share and maturing March 9, 2015; b) Warrants to purchase a total of 3,030,000 shares of common stock, at $0.50 per share, exercisable for four years, and c) a greenshoe to purchase a total of 2,000,000 shares of common stock at $0.25 per share, exercisable for one year from the closing date. On September 9, 2014 the greenshoe expired unexercised. On March 9, 2015, the Note matured. As the note has not been paid nor extended, the outstanding principal, plus accrued but unpaid interest, liquidated damages and other amounts, became due and payable at the election of the holder. The holder has not made such an election.
The fair value of the beneficial conversion feature of the warrants and greenshoe totaled $952,254 and was recorded as a derivative liability. The Company recorded a discount on the note for beneficial conversion feature of the note. The $952,254 discount on the beneficial conversion feature was amortized as interest expense over the term of the note. As of September 30, 2015, the Company has amortized $952,254 of the discount, with no remaining unamortized discount being offset against the outstanding balance of the note in the accompanying balance sheet. As of December, 31, 2016 and 2015, the Company had accrued interest payable on the debenture of $233,802 and $132,802.
NOTE 5 DERIVATIVE FINANCIAL INSTRUMENTS
The Company entered into a variable rate senior secured convertible debenture, wherein the Company agreed to register the underlying share, warrants and greenshoe. The fair value of the beneficial conversion feature of the warrants and greenshoe was estimated using the Black Scholes pricing model and totaled $952,254 upon issuance and was recorded as a derivative liability until the registration of the shares becomes effective. As of December 31, 2016, the fair value of warrants based on a binomial model using the following assumptions (Life 0.69 years, risk free interest rate 0.85%, volatility of 198%; stock price of $.08 and exercise price of $.50) was $53,488, resulting in the recording of a gain totaling $210,044 during 2016.
NOTE 6 FAIR VALUE OF FINANCIAL INSTRUMENTS
The Fair Value Measurement and Disclosure Topic of FASB and ASC:
·
Defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, and establishes a framework for measuring fair value;
·
Establishes a three-level hierarchy for fair value measurement based upon the transparency of inputs to the valuation as of the measurement date;
·
Expands disclosures about financial instruments measured at fair value.
24
FUTURE HEALTHCARE OF AMERICA AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 6 FAIR VALUE OF FINANCIAL INSTRUMENTS - Contunued
Financial assets and financial liabilities record on the Balance sheet at fair value are categorized based on the reliability of inputs to the valuation techniques as follows:
Level 1: Financial assets and financial liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access.
Level 2: Financial assets and financial liabilities whose values are based on the following:
Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in non-active markets or Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the assets or liability
Level 3: Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs may reflect our estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities.
The following tables summarize Level 1, 2 and 3 financial assets and financial (liabilities) by their classification in the Consolidated Balance Sheet:
Level 1
Level 2
Level 3
As of December 31, 2016
Derivative liability - Registration rights of
Debenture and warrants
-
-
(53,488)
NOTE 7 - CAPITAL STOCK
Common Stock
- The Company has authorized 200,000,000 shares of common stock, $0.001 par value. As of December 31, 2016, 11,265,631 shares were issued and outstanding.
On January 7, 2015, the Company issued 50,000 unregistered common shares valued at $7,000 for consulting services.
On September 10, 2015, the Company issued 600,000 common shares in payment of $35,026 of accrued interest.
NOTE 8 WARRANTS AND GREENSHOE
A summary of the status of the warrants and greenshoe granted is presented below for the twelve months ended:
|
|
|
|
|
|
| |
|
December 31, 2016
|
|
December 31, 2015
|
|
Shares
|
|
Weighted Average Exercise
Price
|
|
Shares
|
|
Weighted Average Exercise
Price
|
Outstanding at beginning of period
|
3,030,000
|
$
|
0.50
|
|
3,030,000
|
$
|
0.50
|
Granted
|
-
|
|
-
|
|
-
|
|
-
|
Exercised
|
-
|
|
-
|
|
-
|
|
-
|
Forfeited
|
-
|
|
-
|
|
-
|
|
-
|
Expired
|
-
|
|
-
|
|
-
|
|
-
|
Outstanding at end of period
|
3,030,000
|
$
|
0.50
|
|
3,030,000
|
$
|
0.50
|
25
FUTURE HEALTHCARE OF AMERICA AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 8 WARRANTS AND GREENSHOE
On September 9, 2013, the Company closed a Subscription Agreement wherein the Company granted warrants to purchase a total of 3,030,000 shares of common stock, at $0.50 per share, exercisable for four years, and a greenshoe to purchase a total of 2,000,000 shares of common stock at $0.25 per share, exercisable for one year from the closing date.
NOTE 9 - INCOME TAXES
The Company accounts for income taxes in accordance with FASB ASC Topic 740, Accounting for Income Taxes which requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carryforwards. At December 31, 2016 and 2015, the total of all deferred tax assets was $1,296,820 and $1,154,889, respectively, and the total of the deferred liabilities was $0 and $0, respectively. The amount of and ultimate realization of the benefits from the deferred tax assets for income tax purposes is dependent, in part, upon the tax laws in effect, the Companys future earnings, and other future events, the effects of which cannot be determined. . Because of the uncertainty surrounding the realization of the deferred tax assets the Company has established a valuation allowance of $1,296,820 and $1,154,889 for the years ended December 31, 2016 and 2015. The change in the valuation allowance for the year ended December 31, 2016 and 2015 was $141,931 and $439,022, respectively.
The components of income tax expense (benefit) from continuing operations for the Years ended December 31, 2016 and 2015 consist of the following:
|
|
|
| |
|
|
For the Years Ended
|
|
|
December 31,
|
|
|
2016
|
|
2015
|
Current tax expense:
|
|
|
|
|
Federal
|
$
|
-
|
$
|
-
|
State
|
|
-
|
|
-
|
Current tax expense
|
|
-
|
|
-
|
|
|
|
|
|
Deferred tax expense (benefit):
|
|
|
|
|
Depreciation
|
|
-
|
|
(8)
|
Goodwill Impaired
|
|
-
|
|
-
|
Goodwill
|
|
46,383
|
|
46,383
|
Valuation Allowance
|
|
141,931
|
|
439,022
|
Net operating loss carryforward
|
|
(188,314)
|
|
(485,397)
|
Subtotal deferred tax expense/(benefit)
|
|
-
|
|
-
|
Income tax expense/(benefit)
|
$
|
-
|
$
|
-
|
|
|
|
|
|
Deferred income tax expense/(benefit) results primarily from the reversal of temporary timing differences between tax and financial statement income.
26
FUTURE HEALTHCARE OF AMERICA AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 9 - INCOME TAXES - Continued
A reconciliation of income tax expense at the federal statutory rate to income tax expense at the companys effective rate is as follows:
|
|
|
| |
|
|
For the Years Ended
|
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
Computed tax at the expected statutory rate
|
$
|
(96,449)
|
$
|
(84,768)
|
State and local income taxes, net of federal
|
|
(8,727)
|
|
(26,994)
|
Other non-deductible expenses
|
|
(36,755)
|
|
(327,865)
|
Return to accrual adjustment
|
|
-
|
|
605
|
Valuation Allowance
|
|
141,931
|
|
439,022
|
Income tax expense/(benefit)
|
$
|
-
|
$
|
-
|
The temporary differences, tax credits and carryforwards gave rise to the following deferred tax asset December 31, 2016 and 2015:
|
|
|
| |
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
Current deferred tax assets (liabilities):
|
|
|
|
|
Allowance for doubtful accounts
|
$
|
7,318
|
$
|
7,318
|
Bonus accrual
|
|
-
|
|
-
|
Vacation allowance
|
|
(7,318)
|
|
(7,318)
|
Total current deferred tax assets (liabilities)
|
|
-
|
|
-
|
|
|
|
|
|
Long-term deferred tax assets (liabilities):
|
|
|
|
|
Goodwill - impaired
|
|
695,744
|
|
695,744
|
Goodwill tax amortization
|
|
(484,313)
|
|
(437,930)
|
Depreciation
|
|
112
|
|
112
|
Net operating loss carryforward
|
|
1,077,959
|
|
889,645
|
Valuation allowance
|
|
(1,289,502)
|
|
(1,147,571)
|
Total long-term deferred tax assets (liabilities)
|
$
|
-
|
$
|
-
|
Net term deferred tax assets (liabilities)
|
$
|
-
|
$
|
-
|
At December 31, 2016, the company has loss carryforwards of approximately $2,975,526 that expire in various years through 2034.
We file U.S. federal, and U.S. states returns, and we are generally no longer subject to tax examinations for years prior to 2011 for U.S. federal and U.S. states tax returns.
27
FUTURE HEALTHCARE OF AMERICA AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 10 - LEASES
Operating Lease
- The Company leases office space in Casper, Wyoming for $4,892 a month through June 2018. The Company further leases space in Billings, Montana for $1,490 a month through February 2017.
The future minimum lease payments for non-cancelable operating leases having remaining terms in excess of one year as of December 31, 2016 are as follows:
|
|
| |
Year ending December 31:
|
|
|
Lease Payments
|
2017
|
|
|
61,684
|
2018
|
|
|
29,352
|
2019
|
|
|
-
|
Thereafter
|
|
|
-
|
Total Minimum Lease Payment
|
|
$
|
91,036
|
Lease expense charged to operations was $76,584 and $72,992 for the periods ended December 31, 2016 and 2015, respectively.
NOTE 11 LOSS PER SHARE
The following data shows the amounts used in computing loss per share and the weighted average number of shares of common stock outstanding for the periods presented for the periods ended:
|
|
|
| |
|
|
December 31, 2016
|
|
December 31, 2015
|
|
|
|
|
|
Income (loss) from continuing operations available to common stockholders (numerator)
|
$
|
(283,673)
|
$
|
(249,319)
|
Income (loss) available to common stockholders (numerator)
|
|
(283,673)
|
|
(249,319)
|
Weighted average number of common shares outstanding during the period used in loss per share (denominator)
|
|
11,265,631
|
|
10,848,782
|
At December 31, 2016 and 2015, the Company had 3,030,000 and 3,030,000, respectively warrants to purchase common stock of the Company at $0.50 per share, and a convertible debenture payable wherein the holder could convert the note and underlying accrued interest into a minimum of 6,568,564 and 5,067,766, respectively shares of common stock which were not included in the loss per share computation because their effect would be anti-dilutive.
NOTE 12 COMMITEMENTS AND CONTINGENCIES
On June 17, 2016 and June 30, 2016 two complaints were filed with the Federal Equal Employment Opportunity Commission (EEOC) and the Wyoming State Department of Labor against the Company, alleging discrimination on the basis of sex and disability. The complaints do not seek any specific monetary relief. The complaints are being mediated by the Wyoming State Department of Labor. The Company and the Plaintiff are working a settlement with the assistance of the Wyoming State Department of Labor. After reviewing the facts and circumstances, the Company believes the claims made are weak, at best, and the Company has retained counsel and intends to continue a vigorous defense. At this time, management cannot reasonably estimate the cost to defend or the outcome of the complaints, and we do not expect it will have a material financial impact on the Company.
28
FUTURE HEALTHCARE OF AMERICA AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 13 - CONCENTRATION OF REVENUES
For 2016 and 2015, Medicare and Medicaid reimbursement was 36% and 41% of revenue, respectively.
The following is a break out of revenue by major customer:
|
|
| |
|
|
|
|
|
2016
|
|
2015
|
Medicare
|
$ 736,046
|
|
$ 842,273
|
Medicaid
|
639,844
|
|
787,832
|
All Other
|
2,464,242
|
|
2,374,281
|
Total Sales
|
$ 3,840,132
|
|
$ 4,004,386
|
|
|
|
|
NOTE 14 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of the filing of this report
29