The following tables set forth our selected historical financial data for the periods indicated. The selected statement of operations data for the years ended December 31, 2010 and 2009, and the selected balance sheet data as of December 31, 2010 and 2009, have been derived from our audited financial statements and related notes thereto included elsewhere in this annual report.
The information presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and the notes thereto included elsewhere in this annual report.
REVENUES. During fiscal 2010 and 2009, we had revenues of $603,007 and $1,096,859 respectively. We experienced a decline in revenue due to the number of claims from past hurricane seasons tapering off and previously being settled.
During 2010, we incurred $192,531 of general and administrative expenses as compared to $279,968 during 2009. The decrease was due to a continued reduction of expenses related to our operations corresponding with the decrease in claims.
NET LOSS. We had a net loss of ($185,229) in fiscal year 2010 compared to a net loss of ($37,157) in fiscal 2009. The increase in net loss is primarily attributable to the decrease in revenues partially offset by reduced operating expenses as discussed above.
The current assets at December 31, 2010, were $76,666 compared to $97,264 at December 31, 2009. As of December 31, 2010, we had $4,174 of cash and cash equivalents compared to $12,404 at December 31, 2009.
LIABILITIES. At December 31, 2010, we had total liabilities of $236,280 compared to total liabilities of $162,416 as of December 31, 2009. The increase is attributable to an increase of $100,000 in deferred compensation to an officer,
and $ 20,676 of higher accounts payable. This was partially offset by $11,946 of decreases in accounts payable to insured and lower notes payable of $39,866 (attributable to normal payments and the disposal of an automobile)
CASH FLOWS. Our cash used in operating activities was ($29,278) compared to cash source of $14,829 for the prior year.
In the unlikely event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. Reserves for uncertain tax positions would be recorded if the Company determined it is probable that a position would not be sustained upon examination or if payment would have to be made to a taxing authority and the amount is reasonably estimate. As of December 31, 2010, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. The Company’s tax returns are subject to examination by the federal and state tax authorities for the years ended 2006 through 2009.
We have audited the accompanying consolidated balance sheets of AAA Public Adjusting Group, Inc. as of December 31, 2010 and 2009 and the statements of operations, cash flows and stockholders' equity for the years then ended. 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.
FOR THE PERIOD FROM JANUARY 1, 2009 THROUGH DECEMBER 31, 2010
The books and records of the Company are maintained on the accrual basis of accounting which recognizes revenues when earned, regardless of when received and expenses when incurred, regardless of when paid, which is in accordance with generally accepted accounting principles.
Net income per share is computed by dividing the net income/(loss) 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.
In the unlikely event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. Reserves for uncertain tax positions would be recorded if the Company determined it is probable that a position would not be sustained upon examination or if payment would have to be made to a taxing authority and the amount is reasonably estimate. As of December 31, 2010, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. The Company’s tax returns are subject to examination by the federal and state tax authorities for the years ended 2006 through 2010.
The Company’s financial instruments include cash, accounts receivable, and accounts payable. Due to the short-term nature of these instruments, the fair value of these instruments approximates their recorded value.
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, 2010 and 2009 were $ 11,815 and $ 21,474 respectively.
Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective periods. Depreciation is computed over the estimated useful lives of the related asset (from 5 - 7 years) using the straight-line method for financial statement purposes.
The following is a summary of property and equipment at December 31, 2010 and December 31, 2009:
The Company had funds in excess of the $ 250,000 Federal Deposit Insurance Corporation’s (FDIC) insured limits. The company has funds on deposit with a major bank and does not believe that there is a concentration of risk factor. There is no concentration of risk regarding accounts receivable, as any single receivable is not material and there are offsetting related payables.
Effective April 1, 2011, the nature of this $100,000 deferred compensation liability, was changed to this master convertible note payable.
In January 2010 FASB issued ASU “Equity” (Topic 505), accounting for distributions to shareholders with components of stock and cash. This amendment affects entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders with a potential limitation in the total amount of cash that all shareholders can elect to receive in the aggregate. The Company does believe that implementation of this FASB would have a material effect on the financial statements.