SECURITIES AND EXCHANGE COMMISSION
WASHINGTON , D.C. 20549
FORM 10 Q
Quarterly Report Under Section 13 or 15 (d) of the
Securities Exchange Act Of 1934
For Quarter Ended December 31, 1994 Commission File
Number 0-4328
FIRST MUTUAL , INC.
(formerly MUTUAL ENTERPRISES, INC.)
STATE OF INCORPORATION: DELAWARE
IRS EMPLOYER IDENTIFICATION NUMBER: 04-2434444
120 BOLYSTON STREET
BOSTON, MA 02116
TELEPHONE : (617) 426 - 4020
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
and (2) has been subject to such filing requirements for the
past 90 days.
Yes _____ No X__
As of December 31, 1994 there were 910,209 shares of
common stock (par value $.10 per share) of the Company issued
including 63,951 shares in the treasury of the Company.
<TABLE>
Part I. Financial Information
Item I. Condensed Consolidated Financial Statements
First Mutual, Inc.
Consolidated Balance Sheets
(unaudited)
<CAPTION>
ASSETS December 31, September 30,
1994 1993
<S>
<C> <C>
Current assets:
Cash $85,691 $73,908
Accounts receivable 101,425 131,189
Prepaid expenses 9,730 0
---------- ----------
Total current assets 196,846 205,097
Property and equipment:
Furniture, fixtures &
equipment 76,846 76,846
Leasehold improvements 31,660 31,660
---------- ----------
Total property and equipment 108,506 108,506
Less accumulated depreciation (108,506)
(108,506)
---------- -----------
Net property and equipment 0 0
---------- ----------
Other assets 17,208 17,208
---------- ----------
Total assets $214,054 $222,305
====== ======
See accompanying notes to consolidated financial statements
First Mutual, Inc.
Consolidated Balance Sheets
(unaudited)
LIABILITIES AND STOCKHOLDERS' December 31, September 30,
EQUITY 1994 1993
Current liabilities:
Current portion of long-term debt $30,000 $30,000
Demand loans from officer 150,000 150,000
Accounts payable and
accrued expenses 448,321 452,684
Accrued payroll and
payroll taxes 104,346 76,600
- ------------- -------------
Total current liabilities 732,667 709,284
Demand loans from officer 140,017 274,613
Long-term debt, net of
current portion 554,249 565,801
------------ ----------
Total liabilities 1,426,933 1,549,698
------------ ----------
Net capital deficiency:
Common stock, $.10 par value
per share authorized 2,000,000
shares issued 910,209, outstanding
846,248 91,021 91,021
Additional paid-in capital 3,644,837
3,644,837
Accumulated deficit (4,912,283) (5,026,797)
Treasury stock, 63,951 shares
of common stock at cost (36,454) (36,454)
----------- ------------
Total net capital deficiency (1,212,879)
(1,327,393)
----------- ------------
Total liabilities and stockholders'
equity $214,054 $222,305
======= =======
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
First Mutual, Inc.
Statement of Income
(unaudited)
<CAPTION>
Three months ended
December 31,
1994 1993
------ ------
<S>
<C> <C>
Revenue:
Health care services $787,015 $810,403
----------- ------------
Total revenue 787,015 810,403
----------- ------------
Costs and expenses:
Cost of health care services 587,924
757,273
Selling, general and admin 67,745
76,776
------------ -----------
Total costs: 655,669 834,049
Income from operations 131,346
(23,646)
Interest expense, net (16,832)
(33,182)
----------- -----------
Net income/(loss) $114,514
($56,828)
======== ========
Income/(loss) per share $.14 ($.07)
Weighted average number
of shares 846,258 846,258
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
First Mutual, Inc
Statement of Cash Flows
(unaudited)
<CAPTION>
Three Months Ended
December 31, 1994 December 31, 1993
----------------------- ---------------------
- --
<S>
<C> <C>
Cash flows from operating activities:
Net income $114,514 ($56,828)
Items not affecting cash:
Depreciation 0 3,301
(Increase) decrease in accounts receivable
29,764 27,634
(Increase) decrease in prepaid and
other current assets (9,730)
2,146
Increase (decrease) in accounts payable
and accrued expenses 4,363
66,633
Increase (decrease) in accrued payroll
and payroll taxes 27,746 (6,154)
(Increase) decrease in other assets 0
0
---------------- ------------------
Net cash provided by operating activities 157,931
37,002
----------------
- -------------------
Cash flows from financing activties:
Payment on note payable (146,148) (9,185)
---------------- ------------------
Net cash used for financing activities (146,148)
(9,185)
----------------- ------------------
Net change in cash 11,783 27,817
Cash, beginning of period 73,908
(30,297)
----------------- -------------------
Cash, end of period $85,691 $2,480
========== ============
See accompanying notes to consolidated financial statements
</TABLE>
FIRST MUTUAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial
statements have been prepared by First Mutual , Inc. (the
Company) pursuant to the rules and regulations of the Securities
and Exchange Commission regarding interim financial reporting.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principals
for complete financial statements and should be read in
conjunction with the audited financial statements included in
the Company's Annual Report and Form 10-K for the fiscal year
ended September 30, 1994.
.
In the opinion of the management the accompanying
unaudited condensed consolidated financial statements have been
prepared on the same basis as the audited financial statements,
and include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the results of
the interim periods presented. The operating results for the
interim periods presented are not necessarily indicative of the
results expected for the full fiscal year.
2. INCOME (LOSS) PER SHARE
Earning per share of common stock is computed based on the
weighted average number of shares of common stock and common
stock equivalents outstanding. For purposes of computing
weighted average common stock equivalents outstanding , the
warrants outstanding are not included because the effects would
have been antidilutive.
3. INCOME TAXES
The Company and its subsidiaries file a consolidated Federal
income tax return. The benefits attributable to investment tax
credits and net operating losses can be applied to future years.
No provision is made for current income taxes due to use of the
net operating loss.
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of
Operations
Results of Operations:
Consolidated revenues for the quarter ended December 31, 1994
were $787,015 resulting in net income for the quarter of
$114,514.
For the quarter ended December 31, 1994, Community Group, Inc.
had income from operations of $199,091 before interest expense
of $16,832. The Community Group receives funding from the
Commonwealth of Massachusetts that along with income from
outside workshop contracts, has enabled Community Group to meet
its obligations.
ABC Mobile Systems had no activity during the quarter ended
December 31, 1994.
Liquidity and Capital Resources:
The Company had a cash balance of $85,691 and an accounts
receivable balance of
$101,425 at December 31, 1994.
Cash flows in the quarter ended December 31, 1994 as in the
fiscal year ended September 30, 1994 were relatively stable. In
prior years the Company experienced a large cash shortfall which
was met by:
(1) cash advances to the Company and/or subsidiaries due on
demand but presently being amortized on a ten year basis, by
David Slater, Chairman of the Company, and his wife Barbara W.
Slater.
(2) restructured bank financing totaling $680,000, payable in 10
years with monthly installments based on a twenty year
amortization schedule. David and Barbara Slater personally
have guaranteed and collateralized $227,000 of this loan.
In return for David and Barbara Slater's personal guarantee and
collateralization of $227,000 of the company's bank loan, the
Company has granted each of them a 10 year option on 450,000
shares of its authorized but not issued shares, at $.10 per
share. In addition, in return for forgiving $243,743 of debt
due from BSDJ, Inc. and BSNJ, Inc. the company has granted
David and Barbara Slater each a ten year option on 304,679
shares of its authorized, but not issued shares at $.10 per
share. If all these options are ever exercised for all
1,509,358 shares represented thereby, the total shares owned by
David Slater and his family will increase from the 455,450
shares representing 53.8% of the currently outstanding shares of
the Company to a total of 1,964,808 shares representing 83.4% of
what would then be the outstanding shares of the Company.
In view of the above debt repayment requirements the Registrant
will generate no surplus cash and/or liquidity.
There are no unused sources of liquidity. Loans from officers
and stockholders are demand notes with interest at 2% over
prime, the same rate charged the Company on its bank loan.
In the future, management seeks to cut costs in Community Group,
Inc., expand to new similar programs and negotiate future
increases in rates under state contracts.
ABC Mobile Brake has essentially ceased operations.
BWS Group, Inc. has discontinued all retail operations
permanently.
First Mutual, Inc., continues to seek business opportunities it
can participate in without capital requirement, utilizing its
franchising, management and health services expertise.
PART II . OTHER INFORMATION
See Part II of Form 10 K for the year ended September 30, 1994.
No significant changes have occurred since that report and no
reports on Form 8-K were filed during the quarter ended December
31, 1994.
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.
FIRST MUTUAL, INC.
( Formerly Mutual Enterprises, Incorporated)
(Registrant)
DATE: September 15, 1995 David B. Slater
Director and Principal
Executive Officer
DATE: September 15, 1995 Diane M. Fleming
Clerk
and Director
