Full Press Release Details
FERTILITY AND REPRODUCTIVE SURGERY ASSOCIATES, S.C.
FERTILITY LABS OF WISCONSIN, LLC
COMBINED FINANCIAL STATEMENTS
of and for the years ended December 31, 2021 and 2020 with Report of Independent Registered Public Accounting Firm.
| Page | |
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 3 |
| COMBINED FINANCIAL STATEMENTS | |
| Combined Balance Sheets | 4 |
| Combined Statements of Operations | 5 |
| Combined Statements of Member's Capital (Deficit) | 6 |
| Combined Statements of Cash Flows | 7 |
| Notes to Combined Financial Statements | 8 |
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
the Board of Directors and Members
Labs of Wisconsin, LLC and Wisconsin Fertility and Reproductive Surgery Associates, S.C.
on the Combined Financial Statements
have audited the accompanying combined balance sheets of Fertility Labs of Wisconsin, LLC and Wisconsin Fertility and Reproductive Surgery
Associates, S.C. (the Companies) as of December 31, 2021 and 2020, and the related combined statements of operations, members'
capital/(deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements").
In our opinion, the combined financial statements present fairly, in all material respects, the financial position of the Companies as
of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
combined financial statements are the responsibility of the Companies' management. Our responsibility is to express an opinion
on the Companies' combined financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the combined financial statements are free of material misstatement, whether due to error or fraud.
The Companies are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting.
As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose
of expressing an opinion on the effectiveness of the Companies' internal control over financial reporting. Accordingly, we express
audits included performing procedures to assess the risks of material misstatement of the combined financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the combined financial statements. Our audits also included evaluating the accounting principles
used and the significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We
believe our audits provide a reasonable basis for our opinion.
critical audit matter communicated below is a matter arising from the current period audit of the combined financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material
to the combined financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication
of critical audit matter does not alter in any way our opinion on the combined financial statements, taken as a whole, and we are not,
by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures
to which it relates.
discussed in Note 1 to the combined financial statements, the Companies recognize revenue in accordance with ASC 606, Revenue from Contracts
with Customers. Revenue from clinical and lab services is recognized based on the date the service is performed.
management's evaluation of the service revenue from its agreements with patients involves significant judgment based on the estimates
of the revenue recorded and their subsequent true-up once payment is received.
evaluate the appropriateness and accuracy of the revenue recorded by management, we evaluated management's assessment of the revenue
recorded based on the Companies' service agreements.
have served as the Company's auditor since 2022
FERTILITY AND REPRODUCTIVE SURGERY ASSOCIATES, S.C.
FERTILITY LABS OF WISCONSIN, LLC
COMBINED BALANCE SHEETS
| December 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 627,949 | $ | 462,093 | ||||
| Accounts receivable | 136,588 | 164,978 | ||||||
| Prepaid expenses and other current assets | - | 5,000 | ||||||
| Total current assets | 764,537 | 632,071 | ||||||
| Property and equipment, net | 66,261 | 9,531 | ||||||
| Total assets | $ | 830,798 | $ | 641,602 | ||||
| LIABILITIES AND MEMBERS' DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 22,926 | $ | 17,698 | ||||
| Accrued liabilities | 75,605 | 88,198 | ||||||
| Distribution payable | 426,734 | 363,368 | ||||||
| Deferred revenue | 394,066 | 420,275 | ||||||
| PPP Loan | - | 181,600 | ||||||
| Total liabilities | 919,331 | 1,071,139 | ||||||
| Members' capital (deficit) | ||||||||
| Members' capital (deficit) - beginning | (429,537 | ) | (25,662 | ) | ||||
| Members' capital (deficit) - current year | 341,004 | (403,875 | ) | |||||
| Total members' capital (deficit) | (88,533 | ) | (429,537 | ) | ||||
| Total liabilities and members' capital (deficit) | $ | 830,798 | $ | 641,602 |
accompanying notes are an integral part of these combined financial statements.
FERTILITY AND REPRODUCTIVE SURGERY ASSOCIATES, S.C.
FERTILITY LABS OF WISCONSIN, LLC
COMBINED STATEMENTS OF OPERATIONS
| For the Years Ended | ||||||||
| December 31, | ||||||||
| 2021 | 2020 | |||||||
| Revenue | $ | 5,676,804 | $ | 4,452,394 | ||||
| Cost of revenue | 2,335,774 | 2,100,705 | ||||||
| Gross profit | 3,341,030 | 2,351,689 | ||||||
| Operating expenses | 1,216,069 | 1,073,292 | ||||||
| Income from operations | 2,124,961 | 1,278,397 | ||||||
| Other income (expense): | ||||||||
| Other income | 182,719 | 5,450 | ||||||
| Interest expense | (360 | ) | (236 | ) | ||||
| Total other income (expense) | 182,359 | 5,214 | ||||||
| Net income | $ | 2,307,320 | $ | 1,283,611 |
accompanying notes are an integral part of these combined financial statements.
FERTILITY AND REPRODUCTIVE SURGERY ASSOCIATES, S.C.
FERTILITY LABS OF WISCONSIN, LLC
COMBINED STATEMENTS OF MEMBERS' DEFICIT
| Balance at January 1, 2020 | $ | (25,662 | ) | |
| Member capital distribution | (1,687,486 | ) | ||
| Net income | 1,283,611 | |||
| Balance at December 31, 2020 | $ | (429,537 | ) | |
| Member capital distribution | (1,966,316 | ) | ||
| Net income | 2,307,320 | |||
| Balance at December 31, 2021 | $ | (88,533 | ) |
accompanying notes are an integral part of these combined financial statements.
FERTILITY AND REPRODUCTIVE SURGERY ASSOCIATES, S.C.
FERTILITY LABS OF WISCONSIN, LLC
COMBINED STATEMENTS OF CASH FLOWS
| For the Years Ended | ||||||||
| December 31, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 2,307,320 | $ | 1,283,611 | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Extinguishment of debt | (181,600 | ) | - | |||||
| Depreciation and amortization | 6,660 | 1,254 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 28,390 | 15,987 | ||||||
| Prepaid expenses and other current assets | 5,000 | 12,344 | ||||||
| Accounts payable | 5,228 | (23,142 | ) | |||||
| Accrued liabilities | (12,593 | ) | 39,807 | |||||
| Deferred revenue | (26,209 | ) | 81,311 | |||||
| Net cash used in operating activities | 2,132,196 | 1,411,172 | ||||||
| Cash from investing activities: | ||||||||
| Payments to acquire property, plant, and equipment | (63,390 | ) | (10,785 | ) | ||||
| Net cash used in investing activities | (63,390 | ) | (10,785 | ) | ||||
| Cash from financing activities: | ||||||||
| Proceeds from PPP loan | - | 181,600 | ||||||
| Member capital distribution | (1,902,950 | ) | (1,679,968 | ) | ||||
| Net cash provided by financing activities | (1,902,950 | ) | (1,498,368 | ) | ||||
| Increase (decrease) in cash | 165,856 | (97,981 | ) | |||||
| Cash at beginning of period | 462,093 | 560,074 | ||||||
| Cash at end of period | $ | 627,949 | $ | 462,093 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | 360 | $ | 236 |
accompanying notes are an integral part of these combined financial statements.
FERTILITY AND REPRODUCTIVE SURGERY ASSOCIATES, S.C.
FERTILITY LABS OF WISCONSIN, LLC
TO THE AUDITED COMBINED FINANCIAL STATEMENTS
1 - Summary of Significant Accounting Policies
audited combined financial statements include the following business entities: Wisconsin Fertility and Reproductive Surgery Associates,
S.C. ("WFRSA"), a clinic that provides fertility services and advanced gynecology care and Fertility Labs of Wisconsin, LLC
("FLOW"), a limited liability company that provides lab services exclusively to WFRSA (the "Companies").
Companies' accounting and financial reporting policies conform to accounting principles generally accepted in the United States
preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
and revenue and expenses during the reported period. Actual results could differ from those estimates. The more significant estimates
and assumptions by management include among others: useful life of property and equipment, collectability of accounts receivable and
accrued liabilities.
and Cash Equivalents
financial statement presentation purposes, the Companies consider time deposits, certificates of deposit and all highly liquid investments
with original maturities of three months or less to be cash and cash equivalents. The Companies had no cash equivalents at December 31,
2021 or December 31, 2020.
Receivables and Allowances for Doubtful Accounts
allowance for doubtful accounts is based on the Companies' assessment of the collectability of customer accounts and the aging
of the related invoices and represents the Companies' best estimate of probable credit losses in its existing trade accounts receivable.
The Companies regularly review the allowance by considering factors such as historical experience, credit quality, the age of the accounts
receivable balances, and current economic conditions that may affect a customer's ability to pay. The allowance for doubtful accounts
is included in accounts receivables, net on the Companies' combined balance sheet. The Companies' allowance for doubtful
accounts balance was $33,372 and $0 as of December 31, 2021 and December 31, 2020 respectively.
Companies record property and equipment at cost. Property and equipment is depreciated using the straight-line method over the estimated
economic lives of the assets, which are from 3 to 10 years. The Companies capitalize the expenditures for major renewals and improvements
that extend the useful lives of property and equipment. Expenditures for maintenance and repairs are charged to expense as incurred.
The Companies review the carrying value of long-lived assets for impairment at least annually or whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by a comparison
of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate. If such assets are considered
impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its
Value of Financial Instruments
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. U.S. GAAP established a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; | ||
| Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | ||
| Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Companies had no assets or liabilities which were measured at fair value on a nonrecurring basis during the reporting periods.