x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Florida
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26-0325410
|
|
(State or other jurisdiction or incorporation or
organization)
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(I.R.S. Employer Identification No.)
|
|
1926 Hollywood Blvd, Suite 100 Hollywood
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33020
|
|
(Address of principal executive offices)
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(Zip Code)
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Page
|
|
Consolidated Financial Statements
|
|
Balance Sheets
|
2
|
Statements of Revenues and Expenses
|
3 - 4
|
Statements of Cash Flows
|
5
|
Notes to Financial Statements
|
6 – 13
|
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash and cash Equivalents
|
$
|
11,990
|
$
|
4,174
|
||||
Accounts receivable – net
|
69,019
|
69,100
|
||||||
Prepaid expense
|
6,647
|
3,392
|
||||||
Total current assets
|
87,656
|
76,666
|
||||||
Property, plant, and equipment – net
|
18,083
|
25,255
|
||||||
Total Assets
|
$
|
105,739
|
$
|
101,921
|
||||
Liabilities and Stockholders' Equity
|
||||||||
Current Liabilities
|
||||||||
Notes payable, vehicle - current portion
|
$
|
11,388
|
$
|
12,912
|
||||
Note payable
|
25,000
|
5,000
|
||||||
Notes payable – related parties
|
15,000
|
- |
|
|||||
Accounts payable and accrued liabilities
|
91,011
|
85,787
|
||||||
Deferred compensation
|
111,776
|
100,000
|
||||||
Accounts payable to insured
|
12,070
|
12,645
|
||||||
Total current liabilities
|
266,245
|
216,344
|
||||||
Long Term Liabilities
|
||||||||
Notes payable, vehicle - net of current
|
15,143
|
19,936
|
||||||
Total long term liabilities
|
15,143
|
19,936
|
||||||
Total Liabilities
|
281,388
|
236,280
|
||||||
Stockholders' Equity (Deficiency)
|
||||||||
Preferred Stock, 20,000,000 shares authorized, no shares issued
|
-
|
-
|
||||||
Common Stock, 250,000,000 shares authorized at $.0001 par, 105,842,980, and 103,747,980 shares issued and outstanding at June 30, 2011 and December 31, 2010
|
10,584
|
10,375
|
||||||
Additional paid in capital
|
363,218
|
149,713
|
||||||
Stock subscription receivable
|
(1,500
|
)
|
(1,500
|
)
|
||||
Accumulated Deficit
|
(547,951
|
)
|
(292,947
|
)
|
||||
Total Stockholders' Equity (Deficiency)
|
(175,649
|
)
|
(134,359
|
)
|
||||
Total Liabilities and Stockholders' Equity (Deficiency)
|
$
|
105,739
|
$
|
101,921
|
2011
|
2010
|
|||||||
Revenues (net)
|
$
|
300,418
|
$
|
290,564
|
||||
Operating Expenses:
|
||||||||
Commissions to adjusters
|
195,860
|
184,808
|
||||||
Compensation
|
210,543
|
92,819
|
||||||
Other general and administrative expenses
|
125,601
|
103,151
|
||||||
Total operating expenses
|
532,004
|
380,778
|
||||||
Profit (Loss) from operations
|
(231,586)
|
(90,214
|
)
|
|||||
Other income (expense)
|
||||||||
Interest (expense)
|
(23,418)
|
(5,103
|
)
|
|||||
Net Income/(Loss) Before Income Taxes
|
(255,004)
|
(95,317
|
)
|
|||||
Provision for income tax
|
-
|
-
|
||||||
Net Income/(Loss)
|
$
|
(255,004)
|
$
|
(95,317
|
)
|
|||
Net income (loss) per common share, basic
|
$
|
(0.00)
|
$
|
0.00
|
||||
Weighted average number of common shares outstanding
|
104,357,623
|
91,017,255
|
2011
|
2010
|
|||||||
Revenues (net)
|
$
|
169,225
|
$
|
140,446
|
||||
Operating Expenses:
|
||||||||
Commissions to adjusters
|
115,512
|
85,643
|
||||||
Compensation
|
83,348
|
47,100
|
||||||
Other general and administrative expenses
|
51,258
|
55,247
|
||||||
Total operating expenses
|
250,118
|
187,990
|
||||||
Profit (Loss) from operations
|
(80,893)
|
(47,544
|
)
|
|||||
Other income (expense)
|
||||||||
Interest (expense)
|
(22,018)
|
(3,779
|
)
|
|||||
Net Income/(Loss) Before Income Taxes
|
(102,911)
|
(51,323
|
)
|
|||||
Provision for income tax
|
-
|
-
|
||||||
Net Income/(Loss)
|
$
|
(102,911)
|
$
|
(51,323
|
)
|
|||
Net income (loss) per common share, basic
|
$
|
(0.00)
|
$
|
0.00
|
||||
Weighted average number of common shares outstanding
|
105,454,980
|
101,517,195
|
2011
|
2010
|
|||||||
Cash Flows From Operating Activities:
|
||||||||
Net Income (Loss)
|
$
|
(255,004
|
)
|
$
|
(95,317
|
)
|
||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided By (Used in) Operating Activities:
|
||||||||
Depreciation
|
7,172
|
14,744
|
||||||
Stock issued for services
|
117,500
|
6,000
|
||||||
Beneficial interest expense for below market conversion on common stock to be redeemed for convertible note payable
|
17,714
|
-
|
||||||
Change in operating assets and liabilities:
|
||||||||
Increase) Decrease in accounts receivable
|
81
|
6,328
|
||||||
(Increase) Decrease in prepaid expenses
|
(3,255)
|
(2,060)
|
||||||
Increase in deferred compensation
|
61,776
|
50,000
|
||||||
Increase (Decrease) in accounts payable and accrued liabilities
|
4,649
|
845
|
||||||
Net Cash Provided (Used In) Operating Activities
|
$
|
(49,367
|
)
|
$
|
(19,460)
|
|||
Cash Flows From Investing Activities:
|
||||||||
Net Cash Provided (Used) in Investing Activities
|
-
|
-
|
||||||
Cash Flows From Financing Activities:
|
||||||||
Repayment of notes payable
|
(6,317
|
)
|
(12,125)
|
|||||
Sale of Common stock
|
28,500
|
23,500
|
||||||
Proceeds from loans and notes payable
|
35,000
|
15,000
|
||||||
Net Cash Provided (Used) in Financing Activities
|
57,183
|
26,375
|
||||||
Net increase (decrease) in Cash and Cash Equivalents
|
7,816
|
6,915
|
||||||
Cash and Cash Equivalents at beginning of period
|
4,174
|
12,404
|
||||||
Cash and Cash Equivalents at end of period
|
$
|
11,990
|
$
|
19,319
|
||||
Supplemental disclosure of cash flow Information:
|
||||||||
Cash payments for interest
|
$
|
2,418
|
$
|
2,557
|
||||
Supplemental schedule of non-cash financing activities:
|
||||||||
Issuance of 500,000 shares of common stock for deferred compensation
|
$
|
50,000
|
-
|
NOTE 1 -
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
NOTE 1 -
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
|
NOTE 1 -
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
|
NOTE 2 -
|
GOING CONCERN
|
NOTE 3 -
|
PROPERTY AND EQUIPMENT
|
|
June 30,
|
Dec. 31,
|
||||||
2011
|
2010
|
|||||||
Office furniture & equipment
|
$
|
26,270
|
$
|
26,270
|
||||
Computer equipment
|
14,729
|
14,729
|
||||||
Leasehold improvements
|
2,469
|
2,469
|
||||||
Vehicles
|
81,009
|
125,167
|
||||||
Total equipment
|
124,477
|
168,635
|
||||||
Less accumulated depreciation
|
106,394
|
108,887
|
||||||
Net Property and Equipment
|
$
|
18,083
|
$
|
59,748
|
NOTE 4 -
|
LEASE COMMITMENTS
|
2011
|
$
|
6,360
|
||
2012
|
4,240
|
|||
$
|
10,600
|
NOTE 5 -
|
NOTES PAYABLE-Vehicles
|
June 30,
2011
|
Dec 31,
2010
|
|||||||
Note payable to a financial institution in monthly installments of $ 517 including interest at 9.79% to Mature on February 1, 2012. This note is collateralized by an automobile
|
$
|
3,989
|
$
|
6,814
|
||||
Note payable to a financial institution in monthly installments of $ 740 including interest at 7.74% to mature on May 13, 2014. This note is collateralized by an automobile
|
22,542
|
26,034
|
||||||
Total Notes Payable
|
$
|
26,531
|
$
|
32,848
|
2011
|
$
|
9,485
|
||
2012
|
9,383
|
|||
2013
|
7,663
|
|||
2014
|
||||
Total
|
$
|
26,531
|
NOTE 6 -
|
NOTES PAYABLE-Investor
|
June 30,
|
Dec. 31,
|
|||||||
2011
|
2010
|
|||||||
Note payable - $15,000 initial principle, interest at 16% plus $5,000, maturity extended to March 14, 2011 pursuant to a $5,000 renegotiation fee, and currently overdue
|
$
|
5,000
|
$
|
5,000
|
||||
Note payable - $20,000, 60 day convertible note at 8%, maturity to July 5, 2011
|
20,000
|
- |
|
|||||
$
|
25,000
|
$
|
5,000
|
NOTE 7 -
|
NOTES PAYABLE-related party
|
June 30,
|
Dec. 31,
|
|||||||
2011
|
2010
|
|||||||
Note payable - $15,000 loan with no interest and on demand
|
$
|
15,000
|
$
|
-
|
||||
$
|
15,000
|
$
|
-
|
NOTE 8 -
|
CONCENTRATION OF RISK
|
NOTE 9 -
|
ACCOUNTS RECEIVABLE and OFFSETTING PAYABLES
|
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Total funds receivable – net of allowance
|
$
|
69,019
|
$
|
69,100
|
||||
Payable to insured
|
(12,070)
|
(12,645
|
)
|
|||||
Payable to adjusting agents
|
(34,365)
|
(37,389
|
)
|
|||||
Net of offsetting payable
|
$
|
22,584
|
$
|
19,066
|
NOTE 10 -
|
CAPITAL TRANSACTIONS
|
NOTE 11-
|
DEFERRED COMPENSATION
|
NOTE 12 -
|
INCOME TAXES
|
Federal income taxes at statutory rate
|
34
|
%
|
||
State tax rate, net of federal income tax
|
4
|
|||
Offsetting Valuation Adjustment
|
(38
|
)
|
||
Effective income tax rate
|
0
|
% |
NOTE 13 -
|
LEASED VEHICLES
|
2011
|
$ | 7,584 | ||
2012
|
3,790 | |||
Total payments
|
$ | 10,374 |
NOTE 14 -
|
NEW ACCOUNTING PRONOUNCEMENTS
|
NOTE 15 -
|
SUBSEQUENT EVENTS
|
Exhibit 31.1*
|
Certification of the Principal Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Exhibit 32.1*
|
Certification of the Principal Executive Officer and Chief Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS XBRL
|
Instance Document**
|
101.SCH XBRL
|
Taxonomy ExtensionSchema**
|
101.CAL XBRL
|
Taxonomy Extension Calculation Linkbase**
|
101.DEF XBRL
|
Taxonomy Extension Definition Linkbase**
|
101.LAB XBRL
|
Taxonomy Extension Label Linkbase**
|
101.PRE XBRL
|
Taxonomy Presentation Linkbase**
|
Date: September 14, 2011
|
AAA Public Adjusting Group, Inc.
|
|
By:
|
/s/ Christopher Lombardi
|
|
President, Chief Executive Officer and Principal Financial Officer
|
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Preferred Stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Common Stock, shares authorized | 250,000,000 | 250,000,000 |
Common Stock, par | $ 0.0001 | $ 0.0001 |
Common Stock, shares issued | 105,842,980 | 103,747,980 |
Common Stock, shares outstanding | 105,842,980 | 103,747,980 |
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Revenues (net) | $ 169,225 | $ 140,446 | $ 300,418 | $ 290,564 |
Operating Expenses: | Â | Â | Â | Â |
Commissions to adjusters | 115,512 | 85,643 | 195,860 | 184,808 |
Compensation | 83,348 | 47,100 | 210,543 | 92,819 |
Other general and administrative expenses | 51,258 | 55,247 | 125,601 | 103,151 |
Total operating expenses | 250,118 | 187,990 | 532,004 | 380,778 |
Profit (Loss) from operations | (80,893) | (47,544) | (231,586) | (90,214) |
Other income (expense) | Â | Â | Â | Â |
Interest (expense) | (22,018) | (3,779) | (23,418) | (5,103) |
Net Income/(Loss) Before Income Taxes | (102,911) | (51,323) | (255,004) | (95,317) |
Provision for income tax | ||||
Net Income/(Loss) | $ (102,911) | $ (51,323) | $ (255,004) | $ (95,317) |
Net income (loss) per common share, basic | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 |
Weighted average number of common shares outstanding | 105,454,980 | 101,517,195 | 104,357,623 | 91,017,255 |
Document and Entity Information
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Document Information [Line Items] | Â |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2011 |
Document Fiscal Year Focus | 2011 |
Document Fiscal Period Focus | Q2 |
Trading Symbol | ck0001424718 |
Entity Registrant Name | AAA PUBLIC ADJUSTING GROUP, INC. |
Entity Central Index Key | 0001424718 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 105,842,980 |
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CONCENTRATION OF RISK
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
|||
CONCENTRATION OF RISK |
The
Company did not have funds in excess of the $ 250,000 Federal
Deposit Insurance Corporation’s (FDIC) insured limits. The
company has funds on deposit with a major bank and does not believe
that there is a concentration of risk factor. There is no
concentration of risk regarding accounts receivable, as any single
receivable is not material and there are offsetting related
payables.
|
LEASED VEHICLES
|
6 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||
LEASED VEHICLES |
The
company leases two vehicles with a monthly cost of $1,264. These
leases expire in February and April 2012.
Future
payments are:
|
GOING CONCERN
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
|||
GOING CONCERN |
As
shown in the accompanying financial statements, the Company
incurred a net loss for the six months ended June 30, 2011 of
$255,004, and a $185,229 net loss for the year ending December 31,
2010, and cumulative losses since inception are approximately
$547,951. The Company has a working capital deficit at June 30,
2011 of $178,589. There is no guarantee whether the Company will be
able to generate enough revenue and/or raise capital to support its
operations. This raises substantial doubt about the Company’s
ability to continue as a going concern. Management states that they
are confident that they can improve operations and raise the
appropriate funds to grow their underlying business. The financial
statements do not include any adjustments that might result from
the outcome of these uncertainties.
|
CAPITAL TRANSACTIONS
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
|||
CAPITAL TRANSACTIONS |
On
February 11, 2011, the Company raised the authorized shares of
common stock, pursuant to Florida code, section 607.10025, to two
hundred fifty million (250,000,000) shares and authorized a 15 to 1
forward, stock split effective March 18, 2011. This forward stock
split has been retroactively reflected in the financial
statements.
In
March 2011, 1,125,000 shares of common stock were sold for
$28,500.
In
April 2011, 470,000 shares of common stock were issued for services
for $117,500.
In
June 2011, 500,000 shares of common stock were converted from
deferred compensation for $50,000
In
June 2011, an interest charge was made for stock conversion options
below market price of $17,714
|
SUBSEQUENT EVENTS
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
|||
SUBSEQUENT EVENTS |
Management
has evaluated subsequent events from June 30,2011 through the date
whereupon the financial statements were issued and has determined
that the are no items to disclose
|
DEFERRED COMPENSATION
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
|||
DEFERRED COMPENSATION |
Commencing
in the first quarter 2010, some officers’ salaries are being
deferred until there is sufficient working capital. Deferred
compensation at June 30, 2011 and December 31, 2010 was $111,776
and $100,000, respectively.
On
February 10, 2011 Frederick Antonelli resigned as President and CEO
and remains a Director and employee. Christopher Lombardi was named
President and CEO with an annual salary of $75,000. The $75,000
salary is to be deferred until the company has sufficient working
capital.
On
March 25, 2011, the company executed a master convertible note
agreement, effective April 1, 2011. This agreement allows for the
conversion of deferred salary into debt, at an 8% interest rate, no
specific maturity date and for the conversion of related debt
into shares of common stock at the lower of a 25%
discounted price of the 5 day average closing bid price prior
to the day of execution or $.175 per share.
|
ACCOUNTS RECEIVABLE and OFFSETTING PAYABLES
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTS RECEIVABLE and OFFSETTING PAYABLES |
Accounts
receivable reflects net funds due the company for its services and
gross funds due the company and which are offset by any funds due
to the insured. These “net” receivables are offset by
related commission payments to adjusting agents. The insured
clients and adjusting agents are not paid until the company has
received appropriate compensation. Related balances at June 30,
2011 and December 31, 2010 were:
Allowances
for doubtful accounts for the periods ended June 30, 2011 and
December 31, 2010 was $560 and $5,723 respectively. This allowance
is net of offsetting payables to insured clients, adjusting agents
and related expenses.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Issuance common stock for deferred compensation, shares | 500,000 |
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PROPERTY AND EQUIPMENT
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Jun. 30, 2011
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PROPERTY AND EQUIPMENT |
Property
and equipment are recorded at cost. Expenditures for major
additions and improvements are capitalized and minor replacements,
maintenance, and repairs are charged to expense as incurred. When
property and equipment are retired or otherwise disposed of, the
cost and accumulated depreciation are removed from the accounts and
any resulting gain or loss is included in the results of operations
for the respective periods. Depreciation is computed over the
estimated useful lives of the related asset (from 5 - 7 years)
using the straight-line method for financial statement
purposes.
The
following is a summary of property and equipment at June 30, 2011
and December 31, 2010:
Depreciation
expense for the six months ended June 30, 2011 and 2010 was $7,172
and $14,744 respectively.
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LEASE COMMITMENTS
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Jun. 30, 2011
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LEASE COMMITMENTS |
The
Company renewed their office in Hollywood, Florida through April
30, 2012 at a minimum annual rent of $12,720 (payable monthly)
inclusive of related sale taxes and utilities. The remaining lease
obligations are:
Rent
expense for the six months ended June 30, 2011 and 2010 was $7,687
and $8,572 respectively.
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NEW ACCOUNTING PRONOUNCEMENTS
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Jun. 30, 2011
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NEW ACCOUNTING PRONOUNCEMENTS |
A. ACCOUNTING STANDARDS CODIFICATION
The
Financial Accounting Standards Board (FASB) issued Accounting
Standards Codification (ASC) 105-10 in June 2009, to be effective
September 15, 2009. This establishes the ASC codification as the
single source of authoritative nongovernmental Generally Accepted
Accounting Principles (GAAP). All existing accounting standards are
superseded as described in FASB Accounting Standards
Codification (SFAS) No. 168, aside from those issued by
the SEC. All other accounting literature not included in the
Codification is non-authoritative. Adoption of this Codification as
of September 30, 2009, which is reflected in our disclosures
and references to accounting standards, had no change to our
financial position or results of operations.
B REVENUE RECOGNITION
The
Financial Accounting Standard Board (FASB) in October 2009 issued
Account Standards Update (ASU) 2009-13 Revenue Recognition (Topic
605). This update provides guidance for revenue recognition
consideration in multiple-deliverable contractual arrangements. The
update requires that a vendor determine its best estimate of
selling price in a manner that is consistent with that used to
determine the price to sell the deliverable on a standalone basis.
This update will be effective after June 15, 2010, and early
adoption is permitted.
The
Company has implemented this update effective for the years
beginning January 1, 2010 and does not believe that it would have a
material impact on the financial statement for the year ending
December 31, 2011, and subsequent reporting.
C STOCKHOLDER DISTRIBUTION
In
January 2010 FASB issued ASU “Equity” (Topic 505),
accounting for distributions to shareholders with components of
stock and cash. This amendment affects entities that declare
dividends to shareholders that may be paid in cash or shares at the
election of the shareholders with a potential limitation in the
total amount of cash that all shareholders can elect to receive in
the aggregate. The Company does believe that implementation of this
FASB would have a material effect on the financial
statements.
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NOTES PAYABLE
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Jun. 30, 2011
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Related Party Transactions
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NOTES PAYABLE |
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Investor
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NOTES PAYABLE |
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Vehicles
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NOTES PAYABLE |
Notes
payable consists of:
The
future scheduled payments of notes payable are:
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Organization
AAA
Public Adjusting Group, Inc was incorporated on October 05, 2007 in
the state of Florida. AAA Public Adjusting Group, Inc was formerly
Florida Claims Consultants, LLC formed on March 3, 2004 in the
state of Florida. On October 22, 2007, AAA Public Adjusting Group,
Inc consummated an agreement with Florida Claims Consultants, LLC,
pursuant to which Florida Claims Consultants, LLC, exchanged all of
its Members’ interest for 60,000,000 shares of common stock
of AAA Public Adjusting Group, Inc. The Company has accounted for
the transaction as a combination of entities under common control
and accordingly, recorded the merger at historical cost. The
consolidated, historical financial statements have been
appropriately re-stated.
The
operation’s of the Company is to facilitate insurance claims
by insured parties by representation on their behalf with the
insurance companies.
Basis of Accounting
The
books and records of the Company are maintained on the accrual
basis of accounting which recognizes revenues when earned,
regardless of when received and expenses when incurred, regardless
of when paid, which is in accordance with generally accepted
accounting principles.
The
accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information. As such, not all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements have been
presented. These consolidated financial statements should be read
in conjunction with the financial statements and related footnotes
for the year ended on December 31, 2010. In the opinion of
management, all adjustments considered necessary for a fair
presentation have been included and such adjustments are of a
normal recurring nature. The results of operations for six months
ended June 30, 2011 are not necessarily indicative of the results
for the full fiscal year ended December 31, 2011.
Principles of Consolidation
The
consolidated financial statements include the accounts of AAA
Public Adjusting Group, Inc. and its wholly owned subsidiary
Florida Claims Consultants, LLC. All inter-company transactions and
balances have been eliminated in the consolidated financial
statements.
Net loss per share
Net
income per share is computed by dividing the net income by the
weighted average number of shares outstanding during the period.
Net income per share, diluted, is not presented as no potentially
dilutive securities are outstanding.
Income Taxes
Income
taxes are accounted for under the asset and liability method as
stipulated by Accounting Standards Codification (“ASC”)
740 formerly Statement of Financial Accounting Standards
(”SFAS”) No. 109, “Accounting for Income
Taxes”. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and
operating loss and tax credit carry forwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under ASC 740,
the effect on deferred tax assets and liabilities or a change in
tax rate is recognized in income in the period that includes the
enactment date. Deferred tax assets are reduced to estimated
amounts to be realized by the use of a valuation allowance. A
valuation allowance is applied when in management’s view it
is more likely than not (50%) that such deferred tax will not be
utilized.
Effective
January 1, 2009, the Company adopted certain provisions under ASC
Topic 740, Income Taxes, (“ASC 740”), which provide
interpretative guidance for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a
tax return. Effective with the Company’s adoption of these
provisions, interest related to the unrecognized tax benefits is
recognized in the financial statements as a component of income
taxes. The Adoption of ASC 740 did not have an impact on the
Company’s financial position and results of
operations.
In
the unlikely event that an uncertain tax position exists in which
the Company could incur income taxes, the Company would evaluate
whether there is a probability that the uncertain tax position
taken would be sustained upon examination by the taxing
authorities. Reserves for uncertain tax positions would be recorded
if the Company determined it is probable that a position would not
be sustained upon examination or if payment would have to be made
to a taxing authority and the amount is reasonably estimate. As of
June 30, 2011, the Company does not believe it has any uncertain
tax positions that would result in the Company having a liability
to the taxing authorities. The Company’s tax returns are
subject to examination by the federal and state tax authorities for
the years ended 2006 through 2010.
Use of Estimates
The
preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Cash and equivalents
The
Company considers all highly liquid instruments with an original
maturity of three months or less to be cash
equivalents.
Revenue Recognition
The
Company recognizes revenues when fees due to the company are
reasonably assured to be collected from: our client (the insured)
or by the insured’s insurance carrier and not before.
Collectability is not ensured until receipt of fees.
Fair Value of Financial Instruments
The
Company’s financial instruments include cash, accounts
receivable, and accounts payable. Due to the short-term nature of
these instruments, the fair value of these instruments approximates
their recorded value.
Advertising
Advertising
costs, which are included in selling, general and administrative
expenses, are expensed as costs are incurred. Advertising expenses
for the six months ended June 30, 2011 and 2010 were $2,020 and
$6,685, respectively.
Subsequent Events
In
May 2009, the FASB issued SFAS No. 165, (ASC 855) “Subsequent
Events” which offers assistance to the established general
standards of accounting for and disclosure of events that occur
after the balance sheet date but before financial statements are
issued or are available to be issued. This guidance requires
disclosure of the date through which events subsequent to the
Balance Sheet date have been evaluated and whether that date
represents the date the financial statements were issued or
available to be issued. Subsequent events have been evaluated
through the date financial statements were available to be
issued.
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INCOME TAXES
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INCOME TAXES |
Prior
to the merger in October, 2007, the Company was taxed as a limited
liability company. As such, income taxes and loss benefits were
recognized individually by the limited liability
members.
For
financial statement purposes for the periods ending June 30, 2011,
and December 31, 2010 the reported provision for income taxes
differs from the amount computed by applying the statutory U.S.
Federal income tax rate of 34% to the loss before income taxes as
follows:
As
of June 30, 2011, the Company had a net operating loss carry
forward for income tax reporting purposes of approximately $490,000
that may be offset against future taxable income through 2026.
Current tax laws limit the amount of loss available to be offset
against future taxable income when a substantial change in
ownership occurs. No tax asset has been reported in the financial
statements, due to the uncertainty that there is a 50% or greater
chance the carry-forwards will expire unused. Accordingly, the
potential tax benefits of the loss carry forwards are offset by a
valuation allowance of the same amount.
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