Assisting Hands I lomc Care, LLC - 2008 FDD CHGOIVJ1147916.7
EXHIBIT E FINANCIAL STATEMENTS
ASSISTING HANDS HOME CARE, LLC
FINANCIAL STATEMENTS
For the Year Ended December 31,2007
ASSISTING HANDS HOME CARE, LLC
TABLE OF CONTENTS DECEMBER 31, 2007
PAGE FINANCIAL SECTION Independent Auditor's Report......................................................................................... FINANCIAL STATEMENTS Balance Sheet ..................................................................................................... Statement of Operations and Members' Capital ................................................ Statement of Cash Flows ................................................................................... Notes to the Financial Statements ..................................................................... 2 3 4 5-7 1
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P.O. Box 100
Payette, ID 83661
(208) 642-1417 E-3
Fax (208) 642-1582
FINANCIAL SECTION
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TimoíhyS. Polke FOLKE CPAs, P.C. Kurt R. Polke
INDEPENDENT AUDITOR'S REPORT
To the Members Assisting Hands Home Care, LLC Mesa, Arizona We have audited the accompanying balance sheet of Assisting Hands Home Care, LLC (the Company) as of December 31, 2007, and the related statements of operations and members' capital and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2007, and the results of operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Folke CPAs, P.C.
Payette, Idaho March 10,2008
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FINANCIAL STATEMENTS
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ASSISTING HANDS HOME CARE. LLC
BALANCE SHEET DECEMBER 31,2007
ASSETS Current Assets Cash Prepaid Expenses Total Current Assets Noncurrent Assets Equipment, Net Intangible Assets, Net Total Noncurrent Assets Total Assets LIABILITIES AND MEMBERS* CAPITAL Total Liabilities Members' Capital Total Liabilities and Members' Capital
See notes to the financial statements.
ASSISTING HANDS HOME CARE. LLC
STATEMENT OF OPERATIONS AND MEMBERS* CAPITAL FOR THE YEAR ENDED DECEMBER 31,2007
REVENUES Sales Refund Total Revenues EXPENSES Administration Amortization Commissions Contract Labor Depreciation Legal & Professional Marketing Fees Travel Total Expenses Net Income (Loss) Members' Capital - Beginning of Year Members* Capital - End of Year
$310,000 7,700 317,700 4,048 7,438 72,000 5,333 178 12,968 101,000 5,008 207,973 109,727 107,715 $217,442
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31,2007
CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities: Depreciation Amortization (Increase) Decrease in Prepaid Expenses Increase (Decrease) in Accounts Payable Net Cash Provided (Used) by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Equipment Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash Cash - Beginning of Year Cash-End of Year NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2007 See notes to the financial statements. 3
$109,727
178 7,438 (2,667) (15.700) 98,976
(891) (891) 98,085 35,533 $133.618
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ASSISTING HANDS HOME CARE. LLC
1.
COMPANY OPERATIONS Assisting Hands Home Care, LLC (the Company) is engaged in franchising home care services in the continental United States.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed in the preparation of the financial statements: A. Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting. B. Equipment Major equipment purchases are valued at cost Maintenance, repairs, and minor renewals are charged to expense when incurred. Equipment is depreciated over five years using the straight tine method. C. Intangible Assets Initial web site design costs are amortized over five years using the straight line method. Trademarks and operating manuals are amortized over fifteen years using the straight line method. Organization costs are expensed as incurred. D. Income Taxes The Company is a limited liability company treated as a partnership for federal and state income tax purposes, and therefore is not subject to income tax. The income tax liability of the members/partners is not accrued on the books of the Company. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2007
E. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 3. EQUIPMENT Equipment at year end is as follows: Equipment Accumulated Depreciation Total Equipment, Net 4. INTANGIBLE ASSETS Intangible assets at year end are as follows:
See notes to the financial statements. 4 E-9
ASSISTING HANDS HOME CARE. LLC
WebSite Accumulated Amortization Web Site, Net Trademark 8,500 Accumulated Amortization (1.134) Trademark, Net 7366 Operating Manuals Accumulated Amortization Operating Manuals, Net Total Intangible Assets, Net 78,700
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$80.44
E-ll NOTES TO THE FINANCIAL STATEMENTS DECEMBER31,2007
Future amortization expense at year end is estimated as follows: Year Ending December 31, 2008 2009 2010 2011 2012 Thereafter Total $7,438 7,438 5. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company's financial instruments, none of which are held for trading purposes, include cash as shown on the balance sheet. The Company estimates that the fair value of all financial instruments at year end does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheet. The carrying amounts of financial instruments reported in the balance sheet approximate fair values because of the short maturities of those instruments. 6. CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash. Of the cash listed on the balance sheet, $100,000 is insured by the Federal Deposit Insurance Corporation (FDIC) and the remainder was uninsured and uncollateralized. The Company has not experienced any significant losses in such accounts and believes it is not exposed to any significant credit risk on such financial instruments. See notes to the financial statements. 4 E-10
7,438 5,814 5,814 46.502 $80.444
7.
SIGNIFICANT SUBSEQUENT EVENT In January 2008, the Company received $226,000 from franchise sales.
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ASSISTING HANDS HOME CARE, LLC
ASSISTING HANDS HOME CARE, LLC
FINANCIAL STATEMENTS
From March 9, 2006 (Date of Inception), to December 31, 2006
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TABLE OF CONTENTS DECEMBER 31,2006
PAGE (S) FINANCIAL SECTION Independent Auditor's Report ......................................................................................... FINANCIAL STATEMENTS Balance Sheet ...................................................................................................... Statement of Operations and Members' Capital ................................................. Statement of Cash Flows .................................................................................... Notes to the Financial Statements ....................................................................... 2 3 4 5-7 1
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ASSISTING HANDS HOME CARE, LLC
FINANCIAL SECTION
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Timothy S. Folke FOLKE CPAs, P.C. KurtR. Folke
INDEPENDENT AUDITOR'S REPORT
To the Members Assisting Hands Home Care, LLC Mesa, Arizona We have audited the accompanying balance sheet of Assisting Hands Home Care, LLC (the Company) as of December 31, 2006, and the related statements of operations and members' capital and cash flows from March 9, 2006 (date of inception), to December 31, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2006, and the results of operations and cash flows from March 9, 2006 (date of inception), to December 31, 2006 in conformity with accounting principles generally accepted in the United States of America. Folke CPAs, P.C. Payette, Idaho March 10,2008
1
P.O. Box 100
Payette, ID 83661
(208) 642-1417
Fax (208) 642-1582
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FINANCIAL STATEMENTS
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ASSISTING HANDS HOME CARE. LLC
BALANCE SHEET DECEMBER 31,2006
ASSETS Current Assets Cash Total Current Assets Noncurrent Assets Intangible Assets, Net Total Noncurrent Assets Total Assets LIABILITIES AND MEMBERS' CAPITAL Current Liabilities Accounts Payable Total Current Liabilities Total Liabilities Members' Capital Total Liabilities and Members' Capital $123.415 15.700 15,700 87,882 $123.415
STATEMENT OF OPERATIONS AND MEMBERS' CAPITAL FROM MARCH 9,2006 (DATE OF INCEPTION), TO DECEMBER 31,2006
REVENUES Sales $0 Total Revenues 0
EXPENSES Administration Amortization Organization Costs Marketing Fees Travel Total Expenses Net Income (Loss) Members' Capital - March 9,2006 (Date of Inception) Capital Contribution Members' Capital - December 31,2006
438 7,438 6,080 9,600 3,829 27,385 (27,385) 0 135,100 $107,715
See notes to the financial statements. 2
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ASSISTING HANDS HOME CARE. LLC
STATEMENT OF CASH FLOWS FROM MARCH 9,2006 (DATE OF INCEPTION), TO DECEMBER 31,2006
CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities: Amortization Increase (Decrease) in Accounts Payable Net Cash Provided (Used) by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Net Cash Provided (Used) by Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Capital Contributions Net Cash Provided (Used) by Financing Activities Net Increase (Decrease) in Cash
($27,385)
7,438 15.700 (4,247)
Purchases of Intangible Assets (95,320)
135,100 135.100 35,533
Cash - March 9,2006 (Date of Inception) _____________________________________________ 0_ Cash - December 31,2006 $35.533 NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2006
COMPANY OPERATIONS Assisting Hands Home Care, LLC (the Company) is engaged in franchising home care services in the continental United States. Although open for business in 2006, the Company did not experience any sales by year end. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed in the preparation of the financial statements: A. Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of accounting. B. Intangible Assets
Initial web site design costs are amortized over five years using the straight line method. Trademarks and operating manuals are amortized over fifteen years using the straight line method. Organization costs are expensed as incurred. C. Income Taxes
See notes to the financial statements. 4 E-18
ASSISTING HANDS HOME CARE. LLC
The Company is a limited liability company treated as a partnership for federal and state income tax purposes, and therefore is not subject to income tax. The income tax liability of the members/partners is not accrued on the books of the Company. D. Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
5 NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2006
3.
INTANGIBLE ASSETS Intangible assets at year end are as follows: WebSite $8,120 Accumulated Amortization (1.6241 Web Site, Net 6.496 Trademark 8,500 Accumulated Amortization (567) Trademark, Net 7.933 Operating Manuals 78,700 Accumulated Amortization (5,247) Operating Manuals, Net 73,453 Total Intangible Assets, Net $87.882
Future amortization expense at year end is estimated as follows: Year Ending December 31. 2007 2008 2009 2010 2011 Thereafter
$7,438 7,438 7,438 7,438 5,814 52,316 Total
4.
FAIR VALUE OF FINANCIAL INSTRUMENTS The Company's financial instruments, none of which are held for trading purposes, include cash and payables as shown on the balance sheet. The Company estimates that the fair value of all financial instruments at year end does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheet. 6 NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2006 See notes to the financial statements. 4 E-19
ASSISTING HANDS HOME CARE. LLC
The carrying amounts of financial instruments reported in the balance sheet approximate fair values because of the short maturities of those instruments. 5. CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash. All cash listed on the balance sheet is insured by the Federal Deposit Insurance Corporation (FDIC). Deposit accounts, at times, may exceed federally insured limits. The Company has not experienced any significant losses in such accounts and believes it is not exposed to any significant credit risk on such financial instruments.
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Assisting Hands Home Care, LLC - 2008 FDD CHG01\31147916.7 E-23
See notes to the financial statements. 4 E-20