Audited Financial Statements
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Transcript of Audited Financial Statements
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2012 2011ASSETS
Current Assets
Cash and cash equivalents $5,156,708 $3,860,543Accounts receivable, net 3,320,065 2,646,661 Inventory 661,343 936,688 Other current assets 131,937 154,433
Total current assets 9,270,053 7,598,325
Property and Equipment, net 377,687 273,117
Land 133,680 -
Goodwill 90,294 66,222
Note Receivable 2,832,356 -
Other noncurrent assets 341,074 236,589
Total Assets 13,045,144 8,174,253
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable $1,177,105 $234,898Accrued liabilities 117,571 114,531 Other current liabilities 123,835 565,680
Total current liabilities 1,418,511 915,109
Other noncurrent liabilities 233,213 67,526
Stockholder's Equity
Common Stock 1,000,000 1,000,000 Additional Paid in Capital 400,000 400,000 Accumulated Deficit 9,993,420 5,791,618
Total stockholder's equity 11,393,420 7,191,618
Total Liabilities and Stockholder's Equity 13,045,144 8,174,253
Key Medical, Inc. and Subsidiary Financial StatementsBalance Sheet
For the Period Ended December 31, 2012
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2012
Revenue, net of allowances $11,548,693
Cost of Sales 877,558
Gross Margin $10,671,135
Operating Expenses 6,485,542
Depreciation 92,456
Total Operating Expenses 6,577,998
Operating Income $4,093,137
Other Income (Expense) (16,412)
Net Income Before Income Taxes $4,076,725
Income Taxes (125,077)
Net Income $4,201,802
Key Medical, Inc. and Subsidiary Financial StatementsIncome Statement
For the Period Ended December 31, 2012
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The estimated useful lives of assets are as follows:
Plant Equipment 7 yearsOffice Furniture and Fixtures 5 yearsComputer Equipment 3 years
Property, plant, and equipment at December 31 consists of the following:2012 2011
Land 133,680 - Plant equipment 1,056,293 1,133,635 Computer equipment, office furniture, and fixtures 137,735 137,735 Construction-in-progress 389,220 -
1,716,928 1,271,370
Accumulated depreciation and amortization (1,055,561) (998,253)
Total property, plant, and equipment 661,367 273,117
Revenue Recognition - The Company recognizes revenue upon shipment of its products to customers. Discounts taken by customers for early payments are reported as interest expense in the statements of income.
Nature of Operations - Key Medical Group, Inc. and Subsidiary (the "Company"), a North Carolina corporation, is in the business of manufacturing medical equipment and developing medical software used in hospitals and doctor offices. The company currently has a manufacturing plant in Raleigh, North Carolina and has sales branches in West Virginia. Each sales branch provides sale support, inventory, and technical expertise to direct customers as well as the distributor network.
Basis of Presentation - The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.
Fiscal Year - The Company's fiscal year ends on December 31. The years ended December 31, 2012 and 2011 are referred to herin as 2012 and 2011, respectively.
Inventories - Inventories are valued at the lower of cost, as determined using the average cost method, or market.
Fair Value of Financial Instruments - The Company's cash and cash equivalents, accounts receivable, accounts payable and certain other accrued liabilities are all short-term in nature and the carrying amounts approximate fair value.
Property, Plant, and Equipment - Property, plant, and equipment are stated at cost. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the assets.
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2012 2011Federal (159,210) 158,553 State 34,133 7,771
(125,077) 166,324
2012 2011Deferred tax assets:Current portion for reserves and accruals not currently deductible 125,000 150,000 Long term portion 191,074 236,589
Total deferred tax assets 316,074 386,589
Deferred tax liabilities:Current portion for depreciation and amortization (123,835) (117,735) Long term portion (218,461) (70,205)
Total deferred tax liabilities (342,296) (187,940)
Net deferred tax asset (26,222) 198,649
Income Taxes - The provision for income taxes for the years ended December 31 consists of the following:
The components of the Company's net deferred tax asset at December 31 are as follows:
Balance SheetIncome StatementFootnotes