<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarter ended JUNE 30, 1996
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[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to _________________
Commission file number 0-27654-NY
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Long Island Physician Holdings Corporation
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(Exact name of small business issuer specified in its charter)
New York 11-3232989
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(State of other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
275 Broadhollow Road, Melville, NY 11747
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(Address of principal executive offices) (Zip Code)
(516) 454-1900
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(Issuer's telephone number)
None
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the issuer (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 X No
--- ---
Number of shares of Common Stock, $ .001 par value, outstanding as of June 30,
1996.
1,523 Class A and 4,319 Class B shares
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Transitional Small Business Disclosure Format (Check One) Yes No X
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<PAGE>
INDEX
Page No.
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Part I. Financial Information
Consolidated Balance Sheets as of June 30, 1996 (unaudited)
and December 31, 1995 (audited)............................. 3
Consolidated Statements of Operations for the three and six
months ended June 30, 1996 and June 30, 1995 (unaudited).... 4
Consolidated Statements of Cash Flows for the three and six
months ended June 30, 1996 and June 30, 1995 (unaudited).... 5
Notes to Consolidated Financial Statements.................. 6-7
Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 8-9
Part II. Other Information........................................... 10
Signatures.................................................. 10
2
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Long Island Physician Holdings Corporation
Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, Dec 31,
1996 1995
(unaudited) (audited)
------------ ------------
<S> <C> <C>
Assets
Current Assets
Cash $ 6,993,919 $ 7,566,472
Accounts receivable 1,796,666 --
Interest receivable 4,898 --
Prepaid expenses 228,663 --
Loan receivable 250,000 --
Advances to affiliates -- 811,357
------------ ------------
Total current assets 9,274,146 8,377,829
Fixed Assets, net 19,838 --
Other Assets
Restricted cash 1,206,347 1,036,223
Investments 68,406 --
Other assets 126,359 52,982
------------ ------------
Total assets $ 10,695,096 $ 9,467,034
============ ============
Liabilities and Stockholders Equity
Current Liabilities
Accounts payable $ 3,556,278 $ --
Due to affiliates 151,263 1,079,586
Deferred revenue 105,100 10,934
------------ ------------
Total current liabilities 3,812,641 1,090,520
Minority interest 283,274 40,404
Stockholders Equity
Class A common stock, $.001 par value; 10,000 shares 2 2
authorized, 1,523 issued and outstanding
Class B common stock, $.001 par value; 25,000 shares 4 4
authorized, 4,319 issued and outstanding
Additional paid in capital 11,485,935 11,274,536
Accumulated deficit (4,886,760) (2,938,432)
------------ ------------
Total stockholders equity $ 6,599,181 $ 8,336,110
------------ ------------
Total liabilities and stockholders equity $ 10,695,096 $ 9,467,034
============ ============
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
Long Island Physician Holdings Corporation
Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30, ended June 30,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue $ 5,431,341 $ -- $ 8,097,033 $ --
----------- ----------- ----------- -----------
Total gross revenue 5,431,341 -- 8,097,033 --
Medical Expense 4,484,631 -- 6,697,155 --
----------- ----------- ----------- -----------
Total medical expenses 4,484,631 -- 6,697,155 --
Net revenue 946,710 -- 1,399,878 --
----------- ----------- ----------- -----------
Operating Expense
Management fees 2,085,800 -- 3,711,461 --
General and administrative expenses 509,779 442,717 657,851 1,056,367
----------- ----------- ----------- -----------
Total operating expenses 2,595,579 442,717 4,369,312 1,056,367
Interest income 107,461 233 215,570 233
Loss from operations before income from equity
investments and minority interest (1,541,408) (442,484) (2,753,864) (1,056,134)
Income from equity investments 48,406 -- 48,406 --
Minority interest in loss of subsidiary 377,958 -- 757,130 --
----------- ----------- ----------- -----------
Net loss $(1,115,044) $ (442,484) $(1,948,328) $(1,056,134)
=========== =========== =========== ===========
Loss per share $ (193.58) $ -- $ (336.73) $ --
=========== =========== =========== ===========
Weighted average shares 5,760 -- 5,786 --
=========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
Long Island Physician Holdings Corporation
Consolidated Cash Flows Statements
(unaudited)
<TABLE>
<CAPTION>
For the six months
ended June 30,
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net Loss $(1,948,328) $(1,056,134)
Adjustments to reconcile net loss to net cash flows
from operating activities:
Depreciation 2,143 --
Minority interest in loss of subsidiary 242,870 --
Changes in current assets and current liabilities:
(Increase) in accounts receivable (1,796,666) --
(Increase) in interest receivable (4,898) --
(Increase) in prepaid expenses (228,663) --
(Increase) in loans receivable (250,000) --
(Decrease) in advances to affiliates 811,357 --
Increase in accounts payable 3,556,278 --
(Decrease) in due to affiliates (928,323) 928,537
Increase in deferred revenue 94,166 --
----------- -----------
Net cash used in operating activities (450,064) (127,597)
Cash flows from investing activities:
Purchases of fixed assets (21,981) --
Investment in NextStage Healthcare (68,406)
Net increase in other assets (73,377) (3,653)
----------- -----------
Net cash used in investing activities (163,764) (3,653)
Cash flows from financing activities:
Proceeds from issuance of common stock 211,399 156,000
Payments from cash flow reserve (170,124) --
----------- -----------
Net cash used in financing activities 41,275 156,000
Net increase (decrease) in cash (572,553) 24,750
Cash beginning of period 7,566,472 --
----------- -----------
Cash and cash equivalents, end of period $ 6,993,919 $ 24,750
=========== ===========
</TABLE>
See notes to consolidated financial statements
5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Unaudited Statements:
The accompanying unaudited consolidated financial statements have been
prepared by the Company in accordance with generally accepted accounting
principles, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements have been condensed or omitted pursuant to
such rules and regulations although management believes that the
disclosures are adequate to make the information presented not misleading.
In the opinion of management, the accompanying consolidated financial
statements contain all adjustments necessary to present a fair statement of
the results for the interim period presented. Operating results for the
three and six month periods ended June 30, 1996 is not necessarily
indicative of the results that may be expected for the year ending December
31, 1996. These financial statements should be read in conjunction with the
consolidated financial statements and notes thereto for the year ended
December 31, 1995, included in the Company's Registration Statement 10-SB.
2. Principles of Consolidation:
The consolidated financial statements include the accounts of Long Island
Physician Holdings Corp. (the "Company" or "LIPH"), a holding company for
purposes aimed at advancing the delivery of healthcare on Long Island, its
wholly-owned subsidiaries which consists of Island Practice Association,
Inc., Island Behavioral Health Association, Inc., and Island Dental
Professional Association, Inc., and its two-third (2/3) owned subsidiary,
MDLI Healthcare, Inc. ("MDLI"), a health maintenance organization ("HMO").
Intercompany balances and activities are eliminated in consolidation.
3. Net Loss Per Share of Common Stock:
Net loss per share of common stock is based on the weighted average number
of shares of common stock outstanding during each period.
4. Unconsolidated Subsidiaries:
The Company owns a thirty-three and one-third (33-1/3) interest in
NextStage Healthcare Resources, Inc. ("NextStage Resources"). LIPH records
the investment in NextStage Resources utilizing the equity method.
6
<PAGE>
Notes to Consolidated Financial Statements, cont'd
5. Related Parties:
NextStage Healthcare Management, Inc. ("NextStage Management") is a wholly
owned subsidiary of NextStage Healthcare Resources, Inc.
LIPH, MDLI and the IPAs have a management service agreement with NextStage
Management. This agreement stipulates that NextStage Management will
provide management and consulting services to MDLI for a five year period
ending October 10, 2000. NextStage Management will perform most
administrative services on behalf of MDLI. Under the terms of the
agreement, MDLI is currently providing NextStage Management a management
fee of 100% of costs incurred. When covered lives, the number of people
enrolled, exceed 50,000, fees charged by NextStage Management will be based
on a percentage of premiums generated by the HMO.
6. Subsequent Events:
The Company has authorized an investment of $1,000,000 in a new practice
management company, MainStreet Practice Management, Inc. ("MainStreet"). As
of June 30, 1996, the Company had advanced $500,000 for working capital
needs during the start-up period. The balance due of $500,000 was paid July
5, 1996.
MDLI's business plan for 1996 requires additional capital of $2,000,000.
The Company committed to invest the additional capital required. The
Company paid $1,000,000 July 5, 1996 and will invest the balance of
$1,000,000 by January 1, 1997.
7
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS
Liquidity And Capital Resources
Long Island Physician Holdings Corporation was formed as a holding company to be
owned and controlled by office-based physicians, psychologists, dentists,
chiropractors and podiatrists who reside in New York and provide healthcare
services on Long Island. The initial role of the Company was to finance the
start-up of MDLI as a licensed HMO in the Long Island service area and develop a
provider network in Long Island, consisting of the three IPAs. The IPAs contract
with MDLI to provide services to its enrollees. The Company plans to use a
portion of its capital to make investments in healthcare-related ventures.
The Company had working capital of approximately $5,500,000 at June 30, 1996,
compared to approximately ($900,000) at June 30, 1995. Of the $5,500,000, LIPH
had working capital of $2,900,000 and MDLI had working capital of $2,600,000.
The Company's current ratio at March 31, 1996 was 2.44 to 1. The increase in the
Company's working capital and current ratio at June 30, 1996 compared to June
30, 1995 was primarily the result of the Company's efforts in raising capital
through the sale of shares of the Company in an intrastate offering. MDLI did
not commence operations until January 1, 1996.
Inflation
The Company does not anticipate that inflation will have any significant effect
on its business particularly since the United States, the only market in which
the Company currently intends to operate, is presently experiencing a relatively
low rate of inflation.
Results Of Operations
Revenues
Revenues for the three (3) and six (6) months ended June 30, 1996, were
approximately $5,400,000 and $8,100,000, respectively, generated primarily
through the payments of health premiums by or on behalf of MDLI's enrollees.
There were no revenues for the three (3) and six (6) months ended June 30, 1995.
MDLI did not commence operations until January 1, 1996 and no revenues were
generated other than interest income for 1995. Membership at June 30, 1996, was
7,246 subscribers, representing approximately 15,061 enrollees.
Costs And Expenses
Costs and expenses are broken down into two major categories, medical expenses
and management fees. Medical expenses are based on percentage of premium, 83% at
June 30, 1996, and allocated globally to the IPAs by contract for the payment of
medical claims. The IPAs are currently spending less than the 83%. Medical
expenses for the three (3) and six (6) months ended June 30, 1996 were
approximately $4,500,000 and $6,700,000, respectively. Since there were no
8
<PAGE>
Management's Discussion and Analysis, cont'd
operations for the same three (3) and six (6) month period ended
June 30, 1995, there were no medical claims paid or incurred. Management
fees for the three (3) and six (6) period ended June 30, 1996 were
approximately $2,100,000 and $3,700,000, respectively. General and
administrative expenses were approximately $510,000 and $660,000 for
the three (3) and six (6) month periods ended June 30, 1996, as compared
to approximately $440,000 and $1,060,000 for the same periods ended
June 30, 1995. During 1995, the Company incurred significant costs during the
organizational stage of its development. Expenses included consulting and
professional fees primarily for legal costs to obtain appropriate licensing and
for healthcare business consultants utilized to develop and design the overall
business strategy to develop the provider network.
Net Loss Applicable To Common Shareholders
Net loss applicable to common shareholders for the three (3) and six (6) months
ended June 30, 1996 were ($1,115,000) or ($194) per share and ($1,950,000) or
($337) per share, respectively). There were no shares issued for the same
periods ended June 30, 1995.
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
None
ITEM 2 - Changes In Securities
None
ITEM 3 - Defaults Upon Senior Securities
None
ITEM 4 - Submission Of Matters To A Vote Of Security Holders
None
ITEM 5 - Other Information
None
ITEM 6 - Exhibits And Reports On Form 8-K
(6) There were no reports on Form 8-K for the six months
ended June 30, 1996.
SIGNATURES
Pursuant to the requirements 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 by
Long Island Physician Holdings, Corp.
Date September 30, 1996 _______________________________________
David Weissberg, MD, President and CEO
Date September 30, 1996 __________________________________________________
Harris S. Topel, CPA, Assistant Treasurer and CFO
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,993,919
<SECURITIES> 0
<RECEIVABLES> 1,796,666
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,274,146
<PP&E> 19,838
<DEPRECIATION> 2,143
<TOTAL-ASSETS> 10,695,096
<CURRENT-LIABILITIES> 3,812,641
<BONDS> 0
0
0
<COMMON> 6
<OTHER-SE> 11,485,935
<TOTAL-LIABILITY-AND-EQUITY> 10,695,096
<SALES> 5,431,341
<TOTAL-REVENUES> 5,431,341
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,595,579
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,115,044)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,115,044)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,115,044)
<EPS-PRIMARY> (336.73)
<EPS-DILUTED> 0
</TABLE>
