Exhibit 99.4

 

 

 

 

Certified Public Accountants

 

INDEPENDENT AUDITOR'S REPORT

 

To the members' of

Lucid Pharma, LLC.

 

We have audited the accompanying financial statements of Lucid Pharma, LLC. (a New Jersey Limited Liability Company), which comprise the balance sheets as of December 31, 2014 and 2013, and the related statements of income, retained earnings, and cash flows for the years then ended, and the related notes to financial statements.

 

Management's Responsibility for the Financial Statements

 

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

 

Auditor's Responsibility

 

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design the audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

 

 

  

Opinion

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lucid Pharma, LLC. as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

 

 

 

Ram Associates

Hamilton, NJ

 

September 16, 2016.

 

 

LUCID PHARMA, LLC

Balance Sheets

December 31,

 

		2014				2013
ASSETS
Current assets :
Cash		$	10,422,483			$	1,681,281
Accounts receivable			6,098,754				8,543,783
Inventories			4,314,999				9,138,364
Prepaid expenses			-				10,886
Due from vendor			-				63,146
Due from related party			-				600,000
Investment in unconsolidated subsidiary			6,575				6,575
Total current assets			20,842,811				20,044,035
Property, plant & equipment			13,615				297,357
Goodwill			-				2,575,000
Security deposit			-				54,388
TOTAL ASSETS		$	20,856,426			$	22,970,780
LIABILITIES AND MEMBERS' EQUITY
Current liabilities :
Accounts payable and accrued expenses		$	16,548,985			$	19,530,764
Total current liabilities			16,548,985				19,530,764
Members' equity :
Members' equity			4,307,441				3,440,016
Total members' equity			4,307,441				3,440,016
TOTAL LIABILITIES AND MEMBERS' EQUITY		$	20,856,426			$	22,970,780

 

- See accompanying notes and independent auditors' report -

 

 

LUCID PHARMA, LLC

Statements of Income

For The Years Ended December 31, 2014 and 2013

 

		2014				2013
Net revenue		$	44,272,976			$	20,678,442
Cost of sales			39,194,321				17,131,059
Gross profit			5,078,655				3,547,383
Operating expenses
Selling, general and administration expenses			1,924,349				1,379,078
Net income (loss) before discontinued operations			3,154,306				2,168,305
Discontinued operations
Net income from discontinued operations			16,578,059				1,201,726
Net income (loss)		$	19,732,365			$	3,370,031

 

- See accompanying notes and independent auditors' report -

 

  

LUCID PHARMA, LLC 

Statements of Changes in Members' Equity

For The Years Ended December 31, 2014 and 2013

 

		Members' equity				Total members' equity
Balance at December 31, 2012		$	905,086			$	905,086
Net income			3,370,031				3,370,031
Members' distribution			(835,101	)			(835,101	)
Balance at December 31, 2013		$	3,440,016			$	3,440,016
Net income			19,732,365				19,732,365
Members' distribution			(18,864,940	)			(18,864,940	)
Balance at December 31, 2014		$	4,307,441			$	4,307,441

 

- See accompanying notes and independent auditors' report -

 

 

LUCID PHARMA, LLC

Statements of Cash Flows

For The Years Ended December 31, 2014 and 2013

 

		2014				2013
Cash flows from operating activities
Net income		$	19,732,365			$	3,370,031
Adjustment to reconcile net income to net cash provided by (used in) operating activities
Depreciation			92,490				82,730
Changes in assets and liabilities :
(Increase) / decrease in :
Accounts receivable			2,445,029				(5,565,495	)
Inventory			4,823,365				(6,108,599	)
Prepaid expenses			10,886				8,612
Due from vendor			63,146				25,282
Security deposit			54,388				(15,370	)
Increase / (decrease) in :
Accounts payable and accrued expenses			(2,981,779	)			10,171,943
Total adjustments			4,507,525				(1,400,897	)
Net cash provided by operating activities			24,239,890				1,969,134
Cash flows from investing activities
Advances to related party			600,000				(600,000	)
Sale of asset			204,867				-
Decrease in goodwill			2,575,000				-
Purchase of property, plant and equipment			(13,615	)			(43,551	)
Net cash provided by /(used in) investing activities			3,366,252				(643,551	)
Cash flows from financing activities
Members' distribution			(18,864,940	)			(835,101	)
Net cash used in financing activities			(18,864,940	)			(835,101	)
Net increase in cash			8,741,202				490,482
Cash at the beginning of the year			1,681,281				1,190,799
Cash at the end of the year		$	10,422,483			$	1,681,281
Supplementary disclosure of cash flows information:
Cash paid during the years for:
Income taxes		$	-			$	-
Interest			-				-

 

- See accompanying notes and independent auditors' report -

 

 

LUCID PHARMA, LLC

 

NOTES TO FINANCIAL STATEMENTS

 

For the years ended December 31, 2014 and 2013

 

1) Organization and Description of Business

 

Lucid Pharma, LLC (“Lucid”) provides distribution and pharmacy marketing programs in the pharmaceuticals and distribution industry. Lucid is located in East Brunswick, New Jersey.

 

Lucid, a wholly owned subsidiary of Gensource Pharma LLC, deals with the government contracts and veterinary business. Lucid maintains divisional income and expenses which is presented in the supplementary schedules.

 

Lucid was previously known as Cedardale Distributors LLC (“Cedardale”). On September 30, 2014, Cedardale entered into an Asset Purchase Agreement (‘APA’) subject to which certain assets and liabilities of Cedardale were purchased by the third party buyer (Refer Note. 8) Pursuant to the APA and provisions contained in the agreement pertaining to the exclusive use of the names ‘Gen-source RX’ and ‘Cedardale Distributors’, Cedardale has amended the name to “Lucid Pharma LLC”, effective from the filing date with the State.

 

2) Summary of Significant Accounting Policies

 

Accounting Policies

 

These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (US GAAP); consequently, revenue is recognized when services are rendered and expenses are reflected when costs are incurred.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and use assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are often based on judgments, probabilities and assumptions that management believes are reasonable but that are inherently uncertain and unpredictable. As a result, actual result could differ from those estimates. Management periodically evaluates estimates used in the preparation of the financial statements for continued reasonableness. Appropriate adjustment, if any, to the estimates used are made prospectively based on such periodic evaluations.

 

Revenue Recognition

 

Revenues from sales of products are recognized at the time of delivery and when title and risk of loss passes to the customer. Recognition of revenue also requires reasonable assurance of collection of sales proceeds and completion of all performance obligations. Sales discounts are issued to customers as direct discounts at the point-of-sale or through intermediary wholesaler, known as chargebacks, or indirectly in the form of rebates. Revenues are recorded net of provisions for sales discount and returns, which are established at the time of sale, when estimated provisions for product returns, rebates, and other sales allowances are reasonably determinable, and when collectibles is reasonably assured. Accruals for these provisions are presented as a direct reduction to accounts receivable and revenues.

 

 

LUCID PHARMA, LLC

 

NOTES TO FINANCIAL STATEMENTS

 

For the years ended December 31, 2014 and 2013

 

Cash and cash equivalents

 

The Company considers all highly-liquid investments (including money market funds) with an original maturity at acquisition of three months or less to be cash equivalents. The Company maintains cash balances, which may exceed federally insured limits. The Company does not believe that this results in any significant credit risk.

 

Accounts receivable

 

The Company extends credit to clients based upon management’s assessment of their credit-worthiness on an unsecured basis. The Company provides an allowance for uncollectible accounts based on historical experience and management evaluation of trend analysis. The Company does not expect to have write-offs or adjustments to accounts receivable which would have a material adverse effect on its financial position, liquidity or results of operations. During the years ended December 31, 2014 and 2013, the Company had write offs of accounts receivable of $126,980 and $228,470, respectively. The allowances for uncollectible accounts as of December 31, 2014 and 2013 were $ nil and $50,000, respectively.

 

Inventories

 

Inventories are stated at the lower of cost or market value. Cost is determined on a first-in, first-out (FIFO) basis. The Company establishes reserves for its inventory to reflect situations in which the cost of the inventory is not expected to be recovered. In evaluating whether inventory is stated at the lower of cost or market value, management considers such factors as the amount of inventory on hand; estimated time required to sell such inventory, remaining shelf life and current and expected market conditions, including level of competition. The Company records provisions for the inventory reserves as part of cost of sales.

 

Fair Value Measurements

 

FASB ASC 820, Fair Value Measurements and Disclosures defines fair value and establishes a hierarchy for reporting the reliability of input measurements used to assess fair value for all assets and liabilities. FASB ASC 820 defines fair value as the selling price that would be received for an asset, or paid to transfer a liability, in the principal or most advantageous market on the measurement date. That framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Certain financial instruments are carried at cost on the balance sheet, which approximates fair value due to their short-term, highly liquid nature. These instruments include cash, accounts receivable, accounts payable and accrued expenses and other liabilities.

 

 

LUCID PHARMA, LLC

 

NOTES TO FINANCIAL STATEMENTS

 

For the years ended December 31, 2014 and 2013

 

Advertising

 

The Company expenses advertising costs as they are incurred. Advertising expense for the years ended December 31, 2014 and 2013 was $65,497 and $177,715, respectively.

 

Income taxes

 

The Company is a limited liability company and is treated as a partnership for tax purposes and, as such, the income or loss is reported on the respective members’ income tax returns. Accordingly, no provision for such taxes has been made to the accompanying financial statements.

 

The Company follows ASC Topic 740-10, Accounting for Uncertainty in Income Taxes, which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. For the years ended December 31, 2014 and 2013, the Company has no material uncertain tax positions to be accounted for in the financial statements. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2011 and 2010, respectively. No authorities have commenced income tax examinations through the date of the auditors’ report.

 

Property and Equipment

 

Property and equipment are stated at cost. The Company provides for depreciation of property and equipment using the straight-line method over the estimated useful lives of the related assets ranging from 3 to 39.5 years. The Company charges repairs and maintenance costs that do not extend the lives of the assets to expenses as incurred. Repairs and maintenance expenses during the years ended December 31, 2014 and 2013 were $ 14,357 and $9,299, respectively.

 

At December 31, 2014 and 2013 property and equipment consisted of the following:

 

 

LUCID PHARMA, LLC

 

NOTES TO FINANCIAL STATEMENTS

 

For the years ended December 31, 2014 and 2013

 

		2014				2013
Computer and Equipment		$	13,615			$	359,673
Furniture and Fixtures			-				164,924
Computer Software			-				637,917
Office Equipment			-				67,391
Machinery and Equipment			-				86,402
Leasehold Improvements			-				37,031
Vehicle			-				1,500
Building Improvements			-				91,423
Other Equipment and Fixtures			-				124,741
Security System			-				33,486
			13,615				1,604,488
Less : Accumulated Depreciation			-				1,307,131
Net Fixed Assets		$	13,615			$	297,357

 

Depreciation expenses (discontinued operations) during the years ended December 31, 2014 and 2013 were $ 92,490 and $ 82,730 respectively.

 

Goodwill

 

The Company records goodwill when the purchase price of a business acquisition exceeds the estimated fair value of net identified tangible and intangible assets acquired.

 

The Company follows Accounting Standards Codification Section 350, “Accounting for Goodwill and Intangible Assets”, (“ASC 350”) which no longer allows for the amortization of goodwill. The new statement requires that goodwill and certain intangible assets be assessed annually for impairment using fair value measurement techniques. During the years ended December 31, 2014 and 2013 no such impairment was required.

 

3) Concentrations

 

Concentration of credit risks with respect to accounts receivable is limited because of the credit worthiness of the Company’s major customers. The majority of the Company’s accounts receivable arises from product sales in the United States and are primarily due from drug wholesalers and retailers, hospitals, managed health care providers and pharmacy benefit managers. The Company monitors the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in their credit profile. Revenue from the Company’s three major customers represented approximately 89% and 82% of the Company’s (surviving business) net revenue for the years ended December 31, 2014 and 2013, respectively. Accounts receivable from the top three customers represented approximately 79% and 84% of total accounts receivable as of December 31, 2014 and 2013, respectively.

 

  

LUCID PHARMA, LLC

 

NOTES TO FINANCIAL STATEMENTS

 

For the years ended December 31, 2014 and 2013

  

4) Sales Returns and Allowances

 

At the time of sale, the Company simultaneously records estimates for various costs, which reduce product sales. These costs include estimates for price adjustment, products returns, rebates, including Medicaid rebates, prompt payment discounts and other sales allowances. In addition, the Company records allowances for shelf-stock adjustments when the conditions so warrant.

 

Estimates for sales allowances such as product returns and rebates are based on a variety of factors including actual returns experience of that product or similar products, rebate arrangements for each product, and estimated sales by our wholesale customers to other third parties who have contracts with the Company. Actual experience associated with any of these items may be different than the Company’s estimates. The Company regularly reviews the factors that influence its estimates and, if necessary, makes adjustments when it believes that actual product returns, credits and other allowances may differ from established reserves.

 

5) Product Liability

 

Accruals for product liability claims are recorded, on an undiscounted basis, when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. The accruals are adjusted periodically as additional information becomes available. From time to time the Company is subject to claims and law suits arising in the ordinary course of business, including patent, product liability and other litigation. In determining whether liabilities should be recorded for pending claims, the Company assesses the allegations made and the likelihood that it will be able to defend against the claim successfully. The Company records provisions to the extent it conclude that a contingent liability is probable and the amount thereof is estimable. Because litigation outcomes and contingencies are unpredictable, and because excessive verdicts can occur, these assessments involve complex judgments about future events and can rely heavily on estimates and assumptions. For the years ended December 31, 2014 and 2013, no accruals for product liability were made.

 

6) Legal Settlements and Proceedings

 

The Company is involved in, or has been involved in, legal proceedings that arise from the normal course of business. The Company cannot predict the timing or outcome of these claims and other proceedings. Currently, the Company is not involved in any arbitration and/or other legal proceedings that it expects to have a material effect on the business, financial condition, results of operations or liquidity of the Company. All legal cost is expensed as incurred.

 

 

LUCID PHARMA, LLC

 

NOTES TO FINANCIAL STATEMENTS

 

For the years ended December 31, 2014 and 2013

 

7) New Accounting Pronouncements

 

i)          In August 2014, the Financial Accounting Standards Board (“FASB”) issued amended guidance related to disclosure of uncertainties about an entity’s ability to continue as a going concern. The new guidance requires management to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, as necessary, to provide related footnote disclosures. The guidance has an effective date of December 31, 2016. The Company believes that the adoption of this new standard will not have a material impact on its financial statements.

 

ii)         In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update, or ASU, 2014-09-Revenue from Contracts with Customers, which provides a single, comprehensive revenue recognition model for all contracts with customers. The core principal of this ASU is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. Early adoption is not permitted. The Company is currently evaluating the impact this ASU will have on its financial statements.

 

iii)        In January 2015, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update, or ASU, 2015-01-Income Statement-Extraordinary and Unusual Items, which seeks to simplify income statement presentation by eliminating the concept of Extraordinary Items. This Update eliminates from GAAP the concept of extraordinary items. Subtopic 225-20, Income Statement – Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption.

 

 

LUCID PHARMA, LLC

 

NOTES TO FINANCIAL STATEMENTS

 

For the years ended December 31, 2014 and 2013

 

8) Discontinued Operations

 

As part of the consummated asset purchase agreement (entered into on September 30, 2014 and closed on October 10, 2014) Lucid divested a portion of its business to the buyer. The part that divested included sales, marketing and distribution of pharmaceutical products to independent pharmacies, small chains, long term care centers and certain group purchasing organizations (GPO’s). The total sale value of the said asset purchase agreement is $20,000,000. The sale price was allocated against the net book value of the assets and liabilities acquired by the buyer and the resulting gain of $13,035,416 was classified as Gain on Sale of Business in the accompanying Schedule of Discontinued Operations (page 15).

 

The Schedule of Discontinued Operations is presented for additional analysis and was not subjected to audit procedures. The buyer has taken possession of all the assets and liabilities as of the closing date of the agreement, including the associated documents, invoices, bills, receipts, payments, etc. The agreement allows the buyer to withhold $3,000,000 from the total sale price of $20 million, which is payable after eighteen months from the date of closing, after adjusting for working capital requirements of $1,065,770. The Company has received $15,934,230 after the agreed adjustments. The amount received was allocated to the assets and liabilities as follows:

 

Accounts receivable		$	4,833,491
Inventory			4,545,881
Fixed assets			219,162
Goodwill			2,575,000
Miscellaneous			780
Total Assets:			12,174,314
Accounts payable			(9,275,500	)
Total Liabilities			(9,275,500	)
Net Asset and Liabilities			2,898,814
Total Sale Price received after adjustments			15,934,230
Gain recognized on sale of business		$	13,035,416

 

9) Commitments

 

The Company has vacated the premises located in Carlstadt, New Jersey pursuant to the APA as of October 10, 2014. The Company does not have any lease for its office facility and is currently located at East Brunswick, New Jersey.

 

For the period ended December 31, 2014 and 2013, rent expenses were $ 300,287 and $ 325,842 respectively.

 

 

LUCID PHARMA, LLC

 

NOTES TO FINANCIAL STATEMENTS

 

For the years ended December 31, 2014 and 2013

 

10) Subsequent events

 

The Company has evaluated subsequent events through September 16, 2016, the date which the financial statements were available to be issued. No reportable subsequent events have occurred through September 16, 2016 which would have a significant effect on the financial statements as of December 31, 2014, except as otherwise disclosed.

 

 

LUCID PHARMA, LLC

Schedule of Operating Activities by Division

For The Years Ended December 31,

 

		2014												2013
						Veteran				Veterinary								Veteran				Veterinary
		Total				Division				Division				Total				Division				Division
Revenue
Sales		$	48,274,849			$	42,802,849			$	5,472,000			$	21,703,117			$	12,353,420			$	9,349,697
Chargebacks			(3,053,477	)			(3,053,477	)			-				(830,335	)			(830,335	)			-
Customer Rebates / Discounts			(948,396	)			(798,346	)			(150,050	)			(194,340	)			(194,340	)			-
Total revenue			44,272,976				38,951,026				5,321,950				20,678,442				11,328,745				9,349,697
Cost of sales
Cost of Sales			38,881,266				34,659,702				4,221,564				17,086,487				10,024,645				7,061,842
Shipping			440,872				367,259				73,613				216,703				153,586				63,117
Cash Discount			(127,818	)			-				(127,818	)			(172,131	)			-				(172,131	)
Total cost of sales			39,194,320				35,026,961				4,167,359				17,131,059				10,178,231				6,952,828
Gross profit			5,078,656				3,924,065				1,154,591				3,547,383				1,150,514				2,396,869
Operating expenses
Automobile Expenses			775				775				-				24				-				24
Admin Fee			1,090,564				1,090,564				-				308,205				308,205				-
Cost Recovery Fee			199,705				199,705				-				57,887				57,887				-
Cust. Overpay/Allow for Doubt			87,606				87,606				-				-				-				-
Travel and Entertainment			12,905				8,603				4,302				14,387				-				14,387
Cleaning and Sanitation			1,500				-				1,500				-				-				-
Payroll and Benefits			196,114				130,743				65,371				230,666				76,889				153,777
Commissions			141,465				-				141,465				263,679				22,500				241,179
Licenses and Permits			18,743				12,495				6,248				-				-				-
Professional Fees: System Consultants			1,572				1,048				524				-				-				-
Professional fees			69,771				28,000				41,771				374,231				-				374,231
Dues and Subcription			689				689				-				709				-				709
Supplies			16,726				7,834				8,892				24,815				20,111				4,704
Telephone			11,259				7,506				3,753				28,840				9,613				19,227
Insurance			32,955				24,368				8,587				11,802				3,934				7,868
Rent			42,000				12,000				30,000				63,833				21,278				42,555
Total operating expenses			1,924,349				1,611,936				312,413				1,379,078				520,417				858,661
Net profit		$	3,154,307			$	2,312,129			$	842,178			$	2,168,305			$	630,097			$	1,538,208

 

- See accompanying notes and independent auditors' report -

 

 

LUCID PHARMA, LLC

Schedule of Discontinued Operations

December 31,

 

		2014				2013
REVENUE		$	35,022,959			$	31,909,586
COST OF GOODS SOLD
Inventory, Beginning			4,716,919				2,789,170
Product Costs			19,157,728				26,084,579
Shipping and Delivery			941,821				964,921
			24,816,468				29,838,670
Less: Inventory, Ending			-				4,716,919
Total Cost of Goods Sold			24,816,468				25,121,751
Gross Profit			10,206,491				6,787,835
GENERAL AND ADMINISTRATION EXPENSES
Advertising expenses			65,497				177,705
Automobile expenses			8,308				15,245
Bad debt expenses			126,980				228,470
Bank service and credit card fees			295,620				232,416
Bonus			282,086				-
Computer expense			28,302				26,165
Dues and subscription			11,960				14,527
Employee benefits			137,485				130,457
Employee leasing expense			3,497,086				3,315,064
Equipment rental			8,327				8,670
Filing fees			25,304				10,701
India operations			232,358				307,882
Insurance			25,121				57,543
Licenses and permits			25,361				43,519
Meals and entertainment			15,649				23,075
Office expense			62,438				47,790
Office supplies			34,827				-
Outside services			44,598				-
Payroll service fees			49,296				58,202
Postage and delivery			13,941				12,713
Professional fees			1,060,656				176,552
Rent expense			258,287				272,646
Repairs and maintenance			35,565				49,731
Security system			2,756				5,416
Surety bond premium			6,600				9,876
Training and education			5,197				6,549
Travel			30,260				75,266
Utilities			64,252				59,628
Telephone			69,639				83,916
Warehouse supplies			47,602				53,655
Total general and administrative expenses			6,571,358				5,503,379
Depreciation			92,490				82,730
Gain on sale of business			13,035,416				-
Net Income		$	16,578,059			$	1,201,726

 

- See accompanying notes and independent auditors' report -