Full Press Release Details
PRECISION PATHOLOGY SERVICES
the years ended December 31, 2022 and 2021
OAKS PATHOLOGY SERVICES, P.A.
PRECISION PATHOLOGY SERVICES
| INDEPENDENT AUDITOR'S REPORT | 3 |
| FINANCIAL STATEMENTS | |
| Balance Sheets as of December 31, 2022 and 2021 | 4 |
| Statements of Operations for the years ended December 31, 2022 and 2021 | 5 |
| Statements of Stockholders' Equity for the years ended December 31, 2022 and 2021 | 6 |
| Statements of Cash Flows for the years ended December 31, 2022 and 2021 | 7 |
| Notes to the Financial Statements | 8 |
the Board of Directors and Stockholders of
Oaks Pathology Services, P.A.:
have audited the financial statements of Village Oaks Pathology Services, P.A. (the "Company"), which comprise the balance
sheets as of December 31, 2022 and 2021, and the related statements of operations, changes in stockholders' equity and cash flows
for the years then ended, and the related notes to the financial statements.
our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Village Oaks Pathology
Services, P.A. as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended in accordance
with accounting principles generally accepted in the United States of America.
conducted our audits in accordance with auditing standards generally accepted in the United States of America ("GAAS"). Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements
section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance
with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Doubt About the Entity's Ability to Continue as a Going Concern
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note
2 to the financial statements, the Company has recurring and expected losses from operations, negative operating cash flows, and is projecting
its cash outflows to exceed its cash on hand over the next twelve months. These factors raise substantial doubt regarding the Company's
ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans regarding
these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty. Our opinion is not modified with respect to this matter.
of Management for the Financial Statements
is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally
accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the financial
statements are available to be issued.
Responsibilities for the Audit of the Financial Statements
objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level
of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always
detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate,
they would influence the judgment made by a reasonable user based on the financial statements.
performing an audit in accordance with GAAS, we:
| Exercise professional judgment and maintain professional skepticism throughout the audit. | ||
| Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. | ||
| Obtain an understanding of internal control relevant to the audit in order to design 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 control. Accordingly, no such opinion is expressed. | ||
| Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. | ||
| Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time. |
are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit,
significant audit findings, and certain internal control-related matters that we identified during the audit.
As described in Note 2 to the financial
statements, the Company adopted Accounting Standards Codification ("ASC") Topic 842, Leases, as of January 1, 2022. The
prior year financial statements have not been adjusted and continue to be reported in accordance with the Company's historic
accounting under ASC Topic 840. Our opinion is not modified with respect to this matter.
WithumSmith+Brown, PC
OAKS PATHOLOGY SERVICES, P.A.
PRECISION PATHOLOGY SERVICES
| As of December 31, | ||||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 357,470 | $ | 1,207,341 | ||||
| Certificates of deposit | 100,823 | 100,722 | ||||||
| Investments | 259,392 | 300,051 | ||||||
| Patient fees receivable | 858,950 | 696,759 | ||||||
| Other receivables | 381,204 | 515,464 | ||||||
| Prepaid expenses | 31,123 | 3,374 | ||||||
| Total Current Assets | 1,988,962 | 2,823,711 | ||||||
| Non-Current Assets | ||||||||
| Property and equipment, net | 328,861 | 283,777 | ||||||
| Operating lease right-of-use asset, net | 494,900 | - | ||||||
| Finance/capital lease right-of-use asset, net | 1,554,889 | 1,491,014 | ||||||
| Deposits | 8,000 | 8,000 | ||||||
| Total Non-Current Assets | 2,386,650 | 1,782,791 | ||||||
| TOTAL ASSETS | $ | 4,375,612 | $ | 4,606,502 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 83,386 | $ | 80,136 | ||||
| Accrued expenses | 351,276 | 237,216 | ||||||
| Notes payable, current portion | 40,407 | 33,647 | ||||||
| Operating lease liability, current portion | 96,654 | - | ||||||
| Finance/capital lease liability, current portion | 413,729 | 367,680 | ||||||
| Total Current Liabilities | 985,452 | 718,679 | ||||||
| Non-Current Liabilities | ||||||||
| Notes payable, net of current portion | 95,879 | 100,100 | ||||||
| PPP loan payable | - | 503,950 | ||||||
| Deferred rent | - | 14,078 | ||||||
| Operating lease liability, net of current portion | 403,177 | - | ||||||
| Finance/capital lease liability, net of current portion | 1,218,535 | 1,123,334 | ||||||
| Total Non-Current Liabilities | 1,717,591 | 1,741,462 | ||||||
| TOTAL LIABILITIES | 2,703,043 | 2,460,141 | ||||||
| Commitments and contingencies (see Note 11) | ||||||||
| Stockholders' Equity | ||||||||
| Common stock, authorized 1,000, $0.01 par value; 500 shares issued and outstanding as of December 31, 2022 and 2021 | 5 | 5 | ||||||
| Retained earnings | 1,672,564 | 2,146,356 | ||||||
| Total Stockholders' Equity | 1,672,569 | 2,146,361 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 4,375,612 | $ | 4,606,502 |
accompanying notes to the financial statements.
OAKS PATHOLOGY SERVICES, P.A.
PRECISION PATHOLOGY SERVICES
| Years Ended December 31, | ||||||||
| 2022 | 2021 | |||||||
| Net Revenue | $ | 6,858,212 | $ | 6,196,631 | ||||
| Operating Expenses | ||||||||
| Selling, general, and administrative | 7,184,802 | 5,757,341 | ||||||
| Depreciation and amortization | 544,217 | 536,481 | ||||||
| Total Operating Expenses | 7,729,019 | 6,293,822 | ||||||
| Loss from Operations | (870,807 | ) | (97,191 | ) | ||||
| Other Income (Expense) | ||||||||
| PPP loan forgiveness | 503,950 | 503,900 | ||||||
| Other income, net | 9,192 | 12,467 | ||||||
| Interest expense | (63,308 | ) | (12,730 | ) | ||||
| Investment income | 8,775 | 4,396 | ||||||
| Unrealized loss on investments | (49,434 | ) | (4,345 | ) | ||||
| Total Other Income | 409,175 | 503,688 | ||||||
| Net income (loss) | $ | (461,632 | ) | $ | 406,497 |
accompanying notes to the financial statements.
OAKS PATHOLOGY SERVICES, P.A.
PRECISION PATHOLOGY SERVICES
OF STOCKHOLDERS' EQUITY
| Retained Earnings | Common Stock | Total Stockholders' Equity | ||||||||||
| Balance as of December 31, 2020 | $ | 1,751,859 | $ | 5 | $ | 1,751,864 | ||||||
| Distributions | (12,000 | ) | - | (12,000 | ) | |||||||
| Net income | 406,497 | - | 406,497 | |||||||||
| Balance as of December 31, 2021 | $ | 2,146,356 | $ | 5 | $ | 2,146,361 | ||||||
| Distributions | (12,160 | ) | - | (12,160 | ) | |||||||
| Net loss | (461,632 | ) | - | (461,632 | ) | |||||||
| Balance as of December 31, 2022 | $ | 1,672,564 | $ | 5 | $ | 1,672,569 |
accompanying notes to the financial statements.
OAKS PATHOLOGY SERVICES, P.A.
PRECISION PATHOLOGY SERVICES
| Years Ended December 31, | ||||||||
| 2022 | 2021 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (461,632 | ) | $ | 406,497 | |||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Forgiveness of PPP loan payable | (503,950 | ) | (503,900 | ) | ||||
| Depreciation and amortization | 544,217 | 536,481 | ||||||
| Loss on disposal of fixed assets | - | 16,784 | ||||||
| Investment income | (8,775 | ) | (4,396 | ) | ||||
| Unrealized loss on investments | 49,434 | 4,345 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Patient fees receivable | (162,191 | ) | (50,077 | ) | ||||
| Other receivables | 134,260 | (8,362 | ) | |||||
| Prepaid expenses | (27,749 | ) | (2,481 | ) | ||||
| Accounts payable | 3,250 | 59,455 | ||||||
| Accrued expenses | 114,060 | 51,054 | ||||||
| Operating lease liability | (9,147 | ) | - | |||||
| Deferred rent | - | (326 | ) | |||||
| Net cash provided by (used in) operating activities | (328,223 | ) | 505,074 | |||||
| Cash flows from investing activities: | ||||||||
| (Purchase) sale of certificates of deposit | (101 | ) | 302,835 | |||||
| Purchase of investments | - | (300,000 | ) | |||||
| Purchase of property and equipment | (144,246 | ) | (192,921 | ) | ||||
| Net cash used in investing activities | (144,347 | ) | (190,086 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Borrowings of notes payable | 39,953 | 93,414 | ||||||
| Repayments of notes payable | (37,414 | ) | (36,094 | ) | ||||
| Proceeds from PPP loan payable | - | 503,950 | ||||||
| Net payments from financing lease | (367,680 | ) | (505,651 | ) | ||||
| Distributions | (12,160 | ) | (12,000 | ) | ||||
| Net cash provided by (used in) financing activities | (377,301 | ) | 43,619 | |||||
| Net change in cash | (849,871 | ) | 358,607 | |||||
| Cash, beginning of year | 1,207,341 | 848,734 | ||||||
| Cash, end of year | $ | 357,470 | $ | 1,207,341 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 63,308 | $ | 12,730 | ||||
| Supplemental disclosure of noncash investing and financing activities: | ||||||||
| Equipment purchase included in accounts payable | $ | - | $ | 12,995 | ||||
| Operating lease liabilities arising from obtaining right-of-use assets | 590,474 | - | ||||||
| Finance lease liabilities arising from right-of-use asset modification | 508,930 | - |
accompanying notes to the financial statements.
OAKS PATHOLOGY SERVICES, P.A.
PRECISION PATHOLOGY SERVICES
TO FINANCIAL STATEMENTS
Nature of Operations
Oaks Pathology Services, P.A., doing business as Precision Pathology Services (the "Company" or "Precision Pathology")
is a privately held company organized in 1987 under the laws of the state of Texas. Precision Pathology provides anatomic and clinical
pathology services for patients and their physicians. The Company is known for their exceptionally responsive and helpful service to
the physicians and patients they serve.
The Company, with stockholders' consent, has elected to be taxed as an "S Corporation" under the
provisions of the Internal Revenue Code and comparable state income tax law. As an S Corporation, the Company is generally not subject
to corporate income taxes and the Company's net income or loss is reported on the individual tax return of the stockholders of the Company.
Therefore, no provision or liability for income taxes is reflected in the financial statements. The Company has not been audited by the
Internal Revenue Service, and accordingly the business tax returns since 2020 are open to examination. Management has evaluated its tax
positions and has concluded that the Company had taken no uncertain tax positions that could require adjustment or disclosure in the financial
statements to comply with provisions set forth in Accounting Standards Codification ("ASC") Topic 740, Income Taxes.
Summary of Significant Accounting Policies
accompanying financial statements are prepared in accordance with generally accepted accounting principles in the United States of America
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and 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. The Company evaluates estimates and assumptions on a regular basis.
The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to
be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and
liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The Company's accounting policies
that involve significant judgment and estimates include revenue recognition including contractual adjustments and discounts, patient
fee receivables and the related allowance for contractual discounts and allowance for doubtful accounts, valuation of lease liabilities
and related right-of-use assets, and estimates of useful lives for depreciation. The actual results experienced by the Company may differ
materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the
actual results, future results of operations will be affected.
and Capital Resources
accordance with Accounting Standards Update ("ASU") 2014-15, Presentation of Financial Statements - Going Concern (Subtopic
205-40), the Company has evaluated whether there are conditions and events that raise substantial doubt about the Company's ability
to continue as a going concern for at least one year after the date the financial statements are issued. As required by this standard,
management's evaluation shall initially not take into consideration the potential mitigating effects of management's plans
that have not been fully implemented as of the date the financial statements are issued.