NOTE A BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
||Nature of Operations/ Basis of Presentation|
Nature of Operations
MIT Holding, Inc., a Delaware corporation, is a
holding company. Through three wholly-owned subsidiaries, MIT distributes wholesale pharmaceuticals, administers intravenous infusions,
operates an ambulatory center where therapies are administered and sells and rents home medical equipment.
Medical Infusion Technologies, Inc. was incorporated
in November 1991 in the state of Georgia. On July 6, 2006, an agreement and plan of merger was made between MIT Holding, Inc.,
a Delaware corporation, Medical Infusion Technologies, Inc., and MIT Acquisition A, Inc. By this agreement, MIT Holding, Inc. became
the parent company and Medical Infusion Technologies, Inc. and MIT Ambulatory Care Center, Inc., the wholly-owned subsidiaries.
MIT Holding, Inc. Merger with Convention All
Our company was formerly known as Convention All
Holdings, Inc. and, on May 2, 2007, we acquired a 100% ownership interest in MIT Holding, Inc. through a merger of MIT Holding,
Inc. with and into MIT CVAH Acquisition Corp., a newly formed Delaware corporation and wholly-owned subsidiary, in exchange for
32,886,779 shares of our common stock. Simultaneously with the Merger, the company formerly known as MIT Holding, Inc. changed
its name to Medical Infusion Group, Inc., and we changed our name to MIT Holding, Inc. As a result of the Merger, we now own 100%
of Medical Infusion Group, Inc., a Delaware corporation, which, in turn, continues to own 100% of the issued and outstanding shares
of capital stock of MIT Ambulatory Care Center, Inc., a Georgia corporation ("Ambulatory"), Medical Infusion Technologies,
Inc., a Georgia corporation (Infusion) and MIT International Distribution, Inc., a Delaware corporation (MIT
Basis of Presentation
The accompanying consolidated financial statements
have been prepared in conformity with accounting principles
generally accepted in the United States of America.
||Principles of Consolidation|
The accompanying consolidated financial statements
include the accounts of MIT Holdings, Inc and its wholly owned subsidiaries. All intercompany balances and transactions have been
eliminated in consolidation.
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States 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
Investments having an original maturity of 90 days
or less that are readily convertible into cash are considered cash equivalents. The Company had no cash equivalents as of December
31, 2011 and December 31, 2010.
||Fair Value of Financial Instruments|
The Companys financial instruments consist
of cash and cash equivalents, accounts receivable, net, accounts payable and accrued expenses, and debt. The fair value of these
financial instruments approximate their carrying amounts reported in the balance sheets due to the short term maturity of these
instruments or based upon market quotations or quotations of instruments with similar interest rates and similar maturities.
Inventories are stated at the lower of cost (first-in,
first-out) or market (net realizable value). They consist mainly of pharmaceutical supplies and medical equipment.
||Property and Equipment|
Property and equipment are stated at cost and are
depreciated principally on methods and at rates designed to amortize their costs over their estimated useful lives.
The estimated service lives of property and equipment are
principally as follows:
|Furniture and fixtures
||5- 7 years|
||3- 7 years|
||5- 7 years|
Repairs and maintenance are expensed as incurred.
Expenditures that increase the value or productive capacity of assets are capitalized.
Property and equipment and other long-lived assets,
including non-compete agreements, are evaluated for impairment whenever events or conditions indicate that the carrying value of
an asset may not be recoverable, but not less than annually. If the sum of undiscounted cash flows is less than the carrying value
of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the
asset or group of assets.
Sales and services are recorded when products are
delivered to the customers. Provision for discounts, estimated returns and allowances, and other adjustments are provided for in
the same period the related sales are recorded. In instances where products are configured to customer requirements, revenue is
recorded upon the successful completion of the Companys final test procedures.
Stock-based compensation is accounted for at fair
value in accordance with Accounting Standards Codification (ASC) 718, Compensation- Stock Compensation.
In addition to requiring supplemental disclosures,
ASC 718, Compensation Stock Compensation, addresses the accounting for share-based payment transactions in which
a company receives goods in exchange for (a) equity instruments of the company or (b) liabilities that are based on the fair value
of the companys equity instruments or that may be settled by the issuance of such equity instruments. FASB ASC 718 focuses
primarily on accounting for transactions in which a company obtains employee services in share-based payment transactions.
References to the issuances of restricted stock
refer to stock of a public company issued in private placement transactions to individuals who are eligible to sell all or some
of their shares of restricted Common Stock pursuant to Rule 144 promulgated under the Securities Act of 1933 (Rule 144),
subject to certain limitations. In general, pursuant to Rule 144, a stockholder who is not an affiliate and has satisfied a six-month
holding period may sell all of his restricted stock without restriction, provided that the Company has current information publicly
available. Rule 144 also permits, under certain circumstances, the sale of restricted stock, without any limitations, by a non-affiliate
of the Company that has satisfied a one-year holding period.
Advertising costs are expensed as incurred. Advertising
expense totaled $ 38,140 for the year ended December 31, 2011 and $ 112,844 for the year ended December 31, 2010.
Deferred income taxes are recognized for temporary
differences between the tax bases of assets and liabilities and their reported amounts in the financial statements by applying
enacted statutory tax rates expected to apply in the years in which these temporary differences are expected to be recovered or
settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than
not that some portion or all of the deferred tax assets will be realized. Current income taxes are provided for in accordance with
the laws of the relevant taxing authorities.
||Net Income (Loss) per Common Share|
Basic net income (loss) per common share is computed
on the basis of the weighted average number of common shares outstanding during the period.
Diluted net income (loss) per common share is computed
on the basis of the weighted average number of common shares and dilutive securities (such as warrants and convertible securities)
outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation.
For the years ended December 31, 2011 and 2009,
diluted weighted average number of common shares outstanding exclude 3,593,460 (2009: 3,793,460) shares issuable on conversion
of Series A Preferred Stock, 600,000 shares issuable on exercise of outstanding options and 8,418,780 shares issuable on exercise
of outstanding warrants.
Certain prior period amounts have been reclassified
to conform to the current period presentation.
||Recent Accounting Pronouncements|
Effective for interim and annual periods ending
after September 15, 2009, the FASB Accounting Standards Codification (the Codification) is the single source of authoritative
literature of U.S. generally accepted accounting principles (GAAP). The Codification consolidates all authoritative
accounting literature into one internet-based research tool, which supersedes all preexisting accounting and reporting standards,
excluding separate rules and other interpretive guidance released by the SEC. New accounting guidance is now issued in the form
of Accounting Standards Updates, which update the Codification. The adoption of the Codification did not result in any change in
the Companys significant accounting policies.
In August 2009, the FASB issued an update to ASC 820. This
Accounting Standards Update ("ASU") No. 2009-5, Measuring Liabilities at Fair Value ("ASU 2009-5") amends the
provisions in ASC 820 related to the fair value
measurement of liabilities and clarifies for circumstances
in which a quoted price in an active market for the identical liability is not available. ASU 2009-5 is intended to reduce potential
ambiguity in financial reporting when measuring the fair value of liabilities. ASU 2009-5 was effective for the Company in the
first quarter of fiscal year 2010. ASU 2009-5 concerns disclosure only. The adoption of ASU 2009-5 did not have a material effect
on the Company's consolidated financial statements.
In December 2009, the FASB issued Accounting Standards Update
("ASU") 2009-17, which codifies SFAS No. 167, Amendments to FASB Interpretation No. 46(R) issued in June 2009. ASU 2009-17
requires a qualitative approach to identifying a controlling financial interest in a variable interest entity ("VIE"),
and requires ongoing assessment of whether an entity is a VIE and whether an interest in a VIE makes the holder the primary beneficiary
of the VIE. ASU 2009-17 is effective for annual reporting periods beginning after November 15, 2009. The adoption of ASU 2009-17
did not have a material effect on the Company's financial statements.
In January 2010, the FASB issued ASU 2010-6, Improving Disclosures
About Fair Value Measurements, which requires reporting entities to make new disclosures about recurring or nonrecurring fair-value
measurements including significant transfers into and out of Level 1 and Level 2 fair-value measurements and information on purchases,
sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair-value measurements. ASU 2010-6 is effective
for annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective
for annual periods beginning after December 15, 2010. The Company believes that the adoption of ASU 2010- 6 will not have a material
effect on its consolidated financial statements.
Certain other accounting pronouncements have been issued
by FASB and other standard setting organizations which are not yet effective and have not yet been adopted by the Company. The
impact on the Companys consolidated financial position and results of operations from adoption of these standards is not
expected to be material.