10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[√] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  September 30, 2014

or

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to ____________________

Commission file number:  000-52422

Hasco Medical, Inc.

(Exact name of registrant as specified in its charter)

Florida	65-0924471
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

15928 Midway Road, Addison, TX	75001
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (214) 302-0930

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[√] Yes    [  ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 (or for such shorter period that the registrant was required to submit and post such files).

[√] Yes    [  ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company:

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ] (Do not check if smaller reporting company)	Smaller reporting company	[√]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[  ] Yes    [√] No

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:  

1,001,179,039 shares of common stock were issued and outstanding as of October 27, 2014.

Hasco Medical, Inc.

FORM 10-Q

TABLE OF CONTENTS

Index

PART I – FINANCIAL INFORMATION		4
ITEM 1.	FINANCIAL STATEMENTS.	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	16
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	22
ITEM 4.	CONTROLS AND PROCEDURES.	22
PART II – OTHER INFORMATION		24
ITEM 1.	LEGAL PROCEEDINGS	24
ITEM 1A.	RISK FACTORS	24
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	24
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	24
ITEM 4.	MINE SAFETY DISCLOSURES.	24
ITEM 5.	OTHER INFORMATION.	24
ITEM 6.	EXHIBITS	24
SIGNATURES		25

2

FORWARD–LOOKING STATEMENTS

This Report on Form 10-Q (including the section regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations) and any documents incorporated by reference herein or therein may contain “forward-looking statements”. Forward-looking statements reflect management’s current view about future beliefs, plans, objectives, goals or expectations. When used in such documents, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to us or our management identify forward-looking statements. Such statements include, but are not limited to, statements relating to our business goals, business strategy, our future operating results and liquidity and capital resources outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Our actual results may differ materially from those contemplated by these forward-looking statements. They are neither statements of historical fact nor guarantees or assurance of future performance.  Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events.

Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, a decline in general economic conditions nationally and internationally; decreased demand for our products and services; a change in the market acceptance of our products and services; our ability to protect our intellectual property rights; the impact of any infringement actions or other litigation brought against us; competition from other providers and products; our ability to develop and commercialize new and improved products and services; our ability to raise capital to fund continuing operations; changes in government regulation; our ability to complete customer transactions and capital raising transactions; and other factors (including the risks contained in the sections of our annual report on Form 10-K entitled “Risk Factors”) relating to our industry, our operations and results of operations or any businesses that may be acquired by us. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

We file reports with the Securities and Exchange Commission (“SEC”). Our electronic filings with the United States Securities and Exchange Commission (including our Annual Reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to these reports) are available free of charge on the Securities and Exchange Commission’s website at http://www.sec.gov. You can also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this annual report and other reports we have filed or will file with the SEC and which are incorporated by reference herein, including statements under the caption “Risk Factors” and “Forward-Looking Statements”.  Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these.

OTHER PERTINENT INFORMATION

When used in this annual report, the terms “Hasco,” “the Company,” ” we,” “our,” and “us” refer to Hasco Medical, Inc., a Florida corporation, and our subsidiaries.  “Management” refers to the executive officers of Hasco Medical, Inc. and any of its subsidiaries.

3

PART I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

Hasco Medical, Inc. & Subsidiaries

Consolidated Balance Sheets

(unaudited)

	September 30,			December 31,
	2014			2013
Assets
Current assets
Cash	$	610,714		$	150,313
Accounts receivable, net of allowance for doubtful accounts of $661,250 and $686,345, respectively		8,424,671			6,182,680
Inventory, net		13,782,135			11,572,060
Deferred tax asset, short term		489,014			413,193
Current portion of note receivable		25,505			—
Prepaid expenses and other current assets		519,285			504,819
Total current assets		23,851,324			18,823,065
Property & equipment, net of accumulated depreciation of $1,774,036 and $1,164,634, respectively		2,097,319			2,141,212
Intangible assets, net of accumulated depreciation of $43,285 and $10,192, respectively		6,180,941			6,214,034
Deferred tax asset, long term		181,212			149,204
Note receivable, net of current portion		94,950			—
Other non-current assets		596,609			604,965
Total Assets	$	33,002,355		$	27,932,480
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable and accrued expenses	$	2,763,262		$	1,849,702
Cash overdraft		—			175,572
Customer deposits and deferred revenue		298,804			388,433
Line of credit		3,140,346			2,303,143
Note payable - floor plan		13,160,906			12,174,639
Obligation under capital leases		406,392			366,658
Current portion of notes payable		392,597			376,685
Current portion note payable, related party		355,640			353,008
Other current liabilities		2,012,063			493,923
Total current liabilities		22,530,010			18,481,763
Obligation under capital leases, net of current portion		1,008,521			817,828
Notes payable, net of current portion		3,746,157			4,075,802
Notes payable to related party, net of current portion		1,699,567			1,947,214
Total liabilities		28,984,255			25,322,607
Stockholders’ Equity
Preferred stock, $0.001 par value, 3,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.001 par value, 2,000,000,000 shares authorized; and 1,000,575,949 and 993,134,076 shares issued and outstanding, respectively		1,000,576			993,134
Additional paid-in capital		6,813,312			6,669,056
Accumulated deficit		(3,795,788	)		(5,052,317	)
Total stockholders’ equity		4,018,100			2,609,873
Total Liabilities and Stockholders’ Equity	$	33,002,355		$	27,932,480

See accompanying notes to unaudited consolidated financial statements

4

Hasco Medical, Inc. & Subsidiaries

Consolidated Statements of Operations

(unaudited)

	For the Three Months ended September 30,
	2014			2013
Product sales	$	19,276,144		$	15,905,123
Rental revenue		373,732			368,371
Service and other		4,166,311			3,182,724
Total net revenues		23,816,187			19,456,218
Cost of sales		17,515,451			14,743,910
Gross profit		6,300,736			4,712,308
Operating expenses:
Selling and marketing		1,063,863			1,203,124
General and administrative		3,432,786			2,453,602
Amortization and depreciation		242,511			169,838
Total operating expenses		4,739,160			3,826,564
Income from operations		1,561,576			885,744
Other income (expense)		(118,371	)		47,399
Interest expense		(299,768	)		(215,984	)
Total other income (expense)		(418,139	)		(168,585	)
Income from continuing operations before income taxes		1,143,437			717,159
Provision for income taxes		525,802			236,563
Income from continuing operations		617,635			480,596
Gain (loss) from discontinued operations, net of income tax		184,294			(64,075	)
Net income		801,929			416,521
Earnings per share:
Basic and dilutive-continuing operations	$	—		$	—
Basic and dilutive-discontinued operations	$	—		$	—
Weighted average shares outstanding:
Basic and dilutive		999,941,212			989,460,705

See accompanying notes to unaudited consolidated financial statements

5

Hasco Medical, Inc. & Subsidiaries

Consolidated Statements of Operations

(unaudited)

	For the Nine Months Ended September 30,
	2014			2013
Product sales	$	55,390,038		$	42,452,448
Rental revenue		931,330			912,129
Service and other		12,041,267			9,586,757
Total net revenues		68,362,635			52,951,334
Cost of sales		51,766,472			40,611,949
Gross profit		16,596,163			12,339,385
Operating expenses:
Selling and marketing		3,034,563			3,204,763
General and administrative		10,115,358			7,357,365
Amortization and depreciation		753,703			540,036
Total operating expenses		13,903,624			11,102,164
Income from operations		2,692,539			1,237,221
Other income (expense)		(73,607	)		103,576
Interest expense		(820,606	)		(585,367	)
Total other income (expense)		(894,213	)		(481,791	)
Income from continuing operations before income taxes		1,798,326			755,430
Provision for income taxes		784,578			51,143
Income from continuing operations		1,013,748			704,287
Gain (loss) from discontinued operations, net of income tax		242,781			(235,775	)
Net income		1,256,529			468,512
Earnings per share:
Basic and dilutive-continuing operations	$	—		$	—
Basic and dilutive-discontinued operations	$	—		$	—
Weighted average shares outstanding:
Basic and dilutive		997,460,295			988,694,780

See accompanying notes to unaudited consolidated financial statements

6

Hasco Medical, Inc. & Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)

	For the Nine Months Ended September 30,
	2014			2013
Cash Flows from operating activities:
Net income	$	1,256,529		$	468,512
Adjustment to reconcile net income to net cash provided by (used in) operations:
Depreciation and amortization		754,007			540,493
Stock based compensation		89,602			625,866
(Gain) loss on disposal of property and equipment		(83,710	)		80,165
Gain on disposition of subsidiary		(89,695	)		—
Deferred tax asset		(107,829	)		(72,554	)
Changes in assets and liabilities:
Accounts receivable		(2,241,991	)		1,313,155
Inventory		(2,242,306	)		(973,176	)
Prepaid expenses		(34,466	)		(315,195	)
Other assets		28,356			—
Accounts payable and accrued expenses		913,560			(532,885	)
Customer deposits and deferred revenue		(89,629	)		(412,899	)
Other liabilities		1,517,615			505,283
Net cash provided by (used in) operating activities		(329,957	)		1,226,765
Cash Flows from investing activities:
Purchase of property and equipment		(84,902	)		(168,571	)
Proceeds from sale of property and equipment		—			1,900
Acquisition of business, net of cash acquired		—			(468,976	)
Net cash used in investing activities		(84,902	)		(635,647	)
Cash Flows from financing activities:
Proceeds from floor plan financing		38,450,052			24,035,927
Repayments of floor plan financing		(37,463,785	)		(20,605,798	)
Proceeds from line of credit		2,211,536			1,546,149
Repayments of line of credit		(1,374,333	)		(3,363,854	)
Repayments of note and loan payables		(350,690	)		(364,406	)
Repayments of loans payables – related party		(165,632	)		(83,749	)
Principal payments under capital lease obligations		(275,986	)		(807,267	)
Cash overdraft		(175,572	)		—
Proceeds from issuance of common stock		19,670			2,000
Net cash provided by financing activities		875,260			359,002
Net increase in cash		460,401			950,120
Cash at beginning of period		150,313			850,391
Cash at end of period	$	610,714		$	1,800,511
Supplemental disclosures of cash flow information
Cash paid for:
Interest	$	820,606		$	585,377
Non-Cash transactions:
Loan payments made through issuance of common stock	$	41,366		$	—
Note receivable from sale of business entity	$	120,455		$	—
Vehicles purchased through capital lease	$	344,201		$	886,401

See accompanying notes to unaudited consolidated financial statements

7

Hasco Medical, Inc. & Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Hasco Medical, Inc., formerly BBC Graphics of Palm Beach Inc., was incorporated in May 1999 under the laws of the State of Florida. Through a series of transactions, BBC Graphics of Palm Beach, Inc. (at the time an inactive corporation) became Hasco Medical, Inc. (Hasco).  Concurrently, Hasco Medical, Inc. acquired Southern Medical & Mobility.  In May, 2011, Hasco acquired Mobility Freedom, Inc. and Wheelchair Vans of America.  In November, 2011, Hasco acquired Certified Medical Systems II (Certified Medical).  A more detailed description of these transactions is contained in our 10-K filing with the Securities and Exchange Commission for the period ended December 31, 2013. On September 1, 2012, Hasco Medical, Inc. completed the acquisition of Ride-Away Handicap Equipment Corp., a closely-held New Hampshire corporation (Ride-Away).  On September 4, 2013, Hasco Medical, Inc. completed the acquisition of Auto Mobility Sales, Inc. (Auto Mobility).

Services and Products

Historically, our operations were focused on the provision of a diversified range of home health care services and products.  Following our May 2011 acquisition of Mobility Freedom, our March 2012 acquisition of Ride-Away and our September 2013 acquisition of Auto Mobility Sales, our operations are conducted within one major business unit:

· Modified Mobility Vehicles – conducts sales of handicap accessible vans, parts and services as well as the rental of such vehicles.  This segment consists of Ride-Away Handicap Equipment Corp. which has twelve locations from Maine to Florida, Mobility Freedom Inc. which has five locations in Florida and includes “Wheelchair Vans of America” operating our van rental operations, and Auto Mobility Sales, Inc., which has two (2) locations in Florida.

With our acquisitions of Mobility Freedom, Ride-Away, and Auto Mobility Sales, our Modified Mobility Vehicles segment comprises more than 100% of our consolidated revenues.  As a consequence and for purposes of consolidated financial statement presentation, our Home Health Care segment is no longer materially relevant when considering the consolidated financial statements as a whole.

Our corporate headquarters and principle corporate operations are conducted in Addison, Texas, a northern suburb of Dallas, Texas. We also house a portion of our corporate operations in Londonderry, New Hampshire.  Hasco Medical Inc. is a Florida corporation.

Modified Mobility Vehicles

Ride-Away, Mobility Freedom and Auto Mobility serve individuals with physical limitations that need specialty equipment in order to safely operate their vehicle.  We also provide products for families and care-givers with transport requirements for those under care.  In certain circumstances both the van itself and its specialty equipment is paid for directly by a federal or state agency.  For the periods ended September 30, 2014 and 2013, approximately 27% and 20%, respectively, of the Modified Mobility Vehicles segments revenue was derived from veterans receiving benefits from the United States Department of Veterans Affairs (the “VA”).  Mobility Freedom and Ride-Away are both a VA and Vocational Rehabilitation (VR) certified vendors in all the states in which we operate. Ride-Away has twelve corporate owned stores which are located in Beltsville, MD, East Hartford, CT, Essex Junction, VT, Gray, ME, Londonderry, NH, Norfolk, VA, Norristown, PA, North Attleboro, MA, Norwood, MA, Richmond VA, and Tampa, FL and Astoria, NY.  Mobility Freedom has five corporate owned stores located in Orlando, Largo, Clermont, Bunnell and Ocala, Florida.  Auto Mobility Sales has locations in Fort Lauderdale and Lake Worth, Florida.

Wheelchair Vans of America specializes in renting conversion vans to disabled individuals, and is located in Orlando, Florida. Our rental operations compliment the retail products we provide through our Mobility Freedom, Auto Mobility Sales and Ride-Away subsidiaries.

Discontinued Operations

During the second quarter of 2013, the Company initiated a plan to liquidate the division of Southern Medical and Mobility. These operations were originally reported in the home health care segment. The Company assessed the fair value of the operations less the disposal costs and concluded there is no impairment of the carrying value of the assets.  Management has also determined that the amount of assets continued to be realized is immaterial and therefore not separately disclosed.

8

During the second quarter of 2014, the Company initiated a plan to sell the division of Certified Medical Systems II, Inc. These operations were originally reported in the home health care segment. The Company assessed the fair value of the operations at the time of the disposition and sale of the entity.  Management has also determined that the amount of assets continued to be realized is immaterial and therefore not separately disclosed.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Accounting Policy

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly the consolidated financial position as of September 30, 2014 and the consolidated statements of operations, and cash flows for the three and nine month periods ended September 30, 2014 and September 30, 2013 of Hasco Medical Inc. (“Hasco” or the “Company”).

The significant accounting policies followed by the Company are set forth in Note 1 to the Company’s consolidated financial statements in the December 31, 2013, Hasco Medical Inc. Annual Report on Form 10-K , which should be read in conjunction with these financial statements.  The results of operations for the periods ended September 30, 2014 are not necessarily indicative of the result to be expected for the full year.

The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and present the financial statements of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.  The consolidated entities are:

· Hasco Medical, Inc.;

· Southern Medical & Mobility, Inc.; (discontinued operations)

· Mobility Freedom, Inc.;

· Ride Away Handicapped Equipment, Inc.;

· Auto Mobility Sales, Inc.;

· Certified Medical Systems II, Inc.; (discontinued operations)

Reclassifications

Prior period financial statement amounts have been reclassified to conform to current period presentation.

Use of Estimates

Management’s Discussion and Analysis or Plan of Operations is based upon our audited consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America. Management bases its use of estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates under different assumptions or conditions.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 605, “Revenue Recognition”, and with the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition”. Under SAB 104, four conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) delivery has occurred or service has been rendered, (iii) the price is fixed or determinable, and (iv) collection is reasonably assured.  Revenues consist of the sales of new and used vehicles, sales of parts and automotive services, commissions from finance and insurance products, vehicle rentals, sales of durable medical equipment and home health care services.  The Company recognizes revenue in the period in which products are sold or the services are rendered and only if there is reasonable expectation of collection.  For vehicles, a sale is recorded only when title has transferred and the vehicle has been delivered.  Rebates received from manufacturers are recorded as a reduction of the costs of each vehicle and recognized upon the sale of the vehicle or when earned under a specific manufacturer program.

Rental fees for vehicles are recognized over the course of the rental or service term.

9

In certain instances, customers place deposits on vehicles or special order parts for service and conversions.  Deposits are not recognized as revenue until the related vehicle or part is sold.

The Company arranges financing for customers through various institutions and receives financing fees based on the difference between the loan rates charged to customers and wholesale financing rates set by the financing institution.  The Company also receives fees from the sale of extended service contracts, warranties and vehicle security systems.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.  From time to time and for the three month periods ended September 30, 2014 and December 31, 2013, the Company reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates, at least annually, the rating of the financial institution in which it holds deposits.

Related Parties

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management, and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.

Earnings Per Share

Earnings per common share are calculated under the provisions of ASC 260. The accounting standard requires the Company to report both basic earnings per share, which is based on the weighted-average number of common shares outstanding, and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all potential dilutive common shares outstanding. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding if they would be anti-dilutive. There were no stock options which could potentially dilute earnings per share for the periods ended September 30, 2014 and 2013, respectively.

The following table sets forth the computation of basic and diluted income per share:

	For The Nine Months ended September 30,				For The Three Months ended September 30,
		2014		2013		2014		2013
Net income	$	1,256,529	$	468,512	$	801,929	$	416,521
Basic weighted average outstanding shares of common stock		997,460,295		988,694,780		999,941,212		989,460,705
Diluted weighted average common stock		997,460,295		988,694,780		999,941,212		989,460,705
Earnings per share:
Basic and diluted	$	0.00	$	0.00	$	0.00	$	0.00

The number of outstanding shares of our common stock as of September 30, 2014 was 1,000,572,949.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

10

NOTE 2 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

	September 30, 2014 (unaudited)			%	December 31, 2013			%
Trade receivables	$	2,097,422		23.1	$	2,993,757		43.6
Government receivables		6,988,499		76.9		3,875,268		56.4
		9,085,921		100.0		6,869,025		100.0
Less: allowances for doubtful accounts		(661,250	)			(686,345	)
Total	$	8,424,671			$	6,182,680

Trade receivables represent amounts due for van sales, van rentals, and medical supplies that have been delivered or sold. Government receivables represent receivables from the VA and other Government bodies related to van sales and rentals listed above.  The Company does not bill Medicare or Medicaid for any vehicle-related sales or service.

NOTE 3 – INVENTORY

Inventory consists of the following:

	September 30, 2014 (unaudited)			December 31, 2013
Vehicles	$	12,656,940		$	10,859,361
Equipment and supplies		993,033			1,008,996
Work in Process		644,212			412,829
Inventory reserve		(512,050	)		(709,126	)
	$	13,782,135		$	11,572,060

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

		September 30,
	Estimated	2014			December 31,
	Life	(unaudited)			2013
Building improvements	Varies	$	940,594		$	899,530
Office furniture and equipment	5 years		306,434			303,561
Rental equipment	13-36 months		540,719			434,959
Vehicles	5 years		107,304			91,521
Capitalized leases	Varies		1,976,304			1,576,275
Total			3,871,355			3,305,846
Accumulated depreciation			(1,774,036	)		(1,164,634	)
Net		$	2,097,319		$	2,141,212

For the three and nine months ended September 30, 2014 and 2013 depreciation expense amounted to $231,480 and $166,179, and $720,914 and $540,493, respectively.

The Company has entered into various financing arrangements in connection with the acquisition of delivery vehicles (see Note 6 below).

11

NOTE 5 – INTANGIBLE ASSETS

Intangible assets consist of the following:

		September 30,
	Estimated	2014			December 31,
	Life	(unaudited)			2013
Goodwill related to acquisition of Mobility Freedom	Indefinite		1,641,303			1,641,303
Goodwill related to acquisition of Ride-Away	Indefinite		1,888,710			1,888,710
Trade name related to acquisition of Mobility Freedom	Indefinite		400,000			400,000
Trade name related to acquisition of Ride-Away	Indefinite		990,000			990,000
Primary market area related to acquisition of Mobility Freedom	Indefinite		280,000			280,000
Primary market area related to acquisition of Ride-Away	Indefinite		470,000			470,000
Goodwill related to acquisition of Auto Mobility Sales	Indefinite		284,213			284,213
Trade name related to acquisition of Auto Mobility Sales	2.32 years		40,000			40,000
Primary market area related to acquisition of Auto Mobility Sales	Indefinite		150,000			150,000
Non-compete agreements area related to acquisition of Auto Mobility Sales	3 years		80,000			80,000
Subtotal			6,224,226			6,224,226
Accumulated amortization			(43,285	)		(10,192	)
Total		$	6,180,941		$	6,214,034

For the three and nine months ended September 30, 2014 and 2013 amortization expense was $11,031 and $0, and $33,093 and $3,659, respectively.

NOTE 6 – NOTES PAYABLE AND DEBT

Revolving Line of Credit

On November 1, 2012, the Company renewed its Commercial Note agreement with a bank for advances of funds for working capital purposes under a line of credit arrangement for $8,000,000 with an interest calculation of the prime rate plus 0.25% which reflected an interest rate of 3.50% as of September 30, 2014.  The agreement is secured against all property of the borrowers assets, on demand with an annual review as of December 31, 2013.  Payments due are interest only and the interest rate varies based on the Company’s leverage ratio.  The balance of the line of credit was $3,140,346 at September 30, 2014 and $2,303,143 at December 31, 2013.

Note Payable – Floor Plan

The Company has a floor plan line of credit with General Electric Credit Corporation with a maximum borrowing capacity of $11,250,000 for Ride-Away, $3,850,000 for Mobility Freedom, and $1,750,000 for Auto Mobility Sales at September 30, 2014.  The borrowing capacity was increased by $5 million on May 20, 2013.  Amounts borrowed for vehicles under this line bear no interest for 60 days and then bear interest at the 90 day LIBOR plus 6.0% for Ride-Away and at the 90 day LIBOR plus 5.5% for Mobility Freedom and Auto Mobility Sales.  The loan balance on the vehicle is due when the vehicle is fully funded or paid by the customer.  If the vehicle is not fully funded or paid within nine months of being purchased by the Company and funded by the floor plan, a graduated percentage of the balance is due with the entire balance due at twelve months. The note is secured by the vehicles financed.  At September 30, 2014 and December 31, 2013, the Company had $13,160,906 and $12,174,639 respectively, outstanding under these lines. With the discretionary nature of this loan agreement, the Lender or the Company can terminate this agreement with a thirty (30) day written notice at any time.

12

Installment Debt

Installment debts consist of the following:

	September 30, 2014 (unaudited)		December 31, 2013 (audited)
Vehicle Note Payable, dated August 18, 2011, vehicle financing arrangement for tow truck, original amount of $47,124, 5 years (60 months), 0% interest rate, commenced October 1, 2011, matures on October 1, 2016, monthly installment payments of $785		18,732		25,918
Note Payable, dated May 13, 2011, issued for the acquisition of Mobility Freedom, original amount of $2 million, fifteen years (180 months), 6% interest rate, commenced August 1, 2011, matures on July 1, 2026, monthly installment payments of $16,877 secured by grantee from the majority shareholder of Mobility Freedom		1,704,667		1,785,953
Note Payable to related party, dated May 13, 2011, associated with the acquisition of Mobility Freedom, original amount of $2 million, ten years (120 months), 5% interest rate, commenced August 1, 2011, matures on July 1, 2021, monthly installment payments of $22,204		1,457,931		1,618,387
Note Payable, dated November 16, 2011, issued for the acquisition of Certified Auto, original amount of $50,000, four years (16 quarters), 0% interest rate, commenced January 16, 2012, matures on November 16, 2015, quarterly installment payments of $3,125		18,660		21,785
Note Payable, dated March 1, 2012, issued for the acquisition of Ride-Away, original amount of $3,000,000, ten years (120 months), 5% interest rate, commences September 1, 2012, matures on May 2, 2022, monthly installment payments of $31,820.  Note is with the former owner of Ride-Away		2,406,002		2,618,831
Note payable to related party, dated March 1, 2012, issued for the acquisition of Ride-Away, original amount of $500,000 , five years (60 months), 6% interest rate, commenced April 1, 2012, matures March 1, 2017, monthly installment payments of $9,685		301,722		342,143
Promissory Note payable to a related party, dated September 4, 2013, issued for the acquisition of Auto Mobility Sales, original amount of $210,000 , five years (60 months), 5% interest rate, commenced November 1, 2013, matures October 1, 2018, monthly installment payments of $3,963		171,750		205,877
Promissory Note payable to a related party, dated September 4, 2013, issued for the acquisition of Auto Mobility Sales, original amount of $140,000 , five years (60 months), 5% interest rate, commenced November 1, 2013, matures October 1, 2018, monthly installment payments of $2,642		114,497		133,815
Total debt		6,193,961		6,752,709
Current portion of long-term debt, notes payable		748,237		729,693
Long-term portion	$	5,445,724	$	6,023,016

NOTE 7 – STOCKHOLDERS’ EQUITY

During quarter ended September 30, 2014, the Company sold 601,178 shares of common stock for proceeds of $19,670.

During the nine months ended September 30, 2014, 2,995,613 shares of common stock valued at $35,000 were issued to key employees as employee compensation and 1,161,464 shares of common stock valued at $24,000 were issued to directors as board compensation.

13

During the nine months ended September 30, 2014, the Company issued 2,032,899 shares of common stock valued at $41,366, in lieu of payments for notes payable-related party.

NOTE 8 – CONTINGENCIES

Company operations involve the handling and disposal of waste and hazardous material within a highly regulated oversight structure.  The Company is subjected to inspections by OSHA and other regulatory bodies.  Management believes that there are no current regulatory claims that would have a material effect on the Company’s financial position or results of operations.

NOTE 9 – INCOME TAXES

Prior to its acquisition in September 2008 by HASCO Holdings, LLC, the Company was an S Corporation.  Beginning in September 2008 the Company’s tax status changed to a C Corporation.  The Company accounts for income taxes under ASC Topic 740: Income Taxes requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry forwards. ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.

As of September 30, 2014 and 2013, the Company had no loss carry forwards available to reduce its future federal taxable.

The table below summarizes the differences between the Company’s effective tax rate and the statutory federal rate as follows for income for continuing operations for the nine months ended September 30, 2014 and 2013:

	For The Nine months Ended September 30,
	2014		2013
Expected federal income tax expense (34%)	$	611,431	$	256,846
State tax expense, net of federal tax effect		173,147		17,297
Deferred taxes		—		—
		784,578		274,143
Change in valuation allowance		—		(223,000	)
Net income tax expense		784,578		51,143

NOTE 10 – SEGMENT REPORTING

Accounting standards for the Disclosure about Segments of an Enterprise and Related Information establishes standards for the reporting by business enterprises of information about operating segments, products and services, geographic areas, and major customers. The method for determining what information to report is based on the way that management organizes the operations of the Company for making operational decisions and assessments of financial performance.

According to such standards, management determined that, as a consequence of our Home Healthcare Segment now comprising less than 5% of our Gross Revenue, the reporting of segment operating results is no longer relevant when considering the financial statement as a whole.

NOTE 11 – DIVESTITURE OF CERTIFIED MEDICAL

On June 30, 2014 the Company entered into an agreement with a related party and completed the sale of its Certified Medical business segment in exchange for a note receivable in the amount of $124,618.  In connection with the sale, the Company recognized a gain of $92,653.  In accordance with ASC 205-20, the results of operations for the Certified Medical business segment through September 30, 2014, and for all applicable prior periods, are reported as discontinued operations.   For the three months and nine months ended September 30, 2014, Certified Medical reported income of $193,827 and $246,858 respectively.

Concurrent with the sale of its Certified Medical business segment, the Company and the buyer entered into a transition services agreement pursuant to which each of the parties will provide certain transitional, administrative, and support services to the other party for a period up to nine months, which may be extended upon mutual agreement. Such services provided to the buyer by the Company will be recorded as contra-expense since the Company will be reimbursed for the service cost incurred. Activity associated with transitional service is not considered significant relative to the condensed consolidated financial statements of the Company.

14

NOTE 12 – ACQUISITIONS AND PROFORMA FINANCIAL INFORMATION

Auto Mobility Sales Acquisition

The following table summarized the impact of the acquisition as if the acquisition date were January 1, 2013.

Hasco Medical, Inc. and Subsidiaries

Consolidated Pro Forma Statements of Operations

For the Nine months ended September 30, 2013

(unaudited)

	9/30/2013
Revenues, net	$	58,804,039
Cost of sales		46,015,325
Gross Profit		12,788,714
Operating expenses:
Selling and marketing		3,815,562
General and administrative		7,869,745
Depreciation and amortization		330,437
Total operating expenses		12,015,744
Income from operations		772,970
Other income (expense)		(181,377	)
Income from continuing operations before income taxes		591,593
Provision for income taxes		79,682
Income from continuing operations		511,911
Loss from continued operation, net of income taxes		(235,775	)
Net Income	$	276,136
Earnings per share:
Basic and dilutive	$	0.00
Weighted average shares outstanding
Basic and dilutive		988,694,780

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Results of Operations

The results of operations presented on a historical comparative basis require consideration in the nature of the change in business activity and the acquisition of business entities in 2012.  Any such comparison requires a careful examination of the change in the nature of the Company’s business activity in conjunction with numerical comparisons of quarter-to-quarter results.

The following table provides an overview of certain key factors of our results of continuing operations for the three months ended September 30, 2014 as compared to September 30, 2013:

	Three Months Ended September 30,
	2014			2013
Net revenues	$	23,816,187		$	19,456,218
Cost of sales		17,515,451			14,743,910
Operating expenses:
Selling and marketing		1,063,863			1,203,124
General and administrative		3,432,786			2,453,602
Amortization and depreciation		242,511			169,838
Total operating expenses		4,739,160			3,826,564
Income from operations		1,561,576			885,744
Total other income		(418,139	)		(168,585	)
Provision for income taxes		525,802			236,397
Net income from continuing operations	$	617,635		$	480,762

Other Key Indicators:

	Three Months Ended September 30,
	2014	2013
Cost of sales as a percentage of revenues	73.5%	75.6%
Gross profit margin	26.5%	24.4%
General and administrative expenses as a percentage of revenues	14.4%	12.6%
Total operating expenses as a percentage of revenues	19.9%	19.6%

The following table provides comparative data regarding the source of our net revenues in each of these periods:

	Three Months ended September 30,
	2014		2013
Product Sales	$	19,276,144	$	15,905,123
Rental Revenue		373,732		368,371
Service and other		4,166,311		3,182,724
Total Net Revenues	$	23,816,187	$	19,456,218

Three Months ended September 30, 2014 and 2013

Net Revenues

For the three months ended September 30, 2014, we reported revenues of $23,816,187 as compared to revenues of $19,456,218 for the three months ended September 30, 2013, an increase of $4,359,969 or approximately 22.4%.  The increase is due to the increase in private pay business for van sales and the acquisition of Auto Mobility Sales.

Product sales for the three months ended September 30, 2014 and 2013 amounted to $19,276,144 and $15,905,123, respectively, an increase of $3,371,021 or 21.2%.  Rental revenue for the three months ended September 30, 2014 and 2013 amounted to $373,732 and $368,371, respectively, an increase of $5,361 or 1.5%.  Service and other revenue for the three months ended September 30, 2014 and 2013 amounted to $4,166,311 and $3,182,724, respectively, an increase of $983,587 or 30.9%.  These increases were due to the increase in private pay business for van sales and the acquisition of Auto Mobility Sales.  We are anticipating a 3% price increase for the remainder of 2014.

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Product sales comprise approximately 80.9% of the Company’s sales for the three months ended September 30, 2014 compared to 81.7% in the same period of 2013.

Cost of Sales

Our cost of sales consists of products purchased for resale, and service parts and labor. For the three months ended September 30, 2014, cost of sales was $17,515,451, or approximately 73.5% of revenues, compared to $14,743,910, or approximately 75.6% of revenues, for the three months ended September 30, 2013. The overall increase of cost of sales for our Modified Mobility Vehicle operations is due to the increase in revenue.

We have a single vendor that represents 55% of our Cost of Sales.  Our relationship with this vendor is excellent and we do not anticipate any change in the status of that relationship.  Should there be any such change; management believes that substantially similar products are available from other competitive vendors at terms that will not have a substantial effect on our financial condition.

Gross Profit

Overall gross profit percentage increased to 26.5% for the three months ended September 30, 2014 from 24.4 % for the three months ended September 30, 2013 due to an increase in our service revenue which is a higher margin segment for the company.

Total Operating Expense

Total operating expenses increased as a percentage of revenues to 19.9% for the three months ended September 30, 2014 from 19.6% for the three months ended September 30, 2013.  These changes include:

Selling and Marketing Expense. For the three months ended September 30, 2014, selling and marketing costs were $1,063,863 and $1,203,124 for the three months ended September 30, 2013. The decrease was due to the decrease in marketing, advertising and print advertising programs initiatives, primarily in the Modified Mobility Vehicle operations.

General and Administrative Expense. For the three months ended September 30, 2014, general and administrative expenses were $3,432,786 as compared to $2,453,602 for the three months ended September 30, 2013, an increase of $979,184. The increase is due to the additional rent and professional fees associated with the acquisition of business entities in 2013, additional personnel associated with the acquisition of Auto Mobility Sales, and additions of staff in the accounting and sales departments as well as fully staffing the locations with management and sales personnel.  

Depreciation and Amortization Expense. For the three months ended September 30, 2014, depreciation and amortization expense amounted to $242,511 as compared to $169,838 for the three months ended September 30, 2013, an increase of $72,673.

Income from Continuing Operations

We reported income from continuing operations of $617,635 for the three months ended September 30, 2014 as compared to income from continuing operations of $480,596 for the three months ended September 30, 2013.

Other Income (Expense)

Other Income (Expense) for the three months ended September 30, 2014 amounted to $(418,139) compared to $(168,585) for the three months ended September 30, 2013.   This increase in expense is due to a higher volume of floor plan activity and a larger leased fleet for rental sales. Other income and expense consists of Other Income and Interest Expense.

Other Income consists primarily of discounts earned which totaled $55,126 for the three months ended September 30, 2014 and $70,205 for the three months ended September 30, 2013, as well as a net loss from Medicare and Medicaid charge backs from closed entities which totaled $(173,497) and $(22,806) for the three months ended September 30, 2014 and 2013 respectively.

Interest expense for the three months ended September 30, 2014 amounted to $(299,768) as compared to $(215,984) for the three months ended September 30, 2013, an increase of $72,732.  This increase is due to the additional debt and capital lease obligations the Company has incurred in the acquisition of the Auto Mobility subsidiary and the increase in volume on the GE floor plan agreement.

Net Income

Our net income was $801,929 for the three months ended September 30, 2014 compared to net income of $416,521 for the three months ended September 30, 2013.

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Assets and Liabilities

Assets were $33,002,355 as of September 30, 2014.  Assets consisted of cash of $610,714, accounts receivable of $8,424,671, inventory of $13,782,135, current portion of notes receivable of $25,505, prepaid expense of $519,285, short-term deferred tax asset of $489,014, long-term deferred tax asset of $181,212, property and equipment of $2,097,319, intangible assets of $6,180,941, long term notes receivable of $94,950, and other non-current assets of $596,609.  Liabilities were $28,984,255 as of September 30, 2014. Liabilities consisted primarily of accounts payable of $2,763,262, customer deposits and deferred revenue of $298,804, line of credit of $3,140,346, notes payable – floor plan of $13,160,906, obligation under capital leases short term of $406,392, current portion of notes payable of $392,597, related party short-term notes payable of $355,640, long-term capital leases of $1,008,521, long-term notes payable of $3,746,157, related party long-term notes payable of $1,699,567, and other current liabilities of $2,012,063.

Stockholders’ Equity

Stockholders’ equity was $4,018,100 as of September 30, 2014.  Stockholder’s equity consisted primarily of shares issued for acquisitions, fundraising, employee compensation, and settlement of services totaling $7,813,888, offset primarily by the deficit of $3,795,788 at September 30, 2014.

The results of operations presented on a historical comparative basis require consideration in the nature of the change in business activity and the acquisition of business entities in 2013 and 2012.  Any such comparison requires a careful examination of the change in the nature of the Company’s business activity in conjunction with numerical comparisons of year-to-year results.

The following table provides an overview of certain key factors of our results of continuing operations for the nine months ended September 30, 2014 as compared to September 30, 2013:

	Nine Months Ended September 30,
	2014			2013
Net revenues	$	68,362,635		$	52,951,334
Cost of sales		51,766,472			40,611,949
Operating expenses:
Selling and marketing		3,034,563			3,204,763
General and administrative		10,115,358			7,357,365
Amortization and depreciation		753,703			540,036
Total operating expenses		13,903,624			11,102,164
Income from operations		2,692,539			1,237,221
Total other income (expense)		(894,213	)		(481,791	)
Provision for  income taxes		784,578			51,143
Net income from continuing operations	$	1,013,748		$	704,287

Other Key Indicators:

	Nine months Ended September 30,
	2014	2013
Cost of sales as a percentage of revenues	75.7%	76.7%
Gross profit margin	24.3%	23.3%
General and administrative expenses as a percentage of revenues	14.8%	13.9%
Total operating expenses as a percentage of revenues	20.3%	21.0%

The following table provides comparative data regarding the source of our net revenues in each of these periods:

	Nine Months ended September 30,
	2014		2013
Product Sales	$	55,390,038	$	42,452,448
Rental Revenue		931,330		912,129
Service and other		12,041,267		9,586,757
Total Net Revenues	$	68,362,635	$	52,951,334

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Nine months ended September 30, 2014 and 2013

Net Revenues

For the nine months ended September 30, 2014, we reported revenues of $68,362,635 as compared to revenues of $52,951,334 for the nine months ended September 30, 2013, an increase of $15,411,301 or approximately 29.1%.  The increase is due to the increase in private pay business for van sales and the acquisition of Auto Mobility Sales.

Product sales for the nine months ended September 30, 2014 and 2013 amounted to $55,390,038 and $42,452,448, respectively, an increase of $12,937,590 or 30.5%.  Rental revenue for the nine months ended September 30, 2014 and 2013 amounted to $931,330 and $912,129, respectively, an increase of $19,201 or 2.1%.  Service and other revenue for the nine months ended September 30, 2014 and 2013 amounted to $12,041,267 and $9,586,757, respectively, an increase of $2,454,510 or 25.6%.  These increases were due to the increase in private pay business for van sales and the acquisition of Auto Mobility Sales.  We are anticipating a 3% price increase for the remainder of 2014.

Product sales comprise approximately 81.0% of the Company’s sales for the nine months ended September 30, 2014 compared to 80.2% in the same period of 2013.

Cost of Sales

Our cost of sales consists of products purchased for resale, and service parts and labor. For the nine months ended September 30, 2014, cost of sales was $51,766,472, or approximately 75.7% of revenues, compared to $40,611,949, or approximately 76.7% of revenues, for the nine months ended September 30, 2013. The overall increase of cost of sales for our Modified Mobility Vehicle operations is due to the increase in revenue.

We have a single vendor that represents 52% of our Cost of Sales.  Our relationship with this vendor is excellent and we do not anticipate any change in the status of that relationship.  Should there be any such change; management believes that substantially similar products are available from other competitive vendors at terms that will not have a substantial effect on our financial condition.

Gross Profit

Overall gross profit percentage increased to 24.3% for the nine months ended September 30, 2014 from 23.3 % for the nine months ended September 30, 2013 due to the greater buying power and utilization of capacity in service.

Total Operating Expense

Total operating expenses decreased as a percentage of revenues to 20.3% for the nine months ended September 30, 2014 from 21.0% for the nine months ended September 30, 2013.  These changes include:

Selling and Marketing Expense. For the nine months ended September 30, 2014, selling and marketing costs were $3,034,563 and $3,204,763 for the nine months ended September 30, 2013. The decrease was due to the decrease in marketing, advertising and print advertising programs initiatives, primarily in the Modified Mobility Vehicle operations.

General and Administrative Expense. For the nine months ended September 30, 2014, general and administrative expenses were $10,115,358 as compared to $7,357,365 for the nine months ended September 30, 2013, an increase of $2,757,993. The increase is due to the additional rent and professional fees associated with the acquisition of business entities in 2013, additional personnel associated with the acquisition of Auto Mobility Sales, and additions of staff in the accounting and sales departments as well as fully staffing the locations with management and sales personnel.

Depreciation and Amortization Expense. For the nine months ended September 30, 2014, depreciation and amortization expense amounted to $753,703 as compared to $540,036 for the nine months ended September 30, 2013, an increase of $120,712.  This is due to amortization of intangible assets gained from acquisitions in 2013 and increased assets and capital leases.

Income from Continuing Operations

We reported income from operations of $1,013,748 for the nine months ended September 30, 2014 as compared to income from operations of $704,287 for the nine months ended September 30, 2013.

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Other Income (Expense)

Other Income (Expense) for the nine months ended September 30, 2014 amounted to $(894,213) compared to $(481,791) for the nine months ended September 30, 2013.  Other income and expense consists of Other Income and Interest Expense.

Other Income consists primarily of discounts earned and other expenses which totaled $(155,439) for the nine months ended September 30, 2014 and $166,978 for the nine months ended September 30, 2013, as well as Gain/Loss from Medicare and Medicaid charge backs from closed entities $81,832 and $(63,402) for the three months ended September 30, 2014 and 2013 respectively.

Interest expense for the nine months ended September 30, 2014 amounted to $(820,606) as compared to $(585,367) for the nine months ended September 30, 2013, an increase of $235,229.  This increase is due to the additional debt and capital lease obligations the Company has incurred in the acquisition of the Auto Mobility subsidiary and the increase in volume on the GE floor plan agreement.

Net Income

Our net income was $1,256,529 for the nine months ended September 30, 2014 compared to net income of $468,512 for the nine months ended September 30, 2013.

Liquidity and Capital Resources

General – Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis. The following table provides an overview of certain selected balance sheet comparisons between September 30, 2014 and December 31, 2013:

	September 30, 2014			December 31, 2013			$ Change			% Change
Working capital surplus	$	1,321,314		$	341,302		$	980,012		287.1
Cash		610,714			150,313			460,401		306.3
Accounts receivable, net		8,424,671			6,182,680			2,241,991		36.3
Inventory		13,782,135			11,572,060			2,210,075		19.1
Total current assets	$	23,851,324		$	18,823,065		$	5,028,259		26.7
Property and equipment, net		2,097,319			2,141,212			(43,893	)	(2.0	)
Intangible assets, net		6,180,941			6,214,034			(33,093	)	(0.5	)
Total assets	$	33,002,355		$	27,932,480		$	5,069,875		18.2
Accounts payable and accrued liabilities	$	2,763,262		$	1,849,702		$	913,560		49.4
Cash overdraft		0			175,572			(175,572	)	(100	)
Customer deposits and deferred revenue		298,804			388,433			(89,629	)	(23.1	)
Line of credit		3,140,346			2,303,143			837,203		36.4
Note Payable – Floor Plan		13,160,906			12,174,639			986,267		8.1
Current portion of capital leases		406,392			366,658			39,734		10.8
Notes payable-current		392,597			376,685			15,912		4.2
Notes payable, related party-current		355,640			353,008			2,632		0.7
Total current liabilities	$	22,530,010		$	18,481,763		$	4,048,247		21.9
Capital lease obligations long term		1,008,521			817,828			190,693		23.3
Notes payable-long term		3,746,157			4,075,802			(329,645	)	(8.1	)
Notes payable, related party-long term		1,699,567			1,947,214			(247,647	)	(12.7	)
Total liabilities	$	28,984,255		$	25,322,607		$	3,661,648		14.5
Accumulated deficit		(3,795,788	)		(5,052,317	)		1,256,529		(24.9	)
Stockholders’ equity	$	4,018,100		$	2,609,873		$	1,408,227		54.0

Overall, we had an increase in cash flows of $460,401 in the nine months ending September 30, 2014 resulting from cash used in operating activities of $329,957 and cash used in investing activities of $84,902, and cash provided by financing activities of $875,260.

20

The following is a summary of our cash flows provided by (used in) operating, investing, and financing activities during the periods indicated:

	Nine Months Ended September 30,
	2014			2013
Cash at beginning of period	$	150,313		$	850,391
Net cash provided by (used in) operating activities		(329,957	)		1,226,765
Net cash (used in) investing activities		(84,902	)		(635,647	)
Net cash provided by financing activities		875,260			359,002
Cash at end of period	$	610,714		$	1,800,511

Net cash used in operating activities was $329,957 for the nine months ended September 30, 2014. For the nine months ended September 30, 2014, we had net income of $1,256,529, non-cash items such as depreciation and amortization expense of $754,007, stock-based compensation of $89,602, offset partially by gain on disposal of property and equipment of $9,245, and the changes in operating assets and liabilities of $2,256,690.  The changes in operating assets and liabilities were primarily due to increases in accounts receivable of $2,241,991, the change in deferred tax asset of $107,829, customer deposits and deferred revenue of 89,629, inventory of $2,242,306, prepaid expenses of $34,466; offset partially by the increases in, accounts payable and accrued expenses of $913,560, other current liabilities of $1,517,615 and other assets of $28,356

Net cash provided by operating activities was $1,226,765 for the nine months ended September 30, 2013. For the nine months ended September 30, 2013, we had net income of $468,512, non-cash items such as depreciation and amortization expense of $540,493, stock-based compensation of $80,165; and offset partially by changes in operating assets and liabilities of $488,223.  The changes in operating assets and liabilities were primarily due to increases in inventory of $973,128, prepaid expenses of $315,195, and customer deposits and deferred revenue of $412,899, offset partially by the decreases in accounts receivable of $1,313,155, decreases in accounts payable and accrued expenses of $505,283.

Net cash used in investing activities for the nine months ended September 30, 2014 was $84,902 which consists primarily of purchases of fixed assets.

Net cash used in investing activities for the nine months ended September 30, 2013 was $635,647. During the nine months ended September 30, 2013, cash was provided by the sale of property and equipment offset partially by the cash used for the purchase of property and equipment and the acquisition Auto Mobility Sales.

Net cash provided by financing activities for the nine months ended September 30, 2014 was $875,260. This consisted of principal payments under capital lease obligations of $275,986, repayments of related party notes payable of $165,632, cash overdraft of $175,572, and repayments on our notes payable of $350,690, offset partially by net draws and repayments on our floor plan of $986,267, net draws and repayments on our line of credit of $837,203,  and the proceeds from issuance of common stock of $19,670.

Net cash provided by financing activities for the nine months ended September 30, 2013 was $359,002. This consisted of principal payments under capital lease obligations of $807,267, repayments of related party notes payable of $83,749 and repayments on our notes payable of $364,406 and net draws and repayments on our line of credit of $1,817,705, offset partially by net draws and repayments on our floor plan of $3,430,129 and the proceeds from issuance of common stock of $2,000.

At September 30, 2014 we had a working capital surplus (current assets in excess of current liabilities) of $1,321,314 and accumulated deficit of $(3,795,788).

Financing – We believe our current working capital position, together with our expected future cash flows from operations will be adequate to fund our operations in the ordinary course of business, anticipated capital expenditures, debt and floor plan payment requirements, and other contractual obligations for at least the next twelve months.  However, this belief is based upon many assumptions and is subject to numerous risks (see “Risk Factors”), and there can be no assurance that we will not require additional funding in the future.

As we attempt to expand and develop our operations, there exists a potential for net negative cash flows from future operations in amounts not now determinable, and we may be required to obtain additional financing in support of these plans. We have and expect to continue to have substantial capital expenditures and working capital needs.  We expect that the additional financing will (if available) take the form of a private placement of equity, bank borrowings and seller-financed acquisitions, although we may be constrained to obtain additional debt financing in lieu thereof. We are maintaining an on-going effort to consolidate sources of additional funding, without which we may not be able to continue our expansion efforts.  There are no assurances that we will be able to obtain or continue adequate financing.  If we are able to obtain and continue our required financing, future operating results depend upon a number of factors that are outside such financing considerations.

21

Vehicle Floorplans and Lines of Credit – Vehicle floorplans and line of credit reflect the amounts borrowed to finance the purchase of specific new and, to a lesser extent, used vehicle inventories with our corresponding manufacturers.  Changes in our vehicle floorplan and credit lines are reported in the financing cash flow section.  Below is a listing of our gross usage and payments on the company’s floorplan and credit lines for the nine months ended September 30, 2014 and 2013:

For the nine months ended September 30, 2014:

Facility	Additions		Payments		Net Usage Inc (Dec)
Floor plan	$	38,450,052	$	37,463,785	$	986,267
Line of credit		2,211,536		1,374,333		837,203	)
Total	$	40,661,588	$	38,838,118	$	1,823,470

For the nine months ended September 30, 2013:

Facility	Additions		Payments		Net Usage Inc (Dec)
Floor plan	$	24,035,927	$	20,605,798	$	3,430,129
Line of credit		1,546,149		3,363,854		(1,817,705	)
Total	$	25,582,076	$	23,969,652	$	1,612,424

Contractual Obligations and Off-Balance Sheet Arrangements

Contractual Obligations

With reference to SEC Regulation S-K Item 303(d), tables summarizing our contractual obligations are not required.

Off-balance Sheet Arrangements

The Company’s management considers all liabilities stated on the financial statement contained herein disclose all liabilities and potential liabilities in every material respect.  We have not entered into any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are not reflected in our consolidated financial statements.  Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk in support to such activity. We do not have any determinable or variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no material changes in our quantitative and qualitative market risks since the prior reporting period.

ITEM 4.  CONTROLS AND PROCEDURES.

The Company is exempt from the reporting requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

As a result of the misstatements in the financial statements for the years ended December 31, 2013 and 2012, and in connection with the evaluation of our controls and procedures for the year ended December 31, 2013 we have determined that we have material weaknesses in our controls and procedures, as more fully described below.

A material weakness in internal control over financial reporting is defined in Section 210.1-02(4) of Regulation S-X as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.  A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting.

22

We have become aware that we:

A)	had failed to properly record the purchase price allocations related to the May 13, 2011 acquisition of Mobility Freedom, Inc. and the March 1, 2012 acquisition of Ride-Away Handicap Equipment Corp. and the effects of these corrections on amortization expense and other income accounts.  The error had a significant effect on our previously issued consolidated financial statements for the year ended December 31, 2012, and for each of the quarters for the year ended December 31, 2012;
B)	had failed to properly classify direct labor and overhead as cost of goods sold for the year ended December 31, 2012. We previously classified the direct labor and overhead as a component of general and administrative expenses, a line item in the consolidated statements of operations of our previously issued consolidated financial statements.
C)	had failed to properly depreciate leasehold improvements from useful life to the shorter of useful life or lease term.
D)	had failed to properly relieve inventory for sold vehicles
E)	had failed to record impairment of all of the goodwill associated with the Home Healthcare reporting unit in the quarter ended December 31, 2012.
F)	had failed to properly account for certain Home Healthcare revenues using the Net Revenue method.  We previously used the Gross Revenue method.

As a result of identifying these errors, we concluded that accounting adjustments were necessary to correct the previously issued financial statements for the years ended December 31, 2012 and 2011, for each of the quarters for the year ended December 31, 2012, for the quarters ended September 30, 2011, September 30, 2011, and December 31, 2011, and that the reports we filed with the SEC that included the financial statements that reported the erroneous information for that period should no longer be relied upon.  Accordingly, we have restated our financial statements for the year ended December 31, 2012. In addition, audit adjustments were necessary in the preparation of the 2013 financial statements.

We determined that these failures and related restatements and reclassification demonstrated the following material weakness in our internal control over financial reporting:

· Accounting and Finance Personnel Weakness — As of the years ended December 31, 2013 and 2012, the Company lacked appropriate resources within the accounting function.  The accounting staff is comprised of few people and, as of December 31, 2012, the staff did not have an adequate number of personnel with the expertise and training to meet the Company’s reporting demands.

Remediation Plan for Material Weakness in Internal Control over Financial Reporting

During 2013, we added additional experienced staff to the accounting department.  During 2014 we will continue to assess the needs of our accounting department, hire additional staff as needed and monitor the staff’s continuing education.  We believe that these factors will substantially decrease the possibility of the occurrence of errors in our financial statements.

Management has discussed these material weaknesses with our Audit Committee and Board of Directors and will continue to review progress on these activities on a consistent and ongoing basis at the senior management level in conjunction with our Board of Directors.

We cannot assure you at this time that the actions and remediation efforts we have taken or ultimately will implement will effectively remediate the material weaknesses described above or prevent the incidence of other significant deficiencies or material weaknesses in our internal control over financial reporting in the future.  Our management, including our principal executive officer and principal accounting officer, does not expect that disclosure controls or internal controls over financial reporting will prevent all errors, even as the aforementioned remediation measures are implemented and further improved to address all deficiencies.  The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions.

The implementation of our remediation plan will require substantial expenditures, could take a significant period of time to complete, and could distract our officers and employees from the operation of our business.  

23

With respect to the quarter ended September 30, 2014, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934. Based upon our evaluation regarding the period ending September 30, 2014, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, has concluded that its disclosure controls and procedures were not effective.

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

From time to time the Company is made to answer various legal disputes arising out of the ordinary course of doing business.  It is the opinion of management, in consultation with our attorneys, that to the extent such parties may have a reasonable possibility of prevailing against us, such potential awards or judgments would be of immaterial financial relevance when considering the financial statements as a whole.

ITEM 1A.   RISK FACTORS

There has been no material change in the risk factors set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.   MINE SAFETY DSICLOSURES.

Not applicable.

ITEM 5.   OTHER INFORMATION.

None.

ITEM 6.   EXHIBITS

Attached hereto and incorporated by reference are the following exhibits:

Exhibit Number	Description
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
99.1	Form 8K, dated January 7, 2013**
99.2	Form 8K, dated April 8, 2013**
101	Interactive Data Files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q.***

*     Filed herein

**   Previously filed and incorporated by reference

*** In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.”

24

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Hasco Medical, Inc.
	By: /s/ Hal Compton, Jr.
November 13, 2014	Hal Compton, Jr.,
	Chief Executive Officer, principal executive officer
	By: /s/ Shane Jorgenson
November 13, 2014	Shane Jorgenson
	Chief Financial Officer, principal financial and accounting officer

25

EX-31

EXHIBIT 31.1

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Hal Compton, Jr., certify that:

1.    I have reviewed this quarterly report on Form 10-Q of HASCO Medical, Inc.;

2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared;

b)    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)    all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 13, 2014

By: /s/ Hal Compton, Jr.

Hal Compton, Jr.

Chief Executive Officer, principal executive officer

EX-31

EXHIBIT 31.2

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Shane Jorgenson, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of HASCO Medical, Inc.;

2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared;

b)    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)    all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 13, 2014

By: /s/ Shane Jorgenson

Shane Jorgenson

Chief Financial Officer,

principal financial and accounting officer

EX-32

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of HASCO Medical, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Hal Compton, Jr., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 13, 2014

By: /s/ Hal Compton, Jr.

Hal Compton, Jr.,

Chief Executive Officer,
principal executive officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of HASCO Medical, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Shane Jorgenson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 13, 2014

By: /s/ Shane Jorgenson

Shane Jorgenson

Chief Financial Officer,
principal financial and accounting officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

ACQUISITIONS AND PROFORMA FINANCIAL INFORMATION (Pro Forma Statements of Operations) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
ACQUISITIONS AND PROFORMA FINANCIAL INFORMATION [Abstract]
Revenues, net	$ 58,804,039
Cost of sales	46,015,325
Gross Profit	12,788,714
Operating expenses:
Selling and marketing	3,815,562
General and administrative	7,869,745
Depreciation and amortization	330,437
Total operating expenses	12,015,744
Income from operations	772,970
Other income (expense)	(181,377)
Income from continuing operations before income taxes	591,593
Provision for income taxes	79,682
Income from continuing operations	511,911
Loss from continued operation, net of income taxes	(235,775)
Net Income	$ 276,136
Earnings per share:
Basic and dilutive	$ 0.00
Weighted average shares outstanding
Basic and dilutive	988,694,780

XML

NOTES PAYABLE AND DEBT (Narrative) (Details) (USD $)

1 Months Ended

9 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Nov. 30, 2012

Revolving Line of Credit Commercial Note [Member]

Sep. 30, 2014

Revolving Line of Credit Commercial Note [Member]

Dec. 31, 2013

Revolving Line of Credit Commercial Note [Member]

Sep. 30, 2014

General Electric Credit Corporation [Member]

Floor Plan Line of Credit [Member]

Dec. 31, 2013

General Electric Credit Corporation [Member]

Floor Plan Line of Credit [Member]

May 20, 2013

General Electric Credit Corporation [Member]

Floor Plan Line of Credit [Member]

Sep. 30, 2014

General Electric Credit Corporation [Member]

Floor Plan Line of Credit [Member]

Ride-Away [Member]

Sep. 30, 2014

General Electric Credit Corporation [Member]

Floor Plan Line of Credit [Member]

Mobility Freedom [Member]

Sep. 30, 2014

General Electric Credit Corporation [Member]

Floor Plan Line of Credit [Member]

Auto Mobility Sales [Member]

Line of Credit Facility [Line Items]

Line of credit borrowing capacity

$ 8,000,000

$ 11,250,000

$ 3,850,000

$ 1,750,000

Prime interest rate spread

0.25%

6.00%

5.50%

5.50%

Effective interest rate

3.50%

Debt Instrument, Description of Variable Rate Basis

90 day LIBOR

90 day LIBOR

90 day LIBOR

Line of credit, amount outstanding

3,140,346

2,303,143

3,140,346

2,303,143

Note payable - floor plan

13,160,906

12,174,639

13,160,906

12,174,639

Increase in borrowing capacity

$ 5,000,000

XML

INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2014

INCOME TAXES [Abstract]

Schedule of Net Income Tax Expense (Benefit)

The table below summarizes the differences between the Company's effective tax rate and the statutory federal rate as follows for income for continuing operations for the nine months ended September 30, 2014 and 2013:

	For The Nine Months Ended September 30,
	2014		2013
Expected federal income tax expense (34%)	$	611,431	$	256,846
State tax expense, net of federal tax effect		173,147		17,297
Deferred taxes		-		—
		784,578		274,143
Change in valuation allowance		—		(223,000)
Net income tax expense		784,578		51,143

XML

INCOME TAXES (Schedule of Net Income Tax Expense (Benefit)) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
INCOME TAXES [Abstract]
Expected federal income tax expense (34%)			$ 611,431	$ 256,846
State income tax, net of federal benefit			173,147	17,297
Deferred taxes
Income tax expense (benefit) before change in valuation allowance			784,578	274,143
Change in valuation allowance				(223,000)
Net income tax expense	$ 525,802	$ 236,563	$ 784,578	$ 51,143

XML

PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2014

PROPERTY AND EQUIPMENT [Abstract]

PROPERTY AND EQUIPMENT

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

		September 30,
	Estimated	2014				December 31,
	Life		(unaudited)			2013
Building improvements	Varies		$	940,594			$	899,530
Office furniture and equipment	5 years			306,434				303,561
Rental equipment	13-36 months			540,719				434,959
Vehicles	5 years			107,304				91,521
Capitalized leases	Varies			1,976,304				1,576,275
Total				3,871,355				3,305,846
Accumulated depreciation				(1,774,036	)			(1,164,634	)
Net			$	2,097,319			$	2,141,212

For the three and nine months ended September 30, 2014 and 2013 depreciation expense amounted to $231,480 and $166,179, and $720,914 and $540,493, respectively.

The Company has entered into various financing arrangements in connection with the acquisition of delivery vehicles (see Note 6 below).

XML

ACCOUNTS RECEIVABLE (Details) (USD $)					9 Months Ended				9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Trade receivables [Member]	Dec. 31, 2013 Trade receivables [Member]	Sep. 30, 2014 Trade receivables [Member] Accounts receivable [Member]	Sep. 30, 2013 Trade receivables [Member] Accounts receivable [Member]	Sep. 30, 2014 Government receivables [Member]	Dec. 31, 2013 Government receivables [Member]	Sep. 30, 2014 Government receivables [Member] Accounts receivable [Member]	Sep. 30, 2013 Government receivables [Member] Accounts receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, gross	$ 9,085,921	$ 6,869,025	$ 2,097,422	$ 2,993,757			$ 6,988,499	$ 3,875,268
Less: allowance for doubtful accounts	(661,250)	(686,345)
Total	$ 8,424,671	$ 6,182,680
Concentration percentage					23.10%	43.60%			76.90%	56.40%

XML

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Earnings Per Share) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Net income (loss)	$ 801,929	$ 416,521	$ 1,256,529	$ 468,512
Denominator for basic income per share (weighted-average shares)	999,941,212	989,460,705	997,460,295	988,694,780
Denominator for dilutive income per share (adjusted weighted-average)	999,941,212	989,460,705	997,460,295	988,694,780
Basic and diluted income per share from continuing operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00

XML

INVENTORY (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
INVENTORY [Abstract]
Vehicles	$ 12,656,940	$ 10,859,361
Equipment and supplies	993,033	1,008,996
Work in Process	644,212	412,829
Inventory reserve	(512,050)	(709,126)
Total inventory	$ 13,782,135	$ 11,572,060

XML

PROPERTY AND EQUIPMENT (Details) (USD $)

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Dec. 31, 2013

Property, Plant and Equipment [Line Items]

Property and equipment, gross

$ 3,871,355

$ 3,871,355

$ 3,305,846

Accumulated depreciation

(1,774,036)

(1,774,036)

(1,164,634)

Property and equipment, net

2,097,319

2,097,319

2,141,212

Depreciation

231,480

166,179

720,914

540,493

Building improvements [Member]

Property, Plant and Equipment [Line Items]

Estimated Life

Varies

Property and equipment, gross

940,594

940,594

899,530

Office furniture and equipment [Member]

Property, Plant and Equipment [Line Items]

Estimated Life

5 years

Property and equipment, gross

306,434

306,434

303,561

Rental equipment [Member]

Property, Plant and Equipment [Line Items]

Property and equipment, gross

540,719

540,719

434,959

Rental equipment [Member] | Minimum [Member]

Property, Plant and Equipment [Line Items]

Estimated Life

13 months

Rental equipment [Member] | Maximum [Member]

Property, Plant and Equipment [Line Items]

Estimated Life

36 months

Vehicles [Member]

Property, Plant and Equipment [Line Items]

Estimated Life

5 years

Property and equipment, gross

107,304

107,304

91,521

Capitalized leases [Member]

Property, Plant and Equipment [Line Items]

Estimated Life

Varies

Property and equipment, gross

$ 1,976,304

$ 1,976,304

$ 1,576,275

XML

INVENTORY

9 Months Ended

Sep. 30, 2014

INVENTORY [Abstract]

INVENTORY

NOTE 3 – INVENTORY

Inventory consists of the following:

	September 30, 2014 (unaudited)		December 31, 2013
Vehicles	$	12,656,940	$	10,859,361
Equipment and supplies		993,033		1,008,996
Work in Process		644,212		412,829
Inventory reserve		(512,050)		(709,126)
	$	13,782,135	$	11,572,060

XML

INTANGIBLE ASSETS (Details) (USD $)

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Dec. 31, 2013

Acquired Finite-Lived Intangible Assets [Line Items]

Total Intangibles, subtotal

$ 6,224,226

$ 6,224,226

$ 6,224,226

Accumulated amortization

(43,285)

(43,285)

(10,192)

Total Intangibles, total

6,180,941

6,180,941

6,214,034

Amortization expense

11,031

0

33,093

3,659

Goodwill related to acquisition of Mobility Freedom [Member]

Acquired Finite-Lived Intangible Assets [Line Items]

Estimated Life

Indefinite

Goodwill

1,641,303

1,641,303

1,641,303

Trade name related to acquisition of Mobility Freedom [Member]

Acquired Finite-Lived Intangible Assets [Line Items]

Estimated Life

Indefinite

Indefinite-Lived Intangible Assets

400,000

400,000

400,000

Goodwill related to acquisition of Ride-Away [Member]

Acquired Finite-Lived Intangible Assets [Line Items]

Estimated Life

Indefinite

Goodwill

1,888,710

1,888,710

1,888,710

Trade name related to acquisition of Ride-Away [Member]

Acquired Finite-Lived Intangible Assets [Line Items]

Estimated Life

Indefinite

Indefinite-Lived Intangible Assets

990,000

990,000

990,000

Primary market area related to acquisition of Mobility Freedom [Member]

Acquired Finite-Lived Intangible Assets [Line Items]

Estimated Life

Indefinite

Indefinite-Lived Intangible Assets

280,000

280,000

280,000

Primary market area related to acquisition of Ride-Away [Member]

Acquired Finite-Lived Intangible Assets [Line Items]

Estimated Life

Indefinite

Indefinite-Lived Intangible Assets

470,000

470,000

470,000

Goodwill related to acquisition of Auto Mobility Sales [Member]

Acquired Finite-Lived Intangible Assets [Line Items]

Estimated Life

Indefinite

Goodwill

284,213

284,213

284,213

Trade name related to acquisition of Auto Mobility Sales [Member]

Acquired Finite-Lived Intangible Assets [Line Items]

Estimated Life

2 years 3 months 25 days

Finite-Lived Intangible Assets, Gross

40,000

40,000

40,000

Primary market area related to acquisition of Auto Mobility Sales [Member]

Acquired Finite-Lived Intangible Assets [Line Items]

Estimated Life

Indefinite

Indefinite-Lived Intangible Assets

150,000

150,000

150,000

Non-compete agreements area related to Acquisition of Auto Mobility Sales [Member]

Acquired Finite-Lived Intangible Assets [Line Items]

Estimated Life

3 years

Finite-Lived Intangible Assets, Gross

$ 80,000

$ 80,000

$ 80,000

XML

Consolidated Balance Sheets (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current assets
Cash	$ 610,714	$ 150,313
Accounts receivable, net of allowance for doubtful accounts of $661,250 and $686,345, respectively	8,424,671	6,182,680
Inventory, net	13,782,135	11,572,060
Deferred tax asset, short term	489,014	413,193
Current portion of note receivable	25,505
Prepaid expenses and other current assets	519,285	504,819
Total current assets	23,851,324	18,823,065
Property & equipment, net of accumulated depreciation of $1,774,036 and $1,164,634, respectively	2,097,319	2,141,212
Intangible assets, net of accumulated depreciation of $43,285 and $10,192, respectively	6,180,941	6,214,034
Deferred tax asset, long term	181,212	149,204
Note receivable, net of current portion	94,950
Other non-current assets	596,609	604,965
Total Assets	33,002,355	27,932,480
Current liabilities
Accounts payable and accrued expenses	2,763,262	1,849,702
Cash overdraft		175,572
Customer deposits and deferred revenue	298,804	388,433
Line of credit	3,140,346	2,303,143
Note payable - floor plan	13,160,906	12,174,639
Obligation under capital leases	406,392	366,658
Current portion of notes payable	392,597	376,685
Current portion note payable, related party	355,640	353,008
Other current liabilities	2,012,063	493,923
Total current liabilities	22,530,010	18,481,763
Obligation under capital leases, net of current portion	1,008,521	817,828
Notes payable, net of current portion	3,746,157	4,075,802
Notes payable to related party, net of current portion	1,699,567	1,947,214
Total liabilities	28,984,255	25,322,607
Stockholders' equity
Preferred stock, $0.001 par value, 3,000,000 shares authorized, none issued and outstanding
Common stock, $0.001 par value, 2,000,000,000 shares authorized; and 1,000,575,949 and 993,134,076 shares issued and outstanding, respectively	1,000,576	993,134
Additional paid-in capital	6,813,312	6,669,056
Accumulated deficit	(3,795,788)	(5,052,317)
Total stockholders' equity	4,018,100	2,609,873
Total Liabilities and Stockholders' Equity	$ 33,002,355	$ 27,932,480

XML

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2014

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS 

Hasco Medical, Inc., formerly BBC Graphics of Palm Beach Inc., was incorporated in May 1999 under the laws of the State of Florida. Through a series of transactions, BBC Graphics of Palm Beach, Inc. (at the time an inactive corporation) became Hasco Medical, Inc. (Hasco). Concurrently, Hasco Medical, Inc. acquired Southern Medical & Mobility. In May, 2011, Hasco acquired Mobility Freedom, Inc. and Wheelchair Vans of America. In November, 2011, Hasco acquired Certified Medical Systems II (Certified Medical). A more detailed description of these transactions is contained in our 10-K filing with the Securities and Exchange Commission for the period ended December 31, 2013. On September 1, 2012, Hasco Medical, Inc. completed the acquisition of Ride-Away Handicap Equipment Corp., a closely-held New Hampshire corporation (Ride-Away). On September 4, 2013, Hasco Medical, Inc. completed the acquisition of Auto Mobility Sales, Inc. (Auto Mobility).

Services and Products

Historically, our operations were focused on the provision of a diversified range of home health care services and products. Following our May 2011 acquisition of Mobility Freedom, our March 2012 acquisition of Ride-Away and our September 2013 acquisition of Auto Mobility Sales, our operations are conducted within one major business unit:

• Modified Mobility Vehicles – conducts sales of handicap accessible vans, parts and services as well as the rental of such vehicles.  This segment consists of Ride-Away Handicap Equipment Corp. which has twelve locations from Maine to Florida, Mobility Freedom Inc. which has five locations in Florida and includes “Wheelchair Vans of America” operating our van rental operations, and Auto Mobility Sales, Inc., which has two (2) locations in Florida.

With our acquisitions of Mobility Freedom, Ride-Away, and Auto Mobility Sales, our Modified Mobility Vehicles segment comprises more than 100% of our consolidated revenues.  As a consequence and for purposes of consolidated financial statement presentation, our Home Health Care segment is no longer materially relevant when considering the consolidated financial statements as a whole.

Our corporate headquarters and principle corporate operations are conducted in Addison, Texas, a northern suburb of Dallas, Texas. We also house a portion of our corporate operations in Londonderry, New Hampshire.  Hasco Medical Inc. is a Florida corporation.

Modified Mobility Vehicles

Ride-Away, Mobility Freedom and Auto Mobility serve individuals with physical limitations that need specialty equipment in order to safely operate their vehicle. We also provide products for families and care-givers with transport requirements for those under care. In certain circumstances both the van itself and its specialty equipment is paid for directly by a federal or state agency. For the periods ended September 30, 2014 and 2013, approximately 27% and 20%, respectively, of the Modified Mobility Vehicles segments revenue was derived from veterans receiving benefits from the United States Department of Veterans Affairs (the “VA”).  Mobility Freedom and Ride-Away are both a VA and Vocational Rehabilitation (VR) certified vendors in all the states in which we operate.

Ride-Away has twelve corporate owned stores which are located in Beltsville, MD, East Hartford, CT, Essex Junction, VT, Gray, ME, Londonderry, NH, Norfolk, VA, Norristown, PA, North Attleboro, MA, Norwood, MA, Richmond VA, and Tampa, FL and Astoria, NY.  Mobility Freedom has five corporate owned stores located in Orlando, Largo, Clermont, Bunnell and Ocala, Florida.  Auto Mobility Sales has locations in Fort Lauderdale and Lake Worth, Florida.

Wheelchair Vans of America specializes in renting conversion vans to disabled individuals, and is located in Orlando, Florida. Our rental operations compliment the retail products we provide through our Mobility Freedom, Auto Mobility Sales and Ride-Away subsidiaries.

Discontinued Operations

During the second quarter of 2013, the Company initiated a plan to liquidate the division of Southern Medical and Mobility. These operations were originally reported in the home health care segment. The Company assessed the fair value of the operations less the disposal costs and concluded there is no impairment of the carrying value of the assets.  Management has also determined that the amount of assets continued to be realized is immaterial and therefore not separately disclosed.

During the second quarter of 2014, the Company initiated a plan to sell the division of Certified Medical Systems II, Inc. These operations were originally reported in the home health care segment. The Company assessed the fair value of the operations at the time of the disposition and sale of the entity.  Management has also determined that the amount of assets continued to be realized is immaterial and therefore not separately disclosed.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Basis of Presentation and Accounting Policy

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly the consolidated financial position as of September 30, 2014 and the consolidated statements of operations, and cash flows for the three and nine month periods ended September 30, 2014 and September 30, 2013 of Hasco Medical Inc. (“Hasco” or the “Company”).

The significant accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements in the December 31, 2013, Hasco Medical Inc. Annual Report on Form 10-K , which should be read in conjunction with these financial statements. The results of operations for the periods ended September 30, 2014 are not necessarily indicative of the result to be expected for the full year.

The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and present the financial statements of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.  The consolidated entities are:

• Hasco Medical, Inc.;

• Southern Medical & Mobility, Inc.; (discontinued operations)

• Mobility Freedom, Inc.;

• Ride Away Handicapped Equipment, Inc.;

• Auto Mobility Sales, Inc.;

• Certified Medical Systems II, Inc.; (discontinued operations) 

Reclassifications

Prior period financial statement amounts have been reclassified to conform to current period presentation.

Use of Estimates

Management's Discussion and Analysis or Plan of Operations is based upon our audited consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America. Management bases its use of estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates under different assumptions or conditions.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 605, “Revenue Recognition”, and with the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition”. Under SAB 104, four conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) delivery has occurred or service has been rendered, (iii) the price is fixed or determinable, and (iv) collection is reasonably assured.  Revenues consist of the sales of new and used vehicles, sales of parts and automotive services, commissions from finance and insurance products, vehicle rentals, sales of durable medical equipment and home health care services.  The Company recognizes revenue in the period in which products are sold or the services are rendered and only if there is reasonable expectation of collection.  For vehicles, a sale is recorded only when title has transferred and the vehicle has been delivered.  Rebates received from manufacturers are recorded as a reduction of the costs of each vehicle and recognized upon the sale of the vehicle or when earned under a specific manufacturer program.

Rental fees for vehicles are recognized over the course of the rental or service term.

In certain instances, customers place deposits on vehicles or special order parts for service and conversions.  Deposits are not recognized as revenue until the related vehicle or part is sold.

The Company arranges financing for customers through various institutions and receives financing fees based on the difference between the loan rates charged to customers and wholesale financing rates set by the financing institution.  The Company also receives fees from the sale of extended service contracts, warranties and vehicle security systems.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company's accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.  From time to time and for the three month periods ended September 30, 2014 and December 31, 2013, the Company reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates, at least annually, the rating of the financial institution in which it holds deposits.

Related Parties

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management, and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.

Earnings Per Share

Earnings per common share are calculated under the provisions of ASC 260. The accounting standard requires the Company to report both basic earnings per share, which is based on the weighted-average number of common shares outstanding, and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all potential dilutive common shares outstanding. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding if they would be anti-dilutive. There were no stock options which could potentially dilute earnings per share for the periods ended September 30, 2014 and 2013, respectively.

The following table sets forth the computation of basic and diluted income per share:

	For The Nine Months ended September 30,				For The Three Months ended September 30,
	2014		2013		2014		2013
Net income	$	1,256,529	$	468,512	$	801,929	$	416,521
Basic weighted average outstanding shares of common stock		997,460,295		988,694,780		999,941,212		989,460,705
Diluted weighted average common stock		997,460,295		988,694,780		999,941,212		989,460,705
Earnings per share:
Basic and diluted	$	0.00	$	0.00	$	0.00	$	0.00

The number of outstanding shares of our common stock as of September 30, 2014 was 1,000,572,949.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

XML

STOCKHOLDERS' EQUITY (Details) (USD $)	9 Months Ended		3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Common Stock [Member]	Sep. 30, 2014 Common Stock [Member]	Sep. 30, 2014 Common Stock [Member] Key Employees [Member]	Sep. 30, 2014 Common Stock [Member] Directors [Member]
Class of Stock [Line Items]
Issuance of common stock for cash, shares			601,178
Proceeds from issuance of common stock	$ 19,670	$ 2,000	$ 19,670
Issuance of common stock for compensation, shares					2,995,613	1,161,464
Issuance of common stock for compensation					35,000	24,000
Issuance of common stock in lieu of payments for notes payable-related party, shares				2,032,899
Issuance of common stock in lieu of payments for notes payable-related party				$ 41,366

XML

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2014

PROPERTY AND EQUIPMENT [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following:

		September 30,
	Estimated	2014				December 31,
	Life		(unaudited)			2013
Building improvements	Varies		$	940,594			$	899,530
Office furniture and equipment	5 years			306,434				303,561
Rental equipment	13-36 months			540,719				434,959
Vehicles	5 years			107,304				91,521
Capitalized leases	Varies			1,976,304				1,576,275
Total				3,871,355				3,305,846
Accumulated depreciation				(1,774,036	)			(1,164,634	)
Net			$	2,097,319			$	2,141,212

XML

INCOME TAXES (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
INCOME TAXES [Abstract]
Loss carry forwards
Statutory federal tax rate	34.00%

XML

NOTES PAYABLE AND DEBT (Tables)

9 Months Ended

Sep. 30, 2014

NOTES PAYABLE AND DEBT [Abstract]

Schedule of Installement Debt

Installment debts consist of the following:

	September 30, 2014 (unaudited)		December 31, 2013 (audited)
Vehicle Note Payable, dated August 18, 2011, vehicle financing arrangement for tow truck, original amount of $47,124, 5 years (60 months), 0% interest rate, commenced October 1, 2011, matures on October 1, 2016, monthly installment payments of $785		18,732		25,918
Note Payable, dated May 13, 2011, issued for the acquisition of Mobility Freedom, original amount of $2 million, fifteen years (180 months), 6% interest rate, commenced August 1, 2011, matures on July 1, 2026, monthly installment payments of $16,877 secured by grantee from the majority shareholder of Mobility Freedom		1,704,667		1,785,953
Note Payable to related party, dated May 13, 2011, associated with the acquisition of Mobility Freedom, original amount of $2 million, ten years (120 months), 5% interest rate, commenced August 1, 2011, matures on July 1, 2021, monthly installment payments of $22,204		1,457,931		1,618,387
Note Payable, dated November 16, 2011, issued for the acquisition of Certified Auto, original amount of $50,000, four years (16 quarters), 0% interest rate, commenced January 16, 2012, matures on November 16, 2015, quarterly installment payments of $3,125		18,660		21,785
Note Payable, dated March 1, 2012, issued for the acquisition of Ride-Away, original amount of $3,000,000, ten years (120 months), 5% interest rate, commences June 1, 2012, matures on May 2, 2022, monthly installment payments of $31,820.  Note is with the former owner of Ride-Away		2,406,002		2,618,831
Note payable to related party, dated March 1, 2012, issued for the acquisition of Ride-Away, original amount of $500,000 , five years (60 months), 6% interest rate, commenced April 1, 2012, matures March 1, 2017, monthly installment payments of $9,685		301,722		342,143
Promissory Note payable to a related party, dated September 4, 2013, issued for the acquisition of Auto Mobility Sales, original amount of $210,000 , five years (60 months), 5% interest rate, commenced November 1, 2013, matures October 1, 2018, monthly installment payments of $3,963		171,750		205,877
Promissory Note payable to a related party, dated September 4, 2013, issued for the acquisition of Auto Mobility Sales, original amount of $140,000 , five years (60 months), 5% interest rate, commenced November 1, 2013, matures October 1, 2018, monthly installment payments of $2,642		114,497		133,815
Total debt		6,193,961		6,752,709
Current portion of long-term debt, notes payable		748,237		729,693
Long-term portion	$	5,445,724	$	6,023,016

XML

ACCOUNTS RECEIVABLE

9 Months Ended

Sep. 30, 2014

ACCOUNTS RECEIVABLE [Abstract]

ACCOUNTS RECEIVABLE

NOTE 2 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

	September 30, 2014 (unaudited)		%		December 31, 2013		%
Trade receivables	$	2,097,422		23.1	$	2,993,757		43.6
Government receivables		6,988,499		76.9		3,875,268		56.4
		9,085,921		100.0		6,869,025		100.0
Less: allowances for doubtful accounts		(661,250)				(686,345)
Total	$	8,424,671			$	6,182,680

Trade receivables represent amounts due for van sales, van rentals, and medical supplies that have been delivered or sold. Government receivables represent receivables from the VA and other Government bodies related to van sales and rentals listed above.  The Company does not bill Medicare or Medicaid for any vehicle-related sales or service.

XML

Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 661,250	$ 686,345
Property and equipment, accumulated depreciation	1,774,036	1,164,634
Intangible assets, accumulated amortization	$ 43,285	$ 10,192
Preferred stock, par value per share	$ 0.001	$ 0.001
Preferred stock, shares authorized	3,000,000	3,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	2,000,000,000	2,000,000,000
Common stock, shares issued	1,000,575,949	993,134,076
Common stock, shares outstanding	1,000,575,949	993,134,076

XML

ACQUISITIONS AND PROFORMA FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2014

ACQUISITIONS AND PROFORMA FINANCIAL INFORMATION [Abstract]

ACQUISITIONS AND PROFORMA FINANCIAL INFORMATION

NOTE 12 – ACQUISITIONS AND PROFORMA FINANCIAL INFORMATION

Auto Mobility Sales Acquisition

The following table summarized the impact of the acquisition as if the acquisition date were January 1, 2013.

Hasco Medical, Inc. and Subsidiaries

Consolidated Pro Forma Statements of Operations

For the Nine months ended September 30, 2013

(unaudited)

	9/30/2013
Revenues, net	$	58,804,039
Cost of sales		46,015,325
Gross Profit		12,788,714
Operating expenses:
Selling and marketing		3,815,562
General and administrative		7,869,745
Depreciation and amortization		330,437
Total operating expenses		12,015,744
Income from operations		772,970
Other income (expense)		(181,377	)
Income from continuing operations before income taxes		591,593
Provision for income taxes		79,682
Income from continuing operations		511,911
Loss from continued operation, net of income taxes		(235,775	)
Net Income	$	276,136
Earnings per share:
Basic and dilutive	$	0.00
Weighted average shares outstanding
Basic and dilutive		988,694,780

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Oct. 27, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Entity Registrant Name	HASCO Medical, Inc.
Entity Central Index Key	0001131675
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,001,179,039

XML

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2014

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Basis of Presentation and Accounting Policy

Basis of Presentation and Accounting Policy

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly the consolidated financial position as of September 30, 2014 and the consolidated statements of operations, and cash flows for the three and nine month periods ended September 30, 2014 and September 30, 2013 of Hasco Medical Inc. (“Hasco” or the “Company”).

The significant accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements in the December 31, 2013, Hasco Medical Inc. Annual Report on Form 10-K , which should be read in conjunction with these financial statements. The results of operations for the periods ended September 30, 2014 are not necessarily indicative of the result to be expected for the full year.

The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and present the financial statements of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.  The consolidated entities are:

• Hasco Medical, Inc.;

• Southern Medical & Mobility, Inc.; (discontinued operations)

• Mobility Freedom, Inc.;

• Ride Away Handicapped Equipment, Inc.;

• Auto Mobility Sales, Inc.;

• Certified Medical Systems II, Inc.; (discontinued operations) 

Reclassifications

Reclassifications

Prior period financial statement amounts have been reclassified to conform to current period presentation.

Use of Estimates

Use of Estimates

Management's Discussion and Analysis or Plan of Operations is based upon our audited consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America. Management bases its use of estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates under different assumptions or conditions.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 605, “Revenue Recognition”, and with the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition”. Under SAB 104, four conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) delivery has occurred or service has been rendered, (iii) the price is fixed or determinable, and (iv) collection is reasonably assured.  Revenues consist of the sales of new and used vehicles, sales of parts and automotive services, commissions from finance and insurance products, vehicle rentals, sales of durable medical equipment and home health care services.  The Company recognizes revenue in the period in which products are sold or the services are rendered and only if there is reasonable expectation of collection.  For vehicles, a sale is recorded only when title has transferred and the vehicle has been delivered.  Rebates received from manufacturers are recorded as a reduction of the costs of each vehicle and recognized upon the sale of the vehicle or when earned under a specific manufacturer program.

Rental fees for vehicles are recognized over the course of the rental or service term.

In certain instances, customers place deposits on vehicles or special order parts for service and conversions.  Deposits are not recognized as revenue until the related vehicle or part is sold.

The Company arranges financing for customers through various institutions and receives financing fees based on the difference between the loan rates charged to customers and wholesale financing rates set by the financing institution.  The Company also receives fees from the sale of extended service contracts, warranties and vehicle security systems.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company's accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.  From time to time and for the three month periods ended September 30, 2014 and December 31, 2013, the Company reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates, at least annually, the rating of the financial institution in which it holds deposits.

Related Parties

Related Parties

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management, and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.

Earnings Per Share

Earnings Per Share

Earnings per common share are calculated under the provisions of ASC 260. The accounting standard requires the Company to report both basic earnings per share, which is based on the weighted-average number of common shares outstanding, and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all potential dilutive common shares outstanding. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding if they would be anti-dilutive. There were no stock options which could potentially dilute earnings per share for the periods ended September 30, 2014 and 2013, respectively.

The following table sets forth the computation of basic and diluted income per share:

	For The Nine Months ended September 30,				For The Three Months ended September 30,
	2014		2013		2014		2013
Net income	$	1,256,529	$	468,512	$	801,929	$	416,521
Basic weighted average outstanding shares of common stock		997,460,295		988,694,780		999,941,212		989,460,705
Diluted weighted average common stock		997,460,295		988,694,780		999,941,212		989,460,705
Earnings per share:
Basic and diluted	$	0.00	$	0.00	$	0.00	$	0.00

The number of outstanding shares of our common stock as of September 30, 2014 was 1,000,572,949.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

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Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Consolidated Statements of Operations [Abstract]
Product sales	$ 19,276,144	$ 15,905,123	$ 55,390,038	$ 42,452,448
Rental revenue	373,732	368,371	931,330	912,129
Service and other	4,166,311	3,182,724	12,041,267	9,586,757
Total net revenues	23,816,187	19,456,218	68,362,635	52,951,334
Cost of sales	17,515,451	14,743,910	51,766,472	40,611,949
Gross profit	6,300,736	4,712,308	16,596,163	12,339,385
Operating expenses:
Selling and marketing	1,063,863	1,203,124	3,034,563	3,204,763
General and administrative	3,432,786	2,453,602	10,115,358	7,357,365
Amortization and depreciation	242,511	169,838	753,703	540,036
Total operating expenses	4,739,160	3,826,564	13,903,624	11,102,164
Income from operations	1,561,576	885,744	2,692,539	1,237,221
Other income (expense)	(118,371)	47,399	(73,607)	103,576
Interest expense	(299,768)	(215,984)	(820,606)	(585,367)
Total other income (expense)	(418,139)	(168,585)	(894,213)	(481,791)
Income from continuing operations before income taxes	1,143,437	717,159	1,798,326	755,430
Provision for income taxes	525,802	236,563	784,578	51,143
Income from continuing operations	617,635	480,596	1,013,748	704,287
Gain (loss) from discontinued operations, net of income tax	184,294	(64,075)	242,781	(235,775)
Net income	$ 801,929	$ 416,521	$ 1,256,529	$ 468,512
Earnings per share:
Basic and dilutive-continuing operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Basic and dilutive-discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Weighted average shares outstanding:
Basic and dilutive	999,941,212	989,460,705	997,460,295	988,694,780

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2014

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

NOTE 7 – STOCKHOLDERS' EQUITY

During quarter ended September 30, 2014, the Company sold 601,178 shares of common stock for proceeds of $19,670.

During the nine months ended September 30, 2014, 2,995,613 shares of common stock valued at $35,000 were issued to key employees as employee compensation and 1,161,464 shares of common stock valued at $24,000 were issued to directors as board compensation.

During the nine months ended September 30, 2014, the Company issued 2,032,899 shares of common stock valued at $41,366, in lieu of payments for notes payable-related party.

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NOTES PAYABLE AND DEBT

9 Months Ended

Sep. 30, 2014

NOTES PAYABLE AND DEBT [Abstract]

NOTES PAYABLE AND DEBT

NOTE 6 – NOTES PAYABLE AND DEBT

Revolving Line of Credit

On November 1, 2012, the Company renewed its Commercial Note agreement with a bank for advances of funds for working capital purposes under a line of credit arrangement for $8,000,000 with an interest calculation of the prime rate plus 0.25% which reflected an interest rate of 3.50% as of September 30, 2014. The agreement is secured against all property of the borrowers assets, on demand with an annual review as of December 31, 2013. Payments due are interest only and the interest rate varies based on the Company's leverage ratio. The balance of the line of credit was $3,140,346 at September 30, 2014 and $2,303,143 at December 31, 2013.

Note Payable – Floor Plan

The Company has a floor plan line of credit with General Electric Credit Corporation with a maximum borrowing capacity of $11,250,000 for Ride-Away, $3,850,000 for Mobility Freedom, and $1,750,000 for Auto Mobility Sales at September 30, 2014. The borrowing capacity was increased by $5 million on May 20, 2013. Amounts borrowed for vehicles under this line bear no interest for 60 days and then bear interest at the 90 day LIBOR plus 6.0% for Ride-Away and at the 90 day LIBOR plus 5.5% for Mobility Freedom and Auto Mobility Sales  The loan balance on the vehicle is due when the vehicle is fully funded or paid by the customer.  If the vehicle is not fully funded or paid within nine months of being purchased by the Company and funded by the floor plan, a graduated percentage of the balance is due with the entire balance due at twelve months. The note is secured by the vehicles financed. At September 30, 2014 and December 31, 2013, the Company had $13,160,906 and $12,174,639 respectively, outstanding under these lines. With the discretionary nature of this loan agreement, the Lender or the Company can terminate this agreement with a thirty (30) day written notice at any time.

Installment Debt

Installment debts consist of the following:

	September 30, 2014 (unaudited)		December 31, 2013 (audited)
Vehicle Note Payable, dated August 18, 2011, vehicle financing arrangement for tow truck, original amount of $47,124, 5 years (60 months), 0% interest rate, commenced October 1, 2011, matures on October 1, 2016, monthly installment payments of $785		18,732		25,918
Note Payable, dated May 13, 2011, issued for the acquisition of Mobility Freedom, original amount of $2 million, fifteen years (180 months), 6% interest rate, commenced August 1, 2011, matures on July 1, 2026, monthly installment payments of $16,877 secured by grantee from the majority shareholder of Mobility Freedom		1,704,667		1,785,953
Note Payable to related party, dated May 13, 2011, associated with the acquisition of Mobility Freedom, original amount of $2 million, ten years (120 months), 5% interest rate, commenced August 1, 2011, matures on July 1, 2021, monthly installment payments of $22,204		1,457,931		1,618,387
Note Payable, dated November 16, 2011, issued for the acquisition of Certified Auto, original amount of $50,000, four years (16 quarters), 0% interest rate, commenced January 16, 2012, matures on November 16, 2015, quarterly installment payments of $3,125		18,660		21,785
Note Payable, dated March 1, 2012, issued for the acquisition of Ride-Away, original amount of $3,000,000, ten years (120 months), 5% interest rate, commences June 1, 2012, matures on May 2, 2022, monthly installment payments of $31,820.  Note is with the former owner of Ride-Away		2,406,002		2,618,831
Note payable to related party, dated March 1, 2012, issued for the acquisition of Ride-Away, original amount of $500,000 , five years (60 months), 6% interest rate, commenced April 1, 2012, matures March 1, 2017, monthly installment payments of $9,685		301,722		342,143
Promissory Note payable to a related party, dated September 4, 2013, issued for the acquisition of Auto Mobility Sales, original amount of $210,000 , five years (60 months), 5% interest rate, commenced November 1, 2013, matures October 1, 2018, monthly installment payments of $3,963		171,750		205,877
Promissory Note payable to a related party, dated September 4, 2013, issued for the acquisition of Auto Mobility Sales, original amount of $140,000 , five years (60 months), 5% interest rate, commenced November 1, 2013, matures October 1, 2018, monthly installment payments of $2,642		114,497		133,815
Total debt		6,193,961		6,752,709
Current portion of long-term debt, notes payable		748,237		729,693
Long-term portion	$	5,445,724	$	6,023,016

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INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2014

INTANGIBLE ASSETS [Abstract]

Schedule of Intangibles Assets

Intangible assets consist of the following:

		September 30,
	Estimated	2014		December 31,
	Life	(unaudited)		2013
Goodwill related to acquisition of Mobility Freedom	Indefinite		1,641,303		1,641,303
Goodwill related to acquisition of Ride-Away	Indefinite		1,888,710		1,888,710
Trade name related to acquisition of Mobility Freedom	Indefinite		400,000		400,000
Trade name related to acquisition of Ride-Away	Indefinite		990,000		990,000
Primary market area related to acquisition of Mobility Freedom	Indefinite		280,000		280,000
Primary market area related to acquisition of Ride-Away	Indefinite		470,000		470,000
Goodwill related to acquisition of Auto Mobility Sales	Indefinite		284,213		284,213
Trade name related to acquisition of Auto Mobility Sales	2.32 years		40,000		40,000
Primary market area related to acquisition of Auto Mobility Sales	Indefinite		150,000		150,000
Non-compete agreements area related to acquisition of Auto Mobility Sales	3 years		80,000		80,000
Subtotal			6,224,226		6,224,226
Accumulated amortization			(43,285)		(10,192)
Total		$	6,180,941	$	6,214,034

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2014

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Schedule of Computation of Basic and Diluted Income Per Share

The following table sets forth the computation of basic and diluted income per share:

	For The Nine Months ended September 30,				For The Three Months ended September 30,
	2014		2013		2014		2013
Net income	$	1,256,529	$	468,512	$	801,929	$	416,521
Basic weighted average outstanding shares of common stock		997,460,295		988,694,780		999,941,212		989,460,705
Diluted weighted average common stock		997,460,295		988,694,780		999,941,212		989,460,705
Earnings per share:
Basic and diluted	$	0.00	$	0.00	$	0.00	$	0.00

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SEGMENT REPORTING

9 Months Ended

Sep. 30, 2014

SEGMENT REPORTING [Abstract]

SEGMENT REPORTING

NOTE 10 – SEGMENT REPORTING

Accounting standards for the Disclosure about Segments of an Enterprise and Related Information establishes standards for the reporting by business enterprises of information about operating segments, products and services, geographic areas, and major customers. The method for determining what information to report is based on the way that management organizes the operations of the Company for making operational decisions and assessments of financial performance.

According to such standards, management determined that, as a consequence of our Home Healthcare Segment now comprising less than 5% of our Gross Revenue, the reporting of segment operating results is no longer relevant when considering the financial statement as a whole.

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CONTINGENCIES

9 Months Ended

Sep. 30, 2014

CONTINGENCIES [Abstract]

CONTINGENCIES

NOTE 8 – CONTINGENCIES

Company operations involve the handling and disposal of waste and hazardous material within a highly regulated oversight structure.  The Company is subjected to inspections by OSHA and other regulatory bodies.  Management believes that there are no current regulatory claims that would have a material effect on the Company's financial position or results of operations.

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INCOME TAXES

9 Months Ended

Sep. 30, 2014

INCOME TAXES [Abstract]

INCOME TAXES

NOTE 9 – INCOME TAXES

Prior to its acquisition in June 2008 by HASCO Holdings, LLC, the Company was an S Corporation. Beginning in June 2008 the Company's tax status changed to a C Corporation. The Company accounts for income taxes under ASC Topic 740: Income Taxes requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry forwards. ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.

As of September 30, 2014 and 2013, the Company had no loss carry forwards available to reduce its future federal taxable.

The table below summarizes the differences between the Company's effective tax rate and the statutory federal rate as follows for income for continuing operations for the nine months ended September 30, 2014 and 2013:

	For The Nine Months Ended September 30,
	2014		2013
Expected federal income tax expense (34%)	$	611,431	$	256,846
State tax expense, net of federal tax effect		173,147		17,297
Deferred taxes		-		—
		784,578		274,143
Change in valuation allowance		—		(223,000)
Net income tax expense		784,578		51,143

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DIVESTITURE OF CERTIFIED MEDICAL

9 Months Ended

Sep. 30, 2014

DIVESTITURE OF CERTIFIED MEDICAL [Abstract]

DIVESTITURE OF CERTIFIED MEDICAL

NOTE 11 – DIVESTITURE OF CERTIFIED MEDICAL

On September 30, 2014 the Company entered into an agreement with a related party and completed the sale of its Certified Medical business segment in exchange for a note receivable in the amount of $124,618.  In connection with the sale, the Company recognized a gain of $92,653.  In accordance with ASC 205-20, the results of operations for the Certified Medical business segment through September 30, 2014, and for all applicable prior periods, are reported as discontinued operations. For the three months and nine months ended September 30, 2014, Certified Medical reported income of $193,827 and $246,858 respectively.

Concurrent with the sale of its Certified Medical business segment, the Company and the buyer entered into a transition services agreement pursuant to which each of the parties will provide certain transitional, administrative, and support services to the other party for a period up to nine months, which may be extended upon mutual agreement. Such services provided to the buyer by the Company will be recorded as contra-expense since the Company will be reimbursed for the service cost incurred. Activity associated with transitional service is not considered significant relative to the condensed consolidated financial statements of the Company.

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NOTES PAYABLE AND DEBT (Schedule of Installment Debt) (Details) (USD $)

9 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Installment Debt

Total debt

$ 6,193,961

$ 6,752,709

Current portion of long-term debt, notes payable

748,237

729,693

Long-term portion

5,445,724

6,023,016

Vehicle Note Payable, Dated August 18, 2011 [Member]

Installment Debt

Issuance date

Aug. 18, 2011

Commencement date

Oct. 01, 2011

Maturity date

Oct. 01, 2016

Original amount

47,124

Term of debt

5 years

Interest rate

0.00%

Installment payment

785

Installment payment, frequency

monthly

Total debt

18,732

25,918

Note Payable, Dated May 13, 2011 [Member]

Installment Debt

Issuance date

May 13, 2011

Commencement date

Aug. 01, 2011

Maturity date

Jul. 01, 2026

Original amount

2,000,000

Term of debt

15 years

Interest rate

6.00%

Installment payment

16,877

Installment payment, frequency

monthly

Total debt

1,704,667

1,785,953

Note Payable to Related Party, Dated May 13, 2011 [Member] | Related Party [Member]

Installment Debt

Issuance date

May 13, 2011

Commencement date

Aug. 01, 2011

Maturity date

Jul. 01, 2021

Original amount

2,000,000

Term of debt

10 years

Interest rate

5.00%

Installment payment

22,204

Installment payment, frequency

monthly

Total debt

1,457,931

1,618,387

Note Payable, Dated November 16, 2011 [Member]

Installment Debt

Issuance date

Nov. 16, 2011

Commencement date

Jan. 16, 2012

Maturity date

Nov. 16, 2015

Original amount

50,000

Term of debt

4 years

Interest rate

0.00%

Installment payment

3,125

Installment payment, frequency

quarterly

Total debt

18,660

21,785

Note Payable, Dated March 1, 2012 [Member]

Installment Debt

Issuance date

Mar. 01, 2012

Commencement date

Jun. 01, 2012

Maturity date

May 02, 2022

Original amount

3,000,000

Term of debt

10 years

Interest rate

5.00%

Installment payment

31,820

Installment payment, frequency

monthly

Total debt

2,406,002

2,618,831

Note Payable to Related Party, Dated March 1, 2012 [Member] | Related Party [Member]

Installment Debt

Issuance date

Mar. 01, 2012

Commencement date

Apr. 01, 2012

Maturity date

Mar. 01, 2017

Original amount

500,000

Term of debt

5 years

Interest rate

6.00%

Installment payment

9,685

Installment payment, frequency

monthly

Total debt

301,722

342,143

Promissory Note One, Dated September 4, 2013 [Member] | Related Party [Member]

Installment Debt

Issuance date

Sep. 04, 2013

Commencement date

Nov. 01, 2013

Maturity date

Oct. 01, 2018

Original amount

210,000

Term of debt

5 years

Interest rate

5.00%

Installment payment

3,963

Installment payment, frequency

monthly

Total debt

171,750

205,877

Promissory Note Two, Dated September 4, 2013 [Member] | Related Party [Member]

Installment Debt

Issuance date

Sep. 04, 2013

Commencement date

Nov. 01, 2013

Maturity date

Oct. 01, 2018

Original amount

140,000

Term of debt

5 years

Interest rate

5.00%

Installment payment

2,642

Installment payment, frequency

monthly

Total debt

$ 114,497

$ 133,815

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INVENTORY (Tables)

9 Months Ended

Sep. 30, 2014

INVENTORY [Abstract]

Schedule of Inventory

Inventory consists of the following:

	September 30, 2014 (unaudited)		December 31, 2013
Vehicles	$	12,656,940	$	10,859,361
Equipment and supplies		993,033		1,008,996
Work in Process		644,212		412,829
Inventory reserve		(512,050)		(709,126)
	$	13,782,135	$	11,572,060

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ACQUISITIONS AND PROFORMA FINANCIAL INFORMATION (Tables)

9 Months Ended

Sep. 30, 2014

ACQUISITIONS AND PROFORMA FINANCIAL INFORMATION [Abstract]

Consolidated Pro Forma Statements of Operations

The following table summarized the impact of the acquisition as if the acquisition date were January 1, 2013.

Hasco Medical, Inc. and Subsidiaries

Consolidated Pro Forma Statements of Operations

For the Nine months ended September 30, 2013

(unaudited)

	9/30/2013
Revenues, net	$	58,804,039
Cost of sales		46,015,325
Gross Profit		12,788,714
Operating expenses:
Selling and marketing		3,815,562
General and administrative		7,869,745
Depreciation and amortization		330,437
Total operating expenses		12,015,744
Income from operations		772,970
Other income (expense)		(181,377	)
Income from continuing operations before income taxes		591,593
Provision for income taxes		79,682
Income from continuing operations		511,911
Loss from continued operation, net of income taxes		(235,775	)
Net Income	$	276,136
Earnings per share:
Basic and dilutive	$	0.00
Weighted average shares outstanding
Basic and dilutive		988,694,780

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Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash Flows from operating activities:
Net income	$ 1,256,529	$ 468,512
Adjustment to reconcile net income to net cash provided by (used in) operations:
Depreciation and amortization	754,007	540,493
Stock based compensation	89,602	625,866
(Gain) loss on disposal of property and equipment	(83,710)	80,165
Gain on disposition of subsidiary	(89,695)
Deferred tax assets	(107,829)	(72,554)
Changes in assets and liabilities:
Accounts receivable	(2,241,991)	1,313,155
Inventory	(2,242,306)	(973,176)
Prepaid expenses	(34,466)	(315,195)
Other assets	28,356
Accounts payable and accrued expenses	913,560	(532,885)
Customer deposits and deferred revenue	(89,629)	(412,899)
Other liabilities	1,517,615	505,283
Net cash provided by (used in) operating activities	(329,957)	1,226,765
Cash Flows from investing activities:
Purchase of property and equipment	(84,902)	(168,571)
Proceeds from the sale of property and equipment		1,900
Acquisition of business, net of cash acquired		(468,976)
Net cash used in investing activities	(84,902)	(635,647)
Cash Flows from financing activities:
Proceeds from floor plan financing	38,450,052	24,035,927
Repayments of floor plan financing	(37,463,785)	(20,605,798)
Proceeds from line of credit	2,211,536	1,546,149
Repayments of line of credit	(1,374,333)	(3,363,854)
Repayments of note and loan payables	(350,690)	(364,406)
Repayments of loans payables - related party	(165,632)	(83,749)
Principal payments under capital lease obligations	(275,986)	(807,267)
Cash overdraft	(175,572)
Proceeds from issuance of common stock	19,670	2,000
Net cash provided by financing activities	875,260	359,002
Net increase in cash	460,401	950,120
Cash at beginning of period	150,313	850,391
Cash at end of period	610,714	1,800,511
Supplemental disclosures of cash flow information Cash paid for:
Interest	820,606	585,377
Non-Cash transactions:
Loan payments made through issuance of common stock	41,366
Note receivable from sale of business entity	120,455
Vehicles purchased through capital lease	$ 344,201	$ 886,401

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INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2014

INTANGIBLE ASSETS [Abstract]

INTANGIBLE ASSETS

NOTE 5 – INTANGIBLE ASSETS

Intangible assets consist of the following:

		September 30,
	Estimated	2014		December 31,
	Life	(unaudited)		2013
Goodwill related to acquisition of Mobility Freedom	Indefinite		1,641,303		1,641,303
Goodwill related to acquisition of Ride-Away	Indefinite		1,888,710		1,888,710
Trade name related to acquisition of Mobility Freedom	Indefinite		400,000		400,000
Trade name related to acquisition of Ride-Away	Indefinite		990,000		990,000
Primary market area related to acquisition of Mobility Freedom	Indefinite		280,000		280,000
Primary market area related to acquisition of Ride-Away	Indefinite		470,000		470,000
Goodwill related to acquisition of Auto Mobility Sales	Indefinite		284,213		284,213
Trade name related to acquisition of Auto Mobility Sales	2.32 years		40,000		40,000
Primary market area related to acquisition of Auto Mobility Sales	Indefinite		150,000		150,000
Non-compete agreements area related to acquisition of Auto Mobility Sales	3 years		80,000		80,000
Subtotal			6,224,226		6,224,226
Accumulated amortization			(43,285)		(10,192)
Total		$	6,180,941	$	6,214,034

For the three and nine months ended September 30, 2014 and 2013 amortization expense was $11,031 and $0, and $33,093 and $3,659, respectively.

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Cash balance insured by FDIC	$ 250,000		$ 250,000		$ 250,000
Selling and marketing	$ 1,063,863	$ 1,203,124	$ 3,034,563	$ 3,204,763
Common stock, shares outstanding	1,000,575,949		1,000,575,949		993,134,076
Revenue, Segment [Member] | United States Department of Veterans Affairs (the "VA") [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Concentration percentage			27.00%	20.00%
Modified Mobility Vehicles [Member] | Consolidated revenues [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Concentration percentage			100.00%

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DIVESTITURE OF CERTIFIED MEDICAL (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on sale			$ 89,695
Income from discontinued operations	184,294	(64,075)	242,781	(235,775)
Certified Medical [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Related party note receivable	124,618		124,618
Gain on sale			92,653
Income from discontinued operations	$ 193,827		$ 246,858

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ACCOUNTS RECEIVABLE (Tables)

9 Months Ended

Sep. 30, 2014

ACCOUNTS RECEIVABLE [Abstract]

Schedule of Accounts Receivable

Accounts receivable consisted of the following:

	September 30, 2014 (unaudited)		%		December 31, 2013		%
Trade receivables	$	2,097,422		23.1	$	2,993,757		43.6
Government receivables		6,988,499		76.9		3,875,268		56.4
		9,085,921		100.0		6,869,025		100.0
Less: allowances for doubtful accounts		(661,250)				(686,345)
Total	$	8,424,671			$	6,182,680