ITEM 1. DESCRIPTION OF BUSINESS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Annual Report on Form 10-K (this "Form 10-K"), including statements under "Item 1 Description of Business," and "Item 6 Management's Discussion and Analysis", constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 (collectively, the "Reform Act"). Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology such as "believes", "expects", "may", "should", or "anticipates", or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Healthcare Business Services Groups, Inc. (the Company", "we", "us" or "our") to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. References in this form 10-K, unless another date is stated, are to December 31, 2009 and 2008.
BUSINESS DEVELOPMENT
The Company was incorporated in the State of Nevada on May 2, 2000, as Winfield Capital Group, Inc. On June 6, 2001, the Company filed a Certificate of Amendment to its Articles of Incorporation to affect a name change to "Winfield Financial Group, Inc." On April 23, 2004, the Company acquired 100% of the equity interest of Healthcare Business Services Groups, Inc. (“Healthcare”), a Delaware corporation (“Healthcare”). As part of the same transaction, on May 7, 2004, the Company acquired 100% of the equity interest of AutoMed Software Corp. ("AutoMed"), a Nevada corporation, and 100% of the membership interests of Silver Shadow Properties, LLC ("Silver Shadow"), a Nevada single member limited liability company. The transactions are collectively referred to herein as the "Acquisition”. Prior to the Acquisition, the Company was a business broker, primarily representing sellers and offering its clients' businesses for sale. As a result of the Acquisition, the Company changed its business focus to medical billing.
On January 7, 2005, the Company filed a Certificate of Amendment to its Articles of Incorporation, with the Nevada Secretary of State and changed its name to "Healthcare Business Services Groups, Inc."
On or about May 7, 2004, the Company acquired Healthcare, AutoMed and Silver Shadow from Chandana Basu, the sole owner, in exchange for 25,150,000 newly issued treasury shares of the Company's Common Stock. As a result of the Acquisition, the Company has changed its business focus. The term "Company" shall include a reference to PPJ Enterprise (the "Company").
On June 21, 2004, the Company entered into an agreement with Robert Burley (former Director, President and Chief Executive Officer of the Company) and Linda Burley (former Director and Secretary of the Company) whereby the Company agreed to transfer certain assets owned by the Company immediately prior to the change in control in consideration for Mr. and Mrs. Burley's cancellation of an aggregate of 2,640,000 of their shares of the Company's common stock. The Company transferred the following assets to Mr. and Mrs. Burley: (i) the right to the name "Winfield Financial Group, Inc." and (ii) any contracts, agreements, rights or other intangible property that related to the Company's business operations immediately prior to the change in control whether or not such intangible property was accounted for in the Company's financial statements. After the issuance of shares to Ms. Basu and the cancellation of 2,640,000 shares of Mr. and Mrs. Burley's Common Stock, there were 29,774,650 shares of the Company's Common Stock outstanding. As a result of these transactions, control of the Company shifted to Ms. Basu. At closing, Ms. Basu owned 25,150,000 shares (or approximately 81%) out of 33,960,150 shares of the Company's issued and then outstanding Common Stock.
DESCRIPTION OF THE COMPANY'S CURRENT BUSINESS OPERATIONS
After acquisition, the Company operated as a medical billing service provider which attempts to assist various health care providers to enhance their billing functions. The Company has developed through its subsidiary Automated Software Corp., a proprietary medical billing software system named AutoMed. AutoMed was used in house since 2003, after all program bugs cleaned and beta testing was done for over 2 years prior to launching AutoMed into the market for commercial distributions. expects that after AutoMed is launched, the Company's revenues will grow over the next three to five years, as the Company extends its billing model into the technology era, however, the Company can give no assurances that it will see increases in revenue.
DESCRIPTION OF THE COMPANY'S PRINCIPAL PRODUCTS AND SERVICES
•The Company primarily a healthcare business support service related company who is dedicated to help healthcare practices become more efficient and save money. Due to the over whelming market need the Company entered into the research, development and now marketing of its
•proprietary medical billing software ("AutoMed"). AutoMed is a very flexible automated practice management suite that is a technological innovation by using OCR/OMR technology to provide healthcare providers a simple and cost-effective way to submit their billing to Governmental payors and insurance companies without coding, data entry and billing personnel.
•Prepaid collection service - an added line of business
The Company offers prepaid low-cost collection service to healthcare and all other industries for past due and Bad Debt collection. This is an effective Profit Recovery program provides an alternative to traditional debt collection Agencies.
•Healthcare Accounts Receivable Financing - an added line of business
Medical factoring, a cash flow solution that speeds up cash flow-allowing payment for services rendered in days instead of months. Also, provides a one-stop service for bridge loans, refinancing, asset-based loans, equipment financing, acquisition financing, revolving lines of credit and accounts receivable financing. Unlimited and continuous business funding eliminates having to wait 30 to 60 days or longer for invoice payments. Receive factoring funds within 24 to 48 hours - no complicated process-requires only 2 to 5 minutes of paperwork.
•Healthcare Staffing Solutions - an added line of business
PPJE offers staffing solutions to fulfill a wide breath of healthcare staffing needs from the physician office, home care to hospital based.
PPJE provides a broad range of clinical and medical administrative (including expert coding, billing and collections to Healthcare management) resources to solve the most burdensome staffing needs, fulfilling your requirements for highly qualified staff. All PPJE staff undergoes a stringent process of skills testing, criminal and OIG/GSA background checks, drug testing, PSHA and HIPAA training, and reference checks prior to placement.
COMPETITIVE BUSINESS CONDITIONS
SUBSIDIARY - HEALTHCARE BUSINESS SERVICES GROUPS, INC. NEVADA (“Healthcare”).
MEDICAL BILLING
Healthcare Business Services Groups, Inc. (Delaware Corporation a subsidiary of the Nevada Company) moved its office from 1120 W Foothill Blvd Suite 105 and 106 Upland, CA 91786 and moved to 818 N Mountain Ave, Suite 200, Upland, CA 91786 which was approximately 2600 sqft prestigious space as of July 1, 2008 with month to month rent.
SUBSIDIARY - AUTOMED
AUTOMATED MEDICAL BILLING SOFTWARE (A Nevada Company)
“AutoMed” was initially formed to satisfy its custom medical billing needs. “Healthcare” began implementing AutoMed in its Medical Billing line of business in July 2003. “Healthcare” has been using AutoMed since October 2003 for all new medical billing.
The “Registrant” intends to promote AutoMed for other aspects of medical office management as well, as discussed below.
We sold the first copy of our AutoMed program license in January of 2008 and installed in March of 2008 into general/internal medical clinic. The program was sold for 39 doctors for a selling price of $230,000. Due to the product being new to the market, we only installed the program for one physician with initial deposit of $62,000. We used these funds to customize the program for the clinic, travel, technical, installation and training. We have received an additional $5,000 in the second quarter of 2008. There are multiple interests at this point from the hospital, surgery center and other medical professionals who seek to use AutoMed program. Additional funding of $2.2 million dollars to effect its business plan and to promote AutoMed program through out the United States of America.
DEPENDENCE ON ONE OR A FEW CUSTOMERS
“Healthcare” depended on few customers throughout the United States to continue in the medical billing field with few loyal Clients. Due to our higher fees (10%) to perform a customized service to deliver a higher cash flow to our clients, we have experienced that a few of the former clients were the largest competitors of Healthcare Business Services Groups; Inc itself. Doctors would sign contracts with us to learn our privileged and specialized method of billing, once they see a drastic upwards of collections they will change pay to address to them selves and copy our methods of billing. We have experienced this conduct over and over again in the recent years.
NEED FOR GOVERNMENTAL APPROVAL AND THE EFFECTS OF REGULATIONS
Medical business services are subject to the compliance requirements of the Health Insurance Portability and Accountability Act ("HIPPA") and the billing guidelines of the Health Care Financing Administration ("HCFA"). As a result, Medical Billing and AutoMed are subject to government regulation and government approval.
RESEARCH & DEVELOPMENT OVER THE PAST TWO YEARS
The “Registrant” has spent over $50,000 of resource or time during the last two years on research and development.
EMPLOYEES
The Company had more than 25 employees and 5 consultants during the first half of 2007 and then the number of employees were reduced to 11 during the third Quarter and then to 5 at the end of 4 th quarter of 2007. As of filing this report on November 2, 2008 the Company had one full-time employee, Ms. Chandana Basu and one part time employee in Texas. In addition to two employees, the Company performed most of its business through consultants as needed basis during 2008.
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY
The Company currently leases office space in Reno, Nevada as its corporate address and performs all interaction through this location. This location is rented on month to month basis for rent of space and services are as much as $500.00/mo. The Company leased space at 818 N. Mountain Ave, Suite 200, Upland, Ca 91786 and then 2225 N. 1st Ave, Upland, CA 91784 and then current office located at 440 N. Mountain Ave Suite 201H and 212 Upland, CA 91786. The Company has never been a dormant Company.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS ALL LEGAL PROCEEDING WERE TRANSFERRED TO MS BASU AS OF 1/1/2008 in exchange of 600,000,000 shares
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. Other than the legal proceedings listed below, we are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations.
PART II
ITEM 5.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
"Bid" and "Ask" offers for the common stock are listed on the NASDAQ OTC-Bulletin Board published by the National Quotation Bureau, Inc. below are the high and low bid prices for the Company's Common Stock for the past two (2) fiscal years. Prior to January 12, 2005, the Company's trading symbol was "WFLD," however in connection with the Company's change in business focus and name change; the Company's securities began trading under the symbol "HBSV" on January 12, 2005.
The following table sets forth the high and low bid prices for the Company's common stock for the periods indicated as reported by the NASDAQ OTC-Bulletin Board. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
There are 90 holders of record of the common stock as of December 31, 2009. The Company has never paid a cash dividend on its common stock and does not anticipate the payment of a cash dividend in the foreseeable future. The Company intends to reinvest in its business operations any funds that could be used to pay a cash dividend. The Company's common stock is considered a "penny stock" as defined in the Commission's rules promulgated under the Exchange Act. In general, a security which is currently quoted on Pink sheets
ITEM 6.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This report contains forward looking statements within the meaning of section 27a of the securities act of 1933, as amended and section 21e of the securities exchange act of 1934, as amended. The Company's actual results could differ materially from those set forth on the forward-looking statements as a result of the risks set forth in the company's filings with the Securities and Exchange Commission, general economic conditions, and changes in the assumptions used in making such forward looking statements.
On January 5, 2005, the Registrant changed its name to Healthcare Business Services Groups, Inc. The Registrant is a holding company for subsidiary “Healthcare”. The business operations discussed herein are conducted by “Healthcare”. The Registrant, through “Healthcare”, is engaged in the business of providing medical billing services to healthcare providers in the United States.
The Registrant continued with several Clients billing and sales of AutoMed Software during 2008 and and development of AutoMed software with two employees and several consultants until December of 2009 and then the Company expanded to as many as 20 employees and 3 to 4 consultants according to need.
On February 14, 2008, the Registrant changed its name to PPJ Enterprise (the Company) to clear confusion between the Delaware Company and the Nevada Company. On the same day the Company increased its authorized shares to 1,500,000,000.
On March 21, 2008 PPJE requested change of Ticker Symbol and it is now (PPJE.PK).
RESULTS OF OPERATIONS
The Company is amending 2009 Results of Operations
AMENDED STATEMENTS BELOW: 2007
Healthcare Business Services Groups, Inc. (Delaware Corporation a subsidiary of the Nevada Company) moved its office from 1120 W Foothill Blvd Suite 105 and 106 Upland, CA 91786 and moved to 818 N Mountain Ave, Suite 200, Upland, CA 91786 which was approximately 2600 sqft prestigious space with one year lease. The company kept approximately 11 employees and 5 consultants until end of Oct 2007 and then reduced employees down to 5 and 3 consultants and continued its operation until the Company discovered that its former Client Dr. Narinder S. Grewal (Grewal) was scamming the Company out of millions of dollars of its assets. Due to Grewal’s scam, the Company suffered in excess of estimated $100,000,000 million of dollars of loss during the years of 2001 to 2013. Assets discovered are listed in Exhibit-B which adds up to more than $3,204,919.14 million dollars, having this information and the evidence in possession the Company brought a lawsuit against Dr Narinder S. Grewal residence of Chatsworth, California practicing in of Santa Clarita California, Lancaster and his companies such as Santa Clarita Surgery Center for Advance Pain Management and Narinder S Grewal, MD, Inc. on December 3, 2009 in Los Angeles Superior Court, Los Angeles, California, Case NO. LA BC 427192. Trial on this Case is currently set for October 30, 2013. In addition, Dr. Grewal breached the agreement for “Medical Billing Agreement” with the Company in all terms including Non-Compete clause and stole the Company’s proprietary billing methods and started a billing company naming “G3 Healthcare Business Services, Inc.” which is almost identical name of the company’s prior subsidiary billing company and became a pain management billing provider and competed with the business of the Company. Narinder S. Grewal and his wife Pritpal Grewal practically stole the Company’s identity and become the mirror image of the Registrant’s business. Grewal operates his billing service in Lancaster, California. The Company is also suing Dr. Grewal and his companies for breach of agreement for Non-Compete. The Company located 2085 patients of Dr. Grewal were missing from the exclusive billing service agreement during the year of 2004 to 2007. The Company was deprived of more than $4,000,000 to $7,000,000 in revenue in addition to $3,204,919.14 he scammed the Company. The Company is working to confirm the amount of loss based on evidence. During the year of 2004 and 2007, Grewal was also a member of the Board of Directors of the Company, while he was a fiduciary of the Company and scamming the Company of its assets, the Company is considering filing a Criminal Investigation with the U.S. Security and Exchange Commissions against Grewal.
Due to the negligence of CPA Mr. Ankit Jain of Lake Forest, California 2007 yearly financial only contains the half year of 2007of the actual operational activities. Mr. Jain failed to perform his duties to complete the second half of the Company’s bank statements to prepare an accurate financial for which he was paid for.
The company was aware of overpayments to Narinder S. Grewal and his companies (Grewal) for approximately $706,000 as of 2005 and continued to work with Grewal to recover this money. But the Company had no knowledge of the findings in 2009 that Grewal has been scamming the Company of approximately $3.204,919.14 since year 2000. In 2007 auditors were informed of the overpayments but they ignored to publish because the financials based on cash basis not accrual and due to no signed confirmation from Dr. Grewal at that time. It was disputed by the company, but the Company was unaware of the true facts of how the overpayments happened.
During a court trial between Ms. Chandana Basu and Dr. Grewal in 2009 where Dr. Grewal claimed that the company did not pay all money due him and sued Ms. Basu for $3,000,000. At that time Ms. Basu provided the court with 7 years of accounting review that revealed Dr. Grewal was paid in excess of $3,204,919.14 over and above due Grewal. Ms. Basu won the trial in that case, but Judge ruled that the Company must sue Grewal to recover the money. Later that year by a detail analysis with original books and records, the company came to conclude that Grewal received $3,204,919.14 by scam and other various fraudulent actions.
In addition the company also discovered that during the exclusive service terms, by breaching Non-Compete clause Grewal was billing directly using different Tax-Ids and using the company proprietary billing formulas to gain in excess of $50,000,000 to $60,000,000 dollars from his practice to avoid paying fees to the Company of approximately 4,000,000.00 to 7,000,000,000 (estimated).
Revenue was $1,508,452.83 out of which uncollected $826,732 (fees from Grewal) and 2007 Assets amount was $3,204,919.14(actual amount scammed).
Once the trial in this case is awarded, the company will amend 10KSB financials of 2007.
Revenues earned for the years ended December 31, 2009 and 2008 - were $ with the proper amount after discovery made of accounting errors.
Information below are not accurate as per new discovery of errors in accounting and not to be relied upon due to the negligence of CPA Ankit Jain. Amended Statements.
The Company computed the beneficial conversion liability of $1,300,000 and warrant liability of $ 105,762 based on Black-Scholes model. These amounts have been reflected on the financials as derivative liability in amount of $1,460,962. 2009 and 2008
LIQUIDITY AND CAPITAL RESOURCES (Subsidiary “Healthcare”) It has been discovered that information below are not reliable due to the errors in accounting. Amended statements.
Pursuant to the Securities Purchase Agreement, the Investors purchased the Notes and Warrants in three trenches as set forth below:
At closing, on July 1, 2006 ("Closing"), the Investors purchased Notes aggregating $700,000 and warrants to purchase 43,750 shares based on the prorate shares of our common stock;
On August 8, 2006 the investors purchased Notes aggregating $600,000 and warrants to purchase 37,500 shares based on the prorate shares of our common stock.
Upon effectiveness of the Registration Statement, the Investors will purchase Notes aggregating $700,000. The Company never received the third trench as the Registration Statement was not effective to bring more funds into the Company.
The Notes carry an interest rate of 6% and a maturity date of June 27, 2009. The notes are convertible into common shares at the Applicable Percentage of the average of the lowest three
(3) trading prices for our shares of common stock during the twenty (20) trading day period prior to conversion. The "Applicable Percentage" means 50%; provided, however, that the Applicable Percentage shall be increased to (i) 55% in the event that a Registration Statement is filed within thirty days of the closing and (ii) 60% in the event that the Registration Statement becomes effective within one hundred and twenty days from the Closing.
The Company has an option to prepay the Notes in the event that no event of default exists, there are a sufficient number of shares available for conversion of the Notes and the market price is at or below $.05 per share. In addition, in the event that the average daily price of the common stock, as reported by the reporting service, for each day of the month ending on any determination date is below $.05, the Company may prepay a portion of the outstanding principal amount of the Notes equal to 101% of the principal amount hereof divided by thirty-six (36) plus one month's interest. Exercise of this option will stay all conversions for the following month. The full principal amount of the Notes is due upon default under the terms of Notes. In addition, the Company has granted the investors a security interest in substantially all of its assets and intellectual property as well as registration rights.
The Company simultaneously issued to the Investors seven-year warrants to purchase 81,250 shares of common stock at an exercise price of $28.00.
The Investors have contractually agreed to restrict their ability to convert the Notes and exercise the Warrants and receive shares of the Company's common stock such that the number of shares of the Company's common stock held by them and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of the Company's common stock.
RISK FACTORS Due to accounting error the information below is not reliable - Amended statement.
WE NEED A SUBSTANTIAL AMOUNT OF ADDITIONAL FINANCING.
The Company anticipates the need for approximately $2,200,000 million dollars of financing for marketing its products and other operational expenses and growth. There is no assurance that additional financing will be available on favorable terms, if at all. If the Company is unable to raise such additional financing, or accepts financing on unfavorable terms to the Company, it could have a materially adverse effect upon the Company's ability to implement its business plan with respect to AutoMed, and other products.
WE WERE NOT ABLE TO PAY MS. BASU HER CONTRACTED PAY DUE TO LACK OF CASH FLOW BUT HAVE ACCRUED AMOUNT DUE HER FOR HER HANDLING MULTIPLE JOBS.
Our original employment agreement with Chandana Basu, our Chief Executive Officer and Treasurer was executed on April 1, 2004 and cannot be terminated by us. It shall remain in existence until Ms. Basu retires or assigns her position to others. It provides for a monthly base salary of $5,000 per month and a bonus of 25% of our gross receipts payable monthly with a minimum bonus of $45,000 per month. It also includes reimbursement of all reasonable expenses. It provides for the issuance of a minimum of 1,000,000 shares annually as per amendment of employment agreement in October 2004.
The Company was never able to pay Ms. Basu such an amount as agreed in her employment agreement. So Ms. Basu amended her employment agreement due to Company’s financial conditions during the First Quarter of 2008 as below:
Ms. Basu will accept $5,000 as salary and $20,000 worth of Company’s Common Shares per month for the first six months. After six months her salary must increase $1,000 per month to a maximum $10,000 per month and $20,000 worth of Company’s S-8 shares per month and then the agreement would revert back to original agreement.
On April 29, 2008 Ms. Basu accepted $937,665 Officers Due liability in Company Common and Preferred Socks of the Company as a full payment towards all accrued dues including bonuses as of 12/31/2007. Amended Statements
Ms. Basu also serves as the Chief Executive Officer and President of AutoMed. Ms. Basu is our only employee at this time. She travels for marketing, deals with the auditors, attorneys, and investors in addition she works closely with programmers and other technical professionals to continuously improve the status of the Company.
WE MAY NOT BE ABLE TO DEVELOP A MARKET FOR AUTOMED IN THE EVENT THAT WE ARE ABLE TO RAISE ENOUGH MONEY TO MARKET AUTOMED.
The Company completed development of the basic version of AutoMed software as a stand-alone, commercially viable product, the Company plans to market AutoMed as a "one-stop shopping" solution for medical office management. The Company plans to charge $50,000 per installation for a single user and one computer. Currently the Company generates some revenue through AutoMed. The extent to which AutoMed gains acceptance, if any, will depend, in part, on its cost effectiveness and performance as compared to conventional means of office management, as well as known or unknown alternative software packages. If conventional means of office management or alternative software packages are more costeffective or outperform AutoMed, the demand for AutoMed may be adversely affected. Additionally, the Company anticipates the need for approximately $2,200,000 Million dollars to begin marketing AutoMed. The failure of the Company to raise an additional $2,200,000 to implement our Business Plan and maintain levels of market acceptance would have a material adverse effect on the line of business and the Company's overall business, financial condition and results of operations, and would likely cause the value of the Company's securities to decrease.
OUR AUDITORS HAVE EXPRESSED AN OPINION THAT THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
As of December 31, 2009 and 2008 the Company has accumulated deficit amounting to $3,649,491 and $ 2,130,67 2 respectively, net loss amounting $ 133,873 and 185,353 and net cash used in operations of $27,771 and $103,353. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The financial statements do not include any adjustments that might result from our inability to continue as a going concern. Our continuation as a going concern is dependent upon future events, including obtaining financing (discussed above) for expansion and to implement our business plan with respect to AutoMed, if we are unable to continue you will lose your investment.
WE RELY ON KEY MANAGEMENT.
The success of the Company depends upon the personal efforts and abilities of Chandana Basu. The Company faces competition in retaining Ms. Basu and in attracting new personnel should Ms. Basu choose to leave the Company. There is no assurance that the Company will be able to retain and/or continue to adequately motivate Ms. Basu in the future. The loss of Ms. Basu or the Company's inability to continue to adequately motivate her could have a material adverse effect on the Company's business and operations.
BECAUSE MS. CHANDANA BASU OWNS 81.1% OF OUR OUTSTANDING COMMON STOCK, SHE WILL EXERCISE CONTROL OVER CORPORATE DECISIONS THAT MAY BE ADVERSE TO OTHER MINORITY SHAREHOLDERS.
Chandana Basu, a Director of the Company and the Company's Chief Executive Officer and Treasurer, owns approximately 81.1% of the issued and outstanding shares of our common stock. Accordingly, she will exercise control in determining the outcome of all corporate transactions or other matters, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. The interests of Ms. Basu may differ from the interests of the other stockholders and thus result in corporate decisions that are adverse to other shareholders.
IF THERE'S A MARKET FOR OUR COMMON STOCK, OUR STOCK PRICE MAY BE VOLATILE.
If there's a market for our common stock, we anticipate that such market would be subject to wide fluctuations in response to several factors, including, but not limited to:
•actual or anticipated variations in our results of operations;
•our ability or inability to generate new revenues;
•increased competition; and
•conditions and trends in the medical billing industry.
Further, because our common stock is trading on the Pink sheets our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock.
CRITICAL ACCOUNTING POLICIES
Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of any contingent assets and liabilities. On an on-going basis, we evaluate our estimates. We base our estimates on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
ITEM 7.
ITEM 7. FINANCIAL STATEMENTS TO BE AMENDED
Consolidated Balance Sheets
(Unaudited)
The accompanying notes are an integral part of these financial statements.
Consolidated Statements of Operations
Unaudited
The accompanying notes are an integral part of these financial statements.
Consolidated Statements of Stockholders' Equity (Deficit)
	 	Number of Shares
Par Value ($0.001)
Amount	
Additional
Paid-In-
Capital
Prepaid Consulting Subscriptions (Receivable)
Payable	
Accumulated Deficit	 Total
Stockholders'
Equity
(Deficit)
Consolidated Statements of Cash Flow
The accompanying notes are an integral part of these financial statements.
PPJ Enterprise and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 - Organization, Business & Operations
History
The Company was incorporated in the State of Nevada on May 2, 2000, as Winfield Capital Group, Inc. On June 6, 2001, the Company filed a Certificate of Amendment to its Articles of Incorporation to affect a name change to "Winfield Financial Group, Inc." On April 23, 2004, the Company acquired 100% of the equity interest of Healthcare Business Services Groups, Inc. ("Healthcare"). As part of the same transaction, the Company acquired 100% of the equity interest of AutoMed Software Corp. ("AutoMed") and Silver Shadow Properties, LLC ("Silver Shadow") on May 7, 2004. Prior to the Acquisition (defined below), the Company was a business broker, primarily representing sellers and offering its clients' businesses for sale. As a result of the acquisition, the Company changed its business focus to medical billing. On January 7, 2005, the Company filed a Certificate of Amendment to its Articles of Incorporation, with the Nevada Secretary of State and changed its name to "Healthcare Business Services Groups, Inc."
On April 23, 2004, the Company acquired 100% of the issued and outstanding shares of Healthcare Business Services Groups, Inc., a Delaware corporation ("Healthcare"). As part of the same transaction on May 7, 2004, the Company acquired 100% of the issued and outstanding shares of AutoMed Software Corp., a Nevada corporation ("AutoMed"), and 100% of the membership interests of Silver Shadow Properties, LLC, a Nevada single member limited liability company ("Silver Shadow"). The transactions are collectively referred to herein as the "Acquisition." The Company acquired Healthcare, AutoMed, and Silver Shadow from Chandana Basu, the sole owner, in exchange for 25,150,000 newly issued treasury shares of the Company's Common Stock. As a result of the Acquisition, the Company has changed its business focus. The term "Company" shall include a reference to Healthcare Business Services Groups, Inc. (the "Company").
The merger of the Company with Healthcare Business Services Groups Inc., has been accounted for as a reverse acquisition under the purchase method of accounting since the shareholders of Healthcare Business Services Groups Inc. obtained control of the consolidated entity. Accordingly, the merger of the two companies has been recorded as a recapitalization of the Healthcare Business Services Groups Inc., with Healthcare Business Services Groups Inc. being treated as the continuing entity. The continuing company has retained December 31 as its fiscal year end.
AMENDED STATEMENTS
Healthcare was a medical billing service provider that for over SEVENTEEN years had assisted various health care providers to successfully enhance their billing function.
Name Change
A Certificate of Amendment to the Articles of Incorporation to change the registrant’s name to PPJ Enterprise which amendment became effective on March 20, 2008. As a result of the name change, the Company’s trading symbol changed from “HBSV” to “PPJE”.
An amendment to the Registrant’s Articles of Incorporation to increase the authorized shares to 1,500,000,000 shares of common stock, to reauthorize the par value of $.001 per share of common stock, and to authorize additional 95,000,000 shares of preferred stock making it a total of 100,000,000 with a par value of $.001 per share of preferred stock that became effective March 20, 2008; and 300,000,000 Free Trading shares also were registered with Nevada Secretary of State on March 20, 2008.
On March 20, 2008, the Board of Directors approved an Amendment for a 1:400 reverse stock split. All references in the financial statements to the number of shares outstanding, per share amounts, and stock options data of the Company’s common stock have been restated to reflect the effect of the reverse stock split for all periods presented.
PPJ Enterprise and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 - Going Concern and Management's Plans
AMENDED STATEMENT - DUE TO ACCOUNTING ERRORS THE INFORMATION BELOW IS NOT RELIABLE
The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the company as a going concern. However, as of December 31, 2008, the Company has an accumulated deficit of $2,130,672 and as of December 31, 2009 the Company has an accumulated deficit of $3,649,49. These and other factors raise substantial doubt about the Company's ability to continue as a going concern.
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital and achieve profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Note 3 - Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, AutoMed Software Corp., and Silver Shadow Properties, LLC. All significant inter-company accounts and transactions have been eliminated in consolidation. The acquisition of Healthcare Business Services Groups Inc. on May 7, 2004, has been accounted for as a purchase and treated as a reverse acquisition.
Cash and Cash Equivalents
The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.
Inventories
Inventories are stated at the lower of cost or market. Cost is computed on a weighted-average basis, which approximates the first-in, first-out method; market is based upon estimated replacement costs. Costs included in inventory primarily include finished spirit product and packaging.
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 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. Actual results could differ from those estimates
Property & Equipment
Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over useful lives of 3 to 10 years. The cost of assets sold or retired and the related amounts of accumulated depreciation are removed from the accounts in the year of disposal. Any resulting gain or loss is reflected in current operations. Assets held under capital leases are recorded at the lesser of the present value of the future minimum lease payments or the fair value of the leased property. Expenditures for maintenance and repairs are charged to operations as incurred.
PPJ Enterprise and Subsidiaries
Notes to Consolidated Financial Statements
Impairment of Long-Lived Assets
Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," and the accounting and reporting provisions of APB Opinion No. 30, "Reporting the Results of Operations for a Disposal of a Segment of a Business." The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.
Basic and Diluted Net Income per Share
Basic earnings per share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of stock warrants and convertible notes. Diluted earnings per share is calculated using the weighted-average number of common shares outstanding during the period after consideration of the dilutive effect of stock warrants and convertible notes.
Stock-Based Compensation
In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123(R), Share-Based Payment. This pronouncement amends SFAS No. 123, Accounting for Stock Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS No. 123(R) requires that companies account for awards of equity instruments issued to employees under the fair value method of accounting and recognize such amounts in their statements of operations. Under SFAS No. 123(R), we are required to measure compensation cost for all stock-based awards at fair value on the date of grant and recognize compensation expense in our consolidated statements of operations over the service period that the awards are expected to vest.
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of SFAS 123(R) and the Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services". Common stock issued to non-employees in exchange for services is accounted for based on the fair value of the services received.
Fair Value of Financial Instruments
Statement of financial accounting standard No. 107, Disclosures about Fair Value of Financial Instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.
Revenue Recognition
The Company's revenue recognition policies are in compliance with Staff accounting bulletin SAB 104. All revenue is recognized when persuasive evidence of an arrangement exists, the service or sale is complete, the price is fixed or determinable and collectability is reasonably assured. Revenue is derived from collections of medical billing services. Revenue is recognized when the collection process is complete which occurs when the money is collected and recognized on a net basis.
PPJ Enterprise and Subsidiaries
Notes to Consolidated Financial Statements
License Revenue - The Company recognizes revenue from license contracts when a non-cancelable, non-contingent license agreement has been signed, the software product has been delivered, no uncertainties exist surrounding product acceptance, fees from the agreement are fixed and determinable and collection is probable. Any revenues from software arrangements with multiple elements are allocated to each element of the arrangement based on the relative fair values using specific objective evidence as defined in the SOPs. If no such objective evidence exists, revenues from the arrangements are not recognized until the entire arrangement is completed and accepted by the customer. Once the amount of the revenue for each element is determined, the Company recognizes revenues as each element is completed and accepted by the customer. For arrangements that require significant production, modification or customization of software, the entire arrangement is accounted for by the percentage of completion method, in conformity with Accounting Research Bulletin ("ARB") No. 45 and SOP 81-1.
Services Revenue - Revenue from consulting services is recognized as the services are performed for time-and-materials contracts and contract accounting is utilized for fixed-price contracts. Revenue from training and development services is recognized as the services are performed. Revenue from maintenance agreements is recognized ratably over the term of the maintenance agreement, which in most instances is one year.
Allowance for Doubtful Accounts
We provide an allowance for estimated uncollectible accounts receivable balances based on historical experience and the aging of the related accounts receivable.
Advertising
The Company expenses advertising costs as incurred. The Company incurred no advertising costs for the years ended December 31, 2008 and 2009 data $16,421 and $11,000.
Income Taxes
The Company accounts for income taxes using the liability method as required by Statement of Financial Accounting Standards ("FASB") No. 109, Accounting for Income Taxes ("SFAS 109"). Under this method, deferred tax assets and liabilities are determined based on differences between their financial reporting and tax basis of assets and liabilities. The Company was not required to provide for a provision for income taxes for the periods ended December 31, 2009 and 2008, as a result of net operating losses incurred during the periods. As of December 31, 2009 and 2008, the Company has net operating losses of ($133,873) and ($185.363) available for income tax purposes that may be carried forward to offset future taxable income, if any. These carryforwards expire in various years through 2026. At December 31, 2009 and 2008, the Company has deferred tax assets of approximately 0.00 relating to the Company's net operating losses, respectively. The Company's deferred tax asset has been fully reserved by a valuation allowance since realization of its benefit is uncertain. The Company's ability to utilize its NOL carryforwards may be subject to an annual limitation in future periods pursuant to Section 382 of the Internal Revenue Code of 1986, as amended.
PPJ Enterprise and Subsidiaries
Notes to Consolidated Financial Statements
The provision for income taxes using the federal and state tax rates as compared to the Company's effective tax rate is summarized as follows:
Significant components of the Company's deferred tax assets at December 31, 2008 and 2009, are as follows:
Research and Development Costs
Expenditures for research & development are expensed as incurred. Such costs are required to be expensed until the point that technological feasibility is established. The Company incurred no research and development costs for the years ended December 31, 2009 and 2008 was $17,050 and $43,000.
Reclassifications
Certain items in the prior year financial statements have been reclassified for comparative purposes to conform to the presentation in the current period’s presentation. These reclassifications have no effect on the previously reported income (loss).
Recently Issued Accounting Pronouncements
In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (FAS 141(R)). This Statement provides greater consistency in the accounting and financial reporting of business combinations. It requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in the transaction, establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to disclose the nature and financial effect of the business combination. FAS 141(R) is effective for fiscal years beginning after December 15, 2009. We will adopt FAS 141(R) no later than the first quarter of fiscal 2010 and are currently assessing the impact the adoption will have on our financial position and results of operations.
PPJ Enterprise and Subsidiaries
Notes to Consolidated Financial Statements
In December 2007, the FASB issued SFAS No. 160. Noncontrolling Interests in Consolidated Financial Statements (FAS 160). This Statement amends Accounting Research Bulletin No. 51, Consolidated Financial Statements, to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. FAS 160 is effective for fiscal years beginning after December 15, 2008. We will adopt FAS 160 no later than the first quarter of fiscal 2010 and are currently assessing the impact the adoption will have on our financial position and results of operations.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, which permits entities to choose to measure at fair value eligible financial instruments and certain other items that are not currently required to be measured at fair value. This statement requires that unrealized gains and losses on items for which the fair value option has been elected be reported in earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We will adopt SFAS No. 159 no later than the first quarter of fiscal 2009. We are currently assessing the impact the adoption of SFAS No. 159 will have on our financial position and results of operations.
In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R). SFAS No. 158 requires company plan sponsors to display the net over or under-funded position of a defined benefit postretirement plan as an asset or liability, with any unrecognized prior service costs, transition obligations or actuarial gains/losses reported as a component of other comprehensive income in shareholders’ equity. SFAS No. 158 is effective for fiscal years ending after December 15, 2006. We adopted the recognition provisions of SFAS No. 158 as of the end of fiscal 2007. The adoption of SFAS No. 158 did not have an effect on the Company’s financial position or results of operations.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements. However, the application of SFAS No. 157 may change current practice for some entities. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We will adopt SFAS No. 157 in the first quarter of fiscal 2009. We are currently assessing the impact that the adoption of SFAS No. 157 will have on our financial position and results of operations.
In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109 (FIN 48). This interpretation clarifies the application of SFAS No. 109, Accounting for Income Taxes, by defining a criterion that an individual tax position must meet for any part of the benefit of that position to be recognized in an enterprise’s financial statements and also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006, but earlier adoption is permitted. The Company is in the process of evaluating the impact of the application of the Interpretation to its financial statements.
Note 4 - Operations .
The accompanying financial statements have been reclassified accordingly and presented as operations. The Company's other three subsidiaries; Silver Shadow, AutoMed and Alta Vista, are dormant companies and are also reclassified as part of operations.
PPJ Enterprise and Subsidiaries
Notes to Consolidated Financial Statements
Note 5 - Property and Equipment
As of December 31, 2009 and 2008, property and equipment is comprised of the following:
Note 6 - Software Development Costs
The Company is accounting for computer software technology costs under the Capitalization criteria of Statement of Position 98-1 "Accounting for the Costs of Computer Software
Developed for Internal Use. And for distributions"
Expenditures for maintenance and repairs are expensed when incurred; additions, renewals and betterments are capitalized. Amortization is computed using the straight-line method over the estimated useful life of the asset. Amortization begins from the date when the software becomes operational. The website became operational July 1, 2004. The cost of software development in 2009 and 2008 are $17050 and $43,000 in the accompanying financial statements at December 31, 2009 and 2008, respectively.
Note 7- Accounts Payable and Accrued Expenses
As of December 31, 2009 and 2008, accounts payable and accrued expenses consist of the following:
Accounts payable was $1,121,869 and $1086,869 respectively
Accrued officer’s compensation was $1,177,665 and $997,665 (total accrued)	 	
Total Accounts Payable and Accrued Expenses 	 $	1,652,796
PPJ Enterprise and Subsidiaries
Notes to Consolidated Financial Statements
Note 8 - Accrued Officer Compensation
As of December 31, 2009 and 2008, accrued officer compensation totaled for the year $60,000 and $120,000, respectively.
Note 9 - Lines of Credit
Note 10 - Notes Payable
Note 11 - Convertible Secured Note and Securities Purchase Agreement
On June 27, 2006, the Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with New Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC (collectively, the "Investors"). Under the terms of the Securities Purchase Agreement, the Investors purchased an aggregate of (i) $2,000,000 in callable convertible secured notes (the "Notes") and (ii) warrants to purchase 125,000 reverse split shares of our common stock (the "Warrants").
Pursuant to the Securities Purchase Agreement, the Investors purchased the Notes and Warrants in three trenches as set forth below:
· At closing, on July 1, 2006 ("Closing"), the Investors purchased Notes aggregating $700,000 and warrants to purchase 43,750 shares based on the prorate shares of our common stock;
· On August 8, 2006 the investors purchased Notes aggregating $600,000 and warrants to purchase 37,500 shares based on the prorate shares of our common stock.
· Upon effectiveness of the Registration Statement, the Investors will purchase Notes aggregating $700,000. The Company has withdrawn the third trench as the Registration Statement was not effective to bring more funds into the Company.
The Notes carry an interest rate of 6% and a maturity date of June 27, 2009. The notes are convertible into common shares at the Applicable Percentage of the average of the lowest three
(3) trading prices for our shares of common stock during the twenty (20) trading day period prior to conversion. The "Applicable Percentage" means 50%; provided, however, that the Applicable Percentage shall be increased to (i) 55% in the event that a Registration Statement is filed within thirty days of the closing and (ii) 60% in the event that the Registration Statement becomes effective within one hundred and twenty days from the Closing.
PPJ Enterprise and Subsidiaries
Notes to Consolidated Financial Statements
The Company has an option to prepay the Notes in the event that no event of default exists, there are a sufficient number of shares available for conversion of the Notes and the market price is at or below $.05 per share. In addition, in the event that the average daily price of the common stock, as reported by the reporting service, for each day of the month ending on any determination date is below $.05, the Company may prepay a portion of the outstanding principal amount of the Notes equal to 101% of the principal amount hereof divided by thirty-six (36) plus one month's interest. Exercise of this option will stay all conversions for the following month. The full principal amount of the Notes is due upon default under the terms of Notes. In addition, the Company has granted the investors a security interest in substantially all of its assets and intellectual property as well as registration rights.
The Company has received the $ 1,300,000 through December 31, 2007.
Note 12 - Derivative Liability
Concurrent with the issuance of the $1,300,000 note detailed in Note 11, the Company issued to the Investors seven year warrants to purchase 81,250, post reverse split shares, of common stock at an exercise price of $28.00.
The Investors have contractually agreed to restrict their ability to convert the Notes and exercise the Warrants and receive shares of the Company's common stock such that the number of shares of the Company's common stock held by them and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of the Company's common stock.
The fair value of the share purchase warrants for the period December 31, 2007, was in the amount of $1,460,962, which was determined using the Black-Scholes option value model with the following assumptions:
· Expected life 5.6 years
· Volatility 98%
· Dividend yield 0%
· Risk free rate 3.5%
Note 13 - Stockholders’ Equity
Authorized Shares
An amendment to the Registrant’s Articles of Incorporation to increase the authorized shares to 1,500,000,000 shares of common stock, to reauthorize the par value of $.001 per share of common stock, and to authorize additional 95,000,000 shares of preferred stock making it a total of 100,000,000 with a par value of $.001 per share of preferred stock that became effective March 20, 2008; and 300,000,000 Free Trading shares also were registered with Nevada Secretary of State on March 20, 2008.
Reverse Stock Split
On March 20, 2008, the Board of Directors approved an Amendment for a 1:400 reverse stock split. . All references in the financial statements to the number of shares outstanding, per share amounts, and stock options data of the Company’s common stock have been restated to reflect the effect of the reverse stock split for all periods presented.
PPJ Enterprise and Subsidiaries
Notes to Consolidated Financial Statements
Common Stock
As of December 31, 2007, 428,226 common shares were issued and outstanding. The holders of common stock, and of shares issuable upon exercise of any Warrants or Options, are entitled to equal dividends and distributions, per share, with respect to the common stock when, as and if declared by the Board of Directors from funds legally available therefore. No holder of any shares of common stock has a pre-emptive right to subscribe for any securities of the Company nor is any common shares subject to redemption or convertible into other securities of the Company. Upon liquidation, dissolution or winding up of the Company, and after payment of creditors and preferred stockholders, if any, the assets will be divided prorata on a share-for-share basis among the holders of the shares of common stock. All shares of common stock now outstanding are fully paid, validly issued and non-assessable. Each share of common stock is entitled to one vote with respect to the election of any director or any other matter upon which shareholders are required or permitted to vote. Holders of the Company's common stock do not have cumulative voting rights, so that the holders of more than 50% of the combined shares voting for the election of directors may elect all of the directors, if they choose to do so and, in that event, the holders of the remaining shares will not be able to elect any members to the Board of Directors.
During the year ended December 31, 2007, the Company issued 343,026 restricted common shares of which 302,076 shares were issued to Consultants for services totaling $877,100 and 40,950 shares were issue to Directors for services totaling $114,660. As of December 31, 2008, subscriptions payable totals $75,750.
During the year ended December 31, 2006, the Company issued 300 restricted common shares to Consultants for services totaling $51,623.
Class B Preferred Stock
The Company's Articles of Incorporation (Articles") authorize the issuance of 100,000,000 shares of $0.001 par value Class B Preferred Stock. No shares of Preferred Stock are currently issued and outstanding. Under the Company's Articles, the Board of Directors has the power, without further action by the holders of the Common Stock, to designate the relative rights and preferences of the preferred stock, and issue the preferred stock in such one or more series as designated by the Board of Directors. The designation of rights and preferences could include preferences as to liquidation, redemption and conversion rights, voting rights, dividends or other preferences, any of which may be dilutive of the interest of the holders of the Common Stock or the Preferred Stock of any other series. The issuance of Preferred Stock may have the effect of delaying or preventing a change in control of the Company without further shareholder action and may adversely affect the rights and powers, including voting rights, of the holders of Common Stock. In certain circumstances, the issuance of preferred stock could depress the market price of the Common Stock.
Note 14 - Related Party Transactions
During the year ended December 31, 2009 and 2008 - None
PPJ Enterprise and Subsidiaries
Notes to Consolidated Financial Statements
Note 15- Commitments & Contingencies
Leases liabilities were 2009 and 2008 - $2,230 and $0.00 respectively
Litigation AMENDED - ALL LITIGATION CASES WERE TRANSFERRED TO MS. BASU AS OF 1/1/2008
Authorized Shares and Reverse Stock Split
An amendment to the Registrant’s Articles of Incorporation to increase the authorized shares to 1,500,000,000 shares of common stock, to reauthorize the par value of $.001 per share of common stock, and to authorize additional 95,000,000 shares of preferred stock making it a total of 100,000,000 with a par value of $.001 per share of preferred stock that became effective March 20, 2008; and 300,000,000 Free Trading shares also were registered with Nevada Secretary of State on March 20, 2008.
On March 20, 2008, the Board of Directors approved an Amendment for a 1:400 reverse stock split. . All references in the financial statements to the number of shares outstanding, per share amounts, and stock options data of the Company’s common stock have been restated to reflect the effect of the reverse stock split for all periods presented.
Equity
ITEM 8.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AMENDED - None
ITEM 8A. CONTROLS AND PROCEDURES
The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in the reports filed under the Securities Exchange Act, is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to the Company's management, including the Company's chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management does not expect that our disclosure controls or internal controls over financial reporting will prevent all errors or all instances of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Because of the inherent limitation of a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Based upon their evaluation as of the end of the period covered by this report, the Company's chief executive officer and chief financial officer concluded that, the Company's disclosure controls and procedures are not effective to ensure that information required to be included in the Company's periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms.
This deficiency consisted primarily of inadequate staffing and supervision that could lead to the untimely identification and resolution of accounting and disclosure matters and failure to perform timely and effective reviews. However, the size of the Company prevents us from being able to employ sufficient resources to enable us to have adequate segregation of duties within our internal control system. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
ITEM 8B. OTHER INFORMATION
None.
PART III
ITEM 9.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors are elected by the stockholders to a term of one year and serves until his or her successor is elected and qualified. Officers are appointed by the Board of Directors to a term of one year and serves until his or her successor is duly elected and qualified, or until he or she is removed from office. Our Board of Directors has no nominating, auditing or compensation committees.
The following table sets forth certain information regarding our executive officers and directors as of the date of this report:
Name
Age
Position
Chandana Basu
Chief Executive Officer, Treasurer and Director
Abhijit Bhattacharya
Director
Arjinderpal Singh Sekhon, MD
Director
The above listed officers and directors will serve until the next annual meeting of the shareholders or until their death, resignation, retirement, removal, or disqualification, or until their successors have been duly elected and qualified. Vacancies in the existing Board of Directors are filled by majority vote of the remaining Directors. Officers of the Company serve at the will of the Board of Directors .To the Company's knowledge, there are no agreements or understandings for any officer or director to resign at the request of another person nor is any officer or director acting on behalf of or is to act at the direction of any other person other than in his fiduciary capacity of and for the benefit of the Company and at its direction.
Set forth below is certain biographical information regarding our executive officers and directors:
Chandana Basu - Chief Executive Officer, Treasurer and Director
Chandana Basu has served as our Chief Executive Officer and Treasurer since May 2004, after we acquired Healthcare Business Services Group, Inc. ("“Healthcare”"), a full-service medical billing agency and our wholly-owned subsidiary. She has served as our director since November 12, 2004. Ms. Basu incorporated “Healthcare” in December 1994. Ms. Basu has operated “Healthcare” for the past 18 years as of 2001. Ms. Basu has been grown “Healthcare” from a core client base of doctors and hospitals in California, Florida, Washington State and Texas without the use of consistent marketing or advert advertising. Ms. Basu has over 19 years of experience in medical bill collecting from insurance companies.
Family Relationships
None.
Board Committees
We currently have no compensation committee or other board committee performing equivalent functions. Currently, all members of our board of directors participate in discussions concerning executive officer compensation.
Involvement on Certain Material Legal Proceedings During the Last Five Years
No director, officer, significant employee or consultant has been convicted in a criminal proceeding, exclusive of traffic violations.
No bankruptcy petitions have been filed by or against any business or property of any director, officer, significant employee or consultant of the Company nor has any bankruptcy petition been filed against a partnership or business association where these persons were general partners or executive officers.
No director, officer, significant employee or consultant has been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities.
No director, officer or significant employee has been convicted of violating a federal or state securities or commodities law.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors and executive officers, and persons who beneficially own more than 10% of a registered class of the Company's equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company's securities with the SEC on Forms 3 (Initial Statement of Beneficial Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual Statement of Beneficial Ownership of Securities). Directors, executive officers and beneficial owners of more than 10% of the Company's Common Stock are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file. Except as otherwise set forth herein, based solely on review of the copies of such forms furnished to the Company, or written representations that no reports were required, the Company believes that for the fiscal year ended December 31, 2005 beneficial owners did not comply with Section 16(a) filing requirements applicable to them to the extent they filed all form required under Section 16(a) in February 2005 and had no trading activity in 2005.
Code of Ethics
We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions in that our sole officer and director serves in all the above capacities.
ITEM 10.
ITEM 10. EXECUTIVE COMPENSATION
(1) Chandana Basu is to receive a salary of $5,000 per month and a minimum bonus of $45,000 per month pursuant to an employment agreement with Healthcare as until 12/31/2007.
*Paid in Common Shares of the Company.
**All of these paid by Common shares of the Company
***most of this amount paid in Common Shares of the Company
Ms. Basu did not sell any of her shares as of December 31, 2009 and 2008.
OPTIONS GRANTS IN PRESENT FISCAL YEAR (Individual Grants)
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Aggregated Option Exercises and Fiscal Year-End Option Value Table. The following table sets forth certain information regarding stock options exercised during fiscal year ending December 31, 2005, by the executive officer named in the Summary Compensation Table.
None.
Employment Contracts
We have an employment agreement with Chandana Basu, our Chief Executive Officer and Treasurer. The Agreement was executed on April 1, 2004 and cannot be terminated by us. It shall remain in existence until Ms. Basu retires or assigns her position to others. It provides for a monthly base salary of $5,000 per month and a bonus of 25% of our gross receipts payable monthly with a minimum bonus of $45,000 per month. It also includes reimbursement of all reasonable expenses. It provides for the issuance of a minimum of 1,000,000 shares annually as per amendment of employment agreement in October 2004.
The Company was never able to pay Ms. Basu such an amount as agreed in her employment agreement. So Ms Basu amended her employment agreement due to Company’s financial conditions during the Fourth Quarter of 2007 as below:
This agreement was modified on January 6, 2008 as below:
Ms. Basu will accept $5,000 as salary and $20,000 worth of Company’s Common Shares per month for the first six months. After six months her salary must increase $1,000 per month to a maximum $10,000 per month and $20,000 worth of Company’s S-8 shares per month until financial conditions are changed then would revert back to original agreement.
Modifications will be reviewed as the Company’s financial conditions changes.
On April 29, 2008 Ms. Basu accepted 100,000,000 shares of the Company Common Shares as a full payment towards all accrued dues including cost paid by her, bonuses and note receivable from the Company until this date.
Ms. Basu also serves as the Chief Executive Officer and President of AutoMed. Ms. Basu is our only employee at this time. She travels for marketing, deals with the auditors, attorneys and investors in addition works directly with programmers and other technical people to continuously improve the status of the Company.
Based on our 2006 financing, we were required to purchase $4,000,000 of additional key man life insurance on the life of Chandana Basu, our Chief Executive Officer and Treasurer. $20,000 has been paid to fund the above additional insurance policy.
Compensation of Directors
Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued for, directors in such capacity.
ITEM 11.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information derived from the named person, or from the transfer agent, concerning the ownership of common stock as of July 26, 2006, of (i) each person who is known to us to be the beneficial owner of more than 5 percent of the common stock; (ii) all directors and executive officers; and (iii) directors and executive officers as a group:
(1) Based on 128,766,000 shares issued and outstanding as of September 19, 2008.
Under the terms of the callable secured convertible note and the related warrants, the callable secured convertible note and the warrants are exercisable by any holder only to the extent that the number of shares of common stock issuable pursuant to such securities, together with the number of shares of common stock owned by such holder and its affiliates (but not including shares of common stock underlying unconverted shares of callable secured convertible notes or unexercised portions of the warrants) would not exceed 4.99% of the then outstanding common stock as determined in accordance with Section 13(d) of the Exchange Act. Therefore, the table does not include AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millenium Capital Partners II, LLC.
Change in Control
No arrangements exist that may result in a change of control of Healthcare Business Services Group, Inc.
ITEM 12.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 13, 2005, our majority shareholder and Chief Executive Officer, Chandana Basu voted her shares to adopt our Amended 2004 Stock Option Plan ("Option Plan"). Pursuant to the Option Plan, Ms. Basu is eligible to receive 1,250,000 shares of our common stock in connection with that Option Plan.
Other than as noted above, none of the directors, executive officers or any member of the immediate family of any director or executive officer has been indebted to us since its inception. We have not and do not intend to enter into any additional transactions with our management or any nominees for such positions. We have not and do not intend to enter into any transactions with our beneficial owners.
ITEM 13.
ITEM 13. EXHIBITS
•Exhibits:
EXHIBIT
DESCRIPTION
32.1
Certification
•Reports on Form 8-K
The Company filed no Reports on Form 8-K during the fiscal quarter ended December 31, 2006.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth fees billed to us by our independent auditors for the year ended December 31, 2009 and December 31, 2008 for (i) services rendered for the audit of our annual financial statements and the review of our quarterly financial statements, (ii) services rendered that are reasonably related to the performance of the audit or review of our financial statements that are not reported as Audit Fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.
SIGNATURE
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereto duly authorized.