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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20459
FORM 10Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: February 28, 1999
Commission File Number: 0-11419
Family Health Systems, Inc.
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(Exact Name of Registrant as specified in its Charter)
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<S> <C>
Delaware 22-2435595
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(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
Post Office Box 21238, St. Simons Island, Georgia 31522-0738
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Address of Principal executive offices of Zip Code
Incorporation or organization
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912-634-2584
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Registrants telephone number, including area code
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 and 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 last 90 days.
YES [ ] NO [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as to the latest practical date.
CLASS No. of shares Outstanding on
February 28, 1999
Common Stock 2,006,757
Par Value $.00167
Per share
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PART I
FINANCIAL INFORMATION
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Item 1. Financial Statements
FAMILY HEALTH SYSTEMS, INC.
BALANCE SHEET
February 28, 1999
(Unaudited)
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<CAPTION>
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ASSETS
Cash $ 1,798
Marketable securities 136,840
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Total current assets 138,638
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Other receivables 74,073
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Investment in closely-held company 16,875
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Total assets $ 229,586
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LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Cash overdraft - Investment margin account $ 37,928
------------
Common stock 3,351
Paid in capital 2,673,705
Retained earnings (deficit) (2,485,398)
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191,658
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Total liabilities and stockholder's equity (deficit) $ 229,586
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See Notes to Interim Financial Statements.
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FAMILY HEALTH SYSTEMS, INC.
STATEMENT OF INCOME
Six Months Ended February 28, 1999
(Unaudited)
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<CAPTION>
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Revenues $ Nil
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Expenses
Auto expense 718
Bad debt expense
Bank service charges
Miscellaneous Expense 2,131
Office Supplies 337
Postage 161
Professional Fees 1,000
Publications 4,886
Stock Transfer Fee 1,250
Telephone 97
Travel 2,654
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10,734
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Operating (loss) (10,734)
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Other income (loss)
Capital gains on available-for-sale securities 17,222
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Net Income 6,488
Retained earnings (deficit), beginning (2,491,886)
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Retained earnings (deficit), ending $ (2,485,398)
============
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See Notes to Interim Financial Statements.
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FAMILY HEALTH SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
For Three and Six Months Ended February 28, 1999
(Unaudited)
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<CAPTION>
For the three months For the six months
Ended 2/28/99 ended 2/28/99
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CASH FLOWS FROM OPERATING ACTIVITIES
PROVIDED BY (USED IN) OPERATING
ACTIVITIES
Net income (loss) $ (5,340) $ 6,488
Adjustments to reconcile net income (loss) to
(Gain) loss on sale of investments 2,008 (17,222)
Change in working capital components
(Increase) decrease in note receivable -- 9,155
Increase (decrease) in accounts payable -- --
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Net cash provided by (used in) operating activities (3,332) (1,579)
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CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investments 279,217 415,884
Purchase of investments (279,217) (415,884)
Transfer to operating cash 30,000 55,000
Transfer from operating cash (37,000) (69,273)
Transfer from money market account -- (35,935)
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Net cash provided by investing activities (7,000) (50,208)
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Net increase in cash and cash equivalents (10,332) (51,786)
Cash and cash equivalents
Beginning (25,798) 15,656
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Ending $ (36,130) $ (36,130)
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Cash and cash equivalents:
Operating $ 1,798 $ 1,798
Investment margin account (37,928) (37,928)
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$ (36,130) $ (36,130)
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See Notes to Financial Statements.
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FAMILY HEALTH SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Six Months Ended February 28, 1999
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and wit the instructions to Form
10-Q and Rule 10-01 of Regulations S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments considered necessary for a
fair presentation of the operating results for the second quarter of
the fiscal year 1998 have been included. Operating results for the
quarter ended February 28, 1999 are not necessarily indicative of the
results that may be expected for the fiscal year ending August 31,
1999.
2. CONDENSED PRESENTATION
The Condensed balance sheet and income statement was derived form the
balance sheet and statement of income for that date.
Item 2. Management's Discussion and Analysis of Financial Condition and
results of operation
(A) General Development of Business.
Family Health Systems, Inc. (FHS or REGISTRANT), a Delaware
corporation, was incorporated on January 20, 1983. The
Registrant was formed to provide comprehensive business
services to physicians, dentists and professional
corporations operating full service dental centers and
emergency/industrial medical centers. FHS found this activity
to be unprofitable and it exited the business service
activity in fiscal year 1987 and became engaged in the
formation, registration, distribution and sale of
developmental stage companies. FHS has no activities other
than investment portfolio management at this time.
(B) Description of business:
The Registrant is currently inactive in the formation of
subsidiaries, by registration of those stocks through filing
with the SEC, and is seeking a merger or business combination
for itself.
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(C) Market risk and Investment Risk:
The assets of the Company consist primarily of common stock
of publicly traded companies. As such, the value of the
assets of the Company may be more or less than historical
cost. Any significant declines in market value of investments
will results in a write-down to market value in accordance
with accounting for investments at lower of cost or market.
Item 3. Legal Proceedings
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:
Exhibit 27.1 Financial Data Schedule (for SEC use only)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereto duly authorized.
FAMILY HEALTH SYSTEMS, INC.
May 10, 1999 /s/ William S. Bryant
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William S. Bryant, President
Chief Financial Officer
