| Condensed Consolidated Statement of Operations and Cash Flows |
15. CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS AND CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 31, 2014
| |
|
For the Three Months Ended |
|
| |
|
December 31, 2014 |
|
| |
|
(unaudited) |
|
| |
|
|
|
| Revenues, net of discounts |
|
$ |
2,944,035 |
|
| Cost of revenues |
|
|
1,718,238 |
|
| Gross Profit |
|
|
1,225,797 |
|
| |
|
|
|
|
| Operating Expenses |
|
|
|
|
| Compensation expense - selling, general, and administrative |
|
|
293,575 |
|
| Selling, general and administrative expenses |
|
|
359,280 |
|
| Travel expense |
|
|
60,530 |
|
| Occupancy costs |
|
|
37,558 |
|
| Total Operating Expenses |
|
|
750,943 |
|
| Operating (Loss) Income |
|
|
474,854 |
|
| |
|
|
|
|
| Other Income (Expense) |
|
|
|
|
| Interest expense |
|
|
(263,197 |
) |
| Other (expense) income |
|
|
7,997 |
|
| Total Other Income (Expense) |
|
|
(255,200 |
) |
| |
|
|
|
|
| Net Income |
|
|
219,654 |
|
| |
|
|
|
|
| Preferred stock dividends |
|
|
(19,890 |
) |
| Net Income attributable to common shareholders |
|
$ |
199,764 |
|
| |
|
|
|
|
| Earnings per share: |
|
|
|
|
| Basic |
|
$ |
.10 |
|
| Diluted |
|
$ |
.10 |
|
| |
|
|
|
|
| Weighted average number of common shares outstanding: |
|
|
|
|
| Basic |
|
|
1,999,354 |
|
| Diluted |
|
|
2,062,395 |
|
| |
|
For the Three Months Ended
|
|
| |
|
December 31, |
|
| |
|
2015 |
|
|
2014 (unaudited) |
|
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
| Net income |
|
$ |
546,171 |
|
|
$ |
219,654 |
|
| Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
|
|
|
|
|
| Amortization of deferred financing costs |
|
|
72,876 |
|
|
|
- |
|
| Stock incentive expense to employees |
|
|
342,743 |
|
|
|
- |
|
| Depreciation and amortization |
|
|
96,698 |
|
|
|
9,562 |
|
| Amortization of original issue discount |
|
|
36,448 |
|
|
|
- |
|
| Gain on extinguishment of senior debt |
|
|
(3,431,533 |
) |
|
|
- |
|
| Payment in kind interest-senior debt |
|
|
48,682 |
|
|
|
- |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
| Accounts receivable |
|
|
(231,035 |
) |
|
|
(887,302 |
) |
| Other current assets |
|
|
4,977 |
|
|
|
59,020 |
|
| Accounts payable and accrued liabilities |
|
|
1,076,170 |
|
|
|
199,496 |
|
| Net cash used in operating activities |
|
|
(1,437,803 |
) |
|
|
(399,570 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
| Purchases of property and equipment |
|
|
(94,358 |
) |
|
|
(153,893 |
) |
| Restricted cash account |
|
|
(3,003,226 |
) |
|
|
- |
|
| Net cash used in investing activities |
|
|
(3,097,584 |
) |
|
|
(153.893 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
| Payments on factor lines of credit, net |
|
|
(600,554 |
) |
|
|
- |
|
| Proceeds from issuance of notes payable |
|
|
8,000,000 |
|
|
|
- |
|
| Payments on notes payable |
|
|
(2,194,376 |
) |
|
|
(6,419 |
) |
| Proceeds from issuance of notes payable-related parties |
|
|
62,226 |
|
|
|
- |
|
| Proceeds from repayment of subscriptions receivable |
|
|
140,000 |
|
|
|
600,000 |
|
| Payment of deferred financing costs prior to closing |
|
|
(874,516 |
) |
|
|
- |
|
| Net cash provided by financing activities |
|
|
4,532,780 |
|
|
|
593,581 |
|
| |
|
|
|
|
|
|
|
|
| Net change in cash |
|
|
(2,607 |
) |
|
|
40,118 |
|
| Cash, beginning of period |
|
|
207,740 |
|
|
|
1,254 |
|
| Cash, end of period |
|
$ |
205,133 |
|
|
$ |
41,372 |
|
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
| Cash paid for interest |
|
$ |
264,865 |
|
|
$ |
94,443 |
|
| |
|
|
|
|
|
|
|
|
| Non-cash financing activities: |
|
|
|
|
|
|
|
|
| Notes payable issued to finance equipment purchases |
|
$ |
1,127,797 |
|
|
$ |
94,169 |
|
| Unpaid subscription for preferred shares |
|
$ |
- |
|
|
$ |
783,672 |
|
| Repayment subscription receivable |
|
$ |
5,000 |
|
|
$ |
60,000 |
|
| Issuance of notes payable |
|
$ |
288,000 |
|
|
$ |
- |
|
| Common stock issued for legal settlement |
|
$ |
5,120 |
|
|
$ |
- |
|
| Common stock issued for notes payable |
|
$ |
139,701 |
|
|
$ |
- |
|
| Preferred stock issued for notes payable |
|
$ |
25,000 |
|
|
$ |
- |
|
| Accrued dividends, preferred stock |
|
$ |
19,890 |
|
|
$ |
19,890 |
|
|