x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the quarterly period ended: March 31, 2008 |
¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the transition period from ____________ to ____________
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Commission
file number: 001-33094
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American
CareSource Holdings, Inc.
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Delaware
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20-0428568
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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5429 Lyndon B. Johnson Freeway,
Suite 700, Dallas, Texas 75240
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(Address
of principal executive offices)
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(972)
308-6830
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(Issuer’s
telephone number, including area code)
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(Former
name, former address, and former fiscal year, if changed since last
report)
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q Large Accelerated
Filer
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q Accelerated
Filer
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q Non-Accelerated
Filer (do not check if a smaller reporting
company)
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x Smaller Reporting
Company
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Part
I
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Financial
Information
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1
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Item
1.
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Financial
Statements
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1
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Consolidated
Balance Sheets
(unaudited)
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1
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Consolidated
Statements of Operations (unaudited)
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2
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Consolidated
Statements of Stockholders’ Equity (unaudited)
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3
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Consolidated
Statements of Cash Flows (unaudited)
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4
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Notes
to Unaudited Consolidated Financial Statements
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5
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Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operation
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9
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Item
4.
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Controls
and
Procedures
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13
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Part
II
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Other
Information
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13
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Item
1A.
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Risk
Factors
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13
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Item
6.
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Exhibits
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14
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Signatures
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15
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As
of
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||||||||
Assets
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March 31,
2008 (unaudited)
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December 31,
2007 |
||||||
Current
assets:
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||||||||
Cash
and cash equivalents
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$ | 5,857,094 | $ | 4,272,498 | ||||
Accounts
receivable (less allowance for losses of $358,158 in 2008 and
$189,556 in 2007)
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3,248,579 | 3,651,203 | ||||||
Prepaid
and other current assets
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427,195 | 409,445 | ||||||
Total
current assets
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9,532,868 | 8,333,146 | ||||||
Property
and equipment, net
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388,504 | 332,450 | ||||||
Other
Assets
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||||||||
Certificate
of deposit, restricted
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145,000 | 145,000 | ||||||
Deferred
income taxes
Other
non-current assets
Intangible
assets
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255,731 164,507 1,440,843 | 255,731 237,246 1,494,238 | ||||||
Goodwill
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4,361,299 | 4,361,299 | ||||||
Total
other assets
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6,367,380 | 6,493,514 | ||||||
Total
assets
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$ | 16,288,752 | $ | 15,159,110 | ||||
Liabilities
and stockholders’ equity
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||||||||
Current
Liabilities
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||||||||
Due
to service providers
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$ | 3,709,889 | $ | 3,344,278 | ||||
Accounts
payable and accrued liabilities
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1,288,963 | 1,320,036 | ||||||
Current
maturities of long-term debt
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56,697 | 55,697 | ||||||
Total
current liabilities
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5,055,549 | 4,720,011 | ||||||
Long-term
debt
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35,784 | 50,348 | ||||||
Total
liabilities
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5,091,333 | 4,770,359 | ||||||
Stockholders’
equity:
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||||||||
Common
stock-par value $0.01, 40,000,000 shares authorized and 15,067,423 and
14,668,416 shares issued and outstanding as of March 31, 2008 and December
31, 2007,
respectively
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150,674 | 146,684 | ||||||
Preferred
stock-par value $0.01, 10,000,000 shares authorized and none
outstanding
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- | - | ||||||
Additional
paid-in-capital
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17,897,140 | 17,613,880 | ||||||
Accumulated
deficit
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(6,850,395 | ) | (7,371,813 | ) | ||||
Total
stockholders’ equity
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11,197,419 | 10,388,751 | ||||||
Total
liabilities and stockholders’ equity
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$ | 16,288,752 | $ | 15,159,110 |
Three
Months Ended
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||||||||
March 31,
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||||||||
2008
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2007
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Net
revenue
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$ | 11,505,675 | $ | 2,266,569 | ||||
Total
cost of revenues
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9,801,122 | 2,101,643 | ||||||
Contribution
margin
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1,704,553 | 164,926 | ||||||
Selling,
general, and administrative expense
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1,112,854 | 694,421 | ||||||
Depreciation
and amortization
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92,067 | 78,074 | ||||||
Total
operating expense
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1,204,921 | 772,495 | ||||||
Operating income
(loss)
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499,632 | (607,569 | ) | |||||
Financing
(income) expenses:
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||||||||
Interest
income
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(40,668 | ) | (53,874 | ) | ||||
Interest
expense
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1,838 | 11,071 | ||||||
Debt
issuance cost
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— | 46,300 | ||||||
Total
financing (income) expenses
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(38,830 | ) | 3,497 | |||||
Net
income (loss) before income taxes
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538,462 | (611,066 | ) | |||||
Income
tax provision
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17,044 | — | ||||||
Net
income (loss)
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$ | 521,418 | $ | (611,066 | ) | |||
Earnings
(loss) per common share:
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||||||||
Basic
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$ | 0.04 | $ | (0.04 | ) | |||
Diluted
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$ | 0.03 | $ | (0.04 | ) | |||
Basic
weighted average common shares outstanding
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14,880,266 | 14,486,749 | ||||||
Diluted
weighted average common shares outstanding
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17,255,201 | 14,486,749 |
AMERICAN
CARESOURCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY
FOR
THE THREE MONTHS ENDED MARCH 31, 2008 (UNAUDITED)
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||||||||||||||||||||
Common Stock
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Additional Paid-In
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Accumulated
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||||||||||||||||||
Shares
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Amount
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Capital
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Deficit
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Total
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||||||||||||||||
Balance
December 31, 2007
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14,668,416 | $ | 146,684 | $ | 17,613,880 | $ | (7,371,813 | ) | $ | 10,388,751 | ||||||||||
Exercise
of stock options
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399,007 | 3,990 | 125,735 | — | 129,725 | |||||||||||||||
Stock-based
compensation expense
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— | — | 157,525 | — | 157,525 | |||||||||||||||
Net
income
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— | — | — | 521,418 | 521,418 | |||||||||||||||
Balance
March
31, 2008
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15,067,423 | $ | 150,674 | $ | 17,897,140 | $ | (6,850,395 | ) | $ | 11,197,419 |
Three
Months Ended
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||||||||
March 31,
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||||||||
2008
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2007
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Cash
flows from operating activities:
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||||||||
Net
income (loss)
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$ | 521,418 | $ | (611,066 | ) | |||
Adjustments
to reconcile net income (loss) to net cash provided by (used in) operating
activities:
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||||||||
Stock-based
compensation expense
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157,525 | 49,536 | ||||||
Depreciation
and amortization
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92,067 | 78,074 | ||||||
Amortization
of debt issuance costs
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— | 46,300 | ||||||
Client
management fee expense related to warrants
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13,228 | — | ||||||
Changes
in operating assets and liabilities:
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||||||||
Accounts
receivable
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402,624 | 384,844 | ||||||
Prepaid
and other current assets
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41,761 | (25,660 | ) | |||||
Accounts
payable and accrued liabilities
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(31,073 | ) | (22,287 | ) | ||||
Due
to service providers
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365,611 | (445,683 | ) | |||||
Net
cash provided by (used in) operating
activities
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1,563,161 | (545,942 | ) | |||||
Cash
flows from investing activities:
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||||||||
Purchase
of property and equipment
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(94,726 | ) | (18,833 | ) | ||||
Net
cash used in investing activities
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(94,726 | ) | (18,833 | ) | ||||
Cash
flows from financing activities:
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||||||||
Payments
on long-term debt
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(13,564 | ) | (309,659 | ) | ||||
Net
proceeds from the exercise of stock options
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129,725 | 1,924 | ||||||
Net
cash provided by (used in) financing activities
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$ | 116,161 | (307,735 | ) | ||||
Net
increase (decrease) in cash and cash equivalents
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$ | 1,584,596 | (872,510 | ) | ||||
Cash
and cash equivalents at beginning of period
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4,272,498 | 5,025,380 | ||||||
Cash
and cash equivalents at end of period
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$ | 5,857,094 | $ | 4,152,870 | ||||
Supplemental
disclosures cash flow information:
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Cash
paid for interest
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$ | 1,838 | $ | 29,931 |
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·
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The
Company negotiates a contract with the service provider and also
negotiates separate contracts with the payor. Neither the service provider
nor the payor can look through the Company and claim directly against the
other party. Each service provider contracts with the Company only, and
not with the payor. Likewise, each payor contracts with the
Company only, and not with the service provider. Each party
deals directly with the Company and does not deal directly with each
other.
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·
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The
Company determines through negotiations which service providers will be
included in or excluded from the network to be offered to the
client payor based on, among other things, price and
access.
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·
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The
Company does not earn a fixed dollar amount per client transaction
regardless of the amount billed to clients or earn a stated percentage of
the amount billed to its clients.
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·
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The
Company is responsible to the service provider for processing claims and
managing the claims its adjustors
process.
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·
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The
Company sets prices to be settled with payors and separately negotiates
the prices to be settled with the service
providers.
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·
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The
Company may realize a positive or negative margin represented by the
difference between the negotiated fees received from the payor and the
negotiated amount paid to service
providers.
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Three Months Ended March 31,
2008
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Three Months Ended March 31,
2007
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|||||||||||||||||||||||
Accounts
Receivable
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Revenue
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%
of Total
Revenue
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Accounts
Receivable
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Revenue
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%
of Total
Revenue
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|||||||||||||||||||
Customer
A
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$ | 1,833,000 | $ | 7,067,000 | 61 | % | $ | 584,000 | $ | 1,859,000 | 82 | % | ||||||||||||
Customer
B
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1,188,000 | 4,015,000 | 35 | % | 113,000 | 40,000 | 2 | % | ||||||||||||||||
All
Others
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228,000 | 424,000 | 4 | % | 253,000 | 368,000 | 16 | % | ||||||||||||||||
$ | 3,249,000 | $ | 11,506,000 | 100 | % | $ | 950,000 | $ | 2,267,000 | 100 | % |
Three
Months Ended
March 31, |
||||||||
2008
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2007
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|||||||
Numerator
for basic and diluted earnings per share:
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||||||||
Net
income (loss)
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$ | 521,418 | $ | (611,066 | ) | |||
Denominator:
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||||||||
Weighted-average
basic common shares outstanding
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14,880,266 | 14,486,749 | ||||||
Assumed
conversion of dilutive securities:
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||||||||
Stock
options
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859,796 | - | ||||||
Warrants
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1,515,139 | - | ||||||
Potentially
dilutive common shares
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2,374,935 | - | ||||||
Denominator
for diluted earnings
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||||||||
per
share - Adjusted weighted-average shares
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17,255,201 | 14,486,749 | ||||||
Earnings
(loss) per common share:
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||||||||
Basic
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$ |
0.04
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$ |
(0.04
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) | |||
Diluted
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$ |
0.03
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$ |
(0.04
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) |
March 31,
2008 |
December 31,
2007 |
|||||||
Notes
payable to Capital One Bank, $135,000 due September 2009, due in monthly
installments of approximately $4,143, including interest at
6.5%
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$ | 70,787 | $ | 81,939 | ||||
Capital
lease obligations
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21,694 | 24,106 | ||||||
92,481 | 106,045 | |||||||
Less
current maturities
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(56,697 | ) | (55,697 | ) | ||||
Long-term
debt, less current maturities
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$ | 35,784 | $ | 50,348 |
Statement
of Operations for the Quarters Ended
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||||||||
March 31,
2008
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March 31,
2007
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|||||||
Net
revenue
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$ | 11,505,675 | $ | 2,266,569 | ||||
Cost
of revenue
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9,801,122 | 2,101,643 | ||||||
Contribution
margin
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1,704,553 | 164,926 | ||||||
Selling,
general and administrative expense
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1,112,854 | 694,421 | ||||||
Depreciation
and amortization
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92,067 | 78,074 | ||||||
Operating
income (loss)
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499,632 | (607,509 | ) | |||||
Financing
(income) expense
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(38,830 | ) | 3,497 | |||||
Net
income (loss) before income taxes
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538,462 | (611,066 | ) | |||||
Income
tax provision
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17,044 | — | ||||||
Net
income (loss)
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$ | 521,418 | $ | (611,066 | ) |
American
CareSource Holdings, Inc.
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||||
Date:
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May
15, 2008
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By:
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/s/
David S. Boone
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David
S. Boone
President
and Chief Executive Officer
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||||
Date:
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May
15, 2008
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By:
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/s/
Steven J. Armond
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Steven
J. Armond
Chief
Financial Officer
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Exhibit
#
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Description
of Exhibits
|
14.1
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Code
of Business Conduct and Ethics
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20.1
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Audit
Committee Charter
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20.2
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Compensation
Committee Charter
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20.3
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Governance
and Nominations Committee Charter
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31.1
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Certification
of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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31.2
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Certification
of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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32.1
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Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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