PETHEALTH SYSTEMS, INC.
Form 10-QSB Quarterly Report
For the Period Ended September 30, 1999
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Part I FINANCIAL INFORMATION
Item 1. Financial Statements 3
Unaudited Balance Sheets at September 30, 1999 4
and December 31, 1998
Unaudited Statements of Operations for the Three and
Nine Months Ended September 30, 1999 and 1998 and From
Inception (December 8, 1981) through September 30, 1999 5
Unaudited Statements of Cash Flows for the Nine
Months ended September 30, 1999 and 1998 and From Inception
(December 8, 1981) to September 30, 1999 6
Statement of Stockholders' Equity (Deficit) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II OTHER INFORMATION 9
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Signatures
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
BASIS OF PRESENTATION
The accompanying unaudited financial statements are
presented in accordance with generally accepted accounting
principles for interim financial information and the
instructions to Form 10-QSB and item 310 under subpart A of
Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements.
The accompanying statements should be read in conjunction
with the audited financial statements for the years ended
December 31, 1998 and 1997. In the opinion of management,
all adjustments (consisting only of normal occurring
accruals) considered necessary in order to make the
financial statements not misleading, have been included.
Operating results for the nine months ended September 30,
1999 are not necessarily indicative of results that may be
expected for the year ending December 31, 1999. The
financial statements are presented on the accrual basis.
PETHEALTH SYSTEMS, INC
(A Development Stage Company)
BALANCE SHEETS
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(UNAUDITED) (AUDITED)
September 30, 1999 December 31, 1998
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ASSETS
CURRENT ASSETS
Cash in checking $ 5,450 $ 0
Stock receivable 0 0
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TOTAL CURRENT ASSETS 5,450 0
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FIXED ASSETS
Equipment 0 0
Less accumulated depreciation 0 0
------------------ ----------
Net fixed assets 0 0
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TOTAL ASSETS $ 5,450 $ 0
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 0 $ 406
Accrued interest 12,881 3,819
Due to Jagerton Research Ltd. 143,119 127,300
----------------- ---------------
TOTAL CURRENT LIABILITIES 156,000 131,525
----------------- ---------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, $.10 par value,
100,000,000 shares authorized
none issued 0 0
Common Stock Class A no par value,
800,000,000 shares authorized,
1,153,027 issued and outstanding 243,834 243,834
Deficit accumulated during
Development stage (394,384) (375,359)
----------------- ---------------
TOTAL STOCKHOLDERS' DEFICIT (150,550) (131,525)
----------------- ---------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 5,450 $ 0
----------------- ----------------
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PETHEALTH SYSTEMS, INC
(A Development Stage Company)
STATEMENTS OF OPERATION
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Three Months Ended Nine Months Ended For the Period
September 30, September 30, December 8, 1981
(Inception) to
1999 1998 1999 1998 Sept. 30, 1999
---- ---- ---- ---- ---------------
Revenues $ 0 $ 0 $ 0 $ 0 $ 0
----- ----- ----- ----- --------
OPERATING EXPENSES
Bank Charges 0 0 189 0 189
Consulting Fees 0 0 0 0 47,000
Depreciation Expense 0 251 0 753 1,443
File & transfer fees 150 243 150 642 15,051
Legal & accounting 0 450 5,805 2,625 110,093
Management services 0 0 0 0 120,000
Office and printing 0 57 0 184 4,978
Public relations 0 0 0 0 14,414
Taxes, franchise 0 0 0 220 905
Travel expense 0 0 0 0 534
Other expense 0 0 0 0 35,168
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TOTAL OPERATING
EXPENSES 150 1,001 6,144 4,424 349,775
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NET (LOSS) BEFORE
OTHER INCOME
AND (EXPENSE) (150) ( 1,001) (6,144) ( 4,424) (349,775)
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OTHER INCOME AND (EXPENSES)
Writeoff of advances
on recission
of merger 0 0 0 0 (119,110)
Sale of business plan
and asset 0 0 0 0 74,304
Forgiveness of debt 0 0 0 0 13,666
Interest income
and (expense) (4,294) 0 (12,881) 0 (13,469)
TOTAL OTHER INCOME
AND (EXPENSES) (4,294) 0 (12,881) 0 (44,609)
NET INCOME
OR (LOSS) $(4,444) $(1,001) $(19,025) $(4,424) $(394,384)
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NET (LOSS) PER
COMMON SHARE * * * * N/A
(* less than $.01 net loss per share)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES 1,153,027 1,153,027 1,153,027 1,153,027 N/A
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PETHEALTH SYSTEMS, INC
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
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For the Nine Months Ended For the Period
December 8, 1981
September 30, 1999 September 30, 1998 (Inception) to
(Unaudited) (Unaudited) Sept. 30, 1999
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CASH FLOWS FROM
OPERATING ACTIVITIES
Net Income (loss) $ (19,025) $ (4,424) $ (394,384)
Adjustments to reconcile net (loss) to
net cash used by operating activities:
Amortization 0 0 750
Depreciation 753 1,443
Stock issued for
services/expenses 0 0 52,925
Change in operating assets
and liabilities:
Increase in stock receivable 0 0 0
Increase (decrease) in
current liabilities 24,475 3,368 156,000
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NET CASH FLOWS FROM
OPERATING ACTIVITIES (5,450) (303) (183,266)
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CASH PROVIDED (USED) IN
INVESTING ACTIVITIES
Purchases fixed assets 0 0 (1,443)
Organization costs 0 0 (750)
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NET CASH PROVIDED (USED)
IN INVESTING ACTIVITIES 0 0 (2,193)
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CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from issuance of
common stock 0 0 252,344
Proceeds from issuance of
class B common stock 0 0 10,000
Deferred offering costs 0 0 (71,435)
NET CASH FLOWS FROM
FINANCING ACTIVITIES 0 0 190,909
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NET INCREASE (DECREASE)
IN CASH 5,450 (303) 5,450
CASH, BEGINNING OF PERIOD 0 321 0
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CASH, END OF PERIOD $ 5,450 $ 18 $ 5,450
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PETHEALTH SYSTEMS, INC
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Nine Months Ended September 30, 1999 (UNAUDITED)
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DEFICIT TOTAL
NUMBER ACCUMULATED STOCKHOLDERS'
OF DURING EQUITY
SHARES AMOUNT DEVELOPMENT (DEFICIT)
------ ------- ------------ ----------
Balance,
January 1, 1999 1,153,027 $ 243,834 $ (375,359) $ (131,525)
Net loss for the
Nine Months Ended
September 30, 1999 0 0 (19,025) (19,025)
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Balance,
September 30, 1999 1,153,027 $ 243,834 $ (394,384) $ (150,550)
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Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Plan of Operation
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The Registrant is continuing its efforts to locate a
business opportunity for the purpose of making an
acquisition. It is possible that the registrant will be
successful in locating such a business opportunity and
negotiating and closing an acquisition thereof by the
issuance of restricted shares of the registrant's Common
Stock, without the necessity of paying any cash
consideration for such acquisition. However, if the
registrant cannot effect a non-cash acquisition, the
registrant may have to raise funds from a private offering
of its securities under Rule 506 of Regulation D. There is
no assurance the registrant would obtain any such equity
funding.
As of the date of this report, and throughout fiscal 1998,
the registrant's general and administrative expenses which
were paid have been funded by advances from Ameristar
Capital Corporation, a private corporation affiliated with
Joseph J. Messina and Martin I. Saposnick, former directors
of the registrant. On September 25, 1998, a promissory note
was signed for $127,300 for monies due Ameristar Group
Incorporated with interest accruing at 12% per annum.
Subsequently this note was paid for by Jagerton Research
Limited in December of 1998, and the Company now owes
Jagerton Research Limited with interest accruing at 12%. In
1999, the registrant's general and administrative expenses
which were paid have been funded by advances from Jagerton
Research Limited.
Results of Operations
- ----------------------
The Company did not have any operating income during the
quarterly period ended September 30, 1999, and has not had
any operating income since its inception. For this
quarterly period, the registrant recognized a net loss of
$4,444 compared to a net loss of $1,001 for the quarterly
period ended September 30, 1998. General and administrative
expenses during the current period were funded by Jagerton
Research Limited, a private corporation. Expenses for the
quarterly period ended September 30, 1999 were comprised of
costs associated with transfer agent fees and interest.
Liquidity and Capital Resources
- -------------------------------
At September 30, 1999 the Company had no capital resources
other than an insignificant amount of cash, and will rely on
advances from related parties to fund administrative
expenses pending acquisition of an operating company.
Presently there are no agreements in place for such
acquisition, and there is no assurance any acquisition will
be consummated. Alternatively, the Company may seek equity
funding for administrative costs and anticipated costs of
negotiating a possible acquisition, but such equity funding
is not currently underway.
Potential Change of Control
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On September 25, 1998 an agreement was entered into between
a group of individual stockholders representing a
controlling interest in the Company and a group of foreign
investors whereby the foreign investors will acquire a
majority of the interest and outstanding common stock of the
Company. If a closing takes place, there will be a change
of control in the Company, present management will resign
and new management (including both officers and directors)
will be elected and/or appointed.
PART II OTHER INFORMATION
Item 1. Legal Proceedings. Not Applicable
Item 2. Changes in Securities. None
Item 3. Defaults Upon Senior Securities. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information. None
Item 6. Exhibits and Reports of Form 8-K. None
Exhibit 27 Financial Date Schedule Electronic Filing Only
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed in its behalf by the
undersigned, thereunto duly authorized, on October 8, 1999.
PETHEALTH SYSTEMS, INC.
By:/s/ Richard I. Anslow
----------------------
Richard I. Anslow
Legal Counsel and Agent
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND THE STATEMENT OF OPERATIONS FOR THE
SIX MONTHS ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH. FINANCIAL STATEMENTS.
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[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] SEP-30-1999
[CASH] 5,500
[SECURITIES] 0
[RECEIVABLES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 5,450
[PP&E] 0
[TOTAL-ASSETS] 5,450
[CURRENT-LIABILITIES] 156,000
<LONG TERM-LIABILITIES> 0
[COMMON] 243,834
[PREFERRED] 0
[OTHER-SE] <394,384>
[TOTAL-LIABILITY-AND-EQUITY] 5,450
[SALES] 0
[TOTAL-REVENUES] 0
[CGS] 0
[TOTAL-COSTS] 0
<GENERAL EXPENSE> 150
<OTHER EXPENSE> 0
[INTEREST-EXPENSE] 4,294
[INCOME-PRETAX] <4,444>
[INCOME-CONTINUING] <4,444>
[NET-INCOME] <4,444>
[EPS-BASIC] (.001)
[EPS-DILUTED] 0
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