<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the transition period from
_________________ to _______________
Commission File Number 0-23514
ROCKPORT HEALTHCARE GROUP, INC.
- ------------------------------------------------------------------------------
(Exact Name of Registrant as specified in its Charter)
Delaware 33-0611497
- -------------------------------- --------------------------
State or other Jurisdiction of I.R.S. Employer Identi-
Incorporation or Organization fication No.
50 Briar Hollow Lane, Suite 515W, Houston, Texas 77027
- ------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(713) 621-9424
- ------------------------------------------------------------------------------
(Registrant's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (i) has filed all reports
required to be filed by Section 13, or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (ii) has been subject to
such filing requirements for the past 90 days.
Yes _X__ No_____
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practical date.
Common Stock, $.001 par value 4,463,982
- -------------------------------- -----------------------------
Title of Class Number of Shares outstanding
at December 31, 1998
One exhibit included.
1
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(COMPANIES IN THE DEVELOPMENT STAGE)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DEC 31,
1998 MARCH 31,
(UNAUDITED) 1998
----------- ---------
<S> <C> <C>
ASSETS
Current:
Cash $ 100,847 $ 1,398
Receivables:
Trade 12,083 -
Due from employee - 100
Stock subscriptions receivable (Notes 2 and 13) 911,000 -
Prepaid expenses 1,541 7,449
---------- --------
Total Current Assets 1,025,471 8,947
---------- --------
Property, Plant and Equipment (Note 1)
Office furniture and equipment 26,179 25,317
Computer equipment and software 39,450 39,450
Telephone equipment 15,085 12,617
---------- --------
80,714 77,384
Less accumulated depreciation 16,122 5,724
---------- --------
Net Property, Plant and Equipment 64,592 71,660
---------- --------
Other
Deposits 10,015 12,071
Organization cost, net of amortization 2,094 1,785
Note receivable - 20,000
Notes receivable - employee stock loans (Note 13) 135,000 -
Capitalized loan costs, net of amortization (Note 5) 175,000 -
Other assets 9,541 -
Goodwill (Note 8) 99,849 -
---------- --------
Total Other Assets 431,499 33,856
---------- --------
TOTAL ASSETS $1,521,563 $114,463
---------- --------
---------- --------
</TABLE>
See accompanying notes to unaudited financial statements.
2
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(COMPANIES IN THE DEVELOPMENT STAGE)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DEC. 31,
1998 MARCH 31,
(UNAUDITED) 1998
----------- ---------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Advances payable $ 25,000 $ 25,000
Notes payable (Note 5) 300,000 -
Accounts payable (Note 3) 89,537 30,112
Payroll taxes payable 88,846 13,662
Accrued payroll and related taxes 25,558 15,417
Accrued interest payable 7,414 4,340
Due to shareholders, directors, officers, and
employee (Note 4) 33,092 174,983
----------- ---------
Total Current Liabilities 569,447 263,514
----------- ---------
Long-Term Debt:
Note payable (Note 5) - 75,000
----------- ---------
Total Liabilities 569,447 338,514
----------- ---------
Commitments and Contingencies (Notes 5, 7 and 8)
Shareholders' Equity:
Preferred stock, $.001 par value, 1,000,000
authorized, no shares issued and outstanding
Common stock, no par value, 20,000,000 shares authorized,
4,463,982 shares issued and outstanding 4,464 2,462
Additional paid in capital 2,335,356 84,298
Retained earnings (1,387,704) (310,811)
----------- ---------
Total Shareholders' Equity 952,116 (224,051)
----------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,521,563 $ 114,463
----------- ---------
----------- ---------
</TABLE>
See accompanying notes to unaudited financial statements.
3
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(COMPANIES IN THE DEVELOPMENT STAGE)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED ENDED
DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
--------- -------- ----------- --------
<S> <C> <C> <C> <C>
Income:
Network fees $ 8,068 $ 4,625 $ 27,873 $ 4,625
Cost Of Sales:
Network access fees 4,481 7,524
--------- -------- ----------- --------
Gross Profit 3,587 4,625 20,349 4,625
Operating Expenses:
General and administrative 353,709 31,796 998,472 31,796
Depreciation and amortization 70,308 5 85,698 5
--------- -------- ----------- --------
424,017 31,801 1,084,170 31,801
--------- -------- ----------- --------
Net Loss Before Other Income (Expense)
and Income Taxes (420,430) (27,176) (1,063,821) (21,176)
Other Income (Expense)
Interest income 43 43
Interest expense (9,527) (285) (13,072) (285)
--------- -------- ----------- --------
(9,527) (242) (13,072) (242)
--------- -------- ----------- --------
Net Loss Before Income Taxes (429,957) (27,418) (1,076,893) (27,418)
Income taxes - -
--------- -------- ----------- --------
Net Loss $(429,957) $(27,418) $(1,076,893) $(27,418)
--------- -------- ----------- --------
--------- -------- ----------- --------
Net Loss per share $ (0.11) $ (.02) $ (0.32) $ (.02)
--------- -------- ----------- --------
--------- -------- ----------- --------
Weighted Average Number of Shares
Outstanding
4,063,427 1,467,442 3,402,075 1,338,582
</TABLE>
See accompanying notes to unaudited financial statements.
4
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
PREFERRED COMMON PAID IN RETAINED SHAREHOLDERS'
STOCK STOCK CAPITAL EARNINGS EQUITY
----------- ------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Balance March 31, 1998 $ 0 2,462 84,298 (310,811) $ (224,051)
Stock Issued, 2,002,960 shares - 2,002 2,251,058 - 2,253,060
Net Loss - - - (1,076,893) (1,076,893)
--------------------------------------------------------------
Balance Dec. 31, 1998 (unaudited) $ 0 4,464 2,335,356 (1,387,704) $ 952,116
--------------------------------------------------------------
--------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements
5
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(COMPANIES IN THE DEVELOPMENT STAGE)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED ENDED
DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
--------- -------- --------- -------
<S> <C> <C> <C> <C>
Operating Activities:
Net Loss $(429,957) $(27,418) $(1,076,893) $(27,418)
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation 3,521 986 10,398 986
Amortization of organization costs 121 5 301 5
Amortization of loan costs 66,667 - 75,000 -
Stock issued for services - - 25,000 -
Write-off of bad debt 20,000 - 20,000 -
Changes in assets and liabilities:
Accrued interest receivable - (42) - (42)
Accounts payable 39,832 (2,000) 59,425 (2,000)
Payroll taxes payable 48,619 2,671 75,184 2,671
Accrued payroll and payroll
taxes (1,528) - 10,141 -
Accrued management fees (22,000) - 35,000 -
Accrued interest payable 201 285 3,074 285
Amounts due to shareholder - 10,833 - 10,833
Accounts receivable - trade (4,551) - (12,083) -
Prepaid expenses 166 416 5,908 416
--------- -------- ----------- -------
Cash Used in Operating Activities (278,909) (14,265) (769,546) (14,265)
--------- -------- ----------- -------
Financing Activities:
Proceeds from sale of stock 221,100 - 507,100 -
Proceeds from stock subscription of
sub. - 5,000 - 5,000
Proceeds from notes payable 100,000 - 300,000 -
Loans from shareholders 7,148 - 73,377 -
Deposit refunds - - 2,056 -
--------- -------- ----------- -------
Cash Provided by Financing Activities 328,248 5,000 882,533 5,000
--------- -------- ----------- -------
Investing Activities:
Purchase of fixed assets (2,468) - (3,330) -
Investment in Key Card contract (5,421) - (8,746) -
Employee Advances (53) - - -
Organization costs - - (210) -
Investments in subsidiaries (1,253) - (1,253) -
--------- -------- ----------- -------
Cash Used in Investing Activities (9,195) - (13,539) -
--------- -------- ----------- -------
Net Increase (Decrease) in Cash 40,145 (9,265) 99,449 (9,265)
Cash and Cash Equivalents, beginning 60,702 10,603 1,398 10,603
--------- -------- ----------- -------
Cash and Cash Equivalents, end of period $ 100,847 $ 1,338 $ 100,847 $ 1,338
--------- -------- ----------- -------
--------- -------- ----------- -------
</TABLE>
See accompanying notes to unaudited financial statements.
6
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
Rockport Healthcare Group, Inc. (the "Company") was incorporated under the
laws of the State of Delaware on May 4, 1992. On December 17, 1997, the
Company purchased Rockport Group of Texas, Inc. through the issuance of
1,442,432 shares of common stock, and the surrender, redemption, and
retirement of 254,760 shares of Treasury common stock. These financial
statements have been consolidated effective as of December 17, 1997.
In connection with the Company's purchase of its subsidiary, Rockport Group
of Texas, Inc., the then management of the company resigned and was replaced
by the management of Rockport Group of Texas, Inc.
Effective January 16, 1998, the Company filed and has been approved by the
State of Delaware to change its name to Rockport Healthcare Group, Inc. The
Company is in the process of notifying and effectuating this name change with
the Securities and Exchange Commission.
In addition to Rockport Group of Texas, Inc., as of December 31, 1998, the
following wholly-owned subsidiaries had been formed or acquired:
Rockport Occupational Network, Inc.
Rockport Advanced Care, Inc.
Rockport Community Network, Inc.
Newton Healthcare Network, LLC
Rockport Occupational Network - Greater Houston, LLC
As of September 14, 1998, the Rockport Community Network, Inc. acquired all
of the issued and outstanding stock of Newton Healthcare Network, LLC, a
Texas preferred healthcare provider network for 100,000 shares of stock of
Rockport Healthcare Group, Inc.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and held in bank in
unrestricted accounts.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Expenditures for renewals
and betterment's are capitalized and maintenance and repairs are expensed as
incurred. Depreciation and amortization are computed by the straight-line
method over the estimated useful lives of the assets as follows:
<TABLE>
<S> <C>
Office furniture and equipment ........... 7 years
Computer equipment and software .......... 3 to 5 years
Telephone equipment ...................... 7 years
</TABLE>
7
<PAGE>
ORGANIZATION COSTS
Prior to the acquisition of Rockport Group of Texas, Inc., the Company's
activities had been limited to organizational matters. The Company's
organization costs of $271 have been amortized on a straight-line basis over
a period of five years. As of March 31, 1997, all but $5 had been expensed,
with this $5 expensed during this reporting period. Organization costs for
subsidiaries are amortized on the straight-line basis over a period of five
years.
INCOME TAXES
The Company has adopted the liability method of accounting for income taxes
in accordance with SFAS No. 109, ACCOUNTING FOR INCOME TAXES. Under the new
accounting standard, the Company provides deferred income taxes based on
enacted income tax rates in effect on the dates temporary differences between
financial reporting and tax bases of assets and liabilities reverse. The
effect on deferred tax assets and liabilities of a change in income tax rates
is recognized in the period that includes the enactment date.
The Company will file its initial income tax return using the cash basis of
accounting. Since the utilization of net operating loss carryforwards are
not assured, no benefit for future offset of taxable income has been
recognized.
REVENUE RECOGNITION
Revenue will be recognized as products and services are delivered and earned.
Losses are recognized when reasonable estimates of the amount of the loss can
be made.
NOTE 2: STOCK SUBSCRIPTIONS RECEIVABLE
The Company has a Stock Subscription Receivable for 1,000,000 shares due from
a third party. Of the original amount due, $89,000 has been collected during
the current fiscal year through December 31, 1998. The balance is expected to
be collected during the first calendar quarter of 1999.
NOTE 3: PRIOR PERIOD ADJUSTMENT
The Company's prior president and controlling shareholder, Jehu Hand had
advanced $1,198 to fund operations; $1,168 had been expensed in prior
periods, with $30 having been expensed during the first six months of this
reporting period. In connection with the purchase of the Company's
subsidiary, Mr. Hand released the Company of this liability, such that the
$1,168 expensed in previous years has been reported as an adjustment of prior
periods.
NOTE 4: DUE TO SHAREHOLDERS, DIRECTORS, OFFICERS, AND EMPLOYEE
Shareholders who are also directors and officers of the Company and an
employee of the Company's subsidiary have advanced funds to the Company's
subsidiary for operations, and have deferred receipt of a portion of
remuneration owed during this reporting period, the balance of which remains
in the amount of $33,092, $5,250 of which is represented by deferred
management fees, as of December 31, 1998. These monies are to be repaid as
funds become available. Effective October 31, 1998, three directors and
officers converted $324,960 of debt to equity at the rate of $1.00 per share.
The Company has expensed management fees in the consolidated income statement
of $210,500 of which $5,250 has been accrued and reported as due to the
shareholders or the employees of the Company as of December 31, 1998.
Prior to its acquisition, the Company's subsidiary had expensed management
fees of $36,667.
8
<PAGE>
NOTE 5: NOTES PAYABLE
A subsidiary of the Company's preferred stock shareholder who is also a
director of both the Company and it's subsidiaries has loaned the Company's
subsidiary $100,000 for an 8% note payable due over a one year period,
commencing upon the Company first obtaining a positive cash flow. This note
payable has been reduced by $25,000, as a result of the payment made by the
Company to the prior controlling shareholder on behalf of this shareholder to
effectuate the transfer of control of the Company. Additional loans in the
amount of $57,000 were advanced by this shareholder during the six months
ended September 30, 1998.
On September 14, 1998, Bannon Energy Incorporated loaned the Company $200,000
for a one year, 8% note payable in the same amount plus 200,000 shares of the
Company's common stock. The stock, valued at $1.00 per share has been
recorded as a loan cost and is being amortized over the period of the loan,
one year.
On November 5, 1998, a stockholder loaned the Company $100,000 for a six
month, 10% note payable in the same amount plus 50,000 shares of the
Company's common stock. The stock, valued at $1.00 per share has been
recorded as a loan cost and is being amortized over the period of the loan,
six months.
NOTE 6: LEASES
The Company's subsidiary has assumed leases for office space and office
equipment under operating leases expiring at various dates through 2002.
Management expects that in the normal course of business, leases will be
renewed or replaced by similar leases. Future minimum lease payments for
each year in the four-year period ending March 31, 2002 are as follows:
<TABLE>
<S> <C>
1999 $ 32,333
2000 $ 123,628
2001 $ 32,226
2002 $ 1,830
</TABLE>
NOTE 7: LEGAL PROCEEDINGS
There are no legal proceedings against the Company.
NOTE 8: ACQUISITION
As of December 12, 1997, the Company entered into an agreement with Rockport
Group of Texas, Inc. ("RGT"), a Nevada corporation, for the shareholders of
the Company to exchange 80% of the Company's issued and outstanding common
stock for all of the issued and outstanding stock of RGT. Effective December
17, 1997, the exchange of stock occurred, making RGT a wholly owned
subsidiary of the Company.
The Company's subsidiary has remitted to Jehu Hand, the controlling
shareholder prior to this acquisition, $5,000 for legal fees in connection
with effectuating this acquisition and change in control.
The Company changed its name to Rockport Healthcare Group, Inc. effective
January 16, 1998.
On September 14, 1998, Rockport Community Network, Inc. acquired all of the
issued and outstanding stock of Newton Healthcare Network, LLC in exchange
for 100,000 shares of the Company's common stock. Goodwill has been recorded
in the amount of $100,000 and will be amortized over a 20 year period.
9
<PAGE>
NOTE 9: CONTINGENT LIABILITIES
The Company's subsidiary has issued 1,000 shares of its 8%, cumulative,
non-participating preferred stock. The stock is redeemable at $200 per share
and is expected to be redeemed out of the future cash flow of the Company.
NOTE 10: RELATED PARTY TRANSACTIONS
In connection with the acquisition by the Company of RGT, RGT remitted on
behalf of the then three common stock shareholders $75,000 ($25,000 for each)
to the controlling shareholder of the Company, Jehu Hand, for the right to
exchange the common stock of RGT for that of common stock of the Company.
The Company's subsidiary has reflected in their consolidated financial
statements this remittance made on behalf of its then shareholders as a
$25,000 reduction in the prior advances and/or the note payable made by each
of these shareholders/directors.
NOTE 11: PROSPECTIVE SUBSEQUENT EVENTS/GOING CONCERN
The Company has proposed through the sale of additional common stock to raise
additional funding which will allow and provide for on-going operations, as
well as future potential acquisitions and the ability for the Company to meet
its financial responsibilities and commitments. Should the proposed funding
not materialize, the Company would not be able to proceed prospectively, and
therefore, would no longer anticipate being a going concern.
NOTE 12: INCOME TAXES
The fiscal year end of the Company is March 31. As of March 31, 1997, the
Company would have had a net operating loss carryforward of $3,258 that would
begin expiring in the year 2010; however, due to the effects of the prior
period adjustment (Note 2), this net operating loss carryforward will be
adjusted to $2,090. The consolidated tax return filed for the March 31, 1998
fiscal year reflects a loss of $232,886, which will increase the carryover
loss. This component would expire in the year 2013.
NOTE 13: STOCK OPTION PLAN AND OTHER STOCK TRANSACTIONS
The Company had stock option plans for directors, officers, employees,
advisors, and employees of companies that do business with the Company, which
provide for non-qualified stock options. The Stock Option Committee of the
Board determined the option price which can not be less than the fair market
value at the date of the grant of 110% of the fair market value if the
Optionee holds 10% or more of the Company's common stock. The price per
share of shares subject to a Non-Qualified Option shall not be less than 85%
of the fair market value at the date of the grant. Options generally expire
either three months after termination of employment, or ten years after date
of grant (five years if the Optionee holds 10% or more of the Company's
common stock at the time of grant).
On May 4, 1997, all outstanding stock option agreements had expired, and
there were no extensions or renewals.
On September 1, 1998, the Company sold 135,000 shares of its stock to certain
key officers and employees at the price of $1.00 per share. The Company
received non-recourse notes receivable secured by the stock in exchange. The
notes are due and payable in one year from the issuance of the stock.
The Company entered into a funding arrangement with Primex Capital of
Houston, Texas whereby the Company issued 500,000 shares of its stock in
exchange for $1,000,000 payable in increments with funding to be completed
during 1999. The Company has collected $89,000 during the current fiscal
year. The balance has been reflected as a Subscription Receivable as of
December 31, 1998.
10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The Company is seeking capital to fully commence operations and
implement its business plan. Sales of the Company's common stock, as well as
loans and advances from shareholders, directors, and officers have funded
organizational activities to date.
The goal of the Company is to deliver, through various subsidiaries,
comprehensive, integrated services and/or products to defined healthcare
populations. The result will be a managed care organization comprised of
doctors, hospitals, clinics, chiropractors, dentists, prescription drug,
hearing and vision care providers, focused to address three health care
markets: workers' compensation; catastrophic diseases and injuries; and the
nearly 110 million Americans who are uninsured, non-insurable and
underinsured.
Healthcare is a massive and dynamic industry in which significant niche
opportunities exist. The Company has targeted a number of these inadequately
served niche markets believed to afford the prospect of a high rate of return
for stockholders. The Company will employ innovative and cost effective
techniques and procedures for the delivery of these services. The strategy
for accomplishing responsible but rapid growth and obtaining the competitive
edge includes entry into strategic alliances and acquisition of compatible
quality networks and health care service companies.
Substantial resources have been invested in developing the
infrastructure to include core management functions, such as customer
service, provider relations and finance, designed to support each of the
Company's product lines. This will reduce the cost of operating each separate
subsidiary and will improve the quality of services rendered.
The Rockport Healthcare Group, Inc. subsidiaries include:
Rockport Community Network, Inc. is a preferred provider organization
(PPO) dedicated to developing national networks of high quality
doctors, hospitals, dentists, chiropractors, prescription drug,
hearing, vision care providers and other healthcare providers of goods
and services to serve the workers' compensation market.
Newton Healthcare Network, LLC is a state-wide preferred provider
organization in Texas which will serve the accident and health and
medical access savings card markets.
Rockport Occupational Network, Inc. is an equity model exclusive
provider organization (EPO) designed specifically to align the
incentives among the stakeholders: employees, payors, providers and
the network and offers highly managed workers' compensation health
services.
Rockport Advanced Care, Inc. is a comprehensive and integrated
catastrophic disease and injury network organization comprised of
nationally recognized providers of disease/illness/injury specific
tertiary and quartinary care including:
11
<PAGE>
trauma, burns, transplants, hearts, high risk maternal, perinatal and
neonatal, cancer; gamma knife; neurological and gastrointestinal
disease.
Rockport Group of Texas, Inc. provides consulting services to the
managed care industry and houses the core management functions of the
Company.
The Company is also in the process of establishing or acquiring a company to
market a medical access savings card. This savings card will be marketed to
the uninsured, non-insurable and under-insured populations. The initial
marketing of the card will be in Texas and Louisiana. A marketing contract
has been entered into with a Hispanic owned marketing company located in
Houston, Texas to market the card to the Hispanic population initially in
Texas. The medical access savings card not only provides for savings on
healthcare products and services, it also assists, through the toll free
provider referral telephone number, those individuals not knowledgeable in
healthcare specialties to locate and use the proper type of healthcare
provider.
The following activities, acquisitions and investments are required to
begin operations and generate revenue:
Rockport Community Network, Inc. - Network access agreements have been
executed with a national preferred provider organization and local preferred
provider organizations in Louisiana, Ohio, and Indiana. Several payor
contracts have been signed which began generating revenue in July, 1998.
Rockport Community Network acquired Newton Healthcare Network on September
14, 1998. Newton is a state-wide preferred provider organization in Texas.
The Company has entered into an agreement whereby a large Houston employer
with over 30,000 employees began to utilize the services of Rockport
Community Network as of in January 15, 1999.
Rockport Occupational Network, Inc. - The equity structure has been
determined and the legal opinion has been obtained confirming that the
structure complies with all Federal or state regulations. Primary care
physicians in the Houston market have been identified and contacted and will
be contracted, initial payor agreements signed and revenue is expected to
begin in May, 1999.
Rockport Advanced Care, Inc. will begin development of its specialty
networks for catastrophic diseases and injuries in 1999 and will not begin to
produce revenue until the year 2000.
Rockport has signed an agreement to process and administer the current
accounts of Key Card Company. Development of the Company's Medical Passport
Card and the "MAS" Card for the Hispanic market has begun and Card sales are
scheduled to begin in March, 1999. Continued development of the Card and
installation of the systems necessary to process the Card will cost
approximately $50,000.
Current resources of the Company are inadequate to accomplish the tasks
and acquisitions above and to fund the negative cash flow from operations,
the total of which is estimated at $800,000. This amount is anticipated to be
generated from the sale of the Company's stock and borrowings. The Company
received its Acceptance Letter from the
12
<PAGE>
National Association of Securities Dealers and obtained its trading symbol,
RPHL, as of January 20, 1999. The stock is expected to be publicly trading by
the end of February, 1999.
For several years, the Federal government has proposed various forms of
national health insurance. Should a comprehensive national health insurance
program be enacted, the Company would have to modify its business plan
accordingly.
The Company employed fourteen full time staff as of December 31, 1998.
As the Company implements its business plan, more employees will be added as
required by the Company's operations.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS - None
Item 2. CHANGES IN SECURITIES - None
Item 3. DEFAULTS UPON SENIOR SECURITIES - None
Item 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS - None
Item 5. OTHER INFORMATION - None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
Ex. 27 - Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
ROCKPORT HEALTHCARE GROUP, INC.
(Registrant)
/s/ Larry K. Hinson
--------------------------------------
February 15, 1999 Larry K. Hinson
Chief Financial and Accounting Officer
(duly authorized officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 100,847
<SECURITIES> 0
<RECEIVABLES> 12,083
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,025,471
<PP&E> 80,714
<DEPRECIATION> 16,122
<TOTAL-ASSETS> 1,521,563
<CURRENT-LIABILITIES> 569,447
<BONDS> 0
0
0
<COMMON> 4,464
<OTHER-SE> 947,652
<TOTAL-LIABILITY-AND-EQUITY> 1,521,563
<SALES> 27,873
<TOTAL-REVENUES> 27,873
<CGS> 0
<TOTAL-COSTS> 7,524
<OTHER-EXPENSES> 1,084,170
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,072
<INCOME-PRETAX> (1,076,893)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,076,893)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,076,893)
<EPS-PRIMARY> (0.32)
<EPS-DILUTED> (0.32)
</TABLE>
