<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
===============
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
Commission File Number 33-22011-A
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
-----------------------------------------------------------------
(Exact name of Small Business Issuer as specified in its charter)
Florida 59-2858209
------- ----------
(State of incorporation) (I.R.S. Employer Identification No.)
4900 North Habana Ave., Tampa,FL 33614
- -------------------------------- -----
(Address of principal executive offices) (Zip Code)
Issuer's telephone number,
including area code: (813) 870-4230
--------------
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
----- -----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Class Outstanding at March 31, 1996
Common stock, par value $1.00 per share 427 shares
- --------------------------------------- ----------
Documents incorporated by reference
NONE
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<PAGE> 2
TABLE OF CONTENTS
FORM 10-QSB QUARTERLY REPORT - March 31, 1996
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3 - 9
Item 2. Management's Discussion and Analysis or
Plan of Operation 10 - 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13 - 16
Item 2. Changes in Securities 17
Item 3. Defaults Upon Senior Securities 17
Item 4. Submission of Matters to a Vote of Security
Holders 17
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
</TABLE>
2
<PAGE> 3
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, Dec. 31,
1996 1995
---------- ----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 643,936 $ 643,988
Distribution receivable from investment 38,520 44,000
Prepaid expenses 5,361 8,038
---------- ----------
TOTAL CURRENT ASSETS 687,817 696,026
Equity investments 721,807 690,956
Other investments, noncurrent 20,000 20,000
---------- ----------
TOTAL ASSETS $1,429,624 $1,406,982
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses $ 23,009 $ 18,625
Income taxes payable 5,796 22,156
---------- ----------
TOTAL CURRENT LIABILITIES 28,805 40,781
Deferred income taxes 35,518 35,518
Stockholders' equity:
Common stock, $1 par value, 7,500 shares
authorized, 422 shares issued and
outstanding at March 31, 1996 and
December 31, 1995 422 422
Common stock subscribed, 5 shares at March 31,
1996 and December 31, 1995 5 5
Subscriptions receivable (10,000) (10,000)
Additional paid-in capital 685,477 685,477
Retained earnings 689,397 654,779
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 1,365,301 1,330,683
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,429,624 $1,406,982
========== ==========
</TABLE>
The accompanying notes
are an integral part of these financial statements.
3
<PAGE> 4
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the For the
quarter ended quarter ended
March 31, 1996 March 31, 1995
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
Equity in net earnings of investees $ 30,851 $15,005
Distribution income 38,520 27,500
-------- -------
69,371 42,505
Expenses:
General and administrative 22,270 23,028
-------- -------
Operating income 47,101 19,477
Interest income 6,157 4,783
-------- -------
Income before income taxes 53,258 24,260
Income taxes (18,640) (3,639)
-------- -------
Net income $ 34,618 $20,621
======== =======
Net income per common share $ 81 $ 53
======== =======
Weighted average shares outstanding
and subscribed 427 390
======== =======
</TABLE>
The accompanying notes
are an integral part of these financial statements.
4
<PAGE> 5
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the For the
quarter ended quarter ended
March 31, 1996 March 31, 1995
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 34,618 $ 20,621
Adjustments to reconcile net income
to net cash used in operating activities:
Equity in net earnings of investees (30,851) (15,005)
Distribution income (38,520) (27,500)
Changes in operating assets and liabilities:
Prepaid expenses 2,677 2,687
Accrued expenses 4,384 2,824
Income taxes payable (16,360) (15,661)
-------- --------
Net cash used in operating activities (44,052) (32,034)
INVESTING ACTIVITIES
Distributions received 44,000 39,820
-------- --------
Net cash provided by investing activities 44,000 39,820
FINANCING ACTIVITIES
Redemptions of common stock 0 (2,627)
-------- --------
Net cash used in financing activities 0 (2,627)
-------- --------
Increase (decrease) in cash and cash equivalents (52) 5,159
Cash and cash equivalents at beginning of period 643,988 473,781
-------- --------
Cash and cash equivalents at end of period $643,936 $478,940
======== ========
</TABLE>
The accompanying notes
are an integral part of these financial statements
5
<PAGE> 6
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
NOTES TO FINANCIAL STATEMENTS
The financial statements included herein have been prepared by St. Joseph's
Physician Associates, Inc. (the "Company"), without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. In the opinion of
management, the accompanying unaudited financial statements contain all
adjustments necessary to present fairly the financial position of the Company as
of March 31, 1996 and December 31, 1995, and the results of its operations and
its cash flows for the three months ended March 31, 1996 and 1995.
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization
The Company was organized on November 20, 1987 as a Florida corporation. The
Company was organized to establish and operate an association of qualified
physicians for the purpose of engaging directly or indirectly in health care
related ventures.
In February 1989, the Company acquired 2,500 shares of the common stock of St.
Joseph's Physicians-Healthcenter Organization, Inc. (the "PHO") for $20 per
share. The 2,500 shares represent 50% of the outstanding common stock of the
PHO. The remaining 2,500 common shares of the PHO are owned by St. Joseph's
Enterprises, Inc., which also owns 100% of the PHO's 6,250 preferred shares.
The Company earns equity in the net earnings of the PHO at 22.22% of the PHO's
earnings after deducting a 6% cumulative dividend for the 6,250 preferred
shares. The PHO was organized for the purpose of engaging directly or
indirectly in health care related ventures.
In June 1989, the Company acquired 4,000 shares of the common stock in
Hospitals' Home Health Care of Hillsborough County, Inc. d/b/a St. Joseph's Home
Health Services ("HHC") for $10 per share. The 4,000 shares represent 50% of
the outstanding common stock of HHC. HHC was organized for the purpose of
providing medical services to patients in the home environment.
Equity Investments
The Company accounts for its investments in the PHO and HHC on the equity
method. Accordingly, these investments have been stated in the accompanying
balance sheets at the cost of acquisition plus the Company's equity in the
undistributed earnings/losses since acquisition, less distributions to the
Company. None of the assets or liabilities of the investments are included in
the balance
6
<PAGE> 7
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (con't):
Equity Investments (con't)
sheets except to the extent of the Company's interests in the underlying net
assets included in equity investments. The excess of the cost of acquisition of
the investment in HHC over the Company's interest in the underlying net
liabilities at the date of acquisition was $84,264 ($70,048 at March 31, 1996)
and is being amortized as a component of equity in net earnings of investees
over forty years. The Company's net earnings/losses resulting from its
proportionate share of the investees' revenues and expenses are included in the
statement of income.
Other Investments, Noncurrent
The Company owns five limited partnership units in St. Joseph's Same-Day Surgery
Center, Ltd. ("SDS"). The investment is accounted for at cost due to the
limited percentage interest in the partnership and inability to exercise
significant influence over the partnership. Distributions are recorded as
income when declared and reported as distribution income.
Subscriptions Receivable
Subscriptions receivable relate to agreements to purchase common stock of the
Company and are to be paid in installments during 1996 and 1997.
Cash Equivalents
The Company considers all highly liquid investments with original maturities of
three months or less when purchased to be cash equivalents.
Income Per Common Share
Income per common share is based on the weighted average number of common shares
outstanding during the period.
NOTE 2 - RELATED PARTIES:
The members of the Board of Directors of the Company are also members of the
medical staff of St. Joseph's Hospital, Inc., which is owned by St. Joseph's
Health Care Center, Inc. St. Joseph's Health Care Center, Inc. provides
administrative support to the Company at no charge. Additionally, all limited
partner investors in PHO's ventures are investors in the Company. In addition,
all physicians who hold provider contracts with a subsidiary of the PHO are
investors in the Company.
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<PAGE> 8
NOTE 2 - RELATED PARTIES (con't):
On October 1, 1991, the Company hired an executive director to provide and
facilitate the efficient operations of the Company. Prior to April 29, 1996,
the executive director was a member of the Company's Board of Directors. Under
the terms of a funding agreement dated October 1, 1991, the PHO agreed to
reimburse the Company for compensation paid to the executive director up to the
limits set forth in the Executive Director Agreement. For the three months
ended March 31, 1995, $10,000 of compensation and reimbursement was paid or
accrued. The funding agreement was terminated by the PHO effective January 1,
1996; therefore, the Company continues to be responsible for paying the
compensation of the executive director without reimbursement from the PHO.
8
<PAGE> 9
NOTE 3 - EQUITY INVESTMENTS:
A summary of the changes in equity investments is presented below:
<TABLE>
<CAPTION>
HHC PHO Total
-------- -------- --------
<S> <C> <C> <C>
Balance at December 31, 1995 $589,486 $101,470 $690,956
Equity in net earnings of investees 28,429 2,422 30,851
-------- -------- --------
Balance at March 31, 1996 $617,915 $103,892 $721,807
======== ======== ========
</TABLE>
The condensed balance sheets of the equity investees are as follows:
<TABLE>
<CAPTION>
Balance Sheets March 31, 1996 December 31, 1995
---------------------- ----------------------
HHC PHO HHC PHO
---------- -------- ---------- --------
(unaudited)
<S> <C> <C> <C> <C>
Assets:
Currents assets $2,010,774 $365,932 $1,873,999 $337,592
Noncurrent assets 8,138 197,417 9,217 274,867
---------- -------- ---------- --------
Total assets $2,018,912 $563,349 $1,883,216 $612,459
========== ======== ========== ========
Liabilities and stockholders'
equity:
Current liabilities $ 754,477 $ 61,061 $ 676,697 $152,267
Long-term liabilities 168,697 0 168,697 0
Stockholders' equity 1,095,738 502,288 1,037,822 460,192
---------- -------- ---------- --------
Total liabilities and
stockholders' equity $2,018,912 $563,349 $1,883,216 $612,459
========== ======== ========== ========
</TABLE>
The condensed statements of income of the equity investees are as follows:
<TABLE>
<CAPTION>
For the 3 Months Ended
------------------------
March 31, March 31,
1996 1995
---------- ----------
(unaudited)
<S> <C> <C> <C>
Statement of Income - HHC
Revenues $642,863 $484,585
Expenses 574,729 409,114
-------- --------
68,134 75,471
Income tax provision 10,219 14,346
-------- --------
Net income $ 57,915 $ 61,125
======== ========
Statement of Income - PHO
Equity in partnership earnings $ 22,275 $ 27,510
Other revenues 9,398 12,073
Expenses 13,234 103,120
-------- --------
18,439 (63,537)
Income tax provision 3,780 262
-------- --------
Net income(loss) $ 14,659 $(63,799)
======== ========
</TABLE>
9
<PAGE> 10
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
PART I - FINANCIAL INFORMATION
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
March 31, 1996
Liquidity
Cash resources of the Company remained consistent during the first three months
of 1996. The $44,000 distribution received with respect to the five limited
partnership units in St. Joseph's Same-Day Surgery Center, Ltd. ("SDS") was
offset by expenditures for operating expenses and estimated tax payments.
During the first quarter of 1995, there was a slight increase in cash resources
as a result of the positive net effect of a $39,820 distribution from SDS offset
by certain expenditures for consulting services related to the evaluation of new
ventures.
On May 26, 1995, St. Joseph's Health Network, Inc. ("SJHN"), a 100%-owned
subsidiary of the St. Joseph's Physicians-Healthcenter Organization, Inc. (the
"PHO"), was incorporated. SJHN, a physician-hospital organization, will
negotiate at-risk products with managed care organizations on behalf of its
membership to provide high quality, competitively priced health care services
for persons residing or employed in the Tampa area. In the near future, the
Company might find it appropriate to assist the PHO with providing additional
capitalization for SJHN. The amount of funding, if any, has not been determined
at this time. However, the Company's contribution to such funding would be
determined taking into account the Company's available liquidity and its other
anticipated cash needs. Additional liquidity for SJHN is expected to be
received from other sources, including possibly from provider credentialing
fees, additional equity contributions from the PHO and/or other sources, and/or
borrowings.
On March 31, 1996, a $38,520 distribution with respect to the five SDS limited
partnership units was declared and will be received during the second quarter of
1996. In addition, on April 30, 1996, the Board of Directors of Hospitals' Home
Health Care of Hillsborough County, Inc. ("HHC") declared a dividend in the
amount $95,000 to be paid to the Company during the second quarter of 1996.
Management believes that current cash reserves, additional distributions with
respect to the five SDS limited partnership units, the distribution from HHC, as
well as, the proceeds of additional sales of its common stock will provide
adequate short-term funding of the Company's on-going operations. However,
10
<PAGE> 11
because of the PHO's decision to no longer fund the Executive Director's
compensation and the Company's decision to use its other cash flows to keep the
employment arrangement with the Executive Director in force and effect, it is
possible that the Company will not be in a position to fund some of the new
projects that may arise in the future.
Capital Resources
The Company expects to commence a private offering of its common stock in May
1996 at $3,200 per share. Although there can be no assurance, the Company does
not anticipate substantial difficulty in raising additional funds, should the
need arise.
Results of Operations
Equity in net earnings of investees is the result of the Company's investment in
the PHO and HHC. As a result of an increase in the profitability of the PHO,
the equity in net earnings has increased compared to the first quarter of 1995.
The increase in the profitability of the PHO is a result of a decrease in the
significant expenditures incurred by the PHO during the first three months of
1995 for the evaluation and implementation of new ventures. The profitability
of HHC has remained fairly consistent as compared to the first quarter of 1995.
The Company owns five SDS limited partnership units and receives quarterly
distributions on such units. Distribution income for the first quarter of 1996
was higher than the same period in 1995. The distribution was calculated by
taking into account anticipated operating cash needs of the partnership with the
intent of maintaining appropriate reserves.
Interest earnings represent interest on bank deposits. The increase between
1996 and 1995 is due to increased cash balances and an increase in interest
rates.
General and administrative expenses remained at consistent levels compared to
the first quarter of 1995. The expenditures incurred in the first quarter of
1995 for consulting services relating to the evaluation of new ventures and for
legal expenses for legislative activities have not been incurred in 1996 .
However, additional expenditures have been made relating to the compensation of
the Executive Director. Prior to January 1, 1996, this expense had been funded
through the PHO. It is anticipated that over the near term, general and
administrative expenses will continue to be incurred at comparable levels.
During the first quarter of 1996, the Company had net income of $34,618.
Therefore, the net income per common share was $81 for
11
<PAGE> 12
the first quarter of 1996. The net income per common share for the same quarter
last year was reported as $53 per share. The increase in the net income per
common share for the third quarter of 1996 was due to an increase in net income
offset slightly by a greater number of shares outstanding.
Several new laws and regulations affecting the healthcare business were adopted
at both the state and federal levels during 1992, 1993, 1994 and 1995.
Healthcare reform legislation was passed by the Florida Legislature during its
Session that ended on May 4, 1996, and is awaiting action by the Governor.
Additional reform legislation is being considered in 1996 at the federal level.
All of the legislation and regulation could have a significant adverse impact
on the Company, its related investments, and the stockholders of the Company.
12
<PAGE> 13
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Limiting Fee Schedule Litigation
On July 10, 1992, the Company joined several other entities in filing a lawsuit
in state court against the State of Florida seeking a declaratory judgment on
the constitutionality of the limiting fee schedule on entities that provide
specified "designated health services" that was included in the Patient
Self-Referral Act of 1992 and requesting that an injunction be granted to stop
the enforcement of the limiting fee schedule. The fee limits originally were
scheduled to take effect on July 1, 1992, but enforcement was temporarily
restrained by an order of the United States District Court for the Northern
District of Florida in a separate lawsuit filed by unrelated parties (the
"Federal Case"). The state court action was filed as a protective measure, in
case the federal court in the Federal Case (which agreed to hear the case and
rule quickly) upheld the constitutionality of the fee limits. The state court
action was one of several (the others being filed by unrelated parties) that
were filed in the Circuit Court of the Second Judicial Circuit, Leon County,
Florida, all of which cases were consolidated under the name Physical Therapy
Rehabilitation Center of Coral Springs, Inc. v. State of Florida (the "State
Case"). Shortly after the lawsuit in which the Company is a party was filed,
the United States District Court for the Northern District of Florida, in the
Federal Case, struck down the fee limits as an unconstitutional violation of the
Equal Protection Clause of the United States Constitution, and entered an
injunction against enforcement. The state court hearing the State Case then
entered a temporary injunction against enforcement, based upon the injunction
entered in the Federal Case.
The injunction entered in the Federal Case was appealed to the United States
Eleventh Circuit Court of Appeals, and, on February 15, 1994, the Eleventh
Circuit Court of Appeals reversed the trial court, upholding that the fee limits
do not violate the Equal Protection Clause of the United States Constitution. A
motion for reconsideration was filed with the Eleventh Circuit Court of Appeals,
and that motion was denied in April 1994. Subsequently, a petition of
certiorari was filed with the United States Supreme Court, but the Supreme Court
subsequently denied certiorari. As a result, the decision of the Eleventh
Circuit Court of Appeals on the constitutionality of the fee limits under the
Equal Protection Clause of the United States Constitution stands.
In the meantime, as a result of the Eleventh Circuit Court of
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<PAGE> 14
Appeals' reversal of the federal trial court, the Florida Agency For Health Care
Administration ("AHCA") decided to actively pursue the State Case. AHCA went
back to the state trial court and argued that (1) there is no independent basis
for the state temporary injunction and (2) in any event, the state temporary
injunction should not be entered unless every party who would be protected by
the injunction files a bond with the state trial court. On June 23, 1994, the
trial court ruled that its temporary injunction would stay in place, but anyone
wanting the protection of the injunction would need to post a $1,000 bond. AHCA
was not pleased with these decisions, and it filed an appeal with the Florida
First District Court of Appeals on July 18, 1994.
The state trial court continued to review various motions that were filed by the
plaintiffs, and, on July 7, 1994, the state trial court declared the limiting
fee schedule unconstitutional, under the Florida Constitution, for providers of
the "designated health services" specified in the Patient Self-Referral Act of
1992 (other than providers of radiation therapy services). AHCA filed an appeal
of this decision with the Florida First District Court of Appeals on August 8,
1994. The Florida First District Court of Appeals has ruled that, because the
state trial court's original June 23, 1994 order was already subject to appeal,
the trial court did not have jurisdiction to enter its July 7, 1994 ruling on
unconstitutionality. As a result, all that remained for review by the Florida
First District Court of Appeals was the state trial court's June 23, 1994
ruling.
In the meantime, on February 13, 1995, in a case known as Kagan v. State of
Florida, the Circuit Court of the Second Judicial Circuit, Leon County, Florida,
again ruled that the limiting fee schedule is unconstitutional, under the
Florida Constitution, for providers of diagnostic imaging services. This case
was appealed by AHCA to the Florida First District Court of Appeals on March 9,
1995.
Oral argument in the State Case originally was scheduled before the Florida
First District Court of Appeals on June 29, 1995. However, the Court cancelled
the oral argument and, instead, scheduled an attorneys' conference to determine
how best to resolve the multiple appeals relating to the State Case and the
Kagan decision. As a result of the attorneys' conference, the First District
Court of Appeals entered a new order that (1) allowed the state trial court to
enter a new order in the State Case (replacing the original July 7, 1994
decision) declaring the limiting fee schedule unconstitutional under the Florida
Constitution, and (2) consolidated all of the appeals into one case.
Under the new order of the First District Court of Appeals, the issues in the
appeal were framed as (1) whether the limiting fee schedule is unconstitutional
under the Florida Constitution, (2) whether the limiting fee schedule is an
unlawful delegation of legislative authority, and (3) if the limiting fee
schedule is
14
<PAGE> 15
deemed constitutional and not an unlawful delegation of legislative authority,
then whether the state trial court's June 23, 1994 ruling should be modified or
dissolved. In an opinion filed on January 4, 1996, the First District Court of
Appeals ruled that the limiting fee schedule is unconstitutional under the
Florida Constitution and should be stricken from the Patient Self-Referral Act
of 1992. AHCA has filed an appeal of this decision with the Florida Supreme
Court, its brief having been filed on March 25, 1996. All parties have now
filed their respective briefs. No date has been set for oral argument, and the
Florida Supreme Court has the discretion to rule on the appeal without oral
argument.
At least two bills that were passed by the Florida Legislature during its
Session that ended on May 4, 1996, include provisions that would repeal the
limiting fee schedule. One of the bills would repeal the limiting fee schedule
retroactive to the original date on which it was to become effective (July 1,
1992) and prohibit any governmental agency from imposing or collecting an
administrative fine from a provider for failure to comply with the limiting fee
schedule. Because of the legislative process, the Company has not yet been
able to obtain a copy of the other bill and therefore, the specific provisions
of the other bill and its specific impact are not known at this time.
The bills now must be presented to the Governor for his review. If the
Governor chooses to approve either such bill or allows it to become law by his
silence, then notice of that fact will in all likelihood be filed with the
Florida Supreme Court. In such event, the Company anticipates that the Florida
Supreme Court will find it appropriate to dismiss the action because it is moot.
Declaratory Statement Action With Respect to HHC
The language of the Patient Self-Referral Act of 1992 is ambiguous in many
respects. One such ambiguity can be found in the definition of an "investor,"
which relates to whether a stockholder in the Company is deemed indirectly to be
an "investor" in SDS or HHC. A provision of the Patient Self-Referral Act of
1992 allows a person or an entity that could be affected by the prohibitions
included in the Patient Self-Referral Act of 1992 to request that AHCA, or the
applicable professional board under the Florida Department of Business and
Professional Regulation, issue a declaratory statement defining how the
applicable state agency interprets an ambiguous provision of the Patient
Self-Referral Act of 1992. Using this procedure, a Petition for Declaratory
Statement was filed by Charles E. Cernuda, M.D. and the Company (the
"Declaratory Statement Action"), seeking an interpretation from the Board of
Medicine of the Department of Business and Professional Regulation (the "Board")
on whether a stockholder in the Company is deemed to indirectly be an "investor"
in HHC, thereby prohibiting the stockholder in the Company from referring a
patient to HHC for physical therapy services, occupational and speech therapy
services or clinical laboratory services that are rendered as an incident to
other home health services provided by HHC.
In a Final Order issued on March 16, 1995, the Board of Medicine ruled that the
definition of "investor" should be broadly interpreted and concluded that each
stockholder's investment interest in the Company results in such stockholder
also being an "investor" in HHC (by virtue of the Company's ownership of 50% of
the outstanding stock of HHC). Accordingly, the Board concluded that the
stockholders of the Company are subject to the absolute prohibition for
referrals to HHC for the "designated health services" that are specified in the
Patient Self-Referral Act of 1992.
To the knowledge of the Company's management, there are no other material
pending legal proceedings, other than ordinary routine
15
<PAGE> 16
litigation incidental to the business of the Company or the businesses in which
the Company has ownership interests, to which the Company, or any business in
which the Company has an ownership interest, is a party, or of which, any of
their property is the subject.
16
<PAGE> 17
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 29, 1996, the annual stockholders meeting of the Company was held.
Directors elected at the meeting were:
<TABLE>
<CAPTION>
Number of Votes
------------------
For Withheld
--- --------
<S> <C> <C>
Benedict Maniscalco, M.D. (term expiring 2000) 196 6
Bill Luria, M.D. (term expiring 2000) 194 8
Aaron Laden, M.D. (term expiring 1997) 198 4
</TABLE>
Other directors whose term of office continued after the meeting were:
Andrew Boyer, M.D. N. Bruce Edgerton, M.D.
Anthony Brannan, M.D. Thomas Mawn, M.D.
Norman Castellano, M.D. Michael Wasylik, M.D.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
27 - Financial Data Schedule (for SEC use only)
b. Reports on Form 8-K
None
17
<PAGE> 18
SIGNATURES
May 10, 1996
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.
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
---------------------------------------
(Registrant)
Date: May 10, 1996 /s/ Norman Castellano, M.D.
---------------------------------------
Norman Castellano, M.D., President
St. Joseph's Physician Associates, Inc.
Date: May 10, 1996 /s/ Andrew G. Boyer, M.D.
---------------------------------------
Andrew G. Boyer, M.D., Treasurer and
Principal Financial Officer
St. Joseph's Physician Associates, Inc.
18
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC. 3/31/96 BALANCE
SHEET AND INCOME STATEMENT FOR THE THREE MONTH PERIOD ENDED
3/31/96, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> MAR-31-1996
<CASH> 643,936
<SECURITIES> 0
<RECEIVABLES> 38,520
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 687,817
<PP&E> 0
<DEPRECIATION> 0
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0
0
<COMMON> 675,904
<OTHER-SE> 689,397
<TOTAL-LIABILITY-AND-EQUITY> 1,429,624
<SALES> 0
<TOTAL-REVENUES> 75,528
<CGS> 0
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<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 53,258
<INCOME-TAX> 18,640
<INCOME-CONTINUING> 34,618
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,618
<EPS-PRIMARY> 81.00
<EPS-DILUTED> 0
</TABLE>
