Securities and Exchange Commission
Washington D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended November 30, 1998
-------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
--------------- ---------------
Commission File Number 0-15304
------------
AVESIS INCORPORATED
---------------------------------------
(Exact name of small business issuer as
specified in its charter)
Delaware 86-0349350
------------------------------ ------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3724 North Third Street, Suite 300 Phoenix, Arizona 85012
---------------------------------------------------------
(Address of principal executive offices)
(602) 241-3400
--------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
The number of outstanding shares of the registrant's Common Stock on January 4,
1999 was 7,356,297.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT
(Check One) [ ] Yes [X] No
1 of 14
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
AVESIS INCORPORATED
BALANCE SHEET
NOVEMBER 30, 1998
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,126,195
Receivables, net 356,419
Prepaid expenses and other 252,082
------------
Total current assets 2,734,696
Property and equipment, net 424,282
Deposits and other assets 241,981
------------
Total Assets $ 3,400,959
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,419,567
Current installments of obligations
under capital lease 10,288
Accrued expenses-
Compensation 51,077
Other 111,478
Deferred income 16,368
------------
Total current liabilities 1,608,778
Accrued rent 37,542
Obligations under capital lease, excluding
current installments 25,898
------------
Total liabilities 1,672,218
------------
Stockholders' equity:
Preferred stock $.01 par value, authorized 12,000,000 shares:
$3.75 Class A, senior nonvoting cumulative convertible
preferred stock, Series A, $.01 par value; authorized
1,000,000 shares; 304,960 issued and outstanding
(liquidation preference of $3.75 per share) 3,050
$10 Class A, nonvoting cumulative convertible preferred
stock, Series 2, $.01 par value; authorized 1,000,000
shares; 6,000 shares issued and outstanding (liquidation
preference of $10 per share) and $32,400 of dividends in
arrears at $5.40 per share; dividends accrue at $.225 per
share per calendar quarter 60
Common stock of $.01 par value, authorized 12,000,000 shares;
7,394,297 shares issued and outstanding 73,943
Additional paid-in capital 10,485,407
Accumulated deficit (8,833,719)
------------
Net stockholders' equity 1,728,741
------------
$ 3,400,959
============
The accompanying notes are an integral part of these statements.
- 2 -
<PAGE>
AVESIS INCORPORATED
STATEMENTS OF OPERATIONS
FOR THE QUARTER AND SIX MONTHS ENDED NOVEMBER 30, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
Quarters Ended Six Months Ended
-------------------------- --------------------------
November 30, November 30, November 30, November 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Service revenues:
Administration fees $ 2,175,078 $1,553,780 $4,170,022 $2,918,492
Provider fees 35,780 28,330 72,833 54,796
Buying group 383,613 387,079 789,326 805,609
Other 887 1,103 2,474 2,607
----------- ---------- ---------- ----------
Total service revenues 2,595,358 1,970,292 5,034,655 3,781,504
Cost of services 1,854,719 1,467,039 3,687,391 2,849,689
----------- ---------- ---------- ----------
Income from services 740,639 503,253 1,347,264 931,815
General and administrative expenses 276,674 230,608 514,557 457,748
Selling and marketing expenses 286,458 189,824 535,881 333,084
----------- ---------- ---------- ----------
Income from operations 177,507 82,821 296,826 140,983
----------- ---------- ---------- ----------
Non-operating income (expense):
Other income (expense) 605 (25,373) 1,925 (23,662)
Interest income 21.976 8,664 32,104 17,417
Interest expense (1,024) (7,776) (2,129) (15,161)
Loss on asset disposal -0- (2,124) -0- (2,124)
----------- ---------- ---------- ----------
Net non-operating income (expense) 21,557 (26,609) 31,900 (23,530)
----------- ---------- ---------- ----------
Net income $ 199,064 $ 56,212 $ 328,726 $ 117,453
=========== ========== ========== ==========
Preferred stock dividends (27,081) (87,342) (54,162) (174,684)
Net income/(loss) available to
common stockholders $ 171,983 $ (31,130) $ 274,564 $ (57,231)
=========== ========== ========== ==========
Earnings/(loss) per share - Basic $ 0.02 $ (0.01) $ 0.04 $ (0.01)
=========== ========== ========== ==========
Earnings/(loss) per share - Diluted $ 0.02 $ (0.01) $ 0.03 $ (0.01)
=========== ========== ========== ==========
Weighted average common and equivalent
shares outstanding - Basic 7,395,792 4,097,673 6,221,369 4,099,054
=========== ========== ========== ==========
Weighted average common and equivalent
shares outstanding - Diluted 10,505,803 4,135,473 9,410,912 4,136,854
=========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
- 3 -
<PAGE>
AVESIS INCORPORATED
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---- ----
Cash flows from operating activities:
Net income $ 328,726 $ 117,453
---------- ---------
Adjustments to reconcile net income to net
cash provided by in operating activities:
Depreciation and amortization 57,840 54,937
Loss on fixed asset disposal -0- 2,124
Changes in assets and liabilities:
Decrease (increase) in receivables 123,490 (6,187)
(Increase) in prepaid expenses and other (136,632) (174,271)
Decrease (increase) decrease in other assets 1,528 (74,861)
Increase in accounts payable 313,402 304,268
(Decrease) in accrued expenses (970) (69,092)
(Decrease) in deferred income (579) (15,930)
(Decrease) increase in accrued rent (15,139) 12,534
---------- ---------
Total adjustments 342,940 33,522
---------- ---------
Net cash provided by operating activities 671,666 150,975
---------- ---------
Cash flows from investment activities:
Purchases of property and equipment (74,265) (209,738)
Proceeds from dispositions of property
and equipment 1,370 5,000
---------- ---------
Net cash used in investing activities (72,895) (204,738)
---------- ---------
Cash flows from financing activities:
Principal payments under capital lease obligation (5,237) (1,612)
Exercise of stock options and warrants 1,228,656 -0-
Payments for repurchase of common and preferred stock (689,605) (2,500)
---------- ---------
Net cash provided by (used in)
financing activities 533,814 (4,112)
---------- ---------
Net (decrease) increase in cash and
cash equivalents 1,132,585 (57,875)
Cash and cash equivalents, beginning of period 993,610 817,535
---------- ---------
Cash and cash equivalents, end of period 2,126,195 759,660
========== =========
Supplemental information:
(a) Interest paid during the period -
Debentures -0- 8,978
The accompanying notes are an integral part of these statements.
- 4 -
<PAGE>
AVESIS INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 31, 1998 AND 1997
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of
Avesis Incorporated, and its wholly-owned subsidiary, Avesis of Washington, D.C.
(collectively, the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and pursuant to
the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for a complete financial statement
presentation. In the opinion of Management, such unaudited interim information
reflects all adjustments, consisting only of a normal recurring nature,
necessary to present the Company's financial position and the results of
operations and cash flows for the periods presented. The results of operations
for interim periods are not necessarily indicative of the results to be expected
for a full fiscal year. It is suggested that these condensed consolidated
financial statements be read in conjunction with the Company's audited
consolidated financial statements included in the Company's Annual Report on
Form 10-KSB, for the year ended May 31, 1998.
Note 2. Earnings (Loss) per Share
A summary of the reconciliation from basic earnings (loss) per share to
diluted earnings (loss) per share for the quarter and six month periods ended
November 30, 1998 and 1997 follows:
Quarter ended Quarter ended
November 30, 1998 November 30, 1997
----------------- -----------------
Net earnings $ 199,064 $ 56,212
Less: preferred stock dividends 27,081 87,342
----------- ----------
Income (loss) available to common
stockholders 171,983 (31,130)
=========== ==========
Basic EPS - weighted average shares
outstanding 7,395,792 4,097,673
=========== ==========
Basic earnings (loss) per share $ 0.02 $ (0.01)
=========== ==========
Basic EPS - weighted average shares
outstanding 7,395,792 4,097,673
Effect of dilutive securities:
Convertible debentures -- 37,800
Convertible preferred stock 3,110,011 --
----------- ----------
Dilutive EPS - weighted average shares
outstanding 10,505,803 4,135,473
Net earnings $ 199,064 $ (31,130)
Interest expense on non-CSE debt -- 4,489
----------- ----------
199,064 (26,641)
Diluted earnings (loss) per share $ 0.02 $ (0.01)
=========== ==========
Convertible Preferred Stock not included
in diluted EPS since antidilutive -- 970,450
=========== ==========
-5-
<PAGE>
Six months ended Six months ended
November 30, 1998 November 30, 1997
----------------- -----------------
Net earnings $ 328,726 $ 117,453
Less: preferred stock dividends 54,162 174,684
----------- -----------
Income (loss) available to common
stockholders 274,564 (57,231)
=========== ===========
Basic EPS - weighted average shares
outstanding 6,221,369 4,099,054
=========== ===========
Basic earnings (loss) per share $ 0.04 $ (0.01)
=========== ===========
Basic EPS - weighted average shares
outstanding 6,221,369 4,099,054
Effect of dilutive securities:
Convertible debentures -- 37,800
Convertible preferred stock 3,189,543 --
----------- -----------
Dilutive EPS - weighted average shares
outstanding 9,410,912 4,136,854
Net earnings $ 328,726 $ (57,231)
Interest expense on non-CSE debt -- 8,978
----------- -----------
328,726 (48,254)
Diluted earnings (loss) per share $ 0.03 $ (0.01)
=========== ===========
Convertible Preferred Stock not included
in diluted EPS since antidilutive -- 970,450
=========== ===========
Note 3. Use of Estimates
Management of the Company has made certain estimates and assumptions
relating to the reporting of assets, liabilities, revenues and expenses to
prepare the financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those estimates.
Note 4. Credit Facility
On November 16, 1998, the Company entered into a revolving credit facility
agreement with Norwest Bank Arizona, N.A. to provide a sum not to exceed
$100,000 at an interest rate of prime plus one and one half percent (1.5%) with
an initial maturity date of November 1, 1999. The credit facility is
collateralized by the Company's accounts receivable, inventory, equipment and
general intangibles. The purpose of the credit facility is to cover short term
operating needs pending the collection of accounts receivable. The Company has
not used the revolving credit facility during 1998.
-6-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS FOR THE SIX
MONTHS ENDED NOVEMBER 30, 1998 AND 1997
The statements contained in this discussion and analysis regarding
management's anticipation of adequacy of cash reserves for operations, adequacy
of reserves for claims, anticipated level of operating expenses related to new
cardholders, viability of the Company, cash flows and marketability of the
Company constitute "forward-looking" statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements involve risks
and uncertainties, which could cause actual results to differ materially from
the forward-looking statements. Management's anticipation is based upon
assumptions regarding the market in which the Company operates, the level of
competition, the level of demand for services, the stability of costs, the
retention of Sponsors and cardholders enrolled in the Company's benefit
programs, the relevance of the Company's historical performance, Year 200 issues
and the stability of the regulatory environment. Any of these assumptions could
prove inaccurate, and therefore there can be no assurance that the
forward-looking information will prove to be accurate.
Avesis Incorporated, a Delaware corporation (together with its subsidiary,
the "Company"), incorporated in June 1978, markets and administers vision,
hearing, dental and chiropractic managed care and discount programs ("Programs")
nationally. The Programs are designed to enable participants ("Members" or
"Cardholders"), who are enrolled through various Sponsoring organizations such
as insurance carriers, HMOs, Blue Cross and Blue Shield organizations,
corporations, unions and various associations ("Sponsors"), to realize savings
on purchases of services and products through networks of providers such as
ophthalmologists, optometrists, opticians, hearing specialists, dentists and
chiropractors ("Providers").
The Company derives its administration fee revenue from plan Sponsors who
customarily pay a set fee per Member per month. Administration fee revenue is
recognized on the accrual basis during the month that the Member is entitled to
use the benefit. There are arrangements with certain Sponsors to pay for
services rendered by the Company on a fee for service basis. Based upon the type
of program (e.g., managed care, discount, third party administration) the
Provider's claim for service provided to Members is paid either by the Company,
Sponsor, Member or combination thereof. Buying Group revenues are recorded at
the total amount billed to participating Providers and recognized in the month
the merchandise is shipped. Vision Provider fee revenue is based upon a
percentage of materials sold by certain participating providers under certain
plans.
RESULTS OF OPERATIONS:
The following tables detail the Company's major revenue and expense
categories for the quarters and six months ended November 30, 1998 and 1997:
-7-
<PAGE>
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
November 30, 1998 November 30, 1997 Increase/(Decrease)
------------------------ ------------------------ ---------------------
% of Total % of Total %
REVENUE: Service Revenue Service Revenue Change
--------------- --------------- ------
<S> <C> <C> <C> <C> <C> <C>
Total Service Revenue $2,595,358 100% $1,970,292 100% $ 625,066 24%
Vision & Hearing Program 1,885,658 73% 1,228,662 62% 656,996 35%
Vision Provider Fee 35,780 1% 28,330 1% 7,450 21%
Dental Program 289,352 11% 324,847 16% (35,495) (12%)
Buying Group Program 383,613 15% 387,079 20% (3,466) (1%)
EXPENSES:
Cost of Services 1,854,719 71% 1,467,039 74% 387,680 21%
General & Administrative 276,674 11% 230,608 12% 46,066 17%
Selling & Marketing 286,458 11% 189,824 10% 96,634 34%
Net Income 199,064 8% 56,212 3% 142,852 72%
Six Months Ended Six Months Ended
November 30, 1998 November 30, 1997 Increase/(Decrease)
------------------------ ------------------------ ---------------------
% of Total % of Total %
REVENUE: Service Revenue Service Revenue Change
--------------- --------------- ------
Total Service Revenue $5,034,655 100% $3,781,504 100% $ 1,253,151 25%
Vision & Hearing Program 3,577,545 71% 2,285,869 60% 1,291,676 36%
Vision Provider Fee 72,833 1% 54,796 1% 18,037 25%
Dental Program 586,136 12% 622,236 16% (36,100) (6%)
Buying Group Program 789,326 16% 805,609 21% (16,283) (2%)
EXPENSES:
Cost of Services 3,687,391 73% 2,849,689 75% 837,702 23%
General & Administrative 514,557 10% 457,748 12% 56,809 11%
Selling & Marketing 535,881 11% 333,084 9% 202,797 38%
Net Income 328,726 7% 117,453 3% 211,273 64%
</TABLE>
Past and future revenues in all lines of business are directly related to
the number of Cardholders enrolled in the Company's benefit programs. However,
there may be significant pricing differences to Sponsors depending on whether
the benefit offered is funded in part or whole by the plan Sponsor. A
substantial portion of the Company's Cardholder base is derived from a limited
number of Sponsors. The Company's four largest Sponsors accounted for
approximately 81% and 78% of the total administration fee revenue for the six
months ended November 30, 1998 and 1997, respectively.
The increase in total service revenues is principally due to a vision plan
Sponsor who has increased the level of benefit of their Cardholders, and the
resulting fees, over the prior year, and a second vision plan Sponsor which
added approximately 33,000 Cardholders during May 1998.
-8-
<PAGE>
The Company had approximately 771,000 vision and 6,000 hearing cardholders
as of November 30, 1998, compared to approximately 629,000 vision and 6,600
hearing cardholders as of November 30, 1997. The increase in vision and hearing
revenue during the current quarter and six months was largely the result of the
two vision plan Sponsors mentioned above. Other changes in the number of vision
and hearing cardholders occurred due to Sponsors' employee or Member
fluctuations in the normal course of business. The increase in vision provider
fee revenue resulted from an increase in Members participating in a Plan under
which the Providers are required to pay the fee.
The Company had approximately 160,000 and 127,000 dental cardholders as of
November 30, 1998 and 1997, respectively. The Company's dental program revenue
has declined slightly while the number of cardholders has increased. This
situation is caused by the different prices charged per cardholder related to
the level of benefit provided, as previously discussed.
The Company makes available to its vision Providers a buying group program
that enables the Provider to order eyeglass frames from the manufacturers at
discounts from wholesale costs. These discounted prices are generally lower than
a Provider could negotiate individually, due to the large volume of purchases of
the buying group.
Costs of Services primarily relate to servicing Members, Providers, and
Sponsors under the Company's vision, hearing, dental and chiropractic benefit
programs as well as the cost of frames that are sold through the Company's
buying group program as discussed above. The increase in Cost of Services from
the prior year resulted from additional claims expenses from the increase of
managed care business and payroll for increased staff in the customer service
and claims departments. Cost of Services and General and Administrative expenses
decreased slightly as a percentage of total service revenues during the quarter
and six months ended November 30, 1998, as compared to the same periods in
fiscal 1997. This is due to the efficiencies of scale that the Company is
starting to realize as its Total Service Revenues and Cardholder base continues
to grow.
Selling and marketing expenses include marketing fees, broker commissions,
inside sales and marketing salaries and related expenses, travel related to the
Company's sales activities and an allocation of related overhead expenses. The
increase in expenses during the current period was primarily due to the addition
of a senior salesperson during September 1998 and the increase of commissions
directly related to the Company's increased administrative fee revenues. A
significant amount of the Company's marketing activities has been outsourced to
management consultants, National Health Enterprises (an affiliate).
-9-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and cash equivalents of $2,126,195 as of November 30,
1998, compared to $993,610 as of May 31, 1998. The increase of $1,132,585 is
primarily due to the Company's continued ability to reduce expenses, increase
timely collections of accounts receivable, advantageously time payments to
vendors during the six month period and the exercise of stock options and
warrants during August 1998. The Company is maintaining its policy of paying
vendors on a net 45-day basis and continues to be current on all of its trade
accounts payable. Current cash on hand and cash provided from operations is
expected to allow the Company to sustain operations for the foreseeable future.
As discussed in Note 4 to the financial statements, the Company entered
into a revolving credit facility on November 16, 1998 for an amount not to
exceed $100,000. The credit facility allows the Company to better manage its
cash liquidity.
As of November 30, 1998, the Company had $1,419,567 of Accounts Payable,
compared to $1,106,165 as of May 31, 1998. The increase is predominately due to
reserves for claims of $1,139,764 as of November 30, 1998, compared to $786,052
as of May 31, 1998, included in Accounts Payable. The reserves are for incurred
but not reported claim reimbursements to Providers who participate in certain
managed care programs. The Company believes this reserve is adequate based upon
historical results.
During the fiscal year ended May 31, 1998, the Company retired the final
$189,000 of Convertible Subordinated Debentures, due December 1, 1997, and all
$160,000 of subordinated notes payable to certain affiliates due March 18, 1998,
with funds provided by operations. Accordingly, there are no amounts listed as
interest for Debentures or Notes payable to stockholders during the current
quarter on the Statements of Cash Flows.
The Company paid dividends of $51,715 on the Series A Preferred Stock on
December 1, 1998. This amount was included in Accrued Expenses on the Balance
Sheet as of November 30, 1998.
On December 16, 1998, the Company entered into a lease agreement to expand
its current principal office location by approximately 3,200 square feet. The
term of the lease will run concurrently with the current lease on the principal
office location and will expire on September 30, 2002. The additional space is
necessary to accommodate the growth of the Company's Customer Service
department.
-10-
<PAGE>
YEAR 2000 COMPLIANCE
The Year 2000 issue is the result of computer systems that were written
using two digits rather than four to define the applicable year. This
programming decision may prevent such systems from accurately processing dates
occurring in the year 2000 and thereafter. This could result in system failures
or in miscalculations causing a disruption of operations, including, but not
limited to, a temporary inability to process Member eligibility information, to
process claims payments, or to engage in routine business activities and
operations.
The Company has reviewed all internally used software and believes that the
new systems that have recently been developed and are currently under testing
and all other critical applications are Year 2000 compliant. Based upon its
current computer operations and systems development, the Company believes that
its risks related to Year 2000 compliance are minimal. The Company does not
presently anticipate that any additional costs to address the Year 2000 issue
will have a material adverse effect on the Company's financial condition,
results of operations or liquidity.
The Company is in the process of contacting all vendors and clients who
forward data electronically to determine the extent of their compliance and to
plan accordingly. Based upon information received from third parties, the
Company believes that all significant vendors and clients have Year 2000
remediation efforts underway. To the extent that the Company's vendors and
clients data are not Year 2000 compliant, the Company's new systems have been
written with the flexibility to translate the data accordingly into a Year 2000
compliant format. Therefore, the Company believes that its risks related to
disruption arising from Year 2000 compliance by vendors and its clients are
minimal.
-11-
<PAGE>
PART II OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
(b) The Certificate of Designation for the Company's Class A, Senior Nonvoting
Cumulative Convertible Preferred Stock, Series A, places restrictions upon
the payment of dividends on the Company's Series 2 Preferred Stock and
Common Stock. Accordingly, the Company may not pay the quarterly dividend
otherwise scheduled for payment during January 1999, on shares of its
Series 2 Preferred Stock. Such dividend is cumulative and the total
dividend arrearage is $33,750, or $5.63 per share, as of December 31, 1998
for all 6,000 shares outstanding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) An annual meeting of stockholders of the Company was held on December 14,
1998.
(b) The following nominees were elected for one-year terms as directors of the
Company:
William R. Cohen William L. Richter Gerald L. Cohen
Samuel A. Oolie Kenneth L. Blum, Sr. Kenneth L. Blum, Jr.
Alan S. Cohn
(c) On the record date of October 22, 1998, 3,169,297 common shares were deemed
outstanding. On October 27, 1998, the 4,242,000 common shares arising from
the exercise of stock options and warrants by various members of the
Company's Board of Directors were issued and recorded as outstanding.
The results of voting for the nominees were as follows:
William R. Cohen, William L. Richter, Gerald L. Cohen, Samuel A. Oolie and
Kenneth L. Blum, Sr.
Number of votes cast for: 2,137,698
Number of votes withheld: 10,100
Number of non-votes 1,021,499
Kenneth L. Blum, Jr. and Alan S. Cohn
Number of votes cast for: 2,137,598
Number of votes withheld: 10,200
Number of non-votes 1,021,499
-12-
<PAGE>
ITEM 5. OTHER INFORMATION - RETIREMENT OF STOCK INFORMATION
As previously disclosed in the Company's Form 10-QSB for the quarter ended
August 31, 1998, filed on October 14, 1998, the Company made the following
stock repurchases and retirements:
Common Series A Series 2 Total Purchase Price
Date Shares Shares Shares including Commissions
---- ------ ------ ------ ---------------------
September 3, 1998 500 $ 1,500
September 8, 1998 17,000 $ 3,928
September 24, 1998 2,000 $ 5,268
October 8, 1998 6,800 $25,925
Subsequent to the filing of the Company's Form 10-QSB for the quarter ended
August 31, 1998, the Company made the following stock repurchases and
retirements:
Common Series A Series 2 Total Purchase Price
Date Shares Shares Shares including Commissions
---- ------ ------ ------ ---------------------
November 10, 1998 1,500 $ 5,418
December 21, 1998 38,000 $11,422
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index following the Signatures page, which is incorporated
herein by reference.
(b) No reports on Form 8-K were filed during the quarter ended November 30,
1998.
-13-
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AVESIS INCORPORATED
-------------------
(Registrant)
Date: 1/12/99 /s/ Neal A. Kempler
---------------------------------------
Neal A. Kempler, Vice President
and Secretary
Date: 1/12/99 /s/ Joel H. Alperstein
---------------------------------------
Joel H. Alperstein, Director of Finance
and Treasurer
(Principal Financial Officer)
-14-
<PAGE>
Avesis Incorporated
Exhibit Index
Form 10-QSB for the Quarter Ended November 30, 1998
Exhibit No. Description Incorporated by Reference from the:
- ----------- ----------- -----------------------------------
Earnings (Loss) per Share
11 Statement re: Computation Computation, see Note 2 to the
of per Share Earnings Notes to Condensed Consolidated
Financial Statements
27 Financial Data Schedule Filed herewith
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS IN THE COMPANY'S FORM 10-QSB FOR THE QUARTER ENDED NOVEMBER
30, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-START> JUN-01-1998
<PERIOD-END> NOV-30-1998
<EXCHANGE-RATE> 1
<CASH> 2,126,195
<SECURITIES> 0
<RECEIVABLES> 386,168
<ALLOWANCES> (29,749)
<INVENTORY> 0
<CURRENT-ASSETS> 2,734,696
<PP&E> 1,413,405
<DEPRECIATION> (989,123)
<TOTAL-ASSETS> 3,400,959
<CURRENT-LIABILITIES> 1,608,778
<BONDS> 0
0
3,110
<COMMON> 73,943
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,400,959
<SALES> 0
<TOTAL-REVENUES> 5,034,655
<CGS> 3,687,391
<TOTAL-COSTS> 1,050,438
<OTHER-EXPENSES> 34,029
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2,129)
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