PETHEALTH SYSTEMS, INC.
Form 10-QSB Quarterly Report
For the Period Ended June 30, 1999
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Part I - FINANCIAL INFORMATION Page
- ------------------------------ -----
Item 1. Financial Statements 3
Unaudited Balance Sheets at June 30, 1999 4
and December 31, 1998
Unaudited Statements of Operations for the Three and
Six Months Ended June 30, 1999 and 1998 and From
Inception (December 8, 1981) through June 30, 1999 5
Unaudited Statements of Cash Flows for the Three
Months ended June 30, 1999 and 1998 and From Inception
(December 8, 1981) to June 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
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 six months ended June 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
ASSETS
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(UNAUDITED) (AUDITED)
June 30, 1999 December 31, 1998
-------------- -----------------
CURRENT ASSETS
Cash in checking $ 5,600 $ 0
Stock receivable 0 0
--------------- -------------
TOTAL CURRENT ASSETS 5,600 0
--------------- -------------
FIXED ASSETS
Equipment 0 0
Less accumulated depreciation 0 0
Net fixed assets 0 0
---------------- -------------
TOTAL ASSETS $ 5,600 $ 0
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 0 $ 406
Accrued interest 8,587 3,819
Due to Jagerton Research Ltd. 143,119 127,300
--------------- -------------
TOTAL CURRENT LIABILITIES 151,706 131,525
--------------- -------------
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 (389,940) (375,359)
-------------- -------------
TOTAL STOCKHOLDERS' DEFICIT (146,106) (131,525)
-------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 5,600 $ 0
-------------- -------------
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PETHEALTH SYSTEMS, INC
(A Development Stage Company)
STATEMENTS OF OPERATION
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Three Months Six Months For the Period
Ended Ended December 8, 1981
June 30, June 30 (Inception) to
1999 1998 1999 1998 June 30, 1999
----- ----- ---- ---- ---------------
Revenues $ 0 $ 0 $ 0 $ 0 $ 0
OPERATING EXPENSES
Bank charges 174 0 189 0 189
Consulting Fees 0 0 0 0 47,000
Depreciation Expense 0 251 0 502 1,443
File & transfer fees 0 207 0 399 14,901
Legal & accounting 5,211 675 5,805 2,175 110,093
Management services 0 0 0 0 120,000
Office and printing 0 64 0 127 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
----- ----- ------ ----- ---------
TOTAL OPERATING
EXPENSES 5,385 1,197 5,994 3,423 349,635
----- ------ ----- ------ -------
NET (LOSS) BEFORE
OTHER INCOME
AND (EXPENSE) <5,385> <1,197> <5,994> <3,423> <349,634>
------ ------- ----- ----- -------
OTHER INCOME AND (EXPENSES)
Write-off 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
(expense) (4,294) (8,587) 0 (9,175)
----- ----- ------- ---- ----------
TOTAL OTHER INCOME
AND (EXPENSES) (4,294) (8,587) 0 (40,315)
------- ----- ------- ---- ----------
NET INCOME
OR (LOSS) $(9,679) $ (1,197) 14,581 3,423 $(389,940)
-------- ------- ------ ----- ----------
-------- ------- ------ ----- ----------
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 Six Months Ended For the Period
December 8, 1981
June 30, 1999 June 30, 1998 (Inception) to
(Unaudited) (Unaudited) June 30, 1999
-------------- -------------- ----------------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Income (loss) $ (9,679) $ (3,423) $ (389,940)
Adjustments to reconcile net (loss) to
net cash used by operating activities:
Amortization 0 0 750
Depreciation 0 502 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 4,294 2,977 151,706
--------- ------- ----------
NET CASH FLOWS FROM
OPERATING ACTIVITIES 5,385 56 (183,116)
--------- ------- ------------
CASH PROVIDED (USED) IN
INVESTING ACTIVITIES
Purchases fixed assets 0 0 (1,443)
Organization costs 0 0 (750)
---------- ------- -----------
NET CASH PROVIDED (USED)
IN INVESTING ACTIVITIES 0 56 (2,193)
---------- -------- -----------
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
----------- ------- ----------
NET INCREASE (DECREASE)
IN CASH (5,385) 56 5,600
CASH, BEGINNING OF PERIOD 10,985 265 0
----------- ------- ----------
CASH, END OF PERIOD $ 5,600 $ 321 $ 5,600
------------ ---------- -----------
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PETHEALTH SYSTEMS, INC
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Six Months Ended June 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
Six Months Ended
June 30, 1999 0 0 (14,581) (14,581)
---------- ---------- ----------- -----------
Balance,
June 30, 1999 1,153,027 $ 243,834 $(389,940) $ (146,106)
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Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Plan of Operation
- -----------------
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 will 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 assigned to Jagerton
Research Limited in December of 1998, and Jagerton Research
Limited now holds the promissory note with interest
accruing at 12% per annum.
Results of Operations
- -----------------------
The Company did not have any operating income during the
quarterly period ended June 30, 1999, and has not had
any operating income since its inception. For this
quarterly period, the registrant recognized a net loss of
$4,902 compared to a net loss of $2,226 for the
quarterly period ended June 30, 1998. General and
administrative expenses during the current period were
funded initially by Ameristar Capital Corporation, a
private corporation affiliated with the two prior
directors of the registrant. Jagerton Research Limited
has paid Ameristar Capital Corporation for these amounts
and now assumes this responsibility. Expenses for the
quarterly period ended June 30, 1999 were comprised
of costs associated with legal, transfer agent and
accounting obligations.
Liquidity and Capital Resources
- -------------------------------
At June 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
- ---------------------------
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, and new
management (including both officers and directors) will
be elected and/or appointed. The following officers
and directors resigned:Robert Gordon, President and
Director on December 11, 1998; Geva Laun, Secretary on December 11, 1998;
Chip Kurzenhauser, Director on December
11,1998 and Brian Skelton, Director on September 1, 1998.
PART II - OTHER INFROMATION
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 Data 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 September 21,
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 SIX MONTHS ENDED
JUNE 30, 1999 AND THE STATEMENT OF OPERATIONS FOR THE SIX
MONTHS ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] MAR-31-1999
[CASH] 5,500
[SECURITIES] 0
[RECEIVABLES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 5,600
[PP&E] 0
[TOTAL-ASSETS] 5,600
[CURRENT-LIABILITIES] 151,706
<LONG TERM LIABILITIES> 0
[COMMON] 243,834
[PREFERRED] 0
[OTHER-SE] <389,940>
[TOTAL-LIABILITY-AND-EQUITY] 5,600
[SALES] 0
[TOTAL-REVENUES] 0
[CGS] 0
[TOTAL-COSTS] 0
<GENERAL EXPENSES> 5,385
[OTHER-EXPENSES] 0
[INTEREST-EXPENSE] 4,294
[INCOME-PRETAX] <9,679>
[INCOME-CONTINUING] <4,294>
[NET-INCOME] <4,294>
[EPS-BASIC] (.001)
[EPS-DILUTED] 0
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