U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 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 000-22151
PETHEALTH SYSTEMS, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 93-0969365
(State or other jurisdiction of (IRS Employer
Identification No.)
incorporation or organization)
444 Madison Avenue, Suite 1710, New York, NY 10022
(Address of principal executive offices)
(212) 750-7878
(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), Yes No x ; and (2) has been subject to
such filing requirements for the past 90 days. Yes x No
1,153,027 shares of Common Stock, no par value, outstanding on
April 24, 1998.
PETHEALTH SYSTEMS, INC.
Form 10-QSB Quarterly Report
For the Period Ended March 31, 1998
Table of Contents
Page
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements 3
Unaudited Balance Sheets at March 31, 1998 and
December 31, 1997 4
Unaudited Statements of Operations For Three
Months Ended March 31, 1998 and March 31, 1997
and From Inception (December 8, 1981) through
March 31, 1998 5
Unaudited Statements of Cash Flows For Three
Months Ended March 31, 1998 and 1997 and From
Inception (December 8, 1981) to March 31, 1998 6
Statement of Stockholders' Equity (Deficit) 7
Item 2. Management's Discussion and Analysis of 8
Financial Condition and Results of
Operations
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 9
PART 1. 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, 1997 and 1996. 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 three
months ended March 31, 1998 are not necessarily indicative of
results that may be expected for the year ending December 31, 1998.
The financial statements are presented on the accrual basis.
PETHEALTH SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS (UNAUDITED)
March 31, December 31,
1998 1997
ASSETS
CURRENT ASSETS:
Cash in checking 20 $ 265
Stock Receivable $ 380 $ 380
TOTAL CURRENT ASSETS $ 400 $ 645
FIXED ASSETS:
Equipment 3,138 3,138
Less accumulated depreciation $ 774 $ (523)
Net fixed assets 2,364 2,615
TOTAL ASSETS $ 2,764 3,260
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 8,604 $ 8,174
Due to Ameristar Group
Incorporated (Note 2) 123,800 122,500
TOTAL CURRENT LIABILITIES 132,404 130,674
STOCKHOLDERS' (DEFICIT):
Preferred Stock, $.10 par value,
100,000,000 shares authorized,
none issued - -
Common Stock, Class A no par value,
800,000,000 shares authorized,
1,153,027 shares issued and
outstanding 243,834 243,834
Deficit accumulated during
development stage (373,474) (371,248)
TOTAL STOCKHOLDERS' (DEFICIT) (129,640) (127,414)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 2,764 $ 3,260
PETHEALTH SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
For the Three Months Ended For the Period
March 31, December 8,1981
(Unaudited) (Inception) to
1998 1997 March 31, 1998
Revenues $ - $ - $ -
OPERATING EXPENSES:
Legal and accounting 1,500 18,854 103,163
Management services (Note 2) - 30,000 120,000
Consulting Fees - 12,500 47,000
Depreciation Expense 251 77 774
Filing and transfer fees 192 4,328 14,252
Public relations - - 14,414
Office and Printing Expense 63 937 4,840
Taxes, Franchise 220 598 905
Travel expenses - - 534
Other Expenses - - 35,168
TOTAL OPERATING EXPENSES 2,226 67,294 341,050
NET (LOSS) BEFORE
OTHER INCOME (EXPENSES) 2,226 (67,294) (341,050)
OTHER INCOME AND (EXPENSES):
Writeoff of advances
recision of merger - - (119,110)
Sale of business plan - - 76,000
Forgiveness of debt - - 7,455
Interest income - - 3,230
TOTAL OTHER INCOME
(EXPENSES) - - (32,425)
NET INCOME (LOSS) $ (2,226) $ (67,294) $ (373,475)
NET (LOSS) PER
COMMON SHARE $ * $ * $ *
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,153,027 3,285,030 N/A
* less than $.01 net loss per share
PETHEALTH SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
For the Three Months Ended For the Period
March 31, December 8,1981
(Unaudited) (Inception) to
1998 1997 March 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (2,226) $ (67,294) $ (373,474)
Adjustments to reconcile
net (loss) to net cash used
by operating activities:
Amortization - 25 750
Depreciation 251 52 774
Stock issued for
Services/expenses - - 52,925
Changes in operating assets
and liabilities:
Increase in stock receivable (380)
Increase (decrease) in
Current liabilities 1,730 67,089 132,404
NET CASH (USED) BY
OPERATING ACTIVITIES (245) (128) (187,001)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchased Fixed Assets (3,138) (3,138)
Organization costs - - (750)
NET CASH USED FROM FINANCING
ACTIVITIES: - - (3,888)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of
common stock 76,000 252,344
Proceeds from issuance
of Class B common stock - - 10,000
Deferred offering costs - - (71,435)
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 72,734 190,909
NET INCREASE (DECREASE) IN CASH 72,734
CASH, BEGINNING OF PERIOD $ 265 $ 0 $ 0
CASH, END OF PERIOD $ 20 $ 72,734 $ 20
PETHEALTH SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Three Months Ended March 31, 1998 (UNAUDITED)
Deficit
Accumulated Total
Number Common During Stockholders'
Of Stock Development Equity
Shares Amount Issuable Stage (Deficit)
Balance,
January 1, 1998 1,153,027 $243,834 $ 0 $(371,248) $(127,414)
Net Loss for the
Three Months Ended
March 31, 1998 -- -- -- $ (2,226) $ (2,226)
Balance,
March 31, 1998 1,153,027 $243,834 $ -- $(373,474) $(129,640)
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 would
obtain any such equity funding.
As of the date of this report, and throughout fiscal 1997, 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. As of March 31,
1998, such advances represent $3,800 of the liabilities of the
registrant, and the consulting agreement with Ameristar represents
$120,000 of such liabilities. See Note 2 to financial Statements,
"Related Party Transactions".
Results of Operations
The Company did not have any operating income during the quarterly
period ended March 31, 1998, and has not had any operating income
since its inception. For this quarterly period, the registrant
recognized a net loss of $2,226 compared to a net loss of $67,294
for the quarterly period ended March 31, 1997. General and
administrative expenses during the current quarterly period were
funded by Ameristar Capital Corporation, a private corporation
affiliated with two directors of the registrant. Expenses for the
quarterly period ended March 31, 1998 were comprised of costs
associated with audit, legal and SEC reporting obligations.
Liquidity and Capital Resources
At March 31, 1998 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
currently is not underway.
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.
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 April 28, 1998.
PETHEALTH SYSTEMS, INC.
By:/s/ Robert Gordon
Robert Gordon, President