Variable Interest Entity

12 Months Ended

Dec. 31, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entity Disclosure [Text Block]

8.	Variable Interest Entity

In January 2011, the Company entered into a Management Agreement ("Management Agreement") with Jose David Suarez, PA a Florida Professional Association (the "PA" or the "Practice") and Dr. Jose David Suarez, ("Suarez", "Shareholder" or "Owner" of the Practice) whereby the Company was engaged to implement, operate and manage the Practice, or delegate implementation, operation and management of the Practice to one or more third parties (except where expressly provided otherwise, hereinafter in compliance with all applicable federal and State laws and regulations. The Company has assumed the risk of all profitability or losses of the Practice. In consideration for entering into the Management Agreement, the Company issued 430,782 shares of its Common Stock to Suarez.

The Company has determined that the Management Agreement is a Variable Interest Entity ("VIE") in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 810, "Consolidation". In evaluating whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company considers the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and the Company's decision-making role, if any, in those activities that significantly determine the entity's economic performance as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity's future performance and the exercise of professional judgment in deciding which decision-making rights are most important.

In determining whether the Company has the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the Company evaluates all of its economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity's design, including: the entity's capital structure, contractual rights to earnings (losses), subordination of our interests relative to those of other investors, contingent payments, as well as other contractual arrangements that have potential to be economically significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of the Company's economic interests is a matter that requires the exercise of professional judgment.

The table below summarizes the assets associated with the Practice described above. The practice had no liabilities at December 31, 2011.

Cash		7,171
Accounts receivable		73,451
Property and equipment, net		10,944
Payor contract		7,660

Total revenues from the Practice were $495,337 in 2012. Related expenses consisted primarily of salaries and benefits of $302,243, general and administrative expenses of $174,964 and professional fees of $81,345. Total revenues from the Practice were $659,502 in 2011. Related expenses consisted primarily of salaries and benefits of $231,693, general and administrative expenses of $265,989 and professional fees of $70,255.

Hygea Holdings Corp. 10-K