Twelve months ended December 31, 2009 ("Fiscal 2009" or "2009" or "the current year") compared to twelve months ended December 31, 2008 ("Fiscal 2008" or "2008" or "the prior year").
REVENUES. During fiscal 2009 and 2008, we had revenues of $1,096,859 and $1,675,959 respectively. We experienced a decline in revenue due to the number of claims from past hurricane seasons tapering off and previously being settled.
During 2009, we incurred $279,968 of general and administrative expenses as compared to $454,268 during 2008. The decrease was due to a continued reduction of expenses related to our operations corresponding with the decrease in claims.
LOSS FROM OPERATIONS. We had an operating loss of ($30,237) for fiscal year 2009 as compared to an operating loss of ($112,295) for fiscal 2008, primarily due to decreased operating expenses as described above, including lower operating costs.
NET LOSS. We had a net loss of ($37,157) in fiscal year 2009 compared to a net loss of ($123,491) in fiscal 2008. The increase in net loss is primarily attributable to the decrease in the operating expenses as discussed above.
The current assets at December 31, 2009, were $97,264 compared to $191,300 at December 31, 2008. As of December 31, 2009, we had $12,404 of cash and cash equivalents compared to $13,867 at December 31, 2008.
LIABILITIES. At December 31, 2009, we had total liabilities of $162,416 compared to total liabilities of $274,238 as of December 31, 2008. The decrease is attributable to decreases in accounts payable to insured and notes and loans payable to related parties.
In connection with the sale of debt or equity instruments, the Company may enter into Registration Rights Agreements. Generally, these Agreements require the Company to file registration statements with the Securities and Exchange Commission to register common shares that may be issued on conversion of debt or preferred stock, to permit re-sale of common shares previously sold under an exemption from registration or to register common shares that may be issued on exercise of outstanding options or warrants.
The accompanying 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 incurred significant losses from operations, and because of these losses, the Company has a working capital deficiency, which raises substantial doubts about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
FOR THE YEARS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008
The operation’s of the Company is to facilitate insurance claims by insured parties by representation on their behalf with the insurance companies.
Net income per share is computed by dividing the net income by the weighted average number of shares outstanding during the period. Net income per share, diluted, is not presented as no potentially dilutive securities are outstanding.
Advertising costs, which are included in selling, general and administrative expenses, are expensed as costs are incurred. Advertising expenses for the years ended December 31, 2009 and 2008 were $ 21,474 and $ 17,456 respectively.
As shown in the accompanying financial statements, the Company incurred net losses for the years ended December 31, 2009 and 2008 of $ 37,157, and $123,491, respectively. Cumulative losses since inception are $ 107,718. The Company has a working capital deficit at December 31, 2009 of $ 11,890. There is no guarantee whether the Company will be able to generate enough revenue and/or raise capital to support its operations. This raises substantial doubt about the Company’s ability to continue as a going concern. Management states that they are confident that they can improve operations and raise the appropriate funds to grow their underlying business. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
The Company leases its new office in Hollywood, Florida facility under a lease commencing from May 1, 2010 through April 30, 2011 at a minimum annual rent of $ 12,720 (payable monthly) inclusive of related sale taxes and utilities. The Company terminated the lease at its old Location on April 29, 2010.
Rent expense for the years ended December 31, 2009 and 2008 was $ 34,206 and $ 46,254 respectively.
Accounts receivable reflects net funds due the company for its services and gross funds due the company and which are offset by any funds any due to the insured. These “net” receivables are offset by related commission payments to adjusting agents. The insured clients and adjusting agents are not paid until the company has received appropriate compensation. Related balances at December 31, 2009 and December 31, 2008 were:
Allowances for doubtful accounts for the periods ended December 31, 2009 and December 31, 2008 were $ 5,723 and $ 5,595 respectively. This allowance is net of offsetting payables to insured clients, adjusting agents and related expenses.
Prior to the merger in October, 2007, the Company was taxed as a limited liability company. As such, income taxes and loss benefits were recognized individually by the limited liability members.
For financial statement purposes for the period ending December 31, 2009, the reported provision for income taxes differs from the amount computed by applying the statutory U.S. Federal income tax rate of 34% to the loss before income taxes as follows:
As of December 31, 2009, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $160,000 that may be offset against future taxable income through 2024. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. No tax asset has been reported in the financial statements, due to the uncertainty that there is a 50% or greater chance the carry-forwards will expire unused. Accordingly, the potential tax benefits of the loss carry forwards are offset by a valuation allowance of the same amount.