Foundation Healthcare, Inc.

CIK:0001272597|SEC Filings

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net Revenues:
Patient services	$ 28,609,556	$ 30,152,597	$ 67,045,799	$ 58,090,495
Provision for doubtful accounts	(2,598,924)	(2,177,522)	(4,520,909)	(2,598,546)
Net patient services revenue	26,010,632	27,975,075	62,524,890	55,491,949
Management fees from affiliates	1,639,679	1,973,754	2,552,712	3,223,076
Other revenue, net	(307,828)	1,914,125	901,959	2,690,079
Revenues	27,342,483	31,862,954	65,979,561	61,405,104
Equity in earnings of affiliates	334,388	319,673	723,758	731,072
Operating Expenses:
Salaries and benefits	12,424,992	7,915,961	26,167,540	15,655,824
Supplies	9,500,381	7,390,390	17,123,144	13,460,051
Other operating expenses	13,334,836	13,398,977	30,127,633	27,482,454
Depreciation and amortization	2,660,038	1,345,948	5,408,900	2,727,455
Total operating expenses	37,920,247	30,051,276	78,827,217	59,325,784
Other Income (Expense):
Interest expense, net	(1,055,776)	(279,257)	(2,247,722)	(605,323)
Gain on sale of equity investment in affiliate	2,140,832		2,140,832
Other income (expense)	89,649	(32,231)	319,214	(14,882)
Net other income (expense)	1,174,705	(311,488)	212,324	(620,205)
Income (loss) from continuing operations, before taxes	(9,068,671)	1,819,863	(11,911,574)	2,190,187
Benefit (provision) for income taxes	(1,200,000)	114,038		114,038
Income (loss) from continuing operations, net of taxes	(10,268,671)	1,933,901	(11,911,574)	2,304,225
Income (loss) from discontinued operations, net of tax	(4,320)	3,857,135	(16,081)	3,771,057
Net income (loss)	(10,272,991)	5,791,036	(11,927,655)	6,075,282
Less: Net income (loss) attributable to noncontrolling interests	(1,271,443)	1,074,022	(543,348)	2,494,916
Net income (loss) attributable to Foundation Healthcare	(9,001,548)	4,717,014	(11,384,307)	3,580,366
Preferred noncontrolling interests dividends	(154,455)	(177,670)	(312,342)	(372,885)
Net income (loss) attributable to Foundation Healthcare common stock	$ (9,156,003)	$ 4,539,344	$ (11,696,649)	$ 3,207,481
Earnings per common share (basic and diluted):
Net income (loss) attributable to continuing operations attributable to Foundation Healthcare common stock	$ (0.52)	$ 0.04	$ (0.67)	$ (0.03)
Income (loss) from discontinued operations, net of tax	0.00	0.22	0.00	0.22
Net income (loss) per share, attributable to Foundation Healthcare common stock	$ (0.52)	$ 0.26	$ (0.67)	$ 0.19
Weighted average number of common and diluted shares outstanding	17,769,424	17,248,154	17,540,685	17,252,228

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Operating activities:
Net income (loss)	$ (11,927,655)	$ 6,075,282
Less: Income (loss) from discontinued operations, net of tax	(16,081)	3,771,057
Income (loss) from continuing operations, net of tax	(11,911,574)	2,304,225
Adjustments to reconcile income (loss) from continuing operations, net of tax, to net cash provided by (used in) operating activities:
Depreciation and amortization	5,408,900	2,727,455
Stock-based compensation, net of cashless vesting	(87,738)	293,255
Provision for doubtful accounts	4,520,909	2,598,546
Equity in earnings of affiliates	(723,758)	(731,072)
Gain on sale of equity investment in affiliate	(2,140,832)
Changes in assets and liabilities, net of acquisition:
Accounts receivable, net of provision for doubtful accounts	(4,489,457)	(4,400,806)
Receivables from affiliates	97,026	243,924
Supplies inventories	64,735	(7,693)
Prepaid and other current assets	(8,840,689)	721,773
Other assets	136,089	(105,221)
Accounts payable	10,727,527	(1,694,267)
Accrued liabilities	1,428,043	1,483,207
Other current liabilities	374,747	227,516
Other liabilities	151,127	197,975
Net cash provided by (used in) operating activities from continuing operations	(5,284,945)	3,858,817
Net cash used in operating activities from discontinued operations	(7,184)	(602,074)
Net cash provided by (used in) operating activities	(5,292,129)	3,256,743
Investing activities:
Acquisition of business, net of cash received	(158,000)
Proceeds from sale of equity investment in affiliate	2,200,000
Purchase of property and equipment	(2,009,454)	(720,760)
Disposal of property and equipment		99,267
Distributions from affiliates	792,194	1,245,998
Net cash provided by investing activities from continuing operations	824,740	624,505
Net cash provided by investing activities from discontinued operations		8,388,233
Net cash provided by investing activities	824,740	9,012,738
Financing activities:
Debt proceeds	5,915,642	1,920,112
Debt payments	(3,977,052)	(9,881,531)
Preferred noncontrolling interest dividends	(314,059)	(390,405)
Preferred noncontrolling interest redemptions		(870,000)
Distributions to noncontrolling interests	(1,157,416)	(1,771,064)
Net cash provided by (used in) financing activities from continuing operations	467,115	(10,992,888)
Net cash provided by (used in) financing activities	467,115	(10,992,888)
Net change in cash	(4,000,274)	1,276,593
Cash at beginning of period	5,062,492	2,860,025
Cash at end of period	$ 1,062,218	$ 4,136,618

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
ASSETS
Cash	$ 1,062,218	$ 5,062,492
Accounts receivable, net of allowance for doubtful accounts of $5,050,000 and $6,062,000, respectively	30,965,490	30,383,942
Receivables from affiliates	412,860	509,886
Supplies inventories	3,673,166	3,737,901
Prepaid and other current assets	12,166,019	3,325,330
Current assets from discontinued operations	408,303	416,390
Total current assets	48,688,056	43,435,941
Property and equipment, net	50,619,333	52,781,982
Equity method investments in affiliates	2,944,195	3,012,631
Deferred tax asset	836,290	836,290
Intangible assets, net	9,826,763	10,952,170
Goodwill	13,537,809	7,601,809
Other assets	836,835	1,016,093
Other assets from discontinued operations		8,713
Total assets	127,289,281	119,645,629
Liabilities:
Accounts payable	20,790,348	9,060,060
Accrued liabilities	14,305,754	13,252,521
Preferred noncontrolling interests dividends payable	156,171	157,888
Short-term debt	425,654	308,769
Current portion of long-term debt	9,028,572	4,601,320
Current portion of capital lease obligations	4,071,318	4,478,968
Other current liabilities	2,065,574	590,827
Current liabilities from discontinued operations	2,348,262	2,356,165
Total current liabilities	53,191,653	34,806,518
Long-term debt, net of current portion	40,153,072	41,529,277
Long-term capital lease obligations, net of current portion	28,373,441	29,130,693
Deferred lease incentive	7,289,403	7,672,745
Other liabilities	7,013,650	6,479,181
Total liabilities	136,021,219	119,618,414
Preferred noncontrolling interest	6,960,000	6,960,000
Commitments and contingencies (Note 11)
Foundation Healthcare shareholders’ deficit:
Preferred stock $0.0001 par value, 10,000,000 authorized; no shares issued and outstanding
Common stock $0.0001 par value, 500,000,000 shares authorized; 18,078,337 and 17,303,180 issued and outstanding, respectively	1,807	1,730
Paid-in capital	22,723,100	20,885,915
Accumulated deficit	(43,770,740)	(32,074,090)
Total Foundation Healthcare shareholders’ deficit	(21,045,833)	(11,186,445)
Noncontrolling interests	5,353,895	4,253,660
Total deficit	(15,691,938)	(6,932,785)
Total liabilities, preferred noncontrolling interest and shareholders’ deficit	$ 127,289,281	$ 119,645,629