Nevada
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88-0350448
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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PART I - FINANCIAL INFORMATION
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Page
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PART II - OTHER INFORMATION | ||
20 | ||
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ITEM 1. FINANCIAL STATEMENTS.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(UNAUDITED)
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Three Months Ended March 31,
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2014
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2013
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Revenues
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$ | 10,244,574 | $ | 10,092,152 | ||||
Cost of revenues
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8,504,940 | 8,515,938 | ||||||
Gross profit
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1,739,634 | 1,576,214 | ||||||
Operating expenses:
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Sales and marketing
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508,210 | 682,187 | ||||||
General and administrative expenses
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1,201,874 | 992,479 | ||||||
Total operating expenses
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1,710,084 | 1,674,666 | ||||||
Income (loss) from operations
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29,550 | (98,452 | ) | |||||
Other income (expense):
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Interest expense
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(98,823 | ) | (126,348 | ) | ||||
Total other income (expense)
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(98,823 | ) | (126,348 | ) | ||||
Loss before provision for income taxes
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(69,273 | ) | (224,800 | ) | ||||
Income tax expense
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1,600 | 5,500 | ||||||
Net loss
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$ | (70,873 | ) | $ | (230,300 | ) | ||
Net loss per share:
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Basic
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$ | (0.00 | ) | $ | (0.01 | ) | ||
Diluted
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$ | (0.01 | ) | $ | (0.01 | ) | ||
Number of weighted average shares:
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Basic
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20,658,573 | 20,115,873 | ||||||
Diluted
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22,258,573 | 20,115,873 |
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
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THREE MONTHS ENDED MARCH 31, 2014
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(UNAUDITED)
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Additional
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Total
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Common Stock
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Paid-in
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Accumulated
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Stockholders’
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Shares
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Amount
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Capital
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Deficit
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Equity
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Balance at December 31, 2013
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20,643,966 | $ | 20,645 | $ | 23,491,490 | $ | (21,541,585 | ) | $ | 1,970,550 | ||||||||||
Stock compensation expense for options and warrants granted to employees and directors
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- | - | 200,602 | - | 200,602 | |||||||||||||||
Conversion of convertible note payable
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100,000 | 100 | 99,900 | - | 100,000 | |||||||||||||||
Net loss
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- | - | - | (70,873 | ) | (70,873 | ) | |||||||||||||
Balance at March 31, 2014
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20,743,966 | $ | 20,745 | $ | 23,791,992 | $ | (21,612,458 | ) | $ | 2,200,279 |
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The accompanying notes are an integral part of these condensed consolidated financial statements
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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(UNAUDITED)
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Three Months Ended March 31,
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2014
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2013
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Cash flows from operating activities:
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Net loss
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$ | (70,873 | ) | $ | (230,300 | ) | ||
Adjustments to reconcile net loss to net cash provided by
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operating activities:
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Depreciation
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24,169 | 34,487 | ||||||
Stock compensation expense for warrants and options issued to employees and directors
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200,602 | 196,516 | ||||||
Fair value of stock granted for marketing services
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- | 190,484 | ||||||
Interest expense related to accretion of debt discount costs
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35,250 | 35,250 | ||||||
Interest expense related to amortization of loan acquisition costs
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21,926 | 37,052 | ||||||
Changes in operating assets and liabilities:
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Accounts receivable
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264,602 | 697,236 | ||||||
Supplies
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(72,034 | ) | (197,928 | ) | ||||
Prepaid and other current assets
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(13,100 | ) | (54,040 | ) | ||||
Deposits
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- | 1,250 | ||||||
Accounts payable and accrued expenses
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174,051 | 915,760 | ||||||
Accrued compensation and benefits
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(425,588 | ) | (603,921 | ) | ||||
Deferred revenue
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(19,789 | ) | 25,843 | |||||
Net cash provided by operating activities
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119,216 | 1,047,689 | ||||||
Cash flows from investing activities:
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Purchases of property and equipment
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(14,682 | ) | - | |||||
Net cash used for investing activities
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(14,682 | ) | - | |||||
Cash flows from financing activities:
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Net repayments on line of credit agreement
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- | (528,486 | ) | |||||
Payments on capital leases
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(20,839 | ) | (26,460 | ) | ||||
Net proceeds from issuance of common stock through employee stock options
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- | 1,175 | ||||||
Net cash used for financing activities
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(20,839 | ) | (553,771 | ) | ||||
Net increase in cash and cash equivalents
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83,695 | 493,918 | ||||||
Cash and cash equivalents,
beginning of period
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4,668,624 | 2,190,972 | ||||||
Cash and cash equivalents,
end of period
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$ | 4,752,319 | $ | 2,684,890 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
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AUXILIO, INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
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(UNAUDITED)
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Three Months Ended March 31,
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2014
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2013
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Supplemental disclosure of cash flow information:
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Interest paid
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$ | 42,313 | $ | 54,045 | ||||
Income taxes paid
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$ | 49,460 | $ | 5,655 |
Non-cash investing and financing activities: | ||||||||
Property and equipment acquired through capital leases
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$ | - | $ | 25,834 | ||||
Conversion of note payable into common stock
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$ | 100,000 | $ | - |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
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THREE MONTHS ENDED MARCH 31, 2014 AND 2013
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(UNAUDITED)
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Options
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Shares
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Weighted Average Exercise Price
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Weighted Average Remaining Term in Years
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Aggregate
Intrinsic Value
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Outstanding at December 31, 2013
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5,256,349 | $ | 1.03 | |||||||||||||
Granted
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200,000 | 1.25 | ||||||||||||||
Exercised
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- | - | ||||||||||||||
Cancelled
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(11,538 | ) | 1.11 | |||||||||||||
Outstanding at March 31, 2014
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5,444,811 | $ | 1.04 | 5.14 | $ | 3,923,964 | ||||||||||
Exercisable at March 31, 2014
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4,646,052 | $ | 1.03 | 4.53 | $ | 3,096,333 |
Warrants
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Shares
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Weighted Average Exercise Price
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Weighted Average Remaining Term in Years
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Aggregate
Intrinsic Value
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Outstanding at December 31, 2013
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2,983,565 | $ | 1.15 | |||||||||||||
Granted
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- | - | ||||||||||||||
Exercised
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- | - | ||||||||||||||
Cancelled
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- | - | ||||||||||||||
Outstanding at March 31, 2014
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2,983,565 | $ | 1.15 | 4.19 | $ | 1,695,032 | ||||||||||
Exercisable at March 31, 2014
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2,283,565 | $ | 1.20 | 4.19 | $ | 1,198,032 |
2014
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2013
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Cost of revenues
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$ | 127,164 | $ | 70,969 | ||||
Sales and marketing
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15,075 | 54,706 | ||||||
General and administrative expenses
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58,363 | 70,841 | ||||||
Total stock based compensation expense
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$ | 200,602 | $ | 196,516 |
Three Months Ended March 31,
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2014
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2013
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Numerator:
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Net loss
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$ | (70,873 | ) | $ | (230,300 | ) | ||
Effects of dilutive securities:
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Convertible notes payable
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(42,524 | ) | - | |||||
Loss after effects of conversion of note payable
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$ | (113,397 | ) | $ | (230,300 | ) | ||
Denominator:
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Denominator for basic calculation weighted average shares
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20,658,573 | 20,115,873 | ||||||
Dilutive common stock equivalents:
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Convertible notes payable
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1,600,000 | - | ||||||
Denominator for diluted calculation weighted average shares
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22,258,573 | 20,115,873 | ||||||
Net loss per share:
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Basic net loss per share
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$ | (0.00 | ) | $ | (0.01 | ) | ||
Diluted net loss per share
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$ | (0.01 | ) | $ | (0.01 | ) |
March 31, 2014
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December 31, 2013
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Trade receivable
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$ | 4,269,403 | $ | 4,572,656 | ||||
Unapplied advances and unbilled revenue
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(677,214 | ) | (715,865 | ) | ||||
Allowance for doubtful accounts
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- | - | ||||||
Total accounts receivable
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$ | 3,592,189 | $ | 3,856,791 |
Payments Due by Period
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Total
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Less than
1 year
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1-3 years
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3-5 years
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More than 5 years
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Convertible notes
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$ | 1,676,378 | $ | 1,676,378 | $ | - | $ | - | $ | - | ||||||||||
Capital leases
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108,245 | 72,119 | 36,126 | - | - | |||||||||||||||
Operating leases
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352,996 | 234,086 | 118,910 | - | - | |||||||||||||||
Total
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$ | 2,137,619 | $ | 1,982,583 | $ | 155,036 | $ | - | $ | - |
No.
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Item
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10.1
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Second Amendment to the Loan and Security Agreement between Avidbank Corporate Finance and Auxilio, Inc., April 25, 2014
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10.2
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Employment Agreement effective as of January 1, 2014, by and between Auxilio, Inc. and Joseph J. Flynn
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10.3
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Employment Agreement effective as of January 1, 2014, by and between Auxilio, Inc. and Paul T. Anthony
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31.1
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Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
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31.2
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Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
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32.1
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Certification of the CEO and CFO pursuant to Rule 13a-14(b) and Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 *.
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101**
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Interactive Data File
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AUXILIO, INC.
By: __________________________________________________
Title: _________________________________________________
AUXILIO SOLUTIONS, INC.
By: __________________________________________________
Title: _________________________________________________
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AVIDBANK CORPORATE FINANCE,
A DIVISION OF AVIDBANK
By: __________________________________________________
Title: _________________________________________________
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Dated: ________________________
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________________________________________________________
Joseph Flynn
President & Chief Executive Officer
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Dated: ________________________
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By:______________________________________________________
John D. Pace
Chairman of the Board of Directors
AUXILIO, Inc.
27401 Los Altos, Suite 100
Mission Viejo, CA 92691
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1.
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80% of bonus potential tied to Ebitda target of $4M for the year subject to change by the Board based on future strategic initiatives currently being investigated.
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2.
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20% of bonus potential tied to Service revenue run rate at the end of 2013 of $48M.
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Shares
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Vesting Date
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Performance Target
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100,000
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January 1, 2015
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Adjusted EBITDA of $4 million for FY 2014
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100,000
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January 1, 2016
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Adjusted EBITDA target for FY 2015 of $6.3 million.
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100,000
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January 1, 2017
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Adjusted EBITDA target for FY 2016 of $9.3 million.
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Dated: ________________________
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________________________________________________________
Paul T. Anthony
Executive Vice President & Chief Financial Officer
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Dated: ________________________
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By:______________________________________________________
Joseph Flynn
President and Chief Executive Officer
AUXILIO, Inc.
27401 Los Altos, Suite 100
Mission Viejo, CA 92691
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1.
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50% of bonus potential tied to Ebitda target of $4M for the year subject to change by the Board based on future strategic initiatives currently being investigated.
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2.
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10% of bonus potential tied to completion of financial business plans for new initiatives currently beinginvestigated.*
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3.
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20% of bonus potential tied to completion of a deep dive in to the three major non-toner expense categories and providing support/strategy to Operations in addressing areas of concern identified by the findings. These categories include headcount costs, lease pass thru and 3rd party services. .*
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4.
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20% of bonus potential tied to Service revenue run rate at the end of 2013 of $48M.
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Shares
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Vesting Date
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Performance Target
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66,667
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January 1, 2015
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Adjusted EBITDA of $4 million for FY 2014
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66,667
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January 1, 2016
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Adjusted EBITDA target for FY 2015 of $6.3 million.
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66,666
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January 1, 2017
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Adjusted EBITDA target for FY 2016 of $9.3 million.
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/s/ Joseph J. Flynn
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Joseph J. Flynn,
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President and Chief Executive Officer
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(Principal Executive Officer)
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/s/ Paul T. Anthony
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Paul Anthony,
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Chief Financial Officer
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(Principal Financial Officer)
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By:
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/s/ Joseph J. Flynn
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Joseph Flynn,
President and Chief Executive Officer
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By:
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/s/ Paul T. Anthony
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Paul Anthony,
Chief Financial Officer
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