UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
November 4, 2011
Date of Report (Date of earliest event reported)
Medytox Solutions, Inc.
(Exact name of registrant as specified in its charter)
Nevada
(State or Other Jurisdiction of Incorporation)
000-54346
(Commission File Number)
54-2156042
(IRS Employer Identification No.)
400 S. Australian Ave., Suite 800, West Palm Beach, Florida 33401
(Address of Principal Executive Offices and Zip Code)
(954) 684-8288
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[__] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[__] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[__] Pre-commencement communications pursuant to Rule 14d-2(b) under the
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Exchange Act (17 CFR 240.14d-2(b))
[__] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
Acquisition of Trident Laboratories, Inc.
As previously reported on October 26, 2011, Medytox Institute of Laboratory Medicine, Corp. ("Medytox"), a wholly owned subsidiary of registrant, Casino Players, Inc. (the "Company"), entered into an agreement (the "Agreement") for the purchase of up to eighty-one percent (81%) of the issued and outstanding equity ownership interests of Trident Laboratories, Inc. ("Trident") from its shareholders ("Shareholders"). Trident is a Florida corporation maintaining its principal place of business at 6011 Rodman Street, Suite 107, Hollywood, Florida 33032.
As of the signing of the agreement, Trident assigned 49% of the stock to escrow for the benefit of Medytox and consented to perform testing on behalf of Medytox. Upon payment of the $500,000 note Medytox will receive the 49% of the stock plus an additional 32% from the shareholders of Trident and Medytox will own 81% of the Trident. Until the note is paid in full the former shareholders of Trident will be allowed to keep 100% of the profits of their existing and future non-Medytox testing after a fair allocation of operating costs.
Medytox offers to purchase the remaining 19% from the shareholders of Trident, after 24 months of combined operations, for consideration equal to three (3) times the annual profits as determined from audited financial statements. This offer expires after 36 months.
The Company filed audited financial statements for the years ended December 31, 2010 via Form 8-K on November 4, 2011. Trident was organized in December 2009 and started operations in March 2010. Only the 2010 statements were audited. The balances at August 22, 2011 are as yet unaudited.
Medytox. accounted for the assets, liabilities and ownership interests in accordance with the provisions of ASC 805, Business Combinations for acquisitions occurring in years beginning after December 15, 2008 (formerly SFAS No. 141R, Business Combinations). As such, the recorded assets and liabilities acquired have been recorded at fair value and any difference in the net asset values and the consideration given has been recorded as a gain on acquisition or as goodwill. The unaudited values as of the date of agreement are as follows:
August 22, 2011 (Unaudited)
Cash $848
Accounts receivable 119,477
Other current assets 24,596
Fixed assets 131,714
Goodwill 500,000
-
Total assets purchased $776,636
Account Payables $44,861
Accrued liabilities 11,287
Related party loans 72,091
LT Liabilities 50,799
Equity 97,598
Note 500,000
Total liabilities assumed and
consideration given $776,636
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Pro forma results of operations for the years ended December 31, 2010 and 2009 as though this acquisition had taken place at January 1, 2009 are as follows:
Year ended December 31, 2009 Year ended December 31, 2010
Revenues $11,082 $415,823
Net Income (loss) $(54,500) $(225,643)
Earnings per share $(0.00) $(0.01)
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The unaudited balance sheet and pro forma results disclosed in the
tables above are based on various assumptions and are not necessarily
indicative of the results of the financial position or operations that would
have occurred had the Company completed this acquisition on January 1, 2009 or
2010. The acquired balance sheet above is subject to revision during the year
end audit.
Acquisition of Medical Billing Choices, Inc.
As previously reported, on October 27, 2011, Medytox Solutions, Inc. (OTCBB: "MMMS"), f/k/a Casino Players, Inc. (the "Company",), entered into an agreement (the "Agreement") for the purchase of all issued and outstanding equity ownership interests of Medical Billing Choices, Inc. a/k/a TA ARC Medical Billing ("MBC") from its shareholders ("Shareholders"). MBC is a corporation maintaining its principal place of business at 814 Tyvola Road, Suite 116, Charlotte, North Carolina 28217.
As of the signing of the agreement, MBC assigned 49% of the stock to escrow for the benefit of the Company and assumed the duties of billing the medical services provided by any subsidiary of the Company. Upon payment of the $750,000 note the Company will receive the 49% of the stock and the remaining 51% from the shareholders of MBC and the Company will own 100% of the MBC. Until the note is paid in full the former shareholders of MBC will be allowed to keep 100% of the profits of their existing and future non- Company billings.
The Company filed audited financial statements for the years ended December 31, 2010 and December 31, 2009 via Form 8-K on November 4, 2011. The balances at August 22, 2011 are as yet unaudited.
The Company accounted for the assets, liabilities and ownership interests in accordance with the provisions of ASC 805, Business Combinations for acquisitions occurring in years beginning after December 15, 2008 (formerly SFAS No. 141R, Business Combinations). As such, the recorded assets and liabilities acquired have been recorded at fair value and any difference in the net asset values and the consideration given has been recorded as a gain on acquisition or as goodwill. The unaudited values as of the date of agreement are as follows:
August 22, 2011 (Unaudited)
Cash $80,073
Accounts receivable 15,550
Fixed assets 51,897
Goodwill 812,688
-
Total assets purchased $960,208
Accrued liabilities $58,160
LT Liabilities 52,048
Cash paid 100,000
Installment note given 750,000
-
Total liabilities assumed and
consideration given $960,208
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Pro forma results of operations for the years ended December 31, 2010 and 2009 as though this acquisition had taken place at January 1, 2009 are as follows:
Year ended December 31, 2009 Year ended December 31, 2010
Revenues $501,092 $422,810
Net Income (loss) $(42,374) $(358,350)
Earnings per share $(0.00) $(0.01)
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The unaudited balance sheet and pro forma results disclosed in the tables above are based on various assumptions and are not necessarily indicative of the results of the financial position or operations that would have occurred had the Company completed this acquisition on January 1, 2009 or 2010. The acquired balance sheet above is subject to revision during the year end audit.
Pro-forma results of the acquisitions of Medical Billing Choices, Inc and Trident Laboratories, Inc by Medytox Solutions, Inc and Subsidiary
Pro forma results of operations for the years ended December 31, 2010 and 2009 as though both acquisition had taken place at January 1, 2009 are as follows:
Year ended December 31, 2009 Year ended December 31, 2010
Revenues $501,092 $761,042
Net Income (loss) $(42,374) $(256,952)
Earnings per share $(0.00) $(0.01)
Shares outstanding 30,456,700 32,465,300
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Section 2 - Financial Information
Item 2.01 Completion of Acquisition of Disposition of Assets.
See above.
The Trident Laboratories, Inc. Acquisition
Shareholders involved in the transaction include Michele M. Steegstra, Christopher K. Hawley, Donnette W. Hawley, Skyler V. Lukas and Michael J. Falestra. There are no material relationships between the Company, Medytox or their respective affiliates and any of the parties to the Agreement, other than with respect to the Agreement.
The Medical Billing Choices, Inc. Transaction
The sole Shareholder of Medical Billing Choices, Inc. who entered into the agreement to sell his shares of common stock is Mike Nicholson. There are no material relationships between the Company, or its affiliates and any of the parties to the Agreement, other than with respect to the Agreement. The funds utilized to date in effectuating the purchase were derived from operating revenue of Company subsidiary, Medytox Institute of Laboratory Medicine, Inc. and a loan received from an unaffiliated entity known as Valley View Drive Associates, LLC, a New Jersey limited liability company.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(a) Exhibit 10.1 - Agreement between Trident Laboratories, Inc., et al. and Medytox Institute of Laboratory Medicine, Corp. dated August 22, 2011.
(b) Exhibit 10.2 - Agreement between Medical Billing Choices, Inc., et al. and Casino Players, Inc. n/k/a Medytox Solutions, Inc. dated August 22, 2011.
(c) Financial Statements of Trident Laboratories, Inc.
(d) Financial Statements of Medical Billing Choices, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MEDYTOX SOLUTIONS, INC.
DATED: November 4, 2011. By: /s/: William G. Forhan
William G. Forhan, CEO, CFO and Chairman,
(Principal Executive Officer)
(Principal Financial and Accounting Officer)
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Trident Laboratories, Inc. Financial Statements December 31, 2010
Table of Contents
Report of Independent Registered Public Accounting Firm 2 Balance Sheet as of December 31, 2010 3 Statements of Operations and Changes in Stockholders' Equity For the year ended December 31, 2010 4 Statements of Cash Flows for the year ended December 31, 2010 5 Notes to the Financial statements 6 - 11 |
Peter Messineo
Certified Public Accountant
1982 Otter Way Palm Harbor FL 34685
peter@pm-cpa.com
T 727.421.6268 F 727.674.0511
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Shareholders of Trident Laboratories, Inc.:
I have audited the accompanying balance sheet of Trident Laboratories, Inc. as of December 31, 2010 and the related statements of operations and changes in stockholders' equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required at this time, to have, nor was I engaged to perform an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal controls over financial reporting. Accordingly, I express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provided a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Trident Laboratories, Inc. as of December 31, 2010 and the results of its operations for the year then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Peter Messineo, CPA Peter Messineo, CPA Clearwater, Florida November 4, 2011 |
Trident Laboratories, Inc.
Balance Sheet
December 31, 2010
Assets
Current assets
Cash $69
Accounts receivable 119,476
Other current assets 4,000
Total current assets 123,545
Property & equipment, net of accumulated
depreciation of $1,278 76,661
Total Assets $200,206
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $24,878
Accrued expenses 10,230
Notes payable 19,544
Total current liabilities 54,652
Notes payable, net of current portion 44,156
Total liabilities 98,808
Stockholders' Equity
Common stock, no par value, 1,000 shares
authorized; 1,000 issued and outstanding 1,000
Subscriptions receivable (1,000)
Retained earnings 101,398
Total stockholders' equity 101,398
Total Liabilities and Stockholders' Equity $200,206
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The accompanying notes are an integral part of these financial statements.
Trident Laboratories, Inc. Statement of Operations For the Year Ended December 31, 2010
Revenues $338,232
Operating expenses:
Compensation 105,159
Consulting 29,070
Professional fees 1,000
General and administrative 100,327
Amortization and depreciation 1,278
Total operating expenses 236,834
Net income from operations before income taxes 101,398
Provision for income taxes -
Net income $101,398
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The accompanying notes are an integral part of these financial statements.
Trident Laboratories, Inc. Statement of Stockholders' Equity
Stock-
Common Subscription Retained Holders'
shares Value Receivable Earnings Equity
Balance at December 31, 2009 - $- $- $- $-
Initial capitalization 1,000 1,000 (1,000) -
Net income 101,398 101,398
Balance at December 31, 2010 1,000 $1,000 $(1,000) $101,398 $101,398
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The accompanying notes are an integral part of these financial statements.
Trident Laboratories, Inc.
Statement of Cash Flows
For the Year Ended
December 31,
2010
Cash Flows from Operating Activities:
Net income $ 101,398
Adjustment to reconcile net income to net
cash provided by operations:
Depreciation 1,278
Changes in assets and liabilities:
Accounts receivable (119,477)
Other current assets (4,000)
Accounts payable 24,878
Accrued expenses 10,231
Net Cash Provided by Operating Activities 14,308
Cash Flows from Investing Activities:
Purchase of property and equipment (14,239)
Net Cash (Used) in Operating Activities (14,239)
Net increase in Cash 69
Cash at beginning of period -
Cash at end of period $69
Supplemental cash flow information:
Interest paid $-
Taxes paid $-
Non-cash transactions:
Purchase of vehicle through direct financing $63,700
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The accompanying notes are an integral part of these financial statements.
TRIDENT LABORATORIES, INC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2010 and 2009
1. Description of Business
Trident Laboratories, Inc., ("Trident" or the "Company") was organized under the laws of Florida in December 2009, with an effective date of January 1, 2010. The Company started operations in May 2010 as a medical testing laboratory. The Company performs testing on a contract basis for medical and business entities through-out Florida. The Company operates as an S- Corporation for corporate tax purposes.
2. Accounting Policies and Basis of Presentation
Basis of Presentation
The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles ("GAAP") of the United States.
Use of Estimates
The preparation of the Company's financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates.
Financial Instruments
The carrying amounts of cash, receivables and current liabilities approximated fair value due to the short-term maturity of the instruments. Debt obligations, when present, are carried at cost, which approximate fair value due to the prevailing market rate for similar instruments. Fair Value Measurement
All financial and nonfinancial assets and liabilities were recognized or disclosed at fair value in the financial statements. This value was evaluated on a recurring basis (at least annually). Generally accepted accounting principles in the United States define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on a measurement date. The accounting principles also established a fair value hierarchy which required an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs were used to measure fair value.
* Level 1: Quotes market prices in active markets for identical assets or liabilities.
* Level 2: Observable market based inputs or unobservable inputs that were corroborated by market data.
* Level 3: Unobservable inputs that were not corroborated by market data.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company maintains its cash deposits in major financial institutions in the United States. At times deposits within a bank may exceed the amount of insurance provided on such deposits. Generally, these deposits are redeemed upon demand and, therefore, are considered by management to bear minimal risk.
Accounts Receivable
Accounts receivable represent amounts due from customers in the ordinary course of business from sales activities in each of the Company's market segments. The Company considers accounts more than 90 days old to be past due. The Company uses the allowance method for recognizing bad debts. When an account is deemed uncollectible, it is written off against the allowance. The Company generally does not require collateral for its accounts receivable. The Company considers all accounts receivable to be collectable and consequently has provided no allowance for doubtful accounts.
A portion of the receivables are with governmental payers and subject to periodic review and adjustment.
Property, Plant and Equipment
Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed by applying the straight-line method to the estimated useful lives of the related assets. Useful lives range from 3 to 7 years for office equipment medical equipment, furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. When property or equipment is retired or otherwise disposed of, the net book value of the asset is removed from the Company's balance sheet and the net gain or loss is included in the determination of operating income. Property, plant and equipment acquired as part of a business acquisition is valued at fair value.
Impairment of Long-Lived Assets
The Company evaluates the carrying value of its long-lived assets at least annually. Impairment losses were recorded on long-lived assets used in operations when indicators of impairment were present and the undiscounted future cash flows estimated to be generated by those assets were less than the assets' carrying amount. If such assets were impaired, the impairment to be recognized was measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of were reported at the lower of the carrying value or fair value, less costs to sell.
Revenue Recognition
The Company performs medical testing of samples supplied by medical and corporate customers. Services are billed when the results are presented. The company uses an outside billing agency to process the invoices. The services are billed at the estimated reimbursement rates published by the various payers. A portion of the services are with billed governmental payers and subject to periodic review and retroactive adjustment.
Retroactive adjustment due to a Medicare or Medicaid review are considered to be a change in the estimate and recorded in the period that the adjustment is communicated to the Company. Adjustments are normal and recurring, and generally communicated within reasonable time or within the billing period. Adjustments are considered immaterial.
Advertising Costs
The costs of advertising are expensed as incurred. Advertising expenses are included in the Company's operating expenses. Advertising costs for the year ended December 31, 2010 was $458.
Income Taxes
A. For the year ended December 31, 2010 the Company had elected to be taxes as an S-Corporation. As such, the taxable income is passed-through to the owners and taxed on their return. Therefore no provision or benefit for income taxes is provided in these statements. The Company follows the guidance provided by FIN 48, Accounting for Uncertainty in Income Taxes, for reporting uncertain tax provisions.
Effect of Recent Accounting Pronouncements
The Company reviews new accounting standards as issued. No new standards had any material effect on the financial statements. Accounting pronouncements issued subsequent to the date of these financial statements were considered significant by management and evaluated for the potential effect on these financial statements. Management does not believe any subsequent pronouncements will have a material effect on these financial statements as presented and does not anticipate the need for any future restatement of these financial statements because of the retro-active application of any accounting pronouncements issued subsequent to December 31, 2010 through the date these financial statements were issued.
3. Notes Payable
The Company is party a vehicle loan. At December 31, 2010 notes payable consisted of the following:
December 31,
2011
Commercial loan with a finance company, dated December 10, 2010, in the
original amount of $63,700 and bearing interest at 8%. Principle and interest
payments in the amount of $2,000 are payable for 36 months ending on December
10, 2013. This note is secured by a lien on a vehicle with a carrying value of
$63,700 at December 31, 2010 63,700
63,700
Less current portion (19,544)
$44,156
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Principal maturities of notes payables for the next five years and thereafter are as follows:
Period ended December 31,
2012 $19,544
2013 21,167
2014 22,989
2015 -
2016 -
Thereafter -
$63,700
4. Related Party Transactions
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The Company issued stock to organizing stockholders on a subscription receivable. The subscription receivable is reported in the equity section as a contra-account to the common stock. The subscription receivable for the stockholders at December 31, 2010 was $1,000.
The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.
5. Commitments and Contingencies
From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company's financial position or results of operations.
A portion of the services are to billed governmental payers at published rates and subject to periodic review and retroactive adjustment. Retroactive adjustment due to a Medicare or Medicaid review are considered to be a change in the estimate and recorded in the period that the adjustment is communicated to the Company.
The Company leases office space in Hollywood, Florida under an annually renewable lease ending each February 2011. The Company was also leasing medical office equipment under a short-term lease. Rent expense for the office for year ended December 31, 2010 was $31,896. Leasing costs for the equipment for the year ended December 31, 2010 was $2,422.
The minimum future lease payments on the office and equipment are as follows:
Year ended December 31,
2011 $5,673
2012 $-
2013 $-
2014 $-
2015 $-
6. Subsequent Events
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Subsequent to December 31, 2010, the stockholder elected to sell 81% of the stock to an unrelated corporation on an installment plan. As of August 22, 2011 the stockholders have assigned 49% of the outstanding stock and hold those shares in escrow pending full payment of the installment note. Upon payment of the note the 49% and the additional 32% of the stock will be transferred to the purchasers.
Management has evaluated subsequent events and is not aware of any significant events that occurred subsequent to the balance sheet date but prior to the filing with the Securities and Exchange Commission ("SEC") that would have a material impact on our financial statements.
Medical Billing Choices, Inc. Financial Statements December 31, 2010 and 2009
Table of Contents
Report of Independent Registered Public Accounting Firm 2 Balance Sheets as of December 31, 2010 and 2009 3 Statements of Operations and Changes in Member's Equity For the years ended December 31, 2010 and 2009 4 Statements of Cash Flows for the years ended December 31, 2010 and 2009 5 Notes to the Financial statements 6 - 11 |
Peter Messineo
Certified Public Accountant
1982 Otter Way Palm Harbor FL 34685
peter@pm-cpa.com
T 727.421.6268 F 727.674.0511
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Shareholders of Medical Billing Choices, Inc.:
I have audited the accompanying balance sheets of Medical Billing Choices, Inc. as of December 31, 2010 and 2009 and the related statements of operations and changes in stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required at this time, to have, nor was I engaged to perform an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal controls over financial reporting. Accordingly, I express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provided a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Medical Billing Choices, Inc. as of December 31, 2010 and 2009and the results of its operations for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Peter Messineo, CPA Peter Messineo, CPA Clearwater, Florida November 3, 2011 |
Medical Billing Choice Inc. Balance Sheets
12/31/10 12/31/09
Assets
Current assets
Cash $329 $734
Accounts receivable, net of allowance for doubtful
accounts of $28,000 and $15,000, respectively. 42,954 51,596
Total current assets 43,283 52,330
Property and equipment, net of accumulated
depreciation of $80,334 and $62,275, respectively 63,861 81,921
Total Assets $107,144 $134,251
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $30,707 $12,521
Notes payable, current portion 15,427 13,985
Total current liabilities 46,134 26,506
Notes payable, net of current portion 46,583 62,009
Total liabilities 92,717 88,515
Stockholders' Equity
Common Stock, $0.01 par value, 1,000 shares
authorized; 1,000 and 1,000 shares
issued and outstanding, respectively 10 10
Additional paid-in capital 33,596 33,596
Retained earnings (19,179) 12,130
Total stockholders' equity 14,427 45,736
Total Liabilities and Stockholders' Equity $107,144 $134,251
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The accompanying notes are an integral part of these financial statements.
Medical Billing Choice Inc. Statements of Operations
For the Years Ended
December 31,
2010 2009
Revenues $345,219 $490,010
Operating expenses:
Compensation 133,117 184,288
Consulting - 56,012
Professional fees 55,335 16,890
General and administrative 164,350 210,175
Amortization and depreciation 18,059 7,872
Total operating expenses 370,861 475,236
(Loss) income from operations before income taxes (25,642) 14,774
Other (income) expense
Interest expense 5,667 2,644
Provision for income taxes - -
Net (loss) income $(31,309) $12,130
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The accompanying notes are an integral part of these financial statements.
Medical Billing Choice Inc. Statement of Stockholders' Equity
Stock-
Common Subscription Retained Holders'
shares Value Receivable Earnings Equity
Balance at December 31, 2008 100 $1 $99 $(57,694) $(57,594)
Recapitalization of ARC, change of
control to minority shareholder
(related party), includes transfer
of ownership of existing assets and
conversion of debt to equity:
Sale of ARC, share cancellation (100) (1) 33,507 57,694 91,200
Issuance of shares 1,000 10 (10) - -
Net loss 12,130 12,130
Balance at December 31, 2009 1,000 10 33,596 12,130 45,736
Net loss (31,309) (31,309)
Balance at December 31, 2010 1,000 $10 $33,596 $(19,179) $14,427
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The accompanying notes are an integral part of these financial statements.
Medical Billing Choice Inc. Consolidated Statement of Cash Flows
For the Year Ended
December 31,
2010 2009
Cash Flows from Operating Activities:
Net (loss) income $(31,309) $12,130
Adjustment to reconcile net income to net
cash provided by operations:
Depreciation 18,059 7,872
Changes in assets and liabilities:
Accounts receivable 8,642 (6,663)
Accounts payable and accrued expenses 18,187 9,107
Net Cash Provided by Operating Activities 13,579 22,446
Cash Flows from Investing Activities:
Purchase of assets (2,065)
Net Cash (Used) in Operating Activities - (2,065)
Cash Flows from Financing Activities:
Repayments of notes payable (13,984) (5,606)
Net Cash (Used) in Operating Activities (13,985) (5,606)
Net increase/decrease in Cash (406) 14,775
Cash at beginning of period 734 (14,041)
Cash at end of period $329 $734
Supplemental cash flow information:
Interest paid $5,667 $2,644
Taxes paid $- $-
Non-cash transactions:
Restructuring charges to equity, net of
debt exchange $- $91,200
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The accompanying notes are an integral part of these financial statements.
MEDICAL BILLING CHOICES, INC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2010 and 2009
1. Description of Business Medical Billing Choices, Inc. ("MBC" or the "Company") was started in 1996 and organized as ARC Medical Billing Inc., (a North Carolina corporation) headquartered in Charlotte NC in 2002. ARC Medical Billing Inc. was reorganized as Medical Billing Choices Inc., (a North Carolina corporation) dba ARC Medical Billing in May of 2009 and became a full service medical billing outsourcing firm. We specialize in complete accounts receivable outsourcing, from insurance billing to self-pay collections, for small to mid- level medical practices of all specialties. We service clients nationwide but major focus is in the southeastern US. The Company operates as an S- Corporation for corporate tax purposes.
2. Accounting Policies and Basis of Presentation
Basis of Presentation
The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles ("GAAP") of the United States.
Use of Estimates
The preparation of the Company's financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates.
Financial Instruments
The carrying amounts of cash, receivables and current liabilities approximated fair value due to the short-term maturity of the instruments. Debt obligations, when present, are carried at cost, which approximate fair value due to the prevailing market rate for similar instruments. Fair Value Measurement
All financial and nonfinancial assets and liabilities were recognized or disclosed at fair value in the financial statements. This value was evaluated on a recurring basis (at least annually). Generally accepted accounting principles in the United States define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on a measurement date. The accounting principles also established a fair value hierarchy which required an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs were used to measure fair value.
* Level 1: Quotes market prices in active markets for identical assets or liabilities.
* Level 2: Observable market based inputs or unobservable inputs that were corroborated by market data.
* Level 3: Unobservable inputs that were not corroborated by market data.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company maintains its cash deposits in major financial institutions in the United States. At times deposits within a bank may exceed the amount of insurance provided on such deposits. Generally, these deposits are redeemed upon demand and, therefore, are considered by management to bear minimal risk.
Accounts Receivable
Accounts receivable represent amounts due from customers in the ordinary course of business from sales activities in each of the Company's business segments. The Company considers accounts more than 90 days old to be past due. The Company uses the allowance method for recognizing bad debts. When an account is deemed uncollectible, it is written off against the allowance. The Company generally does not require collateral for its accounts receivable. The Company considers all accounts receivable to be collectable and consequently has provided no allowance for doubtful accounts.
Property, Plant and Equipment
Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed by applying the straight-line method to the estimated useful lives of the related assets. Useful lives range from 3 to 7 years for office equipment, furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. When property or equipment is retired or otherwise disposed of, the net book value of the asset is removed from the Company's balance sheet and the net gain or loss is included in the determination of operating income. Property, plant and equipment acquired as part of a business acquisition is valued at fair value.
Impairment of Long-Lived Assets
The Company evaluates the carrying value of its long-lived assets at least annually. Impairment losses were recorded on long-lived assets used in operations when indicators of impairment were present and the undiscounted future cash flows estimated to be generated by those assets were less than the assets' carrying amount. If such assets were impaired, the impairment to be recognized was measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of were reported at the lower of the carrying value or fair value, less costs to sell.
Revenue Recognition
The Company contracts with various medical providers to process the invoices for services and bill the various government and private third party payers or the patient for the services. The Company receives payment for these services on a percentage of collections rate basis on short-term contracts. The providers are billed when payment for the medical charges are collected.
The Company also provides consulting services on billing and collecting processes to medical providers on fee for services basis. These services are billed as services are providing according the contract.
Advertising Costs
The costs of advertising are expensed as incurred. Advertising expenses are included in the Company's operating expenses.
Income Taxes
B. For the years ended December 31, 2010 and 2009, the Company had elected to be taxes as an S-Corporation. As such, the taxable income is passed- through to the owners and taxed on their personal returns. Therefore no provision or benefit for income taxes is provided in these statements. The Company follows the guidance provided by FIN 48, Accounting for Uncertainty in Income Taxes, for reporting uncertain tax provisions.
Effect of Recent Accounting Pronouncements
The Company reviews new accounting standards as issued. No new standards had any material effect on the financial statements. Accounting pronouncements issued subsequent to the date of these financial statements were considered significant by management and evaluated for the potential effect on these financial statements. Management does not believe any subsequent pronouncements will have a material effect on these financial statements as presented and does not anticipate the need for any future restatement of these financial statements because of the retro-active application of any accounting pronouncements issued subsequent to December 31, 2010 through the date these financial statements were issued.
3. Notes Payable
The Company is party to vehicle loans. At December 31, 2010 and 2009 long term debt consisted of the following:
December 31,
2011 2009
Commercial loan with a finance company, dated September 1, 2009, in the
original amount of $38,800 and bearing interest at 8%. Principle and interest
payments in the amount of $775.47 are payable for 60 months ending on August
31, 2014. This note is secured by a lien on a vehicle with a carrying value of
$28,453 at December 31, 2010. $29,530 $36,181
Commercial loan with a finance company, dated September 1, 2009, in the
original amount of $42,700 and bearing interest at 8%. Principle and interest
payments in the amount of $854.41 are payable for 60 months ending on August
31, 2014. This note is secured by a lien on a vehicle with a carrying value of
$31,313 at December 31, 2010 32,480 39,813
62,010 75,994
Less current portion (15,427) (13,985)
$46,583 $62,009
|
Principal maturities of notes payables for the next five years and thereafter are as follows:
Period ended December 31,
2011 $15,427
2012 16,706
2013 18,094
2014 11,783
2015 and thereafter -
$62,010
|
4. Related Party Transactions
From time to time, certain employees were paid consulting fees for services outside their normal duties. Total amounts paid to related parties for the years ended December 31, 2010 and 2009 were $25,200 and $21,000 respectively
The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.
5. Commitments and Contingencies
From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company's financial position or results of operations.
The Company leases office space in Charlotte, North Carolina under a lease ending March 31, 2011. The Company also leases a vehicle under a lease ending August 31, 2011. Rent expense for the office for the years ended December 31, 2010 and 2009 was $29,804 and $25,153, respectively.
The minimum future lease payments on the office and vehicle are as follows:
Year ended December 31,
2011 $21,500 2012 $2,860 2013 $- 2014 $- 2015 and thereafter $- |
6. Subsequent Events
Subsequent to December 31, 2010, the shareholder entered into an agreement to sell 100% of the shares in the Company under an installment agreement. The Company then entered in to a significant contract with a party related to the prospective buyers to process the billings for Trident Laboratories, Inc.
Management has evaluated subsequent events and is not aware of any significant events that occurred subsequent to the balance sheet date but prior to the filing with the Securities and Exchange Commission ("SEC") that would have a material impact on our financial statements.
DATED THE August 22, 2011
Agreement between
Trident Laboratories, Inc And its Shareholders 6011 Rodman Street Suite 107 Hollywood, Florida 33023
-AND-
Medytox Institute of Laboratory Medicine, Corp.
1080 E. Indiantown Road
Jupiter
Florida 33477
Agreement for the purchase
Of Trident Laboratories, Inc.
By
Medytox Institute of Laboratory Medicine, Corp.
Agreement:
This Agreement dated 22nd August 2011, describes a transaction as has been discussed between the parties hereto. The agreement does not purport to deal with all the issues required in a transaction of this nature but the parts as agreed herein are binding upon the parties to complete the transaction described. Each party will be responsible to seek their own legal representation and neither party will have any responsibility for any costs that the other party may incur as part of this process.
The parties agree and confirm that all communication and discussions regarding this transaction will remain confidential and that under no circumstance will any information be released publicly unless as may be required by law and certain SEC rules to disclose certain information. Even then any information to be released will be agreed by all parties before being made publicly available.
BETWEEN:
1. Medytox Institute of Laboratory Medicine, Corp 1080 E. Indiantown Road, Jupiter, Florida 33477
And
2. Trident Laboratories, Inc And its Shareholders, 6011 Rodman Street, Suite 107, Hollywood, Florida 33023
/s/ DH /s/ CH /s/ MS /s/ SL Initial Initial Initial Initial |
WHEREAS:
A. Medytox Institute of Laboratory Medicine, Corporation (hereinafter referred to as MILM) is a newly formed Florida Corporation that will acquire and operate one or more Clinical Laboratories as subsidiaries for the purpose of carrying out Laboratory tests that may be required by the Medytox business in the Urine Toxicology and with the intention of building diversified Laboratory testing in sectors other than that of the "Medytox" business.
B. Trident Laboratories, Inc and its Shareholders, (hereinafter referred to as TL) operate a certified Clinical Laboratory in Hollywood, Florida where they provide services for a number of customers in the Florida area.
The parties' agree as follows:
1. MILM agrees to purchase 81% ownership in TL upon the signing of this agreement as described in 3 below. Current ownership in TL is disclosed in attachment A hereto.
2. Shareholders of TL will retain 19% ownership of TL for a period of 24 or 36 months after which time they may or may not agree to sell their shareholding as described in 4 below.
3. MILM will acquire 81% ownership in TL for the sum of $500,000 (five hundred thousand US dollars) paid as described below
MILM will pay to the shareholders of TL on a pro-rata basis as per attachment A the following
i. 15% of the revenue generated and collected by TL from Medytox business on a monthly basis until the $500,000 is paid in full
ii. The profits from existing and future business other than Medytox business will be owned 100% by the selling shareholders until such time that MILM has paid the $500,000 in full.
iii. The parties agree to contribute on a pro-rata basis from business generated towards the costs and overheads of TL. That means that if business from Medytox accounts for 30% of the total revenue MILM agrees to cover 30% of the costs and overheads less executive salaries or if TL generated business exclusive of Medytox business accounts for 30% of the total revenue then TL agrees to cover 30% of the costs and overheads less executive salaries. A schedule of fixed costs and overheads and variable costs and overheads is attached in Schedule B hereto.
iv. In the event that the $500,000 is not paid in full 12 months after this agreement is signed any unpaid balance will become due and payable
/s/ DH /s/ CH /s/ MS /s/ SL Initial Initial Initial Initial |
v. Upon signing of this agreement TL will issue new shares or shareholders will assign 49% of their current shareholdings to reflect that MILM owns 49% of TL. TL or the selling shareholders will retain these shares in their possession or place the shares in an escrow agreement with their lawyer until the $500,000 as described above is paid in full. Upon payment of the $500,000 as described herein TL will issue new shares or shareholders will assign a further 32% of their current shareholdings to reflect that MILM owns a total of 81% of TL. The parties will complete whatever amendments or applications as may be necessary to comply with all Medicare and licensing regulations to effect this agreement without violation of any regulations that apply to such a transaction.
vi. No further shares of any classification can be validly issued by TL for any reason for a period of 12 months from the date of this agreement or until TL shareholders have been paid in full for their shares without all parties signing an agreement of approval in the event that an issuance of shares for any reason is desired.
vii. In addition there shall not be (i) any incurrence of debt except in the ordinary course of business, (ii) any material change in the business or (iii) any failure to comply with federal (Medicare) or State license laws or regulations for a period of 12 months from the date of this agreement or until TL shareholders have been paid in full for their shares
viii. In the event that MILM fails to pay the $500,000 as described above within 30 days of the date on which payment is due then TL will or the selling shareholders will have the right to rescind this transaction.
4. MILM agrees to purchase the additional 19% of TL by paying the shareholders of TL an amount equal to three times annual profits generated by the business carried out by TL, excluding profits generated by Medytox business, at 24 months (SD1) from the accounting year end following the date this agreement is signed or at 36 months (SD2) from the accounting year end following the date this agreement is signed if desired by all or one of the shareholders owning the 19% of TL at that time. Profits are defined as sales from business other than "Medytox business" less the relevant proportion towards fixed overheads and costs and variable costs that TL incurs.
i. In the event that one or all of the owners of the 19% decide to sell their shareholding to MILM accountants will provide within 90 days of the year end, audited figures for the profits of the TL business excluding profits generated by Medytox business and MILM will pay to the shareholder a pro-rata amount equal to three times those profits for their pro-rata ownership of the 19%. To confirm; 100% of the three times profits of the TL business minus profits generated by Medytox business will be paid to the 19% shareholders on a pro-rata basis.
ii. TL will retain ownership and full rights to 19% of the net profits generated by TL for as long as they own their shareholding.
/s/ DH /s/ CH /s/ MS /s/ SL Initial Initial Initial Initial |
iii. In the event that one or all of the shareholders owning the 19% holding in TL decide to retain ownership of their shareholding after SD2 then MILM will no longer agree to purchase their shareholding under this agreement. That shareholder will not have the right to sell their shares to any other party and in the event the shareholder offers their shares for sale to a third party MILM will have the right to purchase that shareholder's shares for $1 (one dollar). All other benefits and rights will be retained by the shareholder.
iv. In the event that one or all of the shareholders owning the 19% shareholding in TL decide to retain ownership of their shareholding after SD2 then a dividend policy will be agreed to whereby that shareholder receives a dividend on an annual basis on a pro-rata basis out of the dividend paid by the Company.
v. In the event that one or all of the owners of the 19% decides to avail of this agreement to sell their shares to MILM at SD1 or SD2 and MILM does not purchase the shares as described above, MILM will pay to the shareholders 10% of gross revenue of TL monthly on a pro-rata basis as a default payment until it makes the payment for 19% ownership as described above. This 10% default payment will not reduce the amount owed to the 19% shareholders using the formula of three times profits as described above.
vi. The formula of three times earnings is valid only in the event that MILM generated business accounts for in excess of 80% of the sales revenue at the TL Laboratory at the time that TL agrees to sell their remaining 19% ownership. In the event that MILM generated revenues are not in excess of 80% of the total revenue generated by the business then TL have the right to receive four times earnings for the sale of their 19% as described herein.
/s/ DH /s/ CH /s/ MS /s/ SL Initial Initial Initial Initial |
5. TL will provide a copy of a recent Balance sheet and P&L statement as an attachment (C) to this agreement to confirm that there are no debts currently owed by TL other than in the ordinary course of business
6. Executive salary levels and employment agreements for management will be disclosed in attachment D
7. TL will provide a complete list of equipment owned, the value of that equipment and details of any financing agreement or lien associated with that equipment
8. TL agrees to use the Billing Company, as provided by MILM, for the billing of all Medytox business generated by TL from this date forward.
9. MILM will immediately secure a quantity of "Medytox" tests to be completed and billed by TL along with a complete breakdown of any liabilities against the revenue generated for TL by the completion and billing for these tests.
10. The parties will work to acquire whatever equipment is required to carry out all the tests as may be required by Medytox and the parties recognise that in the meantime it will be necessary to send some of the tests required by "Medytox" to other laboratories.
11. TL will provide whatever information is required by MILM/Medytox regarding their testing and reporting process, including whatever details may be required about other laboratories that may be used to provide a complete service to "Medytox"
12. The parties will work together to install and or refine any reporting documentation that may be required for certain tests in the future
13. Legal and accounting advice will be sought by the parties as to the most efficient means to complete this transaction and both parties agree and accept that nothing will be done that violates any Medicare law or licensure compliance. If changes are suggested to the agreement herein by professional advisors to comply with these laws and license requirements and that do not materially change the end result for both parties then there will be no objection by either party to such changes.
14. REPRESENTATIONS AND WARRANTIES OF PURCHASER The Purchaser makes the following warranties and representations to the Seller:
The Purchaser is a Florida corporation
All actions necessary or appropriate for the Purchaser to consummate this transaction shall have taken place on or before the Closing Date.
The representations and warranties of the Purchaser shall be true as of the date of this Agreement and shall continue to be true through the Closing Date.
All the terms and conditions of this Agreement shall have been materially complied with.
/s/ DH /s/ CH /s/ MS /s/ SL Initial Initial Initial Initial |
15. REPRESENTATIONS AND WARRANTIES OF SELLER(S)
The Seller(s) makes the following warranties and representations to the Seller:
The Seller(s) have the full right and authority to sell the shares as referred to in this agreement and confirm that the shares being sold will be fully paid and without lien or encumbrance of any kind .
All actions necessary or appropriate for the Seller(s) to consummate this transaction shall have taken place on or before the Closing Date.
The representations and warranties of the Seller(s) shall be true as of the date of this Agreement and shall continue to be true through the Closing Date.
All the terms and conditions of this Agreement shall have been materially complied with.
16. Both parties will accept a faxed or scanned copy of this signed agreement as binding
17. Upon the signing of this document, both parties agree that they have entered into a mutually exclusive agreement and hereby confirm that each party has the right and ability to deliver any parts as may be required to complete this agreement.
18. The parties agree that formal contracts will be governed by the Laws of Florida.
/s/ DH /s/ CH /s/ MS /s/ SL Initial Initial Initial Initial |
Signed by /s/ Seamus Lagan Date 8/22/11 For and on behalf of Medytox Institute of Laboratory Medicine |
Signed by;
/s/ Donnette Hawley 8/22/11
Date
For and on behalf of Trident Laboratories, Inc
/s/Christopher Hawley 8/22/11
Date
|
Shareholder of Trident Laboratories, Inc
/s/ Michele Steegsera 8/22/11
Date
Shareholder of Trident Laboratories, Inc
|
Date
Shareholder of Trident Laboratories, Inc
Date
Shareholder of Trident Laboratories, Inc
/s/ DH /s/ CH /s/ MS /s/ SL Initial Initial Initial Initial |
Schedule A
Shareholder details including ownership of Trident Laboratories, Inc
/s/ DH /s/ CH /s/ MS /s/ SL Initial Initial Initial Initial |
Schedule B
Costs:
Fixed monthly costs;
Executive Salaries;
Wages;
Variable costs;
/s/ DH /s/ CH /s/ MS /s/ SL Initial Initial Initial Initial |
Schedule C
Balance sheet and P&L statement
/s/ DH /s/ CH /s/ MS /s/ SL Initial Initial Initial Initial |
Schedule D
Executives, their role and their salary
/s/ DH /s/ CH /s/ MS /s/ SL Initial Initial Initial Initial |
DATED THE 22nd August 2011
Agreement between
Medical Billing Choices Inc
TA ARC Medical Billing
And its Shareholders
814 Tyvola Road
Suite 116
Charlotte North Carolina 28217
-AND-
Casino Players, Inc.
700 W Hillsboro Blvd
Deerfield Beach
Florida 33441-1612
Agreement for the purchase
Of Medical Billing Choices Inc
By
Casino Players, Inc.
Agreement:
This Agreement dated 28th July 2011, describes a transaction as has been discussed between the parties hereto. The agreement does not purport to deal with all the issues required in a transaction of this nature but the parts as agreed herein are binding upon the parties to complete the transaction described. Each party will be responsible to seek their own legal representation and neither party will have any responsibility for any costs that the other party may incur as part of this process.
The parties agree and confirm that all communication and discussions regarding this transaction will remain confidential and that under no circumstance will any information be released publicly unless as may be required by law and certain SEC rules to disclose certain information. Even then any information to be released will be agreed by all parties before being made publicly available.
BETWEEN:
1. Casino Players, Inc., 700 W Hillsboro Blvd, Deerfield Beach, Florida 33441-1612
And
2. Medical Billing Choices Inc (TA ARC Medical Billing) and its shareholders, 814 Tyvola Road, Suite 116, Charlotte, North Carolina 28217
WHEREAS:
A. Casino Players Inc (hereinafter referred to as CPI) is a US based public company that has recently formed two new subsidiary companies to carry out "Medytox" business, Medytox medical Management Solutions, Corp which will provide consulting and services in the medical sector and Medytox Institute of Laboratory Medicine, Corporation that will acquire and operate one or more Clinical Laboratories as subsidiaries for the purpose of carrying out Laboratory tests that may be required by the "Medytox" business in the Urine Toxicology sector and with the intention of building diversified Laboratory testing in sectors other than that of the "Medytox" business. CPI will change its name to Medytox Solutions Inc at the appropriate time in the near future.
B. Medical Billing Choices Inc and its shareholders (hereinafter referred to as MBC) is a company based in North Carolina that provides medical billing services for a number of medical service providers such as laboratories and physicians.
The parties' agree as follows:
1. CPI has a need to secure to provide medical billing services for its subsidiaries and possibly for future customers and therefore agrees to purchase 100% ownership in MBC as described below. Current ownership in MBC is disclosed in attachment A hereto.
2. CPI will acquire 100% ownership in MBC for the total sum of $850,000 (eight hundred and fifty thousand US dollars) paid as described below
CPI will make payment to the shareholders of MBC on a pro-rata basis as per attachment A the following
i. 50% of the revenue generated and collected by MBC from billing for Medytox business on a monthly basis until the $750,000 is paid in full. This will be approximate 2% of the gross figure billed by MBC for Medytox
ii. A sum of $100,000 (one hundred thousand dollars) will be paid immediately by CPI upon CPI securing a funding in excess of $1M
iii. The profits from existing and future business other than Medytox business will be owned 100% by the selling shareholders until such time that CPI has paid the $750,000 in full.
iv. In the event that the $750,000 is not paid in full 24 months after this agreement is signed any unpaid balance will become due and payable
v. Upon signing of this agreement MBC will issue new shares or shareholders will assign 49% of their current shareholdings to reflect that CPI owns 49% of MBC. MBC or the selling shareholders will retain these shares in their possession or place the shares in an escrow agreement with their lawyer until the $750,000 as described above is paid in full. Upon payment of the $750,000 as described herein MBC will issue new shares or shareholders will assign a further 51% of their current shareholdings to reflect that CPI owns a total of 100% of MBC.
vi. No further shares of any classification can be validly issued by MBC for any reason for a period of 24 months from the date of this agreement or until MBC shareholders have been paid in full for their shares without all parties signing an agreement of approval in the event that an issuance of shares for any reason is desired.
vii. In addition there shall not be (i) any incurrence of debt except in the ordinary course of business, (ii) any material change in the business or (iii) any failure to comply with Federal or State laws or regulations for a period of 24 months from the date of this agreement or until MBC shareholders have been paid in full for their shares
viii. In the event that CPI fails to pay the $750,000 as described above within 30 days of the final date on which payment is due then MBC will or the selling shareholders will have the right to rescind this transaction.
3. MBC will provide a copy of a recent Balance sheet and P&L statement as an attachment (B) to this agreement to confirm that there are no debts currently owed by MBC other than in the ordinary course of business
4. Executive salary levels and employment agreements for management will be disclosed in attachment (C). These agreements will provide for a bonus payment equal to 2% of the net revenues being paid to management for a period extending to 24 months after the completion of the purchase of MBC by CPI.
5. MBC will provide a complete list of equipment or assets owned, the value of that equipment/assets and details of any financing agreement or lien associated with that equipment
6. MBC will provide whatever technical information is required by CPI/Medytox regarding their billing and reporting process, including whatever details may be required to provide a complete service to "Medytox"
7. The parties will work together to install and or refine any systems or processes that may be required in the future to enable the use of the Medytox Advantage software
8. Legal and accounting advice will be sought by the parties as to the most efficient means to complete this transaction and both parties agree and accept that nothing will be done that violates any Medicare law or licensure compliance. If changes are suggested to the agreement herein by professional advisors to comply with these laws and license requirements and that do not materially change the end result for both parties then there will be no objection by either party to such changes.
9. REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser makes the following warranties and representations to the Seller:
The Purchaser is a Florida based Nevada corporation
All actions necessary or appropriate for the Purchaser to consummate this transaction shall have taken place on or before the Closing Date.
The representations and warranties of the Purchaser shall be true as of the date of this Agreement and shall continue to be true through the Closing Date.
All the terms and conditions of this Agreement shall have been materially complied with.
10. REPRESENTATIONS AND WARRANTIES OF SELLER(S)
The Seller(s) makes the following warranties and representations to the Seller:
The Seller(s) have the full right and authority to sell the shares as referred to in this agreement and confirm that the shares being sold will be fully paid and without lien or encumbrance of any kind .
All actions necessary or appropriate for the Seller(s) to consummate this transaction shall have taken place on or before the Closing Date.
The representations and warranties of the Seller(s) shall be true as of the date of this Agreement and shall continue to be true through the Closing Date.
All the terms and conditions of this Agreement shall have been materially complied with.
11. Both parties will accept a faxed or scanned copy of this signed agreement as binding
12. Upon the signing of this document, both parties agree that they have entered into a mutually exclusive agreement and hereby confirm that each party has the right and ability to deliver any parts as may be required to complete this agreement.
13. The parties agree that all agreements will be governed by the Laws of Florida.
Signature page Signed by William Forhan Date For and on behalf of Casino Players, Inc. Signed by Mike Nicholson Date For and on behalf of Medical Billing Choices, Inc |
Schedule A
Shareholder details including ownership of Medical Billing Choices Inc
Schedule B
Balance sheet and P&L statement
Schedule C
Executives, their role and their salary