Operating expenses and other costs during the twelve-month period ending December 31, 2008 were $283,471 resulting in an operating loss of $245,144 compared to the operating expenses of $108,706 for the twelve months ending December 31, 2007 with an operating loss of $87,722.
Interest expense for the twelve months ending December 31, 2008 was $41,869 resulting in a net loss from continuing operations of $284,294. By comparison, interest expense for the twelve months ending December 31, 2007 was $38,194 resulting in a net loss from continuing operations of $81,797.
Late in 2007 and early 2008 insurance sales revenue began to come in as a result of our transition into the insurance business. The accounting process; revenue recognition, cost of sales, gross profit and operating expenses will fluctuate as we continue to evolve as an insurance agency. In late 2008 our insurance sales began to drop due to the impending economic situations. In addition, our main insurance company AIG and several other insurance companies received substantial negative press and many individuals began delaying the purchase of insurance products.
The major increase in our 2008 operating expenses has come from SEC compliance requirements for our 10K and 10Q filings and the development of the S-1 Preferred Share Offering for filing.
It is anticipated that once the S-1 application and offering is completed our professional fees will be significantly lower.
As of December 31, 2008, the Company had assets in the amount of $378,785 compared to assets in the amount of $378,814 at December 31, 2007. The Company had total assets consisting of $22,331 in cash and $368,746 less amortization of $12,292 investment in the 68,000 name database. Total assets at December 31, 2007 consisted of $10,068 in cash and $368,746 in investment in our customer database.
On December 31, 2008, the Company had $668,046 in total liabilities. Current liabilities included $76,690 in accounts payable, $84,198 in accrued interest, $3,594 in accrued expenses and $353,564 in current note payable liabilities. Current note payable liabilities include $105,000 in notes payable and $248,564 in notes payable to related parties. Long term liabilities included $150,000 notes payable to related party.
During the twelve month period ending December 31, 2007, the $10,000 balance of a $20,000 note written in 2006 was converted into shares and a note for $50,176 written on February 17, 2006, plus interest of $7,145 was paid.
Except as otherwise disclosed herein as of December 31, 2008, the Company had no capital commitments. We are currently focused on developing revenues from our insurance agency operations and our prescription services operations and reducing debt through converting debentures and notes payable to common stock when our common stock price provides a reasonable conversion ratio. We may also seek funding from unencumbered securities purchases or from lenders offering favorable terms. At this time, we have no contracts, agreements, or understandings for additional funding, nor can any assurance be given that we will be able to obtain this capital on acceptable terms, if at all. In such an event, this may have a materially adverse effect on our business, operating results and financial condition. If the need arises, we may offer a private placement or attempt to obtain funding through the use of various types of short term funding, loans or working capital financing arrangements from financial institutions and or shareholders. No assurance can be given that we will be able to obtain the total capital necessary to fund our new business plans. In such an event, this may have a materially adverse effect on our business, operating results and financial condition.
Our prime focus is to offer preferred shares to bring in funding to develop the company and move our business plans forward. We continue to stress the importance of a successful S-1 application and the successful completion of the offering once approved.
The Company’s discussion and analysis of its financial condition and results of operations are based upon its financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements may have required the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures. On an ongoing basis the Company evaluates estimates, including those related to bad debts, inventories, fixed assets, income taxes, contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of the Company’s judgments on the carrying value of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.
The financial statements of the Company and notes thereto appear on page and are incorporated herein by reference.