The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to the risks discussed in this report.

Overview

HASCO Medical, Inc., formerly BBC Graphics of Palm Beach Inc, was incorporated in May 1999 under the laws of the State of Florida. We operated as a provider of advertising and graphic design services. In June 2009, we changed our name to HASCO Medical, Inc. In May 2009, we changed our fiscal year end from September 30 to December 31.

On January 12, 2009 HASCO Holdings, LLC acquired 75% of the outstanding shares of common stock of the Company from two of its shareholders for total consideration of $150,000. On May 12, 2009, HASCO Medical, Inc. (i) closed a share exchange transaction, pursuant to which HASCO Medical, Inc. became the 100% parent of SOUTHERN MEDICAL & MOBILITY, and (ii) assumed the operations of SOUTHERN MEDICAL & MOBILITY.

On May 12, 2009, we completed the acquisition of Southern Medical & Mobility, Inc. (SMM") pursuant to the terms of the Agreement and Plan of Merger (the "Merger Agreement") among HASCO, SMM and Southern Medical Acquisition, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company. Under the terms of the Merger Agreement, Southern Medical Acquisition, Inc. was merged into Southern Medical & Mobility, Inc., and Southern Medical & Mobility, Inc. became our wholly-owned subsidiary. The former shareholder of Southern Medical & Mobility, Inc. was issued a total of 554,676,000 shares of our common stock in exchange for its Southern Medical & Mobility, Inc. shares.

After the merger and transactions that occurred at the same time as the merger, there were 642,176,000 shares of our common stock outstanding, of which 620,000,000, approximately 96.5%, were held by HASCO Holdings, LLC, the former sole shareholder of Southern Medical & Mobility, Inc. Prior to the merger, the company was a shell company with no business operations.

On May 13, 2011, the Company completed the acquisition of Mobility Freedom Inc. and Wheelchair Vans of America. Mobility Freedom is a Florida Corporation founded in 1999. A few years after the business started Mobility Freedom, Inc. purchased a van rental company, which now does business under the name "Wheelchair Vans of America." Pursuant to the terms of the transaction, HASCO paid the selling shareholders of Mobility Freedom Inc. and Wheelchair Vans of America $1,850,000 in cash and a $2,000,000 Promissory Note with a 15 year term for a total consideration of $3,850,000 along with 250,000 shares of HASCO Medical, Inc. common stock.

On November 16, 2011, the Company acquired Certified Medical Systems II ("Certified Medical") and Certified Auto ("Certified Auto") (together "Certified"). Pursuant to the terms of the transaction, HASCO paid the selling shareholders $50,000 in cash and a $50,000 Promissory Note with a 4 year term for a total consideration of $100,000 along with 2,857,143 shares of HASCO Medical, Inc. common stock. The equity of Certified as well as the amount the Company paid for its assets was less than 10% of the total assets of HASCO and its consolidated subsidiaries.

On March 1, 2012, Hasco Medical, Inc. completed the acquisition of Ride-Away Handicap Equipment Corp., a closely-held New Hampshire corporation (Ride-Away).
Pursuant to the terms and conditions of the Stock Purchase Agreement, Hasco Medical paid the sole selling shareholder of Ride-Away $500,000 in cash and a $3,000,000 Promissory Note bearing 5% simple interest, principle and interest payable monthly over 10 years., along with 165,944,450 shares of HASCO Medical, Inc. common stock, valued at $2,500,000, for a total consideration of $6,000,000.

Services and Products

Historically, our operations were focused on the provision of a diversified range of home health care services and products. Following our 2011 acquisitions of Mobility Freedom and the Certified subsidiaries, and our March 2012 acquisition of Ride-Away, our operations are conducted within two lines of business:

· Wheelchair Vans - which conducts sales of handicap accessible vans, parts and service and rental operations. This segment consists of Ride-Away which has eleven locations from Maine to Florida, Mobility Freedom including its rental operations conducted under the trade name "Wheelchair Vans of America" and Certified Medical Auto, which are located in Florida; and

· Home Health Care - which conducts sales of medical equipment and supplies This segment consists of Southern Medical & Mobility located in Mobile, Alabama and Certified Medical located in Ocala, Florida

Our objective is to continue to grow both intrinsically and through acquisitions in areas that we currently offer products and services in, as well in areas that are complementary. As Ride-Away is significantly larger than the other subsidiaries, we anticipate that the results of operations of Ride-Away will drive our near term financial results.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A summary of significant accounting policies is included in Note 1 to the audited consolidated financial statements included for the year ended December 31, 2011 and notes thereto contained in this report as filed with the Securities and Exchange Commission. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about the Company's operating results and financial condition.

Our consolidated financial statements include a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements. Management believes the following critical accounting policies affect the significant judgments and estimates used in the preparation of the consolidated financial statements.

Use of Estimates - Management's Discussion and Analysis or Plan of Operations is based upon our audited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates these estimates, including those related to allowances for doubtful accounts receivable and the carrying value of and equipment and long-lived assets. Management bases these 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 from these estimates under different assumptions or conditions.

Revenue Recognition - The Company follows the guidance of the FASB ASC 605-10-S99 "Revenue Recognition Overall - SEC Materials. The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:

I) Wheelchair Vans

· We recognize revenue when the earnings process is complete, generally either at the time of sale to a customer or upon delivery to a customer. We recognize used vehicle revenue when a sales contract has been executed and the vehicle has been delivered. A reserve for vehicle returns is recorded based on historical experience and trends, and results could be affected if future vehicle returns differ from historical averages.

· Vehicles are rented to individuals and are invoiced at the date of service. A reserve for receivables is recorded based on historical experience and trends, and results could be affected if future vehicle returns differ from historical averages.

II) Home Health Care

· Revenues are recognized under fee for service arrangements through equipment that the Company rents to patients, sales of equipment, supplies, and other items the Company sells to patients. Revenue generated from equipment that the Company rents to patients is recognized over the rental period and commences on delivery of the equipment to the patients. Revenue related to sales of equipment, and supplies is recognized on the date of delivery to the patients. All revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare and Medicaid.

Revenues are recognized on an accrual basis at the time services and related products are provided to patients and collections are reasonably assured, and are recorded at amounts estimated to be received under healthcare contracts with third-party payers, including private insurers, Medicaid, and Medicare.

· Amounts billed in advance of services being provided are recorded as deferred revenues and recognized in the consolidated statement of operations as services are provided.

Stock Based Compensation - In December 2004, the Financial Accounting Standards Board, or FASB, issued FASB ASC Topic 718: Compensation - Stock Compensation ("ASC 718"). Under ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under ASC 718. Upon adoption of ASC 718, the Company elected to value employee stock options using the Black-Scholes option valuation method that uses assumptions that relate to the expected volatility of the Company's common stock, the expected dividend yield of our stock, the expected life of the options and the risk free interest rate. Such compensation amounts, if any, are amortized over the respective vesting periods or period of service of the option grant.

Accounts Receivable - Management performs ongoing evaluations of its accounts receivable. Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required to record net revenues and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity and uncertainty of reimbursement amounts for certain services from certain payors may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application, claim denial or account review. Management performs periodic analyses to evaluate accounts receivable balances to ensure that recorded amounts reflect estimated net realizable value. Specifically, management considers historical realization data, accounts receivable aging trends, and other operating trends. Also considered are relevant business conditions such as governmental and managed care payor claims processing procedures and system changes. Accounts receivable are reduced by an allowance for doubtful accounts which provides for those accounts from which payment is not expected to be received, although services were provided and revenue was earned. Upon determination that an account is uncollectible, it is written-off and charged to the allowance.

Inventory is valued at the lower of cost or market, on an average cost basis and includes primarily finished goods.

Long-Lived Assets - The Company reviews for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360-10-35-15, "Impairment or Disposal of Long-Lived Assets". The Company reviews, long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset's estimated fair value and its book value.

Goodwill and Other Intangible Assets - In accordance with ASC 350- 30-65 "Goodwill and Other Intangible Assets", the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following:

1. Significant underperformance relative to expected historical or projected future operating results;

2. Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and

3. Significant negative industry or economic trends.

When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows.

Reimbursement by Third Party Payors

We derive a substantial portion (approximately14% for the six months ended June 30, 2012) of our wheelchair van segment revenue from the United States Department of Veterans Affairs (the "VA")

We derive substantially all of our home health care segment revenues from reimbursement by third party payors, including Medicare, Medicaid and private insurers. Our business has been, and may continue to be, significantly impacted by changes mandated by Medicare and government agencies legislation.

The health care industry is subject to extensive regulation by a number of governmental entities at the federal, state and local levels. The industry also is subject to frequent legislative and regulatory changes. Our business is impacted not only by those laws and regulations that are directly applicable to us, but also by certain laws and regulations that are applicable to our managed care payors and patients. State laws also govern, among other things, pharmacies, nursing services, distribution of medical equipment and certain types of home health activities and apply to those locations involved in such activities. If we fail to comply with the laws and regulations applicable to our business, we could suffer civil and/or criminal penalties and we could be excluded from participating in Medicare, Medicaid and other federal and state health care programs.

On July 15, 2008, Congress enacted the MIPPA legislation which reduced Medicare payment rates nationwide for certain DME items, including oxygen equipment, by 9.5% beginning in 2009. In addition to the 9.5% reduction, CMS subjected the monthly payment amount for stationary oxygen equipment to additional cuts of 2.3% in 2009, thereby reducing the monthly payment rate from $199.28 in 2008 to $175.79 in 2009. The monthly payment amount was reduced by 1.5% in 2010, to $173.17. We estimate that this reduction negatively impacted our revenues in 2010. The stationary oxygen payment rate for 2011 has been established by CMS at $173.31 per month, an increase of 0.1%.

Results of Operations


The following table provides an overview of certain key factors of our results
of operations for the three months ended June 30, 2012 as compared to June 30,
2011:


                            Three Months ended June 30,             Six Months ended June 30,
                               2012               2011               2012               2011
Net Revenues             $     19,709,751     $   1,861,783     $    28,534,981     $   2,346,112
Cost of sales                  14,254,897         1,247,279          20,173,250         1,403,118
Operating Expenses:
Selling and Marketing           1,185,540                 -           1,631,324                 -
Amortization and
Depreciation                      127,585            22,103             213,333            29,211
General and
administrative                  3,839,347           650,914           6,057,793         1,119,370
Total operating
expenses                        5,152,472           673,017           7,902,450         1,148,581
Income (loss) from
operations                        302,382           (58,513 )           459,281          (205,587 )
Total other income
(expense)                         (66,409 )          20,822            (160,061 )          12,239
Provision for income
taxes                             (33,016 )               -             (44,613 )               -
Net income (loss)        $        202,957     $     (37,691 )   $       254,607     $    (193,348 )

Other Key Indicators:


                                                Three months ended       Six months ended
                                                     June 30,                June 30,
                                                2012         2011        2012         2011
Cost of sales as a percentage of revenues         72.3%        67.0%       70.7%       59.8%
Gross profit margin                               27.7%        33.0%       29.3%       40.2%
General and administrative expenses as a
percentage of revenues                            19.5%        35.0%       21.2%       47.7%
Total operating expenses as a percentage of
revenues                                          98.5%       103.1%       98.4%      108.8%

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

                         Three months ended            Six months ended
                              June 30,                     June 30,
                         2012          2011           2012          2011
Product Sales        $ 15,419,104   $ 1,476,598   $ 22,603,169   $ 1,855,135
Rental Revenue            448,751        12,088        777,935        12,089
Service and other       3,841,895       373,097      5,153,877       478,888
Total Net Revenues   $ 19,709,751   $ 1,861,783   $ 28,534,981   $ 2,346,112

Three Month Period ended June 30, 2012 and 2011

Net Revenues

For the three months ended June 30, 2012, we reported revenues of $19,709,751 as compared to revenues of $2,346,112 for the three months ended June 30, 2011, an increase of $17,363,639 or approximately712.8 %.

Product Sales Revenue - Product sales for the three months ended June 30, 2012 amounted to $15,419,104 and $1,476,597, an increase of $13,942,507 or 944.2%.
Service revenue increased by $3,841,895 or 929.7%. Rental revenue increase by $436,723 or 3,194.1%. All of these increases were due to the acquisition of Mobility Freedom on May 13, 2011 and Ride-Away on March 1, 2012.

Cost of Sales

Our cost of sales consists of products purchased for resale and the depreciation of rental assets. For the three months ended June 30, 2012, cost of sales was $14,254,897, or approximately 72.3% of revenues, compared to $1,247,279, or approximately 67.0% of revenues, for the three months ended June 30, 2011. During the three months ended June 30, 2012 cost of sales increased due to increased revenues related to our Wheelchair Van operations which has a higher cost of sales as a percentage of net revenues than the Home Healthcare operations. The overall increase of cost of sales for our Wheelchair Van operations is due to the acquisition of Ride-Away Handicap Equipment Corp. on March 1, 2012 and Mobility Freedom Inc. on May 13, 2011.

Gross Profit

Overall gross profit percentage declined from 29.3% for the three months ended June 30, 2011 to 27.7% for the three months ended June 30, 2012, due to the lower gross profit percentage earned in our wheelchair van segment. For the three months ended June 30, 2012, approximately 98.1% of the company's revenues was generated by the Wheelchair Van operations at this lower margin percentage thus negatively impacting the overall margin percentage.

Total Operating Expense

Total operating expenses decreased as a percentage of revenues to 98.5%% for the three months ended June 30, 2012 from 103.1% for the three months ended June 30, 2011. These changes include:

· Marketing and Selling. For the three months ended June 30, 2012, marketing and selling costs were $1,185,540 and there were none for the three months ended June 30, 2011. The increase was due to marketing, advertising and print advertising programs initiatives, primarily in the wheelchair van operations.

· Depreciation and amortization expense. For the three months ended June 30, 2012, depreciation and amortization expense amounted to $127,585 as compared to $22,103 for the three months ended June 30, 2011, an increase of $105,482 . Of this increase, $81,423 is due to the amortization of the identified intangibles recorded as a result of the acquisitions of Ride-Away and Mobility Freedom. The balance of the increase is primarily due to the depreciation on the tangible assets acquired in these acquisitions, primarily rental vans.

· General and administrative expense. For the three months ended June 30, 2012, general and administrative expenses were $3,839,347 as compared to $650,914 for the three months ended June 30, 2011., an increase of $3,188,433. For the three months ended June 30, 2012 and 2011 general and administrative expenses consisted of the following:

                                              Three Months Ended June 30,
                                                  2012             2011
         Rent                               $         92,236    $    47,290
         Employee compensation                     2,423,557        496,322
         Professional fees                            66,932        127,377
         Internet/Phone                               37,856         27,017
         Travel/Entertainment                         73.968         17,393
         Insurance                                    53,823         50,835
         Other general and administrative          1,090,975       (115,320 )
                                            $      3,839,347    $   650,914

· For the three months ended June 30, 2012, Rent expense increased by $44,946 over the same period in 2011. The increase is due to the market leases on the Ride-Away and Mobility Freedom locations which are not included in the 2011 totals as the acquisitions had not yet taken place.

· For the three months ended June 30, 2012, employee compensation, related taxes and stock-based compensation expenses was $2,423,557, an increase of $1,927,235 over the same period in 2011. The increase relates primarily to the personnel added with the acquisition of Ride-Away and Mobility Freedom and to the addition of several key positions in anticipation of these acquisitions.

· For the three months ended June 30, 2012, professional fees decreased to $66,932 as compared to $127,377 for the three months ended June 30, 2011; a decrease of $60,445 or 47.5%. The 2011 professional fees were due to the fees associated with the acquisition of Mobility Freedom.

· For the three months ended June 30, 2012, internet/telephone expense increased to $37,856 as compared to $27,017 for the same period in 2011, an increase of $10,839. This increase is due to the addition of the Ride-Away and Mobility Freedom subsidiaries and their operations and locations.

· For the three months ended June 30, 2012, travel and entertainment expense increased to $73,968 as compared to $17,393 for the same period in 2011, an increase of $56,575. This increase is due to the increased travel necessitated by the addition of the Ride-Away and Mobility Freedom subsidiaries.

· For the three months ended June 30, 2012 insurance expense increased to $53,823 as compared to $50,835 for the three months ended June 30, 2011, an increase of $2,988. This increase is due to the addition of the Ride-Away and Mobility Freedom locations.

· For the three months ended June 30, 2012, other general and administrative expense increased to $1,090,976 as compared to $(115,320) for the three months ended June 30, 2011, an increase of $1,206,296. This increase is due to the addition of the Ride-Away and Mobility Freedom subsidiaries.

INCOME (LOSS) FROM OPERATIONS

We reported income from operations of $302,382for the three months ended June 30, 2012 as compared to a loss from operations of $(58,513) for the three months ended June 30, 2011.

OTHER INCOME (EXPENSES)

Other income (expense) for the three months ended June 30, 2012 amounted to $(66,409) compared to $20,822 for the three months ended June 30, 2011. This income is primarily early pay and trade discounts earned by Ride-Away.

Acquisition fees for the three months ended June 30, 2012 and 2011 were both zero. These are the various legal and professional fees incurred in the . . .