We lease a vehicle for our CEO to be used for business. The term of the lease is 3 years beginning July 9, 2018 and ending July 9, 2021. We currently pay a monthly rate of $893.
The pause in our sales efforts with the clinics allowed the Company, throughout 2018 (with an emphasis on the third and fourth quarters of 2018), to materially penetrate the third party payor market such that going into 2019, the Company now has, in addition to its clinic accounts, a significant number of third party payor accounts. These include unions, municipalities, school districts and small to mid-size corporations - all authorizing us to bill them directly for providing our sleep apnea services to their members/employees.
We expect our relationship with the combined clinic chain, coupled with the new business relationships established primarily during the third and fourth quarters of 2018, will result in a material increase in revenue to the Company without a concomitant increase in expenses. The Company has prepared, internally, for the anticipated increase in its business and the manpower burden this might place on the Company.
A quantitative summary of our revenues by source category for 2018 and 2017 as follows:
Revenues for the year ended December 31, 2018, were $524,172 compared to revenues of $564,117 for the comparable period ending December 31, 2017.
We evaluate selling, general and administrative expenses at the Parent company level as well as at our PVMS subsidiary. Selling, general, and administrative expenses at the Parent company level include overhead and the cost of being a public entity. Selling, general, and administrative expenses at PVMS are solely related to the OSA services segment. A breakdown of these expenses is as follows:
Executive compensation and payroll related expenses decreased $2,441,316. Mr. Marcus agreed to reduce his annual base compensation from approximately $2,100,000 in 2017 to $200,000 and to accept common stock purchase warrants totaling 833,333 in lieu of his 2018 compensation. In July 2018, Mr. Heidt agreed to reduce the annual compensation from $300,000 in 2017 to $125,000. He also agreed to accept 520,833 common stock purchase warrant in lieu of his 2018 compensation.
Payroll related expenses increased $37,880. As the Company began to expand operations it hired additional personnel and began paying commission.
Travel expense was $373,959 lower due to the sales force having cutback on traveling to trade shows and visiting existing and potential clinics. The sales force and supporting forces were most active in 2017 in building up new clientele while in 2018 expanding the services offered to current clientele from local to national.
Professional Fees increased $71,944. In 2018, PVMS hired an outside accountant and for the Company as a whole, whom we pay $7,000 per month. There was a consultant who we paid $15,000 to improve social media activities and transition us to an app-based platform. Legal fees decreased by approximately $26,000 due to decreased litigation expenses.
Advertising decreased $32,108 due to minimized attendance at trade shows and magazine product placements in trade journals.
A breakdown of the interest expense for the years ended December 31, 2018 and 2017 is as follows:
Subsequent to 2018, we issued $480,000 of promissory notes through April 26, 2019.
Income taxes. Computing our provision for income taxes involves significant judgment and estimates particularly in relation to the determination of a valuation allowance for deferred tax assets (primarily from net operating loss carryforwards). See Note 15 to the consolidated financial statements.
No dividends are expected to be paid for the expected life of the instruments; therefore, we assume a dividend rate of zero.
Recent Accounting Standards Update - Recently various new ASUs were issued by the Financial Accounting Standards Board (FASB). Management has determined based on their review that the following ASUs issued will be applicable to the Company. As new ASUs are released, Management will assess if they are applicable and, if they are applicable, the effect will be included in the notes to the consolidated financial statements.