SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K





(Mark One)





[ X ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended December 31, 2009





OR





[    ]     TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934





From the transition period from ___________ to ____________.





Commission File Number 333-142979





TRIPLE A MEDICAL, INC.


(Exact name of small business issuer as specified in its charter)





Nevada
20-4846807(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)





604 Creekview, Ovilla, Texas 75154


(Address of principal executive offices)





(800) 843-8179


(Issuer's telephone number)





N/A


(Former name, former address and former fiscal year, if changed since last report)





Indicate by a check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.  Yes [   ]  No [X]





Indicate by a check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act.  Yes [   ]  No [X]





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (s229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [   ]




Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:.  Yes [ X ]   No [   ].




Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):




Large accelerated filer o
Accelerated filer oNon-accelerated filer o (do not check if a smaller reporting company)
Smaller reporting company x




Indicate by a check mark whether the company is a shell company (as defined by Rule 12b-2 of the Exchange Act:  Yes [   ]   No [X].





As of March 30, 2009, there were 14,270,500 shares of Common Stock of the issuer outstanding.











TABLE OF CONTENTS








PagePART IITEM 1
Description of Business
2ITEM 2
Description of Property
3ITEM 3
Legal Proceedings
3ITEM 4
Submission of Matters to a Vote of Security Holders
3PART IIITEM 5
Market for Registrant’s Common Equity And Related Stockholders Matters
4ITEM 6
Selected Financial Data
4ITEM 7
Management’s Discussion and Analysis of Financial Condition and Results of Operation
4ITEM 7A
Quantitative and Qualitative Disclosures About Market Risk
5ITEM 8
Financial Statements and Supplementary Data
F-1 to F-10ITEM 9
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
8ITEM 9A
Controls and Procedures
8ITEM 9B
Other Information
9PART IIIITEM 10
Directors, Executive Officers and Corporate Governance
10ITEM 11
Executive Compensation
10ITEM 12
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
10ITEM 13
Certain Relationships and Related Transactions, and Director Independence
11ITEM 14
Principal Accounting Fees and Services
11PART IVITEM 15
Exhibits and Financial Statement Schedules
13EXHIBIT INDEXExhibit 31.1
Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 31.2
Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 32.1
Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002SIGNATURES

23













PART I.





ITEM 1.                      DESCRIPTION OF BUSINESS





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.





General





The company was founded to create electronic healthcare software applications.  The initial development is an Electronic Health Record (EHR), specifically designed to meet the needs of orthopedic physicians. For the past 4 years, our President has worked directly with dozens of orthopedic physicians in more than 40 states. He has reviewed orthopedic clinical research and extensively surveyed reference materials. Based upon the research, Mr. McCune created a database with a graphical interface to assist orthopedic physicians with the documentation of the patient encounter.





The Market





Phoenix Ortho is participating in an $18 billion market for Electronic Health Records (EHR). The Orthopedics market approaches $2 billion. There are more than 20,500 board certified orthopedists and over 12,800 orthopedic group practices. Research indicates that this market is less than 10% penetrated.  Recent surveys indicate that 58% of medical practices are looking at purchasing an EHR in the next 2 years. In 2005 the average orthopedic EHR sale was $171,000. (2001 AAOS Census, 2004 MGMA Survey) Recent growth rate in new sales has averaged about 30%. We expected this growth rate will accelerate sharply over the next two years.





Keys to Success





Focus: We believe focus is the essential ingredient to successful EHR development and deployment. Phoenix Ortho is unique in our extensive experience and singular focus on orthopedics. By focusing on one specialty, we can avoid the wholesale generalities that have plagued EHR vendors and frustrated their orthopedic clients. Phoenix Ortho understands the unique requirements of orthopedic physicians. Focus promotes the creation of relevant content and specialty specific application functionality. Content relevance is a significant factor in physician adoption.





In early 2007, we began marketing a new orthopedic EHR. The new project was focused on resolving the key problems that have historically posed barriers to adoption, successful implementation and client satisfaction. These obstacles can be grouped together in four categories; Product Functionality, Product Implementation, Product Support, Product Acquisition Cost.





Product Functionality:The software will establishnew standards for ease of use, efficiency, stability and availability facilitating end user adoption. The software is designed and scaled specifically for the pen tablet environment. We believe the pen tablet is the device of choice for EHR end users. Our development will utilize input tools such as sliders, combo boxes, role over images and other custom designed tools to provide a truly keyboard free interface. Other tablet input options such as “Pen and Ink” and “Voice to Text” will be available as needed to capture representative content. The OD Client ill improve stability, performance and availability by utilizing .NET automatic versioning and auto recovery from deadlock errors and memory leaks. Advanced compilation and caching techniques substantially lower CPU utilization. The ODClient (smart client) will support both disconnected and low bandwidth clients supporting end user mobility and minimizing the frustration of “Systems down”.








2





Product Implementation:We have developed an orthopedic, client focused implementation methodology we call the “AAA” implementation plan. This plan focuses on the three critical aspects of implementation; Assessment, Adoption and Adaptation. All implementations will begin with Assessment. During the assessment phase the unique needs of the end users are identified. Each user is profiled to determine their needs and potential road blocks to success. The physicians are identified as Champions, Contenders or Challengers. An implementation strategy is designed around these “Adoption Profiles”.  The Champions are the eager adopters and should be the first users. The Contenders are frequently indifferent but, usually agreeable adopters.  The Challengers represent approximately 30% of the physicians who will resist implementation for a variety of reasons. Sometimes they feel they are too technology challenged and fearful, some are too busy and may fear loss of revenue by adoption, while others are just resistant to anything new. When these objections are clearly understood, “Adaptation” can take place and in most cases mitigate the Challengers objection(s). Adaptation is the process of introducing (training) the end users to the application “Best Practices”. It also takes into account the “Profile” of the end user to create a “Best Practices” by provider (See Challengers above).





Product Support:The ODClient on the .NET framework makes it easier than ever to update and deploy new applications. Thanks to intelligent, one touch updates and intelligent support client PCs can be updated by copying the application to the target directory.  Client PCs may be updated automatically with no interruption or they may be updated on demand.








ITEM 2.                      DESCRIPTION OF PROPERTY





Our corporate facilities are located in a 1,200 sf office facility at 604 Creekview, Ovilla, Texas 75154. The space is being leased on a month to month basis for $5,000 per month.








ITEM 3.                      LEGAL PROCEEDINGS





We are not involved in any legal proceedings at this time.





ITEM 4.                      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





On December 29, 2008, in the annual meeting of the shareholders, the security holders elected the following directors of the corporation:





P. Morgan McCune















3


PART II





ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS





The common stock is currently quoted on the NASDAQ bulletin board under the symbol “TAAA” and has been quoted since March of 2008.





The following table sets forth the quarterly high and low prices paid (or if no activity, the last sale price) for the Common Stock for 2009 and 2008.





Fiscal 2009 and 2008

High


LowFirst Quarter 2009

$
0.50


$
0.50Second Quarter

$
0.50


$
0.50Third Quarter

$
0.50


$
0.50Fourth Quarter

$
0.50


$
0.50First Quarter 2008

$
0.50


$
0.50Second Quarter

$
0.50


$
0.50Third Quarter

$
0.50


$
0.50Fourth Quarter

$
0.50


$
0.50





Shareholders





As of December 31, 2009, there were approximately 112 record holders of the Common Stock. This number excludes any estimate by the Company of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.





Dividends


The Company has not paid dividends on any class of common equity since formation and the Company does not anticipate paying any dividends on its outstanding common stock in the foreseeable future.





Warrants


The Company has no warrants outstanding.








ITEM 6.                      SELECTED FINANCIAL DATA





Not required








ITEM 7.                      MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION





EXECUTIVE OVERVIEW






4







2009 was our second full year of selling our proprietary software as it became operational in early 2007.  Our marketing efforts whether through trade shows, print media and word of mouth reputation, began to pay dividends in 2008 and really vaulted us forward in 2009.  Our sales in 2009 were $1,116,241, a 106% increase over 2008.  Our software is being very well received in the market place and with the market less than 10% penetrated we feel that we are well positioned, both technically and cost wise, to continue to gain market share.





Results for the fiscal year ended December 31, 2009





At the end of the first quarter of 2007, our software became operational and we started marketing it by attending trade shows, print advertising and brochures and personal contacts.  In August we had our first sale and installation of the software which took us out of the development stage and into the operating phase of our business. Our sales leads continue to be followed up on as we receive them from our own efforts by attendance at trade shows and from referrals from our industry cross marketing agreements.





REVENUE.  Revenue in the year ended December 31, 2009 was $1,116,241 compared to $542,165 in the year ended December 31, 2008.





The fluctuation in sales is due to the timing of closing sales contracts.  Please reference the table below to view the Installation Contracts year-to-date (YTD) for 2009 versus 2008.




Revenue

Average Contract Price2009

2008

2009

2008Installation Contracts

901,365

451,980

81,942

90,396Maintenance/Other

214,876

90,185TOTAL

1,116,241

542,165




Revenue for the year ended December 31, 2009 was impacted by 11 new implementation contracts that averaged $81,942 per contract versus an average of $90,396 in 2008 to five customers.  The price of an installation contract can vary anywhere from $40,000 to $140,000 depending on features and installation requirements.  The difference in the income is related to maintenance/service on new and existing installations.  During year ended December31, 2009 and 2008 there were a total of 12 and 5 customers making up the service/maintenance revenue of $214,876 and $90,185, respectively.  Monthly service agreements can vary from $500 to over $2,000 depending on the installation and support contracted.  Monthly maintenance revenue is important to establishing consistent cash flow and profitability once the Company reaches the right level of critical mass.





EXPENSES. Total expenses for the twelve months ended December 31, 2009 was $1,308,799 compared to $1,240,478 for the year of 2008, not including depreciation and amortization expense.  The increase of about $68,000 is attributable to:


·
Increases of $319,000:


o
Agent commissions of $295,000 due to the increase in installment sales.


o
Rent of $24,000 due to the increased space that’s being utilized and increase in number of leased employees.


·
Decreases of $219,000:


o
Employee leasing of $109,000 due to reduced employee leasing hours and increased agent commissions.


o
Professional / contract services of $35,000 due to the increased agent activity.


o
Bad debt expense of $45,000.  2008 experienced a dispute with a customer over items in a contract ($96,000) and 2009 saw improved contract quoting and reduced disputes.


o
Software development costs of $26,000 as 2008 was the last time the software was updated.


o
Trade shows of $4,000.








5





Depreciation and amortization was $84,727 in both 2009 and 2008.





OTHER INCOME . We had interest income of $21 in 2009 and $2,349 in 2008. In 2009 we had interest expense of $2,043 compared to $398 in 2008.





NET LOSS. Net loss for the year ended December 31, 2009 was $279,307 compared with a loss of $781,089 for the year of 2008. Fiscal year 2009 saw improvement over 2008 (see explanations above) which was the first full year of sales.





LIQUIDITY AND CAPITAL RESOURCES. Our cash balance at December 31, 2009 was $132,993 compared to $47,954 at December 31, 2008.  As discussed in Note 2 to the financial statements, the Company has suffered losses from operations and has deficits in cash flows from operating activities, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding these matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.  The Company plans for liquidity needs on a short term and long term basis as follows:





Short Term Liquidity:


The company currently relies on short-term financing of working capital from individual investors and also shareholder advances, when necessary, to fund operations.  In 2009 cash flow from operations also became s source of liquidity due to increased revenue in the final six months of the year.





Long Term Liquidity:


The long term liquidity needs of the Company are projected to be met primarily through the cash flow provided by operations.  Although our operating cash flow from operations is about negative $191,200 for the year ended December 31, 2009 it is an improvement versus the same period in 2008 which has a negative operating cash flow of about $643,600.  As we sign new contracts and perpetuate maintenance revenue we expect cash flow from operations to fund itself.





Capital Resources





During the year ended December 31, 2009, the Company had an advance of $62,617 by a shareholder.  This is a $22,219 increase over 2008 when the balance was $40,398.  $39,707 of the advance is a line-of-credit with an annual interest rate of 5.85%  There is no interest associated with the general shareholder advances totaling $22,910 and is payable on demand.





Over the past few years we have noticed that our business does not have a seasonal trend.  We do see trends based on lead generation and follow-up after trade show events or targeted advertising.  Trade shows are typically early in the year and therefore we experience increased implementation revenue in the latter part of the fiscal year.  Currently our revenue stream is geared toward installation contracts and as we grow we expect to see a more balanced revenue line between installation and maintenance sales.








6





We do not expect any significant change to our equity or debt structure and do not anticipate entering into any off-balance sheet arrangements.





Critical Accounting Policies





The Company’s critical accounting policies and estimates are depreciation (fixed assets) and amortization (capitalized software) expense, reserve for doubtful accounts and commissions on agent installment sales.





Material Changes in Financial Condition





WORKING CAPITAL: Working capital increased by about $46,420 to a deficit of $19,081.  This improvement is due to three main items.


·
Firstly: Short term debt increased by 15,000


·
Secondly: Accounts payable increased by about $16,300 due to increased travel expense accruals


·
Thirdly: Amounts due Shareholder: $22,910 (unfavorable)





Future Financial Condition





The Company’s future prospects look promising with residual income related to service maintenance agreements estimated to be about $250,000 per annum and increased sales growth on systems implementations, the Company believes that sales will achieve double digit percentage growth again 2010 (2009 growth over 2008 was 106%).





Employees





As of December 31, 2009, the Company had seven employees which it pays through an employee leasing agreement.  Four of the employees are support and/or technical personnel.








ITEM 7A.                      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not applicable








ITEM 8.                         FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





Incorporated in this filing are the following financial statements:





Report of Independent Registered Public Accounting Firm


Consolidated Balance Sheets at December 31, 2009 and 2008


Consolidated Statements of Operations for the years ended December 31, 2009 and 2008


Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2009 and 2008


Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 2008


Notes to the Financial Statements













7


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM










To the Board of Directors


Triple A Medical, Inc.


Ovilla, Texas





We have audited the accompanying consolidated balance sheets of Triple A Medical, Inc. , as of December 31, 2009 and 2008, and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the management of Triple A Medical, Inc.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Triple A Medical, Inc is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control 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 Triple A Medical, Inc’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Triple A Medical, Inc. as of December 31, 2009 and 2008, and the results of its operations and its cash flows for the periods described in conformity with accounting principles generally accepted in the United States of America.





The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered losses from operations and has deficits in cash flows from operating activities, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding these matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.







/s/  MALONE BAILEY, LLP


MALONE BAILEY, LLP


www.malonebailey.com


Houston, Texas





March 31, 2010
































F-1


TRIPLE A MEDICAL, INC.Consolidated Balance SheetsDecember 31, 2009 and 2008ASSETS
2009

2008Current AssetsCash and cash equivalents
$
132,993

$
47,954Accounts Receivable, net of allowance of $17,576 and $95,799

In 2009 & 2008, respectively

14,522


22,083Total Current Assets

147,515


70,037Computer equipment, net

6,844


15,057Developed software, net

209,521


286,035TOTAL ASSETS
$
363,880

$
371,129LIABILITIES AND STOCKHOLDERS' EQUITYCurrent LiabilitiesAccounts payable and accrued expenses
$
96,479

$
95,140Line-of-credit

39,707


40,398Convertible Short term debt

15,000


-Advanced from shareholder

22,910


-Total Current Liabilities

174,096


135,538Stockholders' EquityPreferred stock, $0.01 par value, 20,000,000 authorized,-0-  issued and outstanding

-


-Common stock, $.001 par value, 50,000,000 shares authorized,14,050,500 and 13,744,000 shares issued and outstanding, respectively

14,051


14,051Additional Paid-In Capital

1,896,697


1,655,697Accumulated Deficit

(1,720,964
)

(1,434,157
)Total Stockholders' Equity

189,784


235,591TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
$363,880

$
371,129See accompanying summary of accounting policies and notes to consolidated financial statements.


F-2


TRIPLE A MEDICAL, INC.Consolidated Statements of OperationsYears Ended December 31, 2009 and 20082009


2008REVENUE

$
1,116,241


$
542,165OPERATING EXPENSESDepreciation and amortization


84,727



84,727Selling, General & Administrative:


1,316,299



1,213,978Software Development Costs


-



26,500TOTAL OPERATING EXPENSES


1,401,026



1,325,205NET LOSS FROM OPERATIONS


(284,785
)


(783,040
)OTHER INCOME (EXPENSE)Interest income


21



2,349Interest expense


(2,043
)


(398
)TOTAL OTHER INCOME (EXPENSE)


(2,022
)


1,951NET LOSS

$
(286,807
)

$
(781,089
)Basic and diluted weighted average shares outstanding


14,050,500



14,007,255Basic and diluted net loss per share

$
(0.02
)

$
(0.05
)See accompanying summary of accounting policies and notes to consolidated financial statements.


F-3


TRIPLE A MEDICAL, INC.

Consolidated Statements of Stockholders' Equity

Years Ended December 31, 2009 and 2008Common Stock


Paid-In


Subscription


AccumulatedShares


Amount


Capital


Receivable


Deficit


TotalsBalance at December 31, 2007


13,744,000


$
13,744


$
1,258,756


$
-


$
(653,068
)

$
619,432Contributed capital










244,000











244,000Imputed rent










2,000











2,000Cash received for stock


276,500



277



137,971



(2,000
)






136,248Shares issued for services


30,000



30



14,970











15,000Net Loss


















(781,089
)


(781,089
)Balance at December 31, 2008


14,050,500


$
14,051


$
1,657,697


$
(2,000
)

$
(1,434,157
)

$
235,591Contributed capital










239,000











239,000Cash received for stock














2,000







2,000Net Loss


















(286,807
)


(286,807
)Balance at December 31, 2009


14,050,500


$
14,051


$
1,896,697


$
-


$
(1,720,964
)

$
189,784See accompanying summary of accounting policies and notes to consolidated financial statements.


F-4


TRIPLE A MEDICAL, INC.Consolidated Statements of Cash FlowsYears Ended December 31, 2009 and 20082009


2008CASH FLOWS FROM OPERATING ACTIVITIESNet Loss

$
(286,807
)

$
(781,089
)Adjustments to reconcile net income to net cashprovided by operating activities:Depreciation and amortization


84,727



84,727Common stock issued for services


-



15,000Write-off of subscription receivable


2,000



-Bad debt expense


58,078



-Changes in operating assets and liabilities:Imputed rent


-



2,000Accounts receivable


(50,517
)


(22,084
)Accounts receivable - employee


-



1,100Prepaid expenses


-



29,363Accounts payable and accrued expenses


1,339



27,384Net Cash Used in Operating Activities


(191,180
)


(643,599
)CASH FLOWS FROM FINANCING ACTIVITIESContributed capital


239,000



244,000Proceeds from sale of stock


-



136,249Payments on  short term debt


-



(5,000
)Payments to shareholder


(57,140
)


-Proceeds from short term debt


15,000



-Advances from shareholder


80,050



-Proceeds (payments) on line-of-credit


(691
)


45,398Net Cash Provided by Financing Activities


276,219



420,647NET INCREASE IN CASH AND CASH EQUIVALENTS (DECREASE)


85,039



(222,952
)CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR


47,954



270,906CASH AND CASH EQUIVALENTS AT END OF YEAR

$
132,993


$
47,954SUPPLEMENTAL DISCLOSURESInterest paid

$
-


$
-Income taxes paid

$
-


$
-See accompanying summary of accounting policies and notes to consolidated financial statements.





F-5


TRIPLE A MEDICAL, INC.


Notes to the Consolidated Financial Statements


December 31, 2009 and 2008








NOTE 1 – NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES





Nature of Activities, History and Organization:





Triple A Medical, Inc. (Triple A), through its wholly owned subsidiary Triple A Software, Inc. (TAS), has developed and is in the process of selling and distributing a proprietary software developed for use as an electronic medical record by orthopedic surgeons. Triple A is located in Ovilla, Texas and was incorporated on December 27, 2006 in Nevada.





Triple A is the parent company of TAS, a Texas corporation. TAS was established in 2005 and since that time has been working to develop software. The software being developed is designed as an easy to use, interactive software with customization that can be made as it is used.





On December 29, 2006, Triple A issued 13,500,000 shares of common stock in exchange for a 100% equity interest in TAS. As a result of the share exchange, TAS became the wholly owned subsidiary of Triple A. The share exchange was treated as a recapitalization of TAS. The financial statements have been prepared as if TAS had always been the reporting company and then on the share exchange date, had changed its name and reorganized its capital stock.





The financial statements also include the accounts of Triple A’s subsidiary, Phoenix Ortho, LLC.








Significant Accounting Policies:





The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application.  The application of accounting principles requires the estimating, matching and timing of revenue and expense. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements.





The financial statements and notes are representations of the Company’s management which is responsible for their integrity and objectivity. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud.  The Company's system of internal  accounting control is designed to assure, among other items, that  1) recorded  transactions  are valid;  2) valid  transactions  are recorded;  and  3) transactions  are  recorded in the proper  period in a timely  manner to produce financial  statements which present fairly the financial  condition,  results of operations  and cash  flows of the  Company  for the  respective  periods  being presented.








Basis of Presentation:





The Company prepares its financial statements on the accrual basis of accounting.  All intercompany balances and transactions are eliminated.  The Company consolidates its subsidiaries using the equity method.





Certain 2008 amounts have been reclassed to agree with the 2009 classifications.







F-6





Cash and Cash Equivalents:





Cash and cash equivalents includes cash in banks with original maturities of three months or less and are stated at cost which approximates market value, which in the opinion of management, are subject to an insignificant risk of loss in value.





Fair Value of Financial Instruments:





The carrying amounts of cash, cash equivalents, accounts receivable, accounts payable and notes payable approximate their fair values due to the short-term maturities of these instruments.  The carrying amount of the Company’s marketable securities and accounts payable approximate fair value due to the stated interest rates approximating market rates.





Property and Equipment





Property and equipment are carried at the cost of acquisition or construction and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which is 3 years.





Software Development Costs





Triple A follows ASC 985, “Accounting for the costs of computer software to Be Sold, Leased, or Otherwise Marketed.”  In accordance with ASC 985, internal costs incurred to create computer software are charged to expense when incurred until technological feasibility has been established for the product. Technological feasibility is established upon completion of a detailed program design or, in its absence, completion of a working model. After technological feasibility is established, the costs of coding and testing and other costs of producing product masters are capitalized. Cost capitalization ceases when the product is available for general release to customers.





Capitalized software costs are amortized on a product-by-product basis, starting when the product is available for general release to customers. Annual amortization is the greater of straight-line over the product's estimated useful life or the percent of the product's current-year revenues as compared to the product's anticipated future revenues.





Capitalized software costs are evaluated for impairment on a product-by-product basis by a comparison of the unamortized capitalized costs to the product's net realizable value. The amount by which the unamortized capitalized costs exceed the net realizable value is recognized as an impairment charge.





Revenue Recognition





Triple A recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured, under EITF 08-01. Triple A recognizes revenue under multiple deliverable arrangements from installation and other services as the services are performed.








F-7





Our software products are modified and customized to each specific customer. As a result, the service element is essential to the functionality of the software license. Consequently, we recognize revenue upon completion of specific contractual milestones or by using the percentage-of-completion method. Typically, we recognize 40% of the revenue upon delivery of the software; 40% on the completion of the installation, which generally takes from four to six weeks and 20% upon the completion of training and the “go live” date.





Accounts Receivable:





Accounts receivable are carried at their face amount, less an allowance for doubtful accounts.  On a periodic basis, the Company evaluates accounts receivable and establishes the allowance for doubtful accounts based on a combination of specific customer circumstances and credit conditions, based on a history of write offs and collections.  The Company’s policy is generally not to charge interest on trade receivables after the invoice becomes past due.  A receivable is considered past due if payments have not been received within agreed upon invoice terms.   The Company provides an allowance for all receivables that are greater than 90 days old. Allowances for Doubtful Accounts totaled $17,576 and $95,799 at December 31, 2009 and 2008 respectively.  Write offs are recorded at a time when a customer receivable is deemed uncollectible.





Income Taxes





Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.





Earnings (Loss) per Share





Earnings (loss) per share (basic) is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding for the period covered.  As Triple A has no potentially dilutive securities, fully diluted earnings (loss) per share is identical to earnings (loss) per share (basic).





Recent Accounting Pronouncements:





The Company does not expect  the  adoption  of  recently  issued  accounting pronouncements  to have a significant  impact on the Company’s  results of  operations, financial position or cash flow.








NOTE 2 - GOING CONCERN





Triple A 's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  Triple A has suffered losses since inception and has an accumulated deficit as of December 31, 2009. Additionally, Triple A has incurred deficits in cash flows from operating activities.








F-8





Triple A 's ability to continue as a going concern is dependent upon its ability to complete the development of its developed software product with existing sources of capital, to successfully market and implement its developed software product and to achieve profitable operations.  The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.








NOTE 3 - CONCENTRATIONS





Triple A maintains demand deposit accounts which at times exceed FDIC insurance limitations of $250,000 per account. Balances on deposit at financial institutions as of December 31, 2009 and 2008 in excess of FDIC deposit insurance amounts were $0.





Triple A has a concentration of revenues based upon a limited number of customers. For the year ended December 31, 2009 seven customers comprised 74%  of total revenues. For the year ended December 31, 2008 three customers comprised 76%  of total revenues.  All of the customers are Orthopedic medical practices.





Triple A has contracted with the entity Ortho Dev, LLC to develop the software it uses to provide its electronic medical records. All software development costs including those capitalized as well as expense, as detailed in the following tables, have been acquired from Ortho Dev, LLC.








NOTE 4 - PROPERTY AND EQUIPMENT





Property and equipment consisted of the following at December 31, 2009 and 2008:




Description
Life

2009

Amount


2008

AmountComputer equipment
3 years

$
24,639


$
24,639Accumulated depreciation



(17,795
)


(9,582
)$
6,844


$
15,057


Depreciation expense totaled $8,213 and $8,213 for the years ended December 31, 2009 and 2008, respectively.








NOTE 5 – CAPITALIZED SOFTWARE DEVELOPMENT COSTS





Capitalized software development costs at December 31, 2009 and 2008 consist of the following:




2009


2008Software

$
382,569


$
382,569Less: accumulated amortization


(173,048
)


(96,534
)$
209,521


$
286,035
    F-9


Amortization expense totaled $76,514 and $76,514 in 2009 and 2008, respectively





$26,500 of software development costs were expensed during 2008. There was no software development costs incurred during 2009.








NOTE 6 – SHORT-TERM NOTES PAYABLE





Triple a borrowed $45,398 in the form of a short term line of credit from Ortho Dev, LLC, the entity responsible for developing its software in September 2008. This line of credit matures in September 2011 and bears interest at a rate of 5.85%. The balance on this line of credit amounted to $39,707 at December 31, 2009 and $40,398 as of December 31, 2008.





At December 31, 2009, the Company owed advances of $15,000 to shareholders.  The note is convertible into common shares at $0.50 per share. This was converted into common stock on January 8, 2010, at $0.50 per share, or 30,000 shares.








NOTE 7 – INCOME TAXES





Deferred tax assets at December 31, 2009 and 2008 consisted of the following:


Year ended

December 31,


Year ended

December 31,Deferred tax asset related to:

2009


2008Net operating loss carry forward

$
383,797


$
481,493Less: valuation allowance


(383,979
)


(481,493
)Net deferred tax asset

$
-


$
-





The net deferred tax asset generated by the loss carry-forward has been fully reserved.  The cumulative net operating loss carry-forward is approximately $1,129,349 at December 31, 2009, and will expire in the years 2024 through 2029.





The difference in the income tax benefit not shown in the consolidated statements of operations and the amount at that would  result  if  the U.S. Federal statutory rate  of  34%  were  applied to pre-tax loss for 2009 and 2008 is attributable to the valuation allowance.





The realization of deferred tax benefits is contingent upon future earnings.





Upon adoption of FIN 48, the Company had no gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods.  The Company has not accrued any additional interest or penalties as a result of the adoption of FIN 48.








NOTE 8 – RELATED PARTY TRANSACTIONS





In order to fund the development of the software, Triple A entered into an ‘Investment and Net Revenue Agreement’ with Phoenix Ortho, LLC (ORTHO), an entity controlled by a relative of the President of Triple A. In connection with this agreement, ORTHO provided Triple A with contributions to capital of $244,000 during 2008 and $239,000 in 2009. This cash is reflected as additional paid-in capital as of December 31, 2008 and 2009. In exchange for this contributed capital, Triple A provided ORTHO with an income participation interest in its operations. The terms of this agreement require Triple A to pay ORTHO 32.60% of the net income generated by the business in the immediately preceding month. This Investment and net revenue agreement has been assigned form Ortho to another entity controlled by the owners, Phoenix Scap, LLP during 2006.





In addition, office space has been contributed by related parties from April 2006 to March 2008 rent-free.  $0 in 2009 and $2,000 in 2008 has been imputed related to this office space.




NOTE 9 – SUBSEQUENT EVENTS
  On January 5, 2010, Triple A issued 170,00 shares of common stock to a third party for services received. These shares were valued at $0.50 per share determined from the closing price of the Company’s stock at date of issuance.
  On January 8, 2010, a third party elected to convert $15,000 of their loan to common stock. Triple A issued the note holders 30,000 shares of common stock.
  On January 25, 2010, Triple A issued 20,000 shares of common stock to a third party for a total of $15,000.
  Triple A evaluated subsequent events through March 31, 2010.





F-10








ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





We have retained Malone & Bailey, PC as our registered independent public accounting firm. We have


had no disagreements with them on accounting and disclosure issues.








ITEM 9A.                      CONTROLS AND PROCEDURES







Evaluation of Disclosure Controls and Procedures





We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2009.  This evaluation was accomplished under the supervision and with the participation of our chief executive officer / principal executive officer, and chief financial officer / principal financial officer who concluded that our disclosure controls and procedures are not effective to ensure that all material information required to be filed in the annual report on Form 10-K has been made known to them.





Disclosure, controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by in our reports filed under the Securities Exchange Act of 1934, as amended (the "Act") is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.





Based upon an evaluation conducted for the period ended December 31, 2009, our Chief Executive and Chief Financial Officer as of December 31, 2009 and as of the date of this Report, has concluded that as of the end of the periods covered by this report, we have identified the following material weakness of our internal controls:




·
Reliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transaction.




·
Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control.




In order to remedy our existing internal control deficiencies, as our finances allow, we will hire additional accounting staff.




Management’s Annual Report on Internal Control Over Financial Reporting





Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles in the United States of America.  Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.









8




Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.





Our management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework at December 31, 2009.   Based on its evaluation, our management concluded that, as of December 31, 2009, our internal control over financial reporting was not effective because of limited staff and a need for a full-time chief financial officer and that we do not have an audit committee..  A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.





This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to the attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.





Changes in Internal Controls over Financial Reporting




We have not yet made any changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.








ITEM 9B.                      OTHER INFORMATION





None.

















9


PART III





ITEM 10.                      DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE





The directors and officers of the company, their ages and principal positions are as follows:





P. Morgan McCune                                                       31                      Director, President; Secretary and Director


Since December 2006





Background of Directors and Executive Officers:





P. Morgan McCune.


AA Degree Dallas Art Institute, Multimedia, Animation, Web Design, Web Developer, Graphic Artist, Medical Illustrator 6 years experience, Co-developer NextGen Orthopedic DB Developer NextGen Physical Therapy DB, Medical Illustrator for NextGen EMR, Development Proficiency: SQL 2005, Visual Studio 2005, .NET, C#, VB.





The Registrant has one shareholder, the President, P. Morgan McCune, who owns at least ten percent of the Company’s common stock. The initial Form 3 required to be filed by the shareholder was filed late. P. Morgan McCune was not required to file a Form 4 or Form 5 as his share holdings did not change.








ITEM 11.                      EXECUTIVE COMPENSATION





Our sole officer and director received the following compensation for the years of 2009 and 2008. He has no employment contract with the company.






Name of Person

Receiving compensation

Capacity in which he served

to receive remuneration

Aggregate remunerationP. Morgan McCune

President, Secretary and Treasurer

2009 - $74,536

2008 - $124,000


We have no employment agreements with any officer, director or employee.








ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS





The following table lists the officers, directors and stockholders who, at the date hereof, own of record or beneficially, directly or indirectly, more than 10% of the outstanding common stock, and all officers and directors of the company:




Title/relationshipto Issuer

Name of Owner

Amount Owned Before the Offering

PercentPresident, Secretary and Director

P. Morgan McCune

13,000,000

92.52%All officers andDirectors as a group



13,000,000

92.52%


No options, warrants or rights have been issued by the Company.








10







ITEM 13.                      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE





None.





As of the date of this filing, there are no other agreements or proposed transactions, whether direct or indirect, with anyone, but more particularly with any of the following:


*           a director or officer of the issuer;


*           any principal security holder;


*           any promoter of the issuer;


*
any relative or spouse, or relative of such spouse, of the above referenced persons.





ITEM 14.                      PRINCIPAL ACCOUNTING FEES AND SERVICES





(1) Audit fees





The aggregate fees billed for professional services rendered by our auditors, for the audit of the registrant's annual financial statements and review of the financial statements included in the registrant's Form 10-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for fiscal years 2009 and 2008, were $23,700 and $21,300 respectively.





(2) Audit-related fees





None





(3) Tax fees





None





(4) All other fees





None









11




(5) Audit committee policies and procedures





Audit Committee Financial Expert:


The Securities and Exchange Commission has adopted rules implementing Section 407 of the Sarbanes-Oxley Act of 2002 requiring public companies to disclose information about “audit committee financial experts.”  As of the date of this Annual report, we do not have a standing Audit Committee.   The functions of the Audit Committee are currently assumed by our Board of Directors.  Additionally, we do not have a member of our Board of Directors that qualifies as an “audit committee financial expert.”  For that reason, we do not have an audit committee financial expert.





Policies and Procedures:


The Board of Directors policies and procedures for hiring Independent Principle Accountants are summarized as follows:


·
The Board ensures that the accountants are qualified by reviewing their valid license information as filed with the Texas State Board of Public Accountancy.


·
The Board ensures that the accountants are independent by reviewing Regulation S-X, section 210.2-01(b).





(6) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.





Not applicable.

















12


PART IV





ITEM 15.                      EXHIBITS, FINANCIAL STATEMENT SCHEDULES





a) 1.           Financial Statements Schedules





None





a) 3.           Exhibits





Exhibits





Exhibit Number                                                      Name of Exhibit





31.1                      Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.





31.2                      Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.





32.1                      Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002.





























13





SIGNATURES





In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.





TRIPLE A MEDICAL, INC.





By /s/ P. Morgan McCune


P. Morgan McCune, President, CFO





Date: March 30, 2010

























14