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<br /> DRC EMERGENCY SERVICES,LLC
<br /> INOTES TO FINANCIAL STATEMENTS
<br /> DECEMBER 31,2016
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<br /> 2. NOTES RECEIVABLE continued:
<br /> ' In October 2016,the Company issued a note in the amount of$185,000.The note bears interest at 10%and is due in eight
<br /> quarterly installments,with the final payment due August 7,2018.
<br /> IlMaturities of these notes receivable are as follows:
<br /> December 31,2017 $ 170,686
<br /> December 31,2018 175.677
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<br /> Balance as of December 31,2016 $ 346,363
<br /> I3. RELATED PARTY TRANSACTIONS:
<br /> During 2016,the Company borrowed operating capital from a related party at 6%interest per annum.As of December 31,
<br /> I 2016, the balance due was $1,500,000. For the period January 19, 2016 through December 31, 2016,the Company
<br /> incurred$168,167 in interest related to this borrowing,of which$73,481 was payable at December 31,2016.On February
<br /> 24,2017,the Company paid back this outstanding balance and all related accrued interest.
<br /> IOn January 19,2016,the Company borrowed funds to purchase the equity of DRC Emergency Services from a related
<br /> party at 0%interest per annum.As of December 31,2016,the balance was$6,001,417.On March 7,2017,the Company
<br /> paid back$4,000,000 of this outstanding balance.
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<br /> 4. CONCENTRATION OF CREDIT RISK:
<br /> I The Company extends unsecured credit to its customers on a routine basis. As of December 31,2016,the Company had
<br /> extended unsecured credit totaling$15,994,508.
<br /> I The Company maintains cash deposits at two financial institutions in Texas.These accounts are covered by the Federal
<br /> Deposit Insurance Corporation(FDIC),which covers depositors up to$250,000. The cash deposits of the Company
<br /> routinely exceeded the FDIC insured coverage amounts at these financial institutions. Had the institutions become
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<br /> insolvent while deposits exceeded FDIC insured coverage amounts,the Company could have sustained losses up to the
<br /> uninsured amounts.
<br /> I5. RETIREMENT PLAN:
<br /> The Company adopted a 401(k)profit sharing plan effective January 19,2016.The plan covers all employees who are age
<br /> twenty or older and have completed six months of service and one hour of service in each month,or,have completed a
<br /> I total of 1,000 hours of service in the eligibility period.The Company makes matching contributions of 100%for the first
<br /> 3%of employee contributions,and 50%of the next 2%of employee contributions.Total employer matching contributions
<br /> for the year ended December 31,2016 were$11,838.
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<br /> I DRC Emergency Services,LLC 106
<br /> RFP No.18-04-02
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